Insurance Claim Terms Glossary | ACV, RCV, Umpire & More

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Actual cash value (ACV): The value of damaged property at the time of loss, usually replacement cost minus depreciation. Many policies pay ACV first and the rest after repairs.
Additional living expense (ALE): Coverage, often Coverage D, for reasonable extra costs of living elsewhere while a home is uninhabitable after a covered loss, such as rent, meals and mileage above normal.
Anti-concurrent causation: Policy language stating that if an excluded cause, such as flood, combines with a covered cause, the loss may be excluded regardless of the sequence of events.
Appraisal clause: The policy provision allowing either party to demand appraisal when they disagree on the amount of loss, using two appraisers and an umpire.
Award: The written decision of an appraisal panel stating the amount of loss. Under the typical clause it is effective when signed by any two of the three panel members.
Code upgrade: Work required by current building codes when damaged property is repaired, such as new underlayment or electrical updates, often covered under ordinance or law coverage.
Competent appraiser: An appraiser with the construction, pricing and estimating knowledge needed to value the specific loss accurately, as most appraisal clauses require.
Contents inventory: A room-by-room list of damaged or destroyed personal property, with descriptions, ages, quantities and replacement prices, used to support a Coverage C claim.
Coverage A (Dwelling): The part of a homeowners policy covering the house itself and attached structures, such as an attached garage or deck.
Coverage B (Other structures): Coverage for detached structures on the property, such as fences, sheds and detached garages, typically a percentage of the dwelling limit.
Coverage C (Personal property): Coverage for belongings such as furniture, clothing and electronics, subject to limits and special sub-limits for certain categories.
Coverage D (Loss of use): Coverage for additional living expense or fair rental value when a covered loss makes the home unfit to live in.
Debris removal: Coverage for removing damaged property and certain storm debris, often included within limits or subject to a separate sub-limit such as for fallen trees.
Declarations page: The summary page of a policy listing the insured, property, coverage limits, deductibles, endorsements and policy period.
Depreciation: The reduction in value of property due to age, wear and condition, subtracted from replacement cost to arrive at actual cash value.
Disinterested appraiser: An appraiser without a personal or financial stake that would compromise independence. What qualifies is judged by the policy wording and applicable law.
Holdback: The portion of a claim payment, usually recoverable depreciation, that the insurer withholds until repairs or replacement are completed and documented.
Ice dam: A ridge of ice at a roof edge that traps melting snow, allowing water to back up under shingles and leak into the home.
Line item: A single entry in an estimate describing a task or material with a quantity, unit and price, such as removing and replacing a square of shingles.
Matching: The question of whether undamaged materials must be replaced so repairs are reasonably uniform in appearance with adjoining areas, as policy wording allows.
Mitigation: Reasonable steps a policyholder takes after a loss to prevent further damage, such as tarping a roof, shutting off water or drying wet materials.
Mold remediation: The process of containing, removing and cleaning mold growth, often subject to policy exclusions or sub-limits depending on the cause and wording.
Named-storm deductible: A deductible that applies to damage from a named tropical storm or hurricane, often a percentage of the dwelling limit rather than a flat amount.
NCIUA (Coastal Property Insurance Pool): The North Carolina Insurance Underwriting Association, which offers wind and other property coverage in beach and coastal areas of 18 eastern counties.
NCJUA (FAIR Plan): The North Carolina Joint Underwriting Association, the state’s FAIR Plan, which offers basic property coverage to owners unable to obtain it in the regular market.
NFIP: The National Flood Insurance Program, a federal program that provides flood coverage, which standard homeowners policies typically exclude. It has its own claim rules and deadlines.
Ordinance or law coverage: Coverage for added costs of complying with building codes or ordinances when repairing or rebuilding after a covered loss, usually limited to a percentage of the dwelling limit.
Overhead and profit (O&P): A general contractor’s charge for coordinating a job and earning a margin, often figured as a percentage added when several trades are involved.
Percentage deductible: A deductible calculated as a percentage of the dwelling coverage limit rather than a fixed dollar amount, common for named-storm and wind or hail perils.
Pitch: The steepness of a roof, expressed as rise over twelve inches of run. Steeper roofs often carry additional labor charges in estimates.
Proof of loss: A formal statement from the policyholder of the amount claimed, often required by the policy within a set time after the insurer requests it.
Recoverable depreciation: Depreciation withheld from an initial payment that can be recovered once repairs or replacement are completed, under replacement cost policies.
Replacement cost value (RCV): The cost to repair or replace damaged property with materials of like kind and quality at current prices, without deducting depreciation.
Reservation of rights: A letter in which the insurer continues handling a claim while reserving the right to deny or limit coverage later based on stated reasons.
Scope of loss: The full description of damaged areas and the repairs needed, before pricing. Many estimate disputes start with differences in scope rather than price.
Square (roofing): A unit of roof area equal to 100 square feet, used to measure and price shingles, underlayment and related roofing work.
Suit limitation: A policy provision setting the time within which a lawsuit must be filed against the insurer. Check your policy and consult an attorney about how it applies.
Supplement: A request to add items or costs to an existing estimate, often because hidden damage is found or the original scope missed necessary work.
Sworn statement: A signed and notarized statement, such as a sworn proof of loss, that the policyholder attests is true under penalty of law.
Umpire: The neutral third member of an appraisal panel, chosen by the two appraisers, who decides items they cannot agree on.
Umpire selection: The process by which the two appraisers agree on an umpire. Many policies allow a court to appoint one if the appraisers cannot agree in time.
Wind/hail deductible: A separate deductible that applies to wind or hail damage, which may be a flat amount or a percentage of the dwelling limit.
Xactimate: Widely used estimating software with regional price lists that insurers, contractors and appraisers use to build line-item repair estimates.

Insurance Claim Terms, Defined in Plain English