Insurance Claim Glossary
The words in your policy and your adjuster’s letters, explained in plain English by Houston public adjusters.
- Actual Cash Value (ACV)
- Replacement cost minus depreciation. The first payment on most claims, and the total payment on an ACV policy.
- Additional Living Expense (ALE)
- Coverage D, or loss of use. Pays the extra cost of living elsewhere while your home is unlivable after a covered loss.
- Appraisal
- A policy process for resolving disputes over the amount of loss. Each side picks an appraiser, and an umpire settles disagreements.
- Coverage A
- Dwelling coverage: the house and attached structures. Percentage deductibles are calculated from this limit.
- Coverage B
- Other structures such as detached garages, fences and sheds, typically 10% of Coverage A.
- Coverage C
- Personal property, or contents: furniture, clothing, electronics and other belongings.
- Declarations Page
- The summary page of your policy listing coverages, limits, deductibles and endorsements.
- Depreciation
- The reduction in value for age and wear. Recoverable depreciation is paid after repairs on a replacement-cost policy.
- Endorsement
- An addition to the policy that changes coverage, such as a roof ACV endorsement or water-backup coverage.
- Exclusion
- Something the policy does not cover, such as flood, earth movement or wear and tear.
- Hurricane / Named-Storm Deductible
- A separate deductible, usually 1%–5% of Coverage A, applied to damage from a named storm.
- Independent Adjuster
- An adjuster hired by the insurance company on contract, often brought in after large storms. Works for the insurer.
- Matching
- Whether undamaged materials must be replaced so repairs match in color and quality — a frequent roof and flooring dispute.
- Mitigation
- Your duty to prevent further damage after a loss, such as tarping a roof or drying a flooded room.
- NFIP
- The National Flood Insurance Program, run by FEMA, which writes most U.S. flood insurance policies.
- Ordinance or Law Coverage
- Pays the extra cost of rebuilding to current building codes after a covered loss.
- Overhead and Profit (O&P)
- A general contractor’s charge (commonly 10% + 10%) for coordinating multi-trade repairs. Often left off carrier estimates.
- Proof of Loss
- A sworn statement of the amount you are claiming, sometimes required by a deadline in the policy.
- Public Adjuster
- A licensed professional hired by the policyholder to prepare, document and negotiate a property insurance claim.
- Replacement Cost Value (RCV)
- What it costs today to repair or replace damaged property with materials of like kind and quality.
- Reservation of Rights
- A letter in which the insurer continues investigating while reserving the right to deny coverage later.
- Scope of Loss
- The list of damaged items and repairs included in an estimate. An incomplete scope is the most common cause of underpayment.
- Supplement
- A request for additional payment for damage or costs not included in the original estimate.
- TWIA
- The Texas Windstorm Insurance Association, which provides wind and hail coverage in designated coastal counties, including parts of Harris and Galveston counties.
- Xactimate
- The estimating software most insurers and public adjusters use to price repairs line by line by ZIP code.
Property damage? The clock is already ticking.
Start with a free consultation from Houston Public Adjusters and protect your claim before mistakes cost you money.
