Insurance Claim Glossary
Plain-English definitions for every term you'll encounter on a property insurance claim.
- Actual Cash Value (ACV)
- The replacement cost of damaged property minus depreciation for age and wear. ACV policies pay less than RCV. If a 10-year-old roof is destroyed, ACV pays for what a 10-year-old roof is worth, not a new one.
- Additional Living Expenses (ALE)
- Coverage that pays for hotel, food, and other costs above your normal living expenses while your home is uninhabitable due to a covered loss. Also called Loss of Use.
- Adjuster
- An insurance professional who investigates claims, assesses damage, and recommends settlement amounts. Three types: company adjusters (work for insurer), independent adjusters (contract to insurer), and public adjusters (work for policyholder).
- Appraisal
- A policy provision allowing dispute resolution when policyholder and insurer disagree on the amount of loss. Each side picks an appraiser, and an umpire breaks ties. Faster and cheaper than litigation.
- Bad Faith
- Insurer conduct that violates the duty to handle claims fairly — unreasonable denial, delay, low-balling, or refusing to investigate. Florida allows bad-faith claims under FL Statute 624.155.
- Coinsurance
- A clause requiring you to insure your property for at least a certain percentage (typically 80%) of its replacement value. Underinsurance triggers a penalty proportionally reducing every claim payment.
- Contingency Fee
- A fee paid only if the case results in additional recovery. Public adjusters in Florida typically charge 10–20% on a contingency basis. No recovery, no fee.
- Declarations Page (Dec Page)
- The first page of your insurance policy. Lists your name, property address, coverage limits, deductibles, premium, and effective dates. Always read your dec page before filing a claim.
- Deductible
- The amount you pay out of pocket before insurance kicks in. Florida hurricane deductibles are typically a percentage (2%, 5%, 10%) of the dwelling coverage, not a flat dollar amount.
- Denial
- Insurer's formal rejection of a claim. Must be in writing with the policy provisions cited. Can be reversed with documentation, public adjuster involvement, appraisal, or litigation.
- Depreciation
- The reduction in value of property due to age, wear, or obsolescence. Most policies withhold depreciation as 'recoverable depreciation' until repairs are completed.
- Endorsement
- A written modification to your insurance policy. Can add, remove, or change coverage. Examples: ordinance and law endorsement, mold limitation endorsement, hurricane deductible endorsement.
- First-Party Claim
- A claim by the policyholder against their own insurance company. Public adjusters represent first-party claims. (Third-party claims are filed against another person's insurer.)
- Hurricane Deductible
- A separate, usually higher, deductible that applies to claims caused by named tropical storms or hurricanes. In Florida, typically 2–10% of dwelling coverage.
- Loss of Use
- See Additional Living Expenses. Coverage for the extra cost of living elsewhere while your home is being repaired after a covered loss.
- Mitigation
- Steps the policyholder must take to prevent further damage after a loss — tarping a roof, drying water, boarding broken windows. Mitigation costs are reimbursable; failure to mitigate can void coverage for additional damage.
- Ordinance and Law Coverage
- Coverage for the additional cost to rebuild to current building code after a covered loss. Without it, you only get paid to rebuild to the original (often outdated) standard.
- Personal Property Coverage
- Coverage for the contents of your home — furniture, electronics, clothing, etc. Typically a percentage (50–75%) of dwelling coverage. May have sub-limits for jewelry, art, firearms.
- Policyholder
- The person who owns the insurance policy. Public adjusters work for the policyholder.
- Proof of Loss
- A sworn statement detailing the damage, value, and circumstances of the loss. Most policies require Proof of Loss within 60 days. Failure to submit can defeat the claim.
- Public Adjuster
- A state-licensed professional who works for the policyholder (not the insurer) to assess damage, prepare estimates, file the claim, and negotiate settlement. Florida Statute 626.854.
- Replacement Cost Value (RCV)
- The cost to replace damaged property with new property of like kind and quality, without deduction for depreciation. RCV pays more than ACV but typically requires actual repairs to release the full amount.
- Reservation of Rights
- Insurer's letter stating they're investigating but reserving the right to deny coverage later. Often a warning sign that coverage is in question.
- Subrogation
- After paying a claim, the insurer steps into the policyholder's shoes to recover from the responsible party. E.g., insurer pays for water damage from a contractor's mistake, then sues the contractor.
- Supplemental Claim
- An additional claim for damages discovered or repair costs incurred after the initial settlement. Florida allows supplemental claims for up to 18 months after the original claim (FL Statute 627.70132).
- Underinsured
- When your coverage limits are below the actual replacement value of the property. Common in inflationary periods. Triggers coinsurance penalties.
- Underpaid Claim
- A claim where the insurer's payment is below the actual cost of repair. Often resolved through supplemental documentation, re-inspection, public adjuster involvement, or appraisal.
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