Install
Claims and Disputes terms
Claims and Disputes in Homeowners Insurance: the news, the names and what changed.
Actual cash valueWhat an insurer pays for damaged property: the cost to repair or replace it today, minus a deduction for age and wear, so less than a new-for-old payment.Additional living expensesThe increase in your normal costs of living, such as hotel bills, restaurant meals and extra mileage, after a covered loss forces you out of your home.AdjusterThe person who investigates a reported loss, decides what the policy covers and how much it will pay, and negotiates the settlement.Assignment of benefitsA signed agreement that transfers your right to claim payments to a contractor or other vendor, who then deals with the insurer directly.Claim numberThe reference code an insurer assigns when it opens a file on your loss, used to track the adjuster's notes, estimates, payments and correspondence.CollapseUnder most policies, the abrupt falling down or caving in of a building or part of it so it cannot be used as intended, covered only for listed causes.Constructive total lossA loss where the building is not wholly destroyed but repair would cost so much, or be so restricted by law, that it is treated as a total loss.Contents inventoryAn itemized list of belongings that were damaged, destroyed or stolen, with quantity, description, age and cost, used to support a personal property claim.Debris removalCoverage for hauling away the wreckage of covered property after a loss, and in limited cases fallen trees, with a small allowance beyond the limit.DepreciationThe loss in an item's value from age, wear and obsolescence, which an adjuster subtracts when pricing what a claim should pay.Desk adjusterA claims adjuster who handles a claim from an office or home by phone, email, photos and estimating software, usually without visiting the property in person.Duties after lossThe steps a homeowners policy requires after damage occurs: reporting it, protecting the property, documenting the loss and cooperating with the insurer.First notice of lossThe first report you or your agent makes to the insurer that damage has occurred, which opens the file and starts the insurer's response deadlines.Gradual damageHarm that builds up over weeks, months or years, such as a slow leak, rot or corrosion, which most homeowners policies exclude.HoldbackThe part of a claim payment the insurer keeps back until repairs are finished and documented, usually the depreciation on a replacement cost claim.Independent adjusterA claims adjuster who works for an adjusting firm or on contract, hired and paid by insurers to handle claims, especially surges after storms and wildfires.MatchingWhether an insurer must also replace undamaged siding, shingles or flooring so repaired areas look uniform, which depends on state rules and policy wording.Mitigation of damagesYour duty to take reasonable steps after a loss, such as tarping a roof or shutting off water, to keep damage from spreading; the policy usually pays for it.Mold exclusionPolicy wording that removes or caps coverage for mold, fungus and wet rot, usually leaving a small limit for growth that follows a covered water loss.NeglectFailure to use all reasonable means to save and protect property at and after the time of a loss, which the policy excludes to the extent the damage grows.Non-recoverable depreciationThe age-and-wear deduction an insurer takes from a claim payment and never pays back, because the policy settles at depreciated value or repairs are not made.Proof of lossA signed, sworn statement of what happened and what you are claiming, which most policies require within a set number of days.Public adjusterA licensed claims professional hired by the policyholder, not the insurer, who documents and negotiates the claim for a fee, usually a share of the payout.Reasonable repairsCoverage for the cost of temporary steps you take to stop covered damage from getting worse, such as tarping a roof or boarding up a broken window.Recoverable depreciationThe part of a replacement cost payment an insurer withholds at first and releases after you finish the repair or replacement and send proof of the cost.SalvageWhat remains of damaged property after a loss, and the insurer's option to take it or deduct its leftover value once the claim is paid.Scope of lossThe written list of damaged areas and repairs an adjuster decides are needed and covered, which becomes the basis for the estimate and the payment.Staff adjusterA claims adjuster who is a direct employee of an insurance company and handles that insurer's claims under its own guidelines and settlement authority.SubrogationThe insurer's right, after paying your claim, to step into your place and recover that money from whoever caused the loss.Sudden and accidentalWording insurers use to separate covered, abrupt losses such as a burst pipe from slow, foreseeable damage like a leak that has dripped for months.Supplemental claimA request for more money on a loss you already reported, usually for damage found or costs incurred after the first estimate was written.Total lossA loss in which the home is destroyed or too damaged to repair, so the insurer pays toward rebuilding up to the dwelling limit rather than for repairs.Water damage exclusionPolicy language that excludes certain kinds of water loss, either the standard flood, backup and groundwater group or a broader endorsement an insurer adds.Wear and tearThe slow breakdown of materials from age, weather and ordinary use, which homeowners policies exclude because insurance pays for sudden loss, not upkeep.XactimateEstimating software from Verisk that adjusters and contractors use to price repairs line by line from regional unit-cost price lists.