Glossary of Insurance Terms
- ACV – Actual Cash Value
- This is the amount calculated by taking the RCV minus the depreciation. Some policies are ACV policies but you should always check to make sure you have a RCV policy. The reason for this is ACV is a lower amount of settlement and depreciation is very subjective.
- Adjuster
- Your insurer will have a “field”, “desk”, or even an “independent” adjuster assigned to determine if your claim is covered and if so, to what extent.
- Appraisal
- A process available under your policy where either side may elect to “invoke” appraisal where each side has an independent appraiser and the two sides will determine what the amount of settlement is. Usually binding.
- AOB – Assignment of Benefits
- Insurers hate AOB’s. However, they are great vehicles in resolving your claim. You “assign” the benefits of the claim over to someone else (usually your contractor/roofer) and they handle the workload of getting the claim settled so you do not have to.
- Bad Faith
- This is when the insurer acts in a manner contrary to your policy. Insurers must negotiate in good faith and attempt to properly settle your claim, not by using deceptive or manipulative tactics.
- Covered Peril (Type of Loss)
- What was the cause of the damage at your property (i.e. wind, hail, hurricane, fire, flood, etc.)
- Date of Loss
- The date the “covered peril” occurred which caused the damage.
- EUO – Examination Under Oath
- A formal proceeding, germane to a deposition, usually taken by an attorney of the insured regarding the claim and the circumstances surrounding it.
- Mediation
- A proceeding sometimes used where both the insured and the insurer try to amicably resolve the claim with a neutral mediator.
- Policy
- The written agreement laying out the rights and responsibilities of both you and your insurer. ALWAYS read this carefully as you have very little input in the contract as your insurer basically says take it or leave it (adhesion contract).
- Premiums
- The amount you pay for your policy.
- RCV – Replacement Cost Value
- This is the cost to fully replace the property and bring it back to pre-loss condition, NOT taking into account depreciation, etc. It is better coverage than ACV.
- Recorded Statement
- Per your policy, a requirement which can be enforced where the insurance adjuster asks questions of the insured regarding the loss on a recorded line.
- Umpire
- Used in appraisal if the two appraisers cannot agree on the dollar figure of the loss. The umpire is the “tie-breaker”.