Know These Insurance Terms to Successfully Manage Your Claim

When you’ve suffered a property loss, for example fire damage, flooding, storm, or any type of loss, being familiar with insurance terms helps you successfully manage your insurance claim. Knowledge is power, and arming yourself with the terms your insurance company uses helps you understand what they are talking about.

Let’s review common property insurance terms and their meanings.

Actual Cash Value - The property value based on the cost to replace it less applicable depreciation. As related to damage, the Actual Cash Value(ACV) of the loss is defined as replacement cost less deprecation. Some states consider Broad Evidences Rule(BER) as a way to determine Actual Cash Value.

Additional living expenses (ALE) - ALE is monies paid to you, the policyholder, when property damage covered by your insurance policy renders your home unlivable. This allows you to find suitable housing to meet your needs. These funds are to be used towards temporary housing, food, and any other necessary living expenses the you incur if not for the loss. Some policies limit this based on a time line or monetary cap.

Appraisal - In most policies you have what is called the Appraisal Provision Clause. If there is a disagreement in the amount of loss or damage, this allows the policyholder (you) or the insurance company to invoke this clause to determine the value of the damaged property. Each party is responsible for hiring a competent and impartial appraiser. The two appraisers will then get together and select an umpire. If a disagreement in the amount of loss between the two appraisers, they would present their differences to the umpire who will make the final ruling.

Contract - Contract is another word your insurance carrier will use for your insurance policy. A policy is legally considered a contract between the insurance company and you, the policyholder.

Declarations page - A specific page or pages in your insurance policy showing the name and address of the insurance company, the time frame that the policy is in force, the cost of the premium, and the amount of coverage. This would also list all applicable amendments, exclusions, and any other forms that are attached to the policy.

Deductible - The cost you, as the insured party, must pay out in a loss situation before any monies are due from your insurance company.

Endorsement - A written agreement added to your policy that expands or limits the benefits otherwise payable under the policy. In some cases, this is called a rider.

Escrow - Money held by a third party until specified conditions are met. An example of this is when your mortgage company places funds, payable to you and your home loan lender, in an account to be used by an outside company who is managing repairs and reconstruction to your home.

First-party claim - A claim filed by you, the insured homeowner, against your own insurance policy.

Loss - The amount an insurance company pays on a claim.

Market value - The current value of your home or property.

Public insurance adjuster - An individual you hire to negotiate a claim with your insurance company who represents you, the policyholder, not the insurance company. A Public Adjuster is paid a percentage of the claim settlement.

Replacement cost - This is the   dollar amount needed to replace the damaged property without a depreciation deduction.

It’s recommended you review your homeowner’s insurance policy, so you can see how these terms fit in the context of your papers. It helps you understand how an insurance policy is written, and exactly what the terms are, to obtain a success settlement when you are managing your insurance claim.

Miller Public Adjusters currently serves the states of
Wisconsin -Florida - Illinois - Indiana - Michigan - Minnesota - Texas

Call us 24 hours a day at (800)958-4829 to schedule an appointment or
please fill out a Free Claim Review to see if we can help.