Insurance terminology can be hard to follow if you are unaware what all those acronyms mean. To the average homeowner, insurance paperwork is difficult to understand due to a number of reasons – from never filing a claim before to high emotion after a devastating loss. Below is a list of some common insurance terms every homeowner should be aware of. Not only will this allow you to read and understand your policy or claim paperwork, it allows you to be on the same page as the adjuster assigned to your file.
  • ACV – Actual Cash Value = First check received by the homeowner less the deductible
  • RCV – Recoverable Cash Value = Claim total (ACV + deductible + depreciation)
  • Deductible – Homeowner’s out of pocket expense – this must be paid to your contractor
  • ILS – Insurance Loss Statement – paperwork received from the adjuster outlining what is being covered
  • COC – Certificate of Completion – Verification of work completed, sent to the carrier to initiate release of depreciation (final check)
  • Supplement – Estimate sent by your contractor for missing items on original claim paperwork
  • Recoverable Depreciation – Amount held back to be paid when work is complete
  • Non-recoverable depreciation – Amount held back and will NOT be paid
  • O&P – Overhead and Profit – Overhead costs are operating expenses for necessary equipment and facilities. Profit is what allows the general contractor to earn their living. While two separate costs they are almost always under the label “O & P”
  • Peril – Cause of Loss – For example; wind and hail
  • IA – Independent Adjuster – Adjuster hired and sent out by the carrier to evaluate your loss – is employed by a third party firm
  • FA – Field Adjuster – Adjuster hired and sent out by the carrier to evaluate your loss – is employed by the insurance company
  • Endorsement – A statement added to an insurance policy that alters, deletes or adds coverage, terms or provisions of the policy. Optional coverage that has been included in your policy per homeowners choice (For example; Matching Endorsement)
  • Exclusion – Optional coverage that has been excluded from your policy per homeowners choice (For example; law and ordinance)
  • Appraisal – An estimate of property value, or of the extent of property damage, provided by an authorized appraiser
  • Declarations page – A page in your policy – usually the front page – with basic information that identifies the policyholder, the property or vehicles covered, the coverages and the premium/deductible amounts.
  • Hurricane/named storm deductible – Depending on the state of residence, if a policy includes coverage for wind and hail, a separate deductible for insuring damages caused by a hurricane or named storm may be required. Usually 1-2% of the properties value
  • Limits of insurance – The amount an insurance company will pay for a covered loss, as stated in the policy.
Understanding insurance terminology, how insurance works and your rights as a policy holder will all benefit you, as a homeowner, long term. Have a general question about insurance or claims – send them into Maven and we will make sure to get them answered.

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