50 terms
- Actual Cash Value (ACV)
- Replacement cost minus depreciation. Many policies pay this amount first, before repairs are finished.
- Additional Living Expense (ALE)
- Coverage for the extra cost of living elsewhere while a home is unlivable after a covered loss; often called loss of use or Coverage D.
- Amount of Loss
- The dollar value of a covered loss. It is the question an appraisal panel is set up to decide.
- Appraisal
- A policy-based process in which two appraisers and, if needed, an umpire determine the amount of a covered loss when the insured and insurer disagree.
- Appraisal Award
- The written decision, signed by any two of the three panel members, that sets the amount of loss.
- Bad Faith
- A general term for unreasonable claim handling by an insurer. In Minnesota, claims of this kind are legal matters for an attorney, not for an appraisal panel.
- Causation
- What caused the damage, such as hail versus age-related wear. Minnesota courts have allowed appraisers to address causation as part of the amount of loss.
- Claim Supplement
- A request to add items or increase pricing on an existing estimate, usually supported by new photos, bids or code requirements.
- Coverage A (Dwelling)
- The part of a homeowners policy that pays to repair or rebuild the house itself and attached structures.
- Coverage B (Other Structures)
- Coverage for detached structures on the property, such as a garage, shed or fence.
- Declarations Page
- The summary page of a policy listing the named insured, property address, coverage limits, deductibles and policy period.
- Deductible
- The portion of a covered loss the policyholder pays before insurance pays. Some policies use a separate wind or hail deductible.
- Department of Commerce
- The Minnesota Department of Commerce, the state agency that regulates insurers and licenses agents, adjusters and public adjusters.
- Depreciation
- A reduction in value for age, wear and condition, subtracted from replacement cost to arrive at actual cash value.
- Derecho
- A long-lived, widespread windstorm with straight-line winds, such as the one that crossed southern Minnesota on May 12, 2022.
- Disinterested Appraiser
- An appraiser with no financial stake in the outcome of the claim beyond a reasonable fee for services.
- Drip Edge
- Metal flashing installed along roof edges to direct water into the gutters and protect the fascia and deck edge.
- Estimate Review
- An independent check of an insurer’s or contractor’s estimate for missing items, measurement errors and pricing problems.
- FAIR Plan
- The Minnesota FAIR Plan, which offers basic property insurance when coverage isn’t available in the voluntary market.
- Fascia
- The vertical board along the roof edge where gutters attach; often damaged by hail, wind and ice.
- Gutter Apron
- A flashing piece that tucks under shingles and laps into the gutter to keep water from running behind it.
- Hail Bruise
- A soft spot in a shingle where hail has fractured the mat beneath the granules, even if no hole is visible.
- Ice and Water Shield
- A self-adhering waterproof membrane installed at eaves, valleys and penetrations to resist leaks from ice dams and wind-driven rain.
- Ice Dam
- A ridge of ice at the roof edge that traps meltwater, which can back up under shingles and leak into walls and ceilings.
- Insured
- The person or entity covered under the policy. See also named insured.
- Joint Inspection
- A site visit attended by both appraisers, and sometimes the umpire, to measure and document the damage together.
- Line Item
- A single entry in an estimate, such as removal of one square of shingles, with quantity, unit price and total.
- Loss of Use
- Coverage for added living expenses or lost rental income when property can’t be used after a covered loss.
- Matching
- The question of whether undamaged materials must be replaced so repairs reasonably match in color, texture and appearance.
- Mortgagee Clause
- Policy wording that protects the lender’s interest; it is why claim checks often name the mortgage company as a payee.
- Named Insured
- The person or entity listed on the declarations page as the policyholder.
- Ordinance or Law Coverage
- Coverage for added costs to bring repaired portions of a building up to current building codes.
- Overhead and Profit (O&P)
- A general contractor’s charge for managing a project and running a business, often 10 percent each, when the job requires coordinating several trades.
- Proof of Loss
- A sworn statement of the amount claimed, which some policies require within a set time after the insurer asks for it.
- Public Adjuster
- A professional licensed by the Minnesota Department of Commerce to represent policyholders in preparing and negotiating a claim.
- Quade v. Secura
- A 2012 Minnesota Supreme Court decision recognizing that appraisers may decide causation as part of the amount of loss, while coverage remains for courts.
- Recoverable Depreciation
- Depreciation withheld from an initial payment that can be recovered once repairs are completed, if the policy provides replacement cost coverage.
- Replacement Cost Value (RCV)
- The cost to repair or replace damaged property with materials of like kind and quality, without a deduction for depreciation.
- Scope of Loss
- The list of damaged items and the repairs needed, before pricing is applied.
- Sewer Backup Endorsement
- Optional coverage for damage caused by water backing up through drains or sewers; many base policies exclude it.
- Square (Roofing)
- A roofing unit equal to 100 square feet of roof surface.
- Steel Siding
- Painted steel lap siding common on older Minnesota homes; dents easily in hail and is often hard to match once discontinued.
- Suit Limitation
- A policy condition limiting how long you have to sue the insurer, commonly two years after the loss in Minnesota forms; confirm with an attorney.
- Supplemental Payment
- An additional payment the insurer issues after approving a supplement or after an appraisal award.
- Tear-Off
- Removal of existing roofing layers down to the deck before new roofing is installed.
- Umpire
- The neutral third member of an appraisal panel who decides items the two appraisers cannot agree on.
- Underlayment
- The protective layer between the roof deck and shingles, such as felt or synthetic sheet.
- Valley
- The internal angle where two roof slopes meet; a common point for ice and water leaks.
- Wind Deductible
- A separate deductible for wind or hail losses, sometimes stated as a percentage of the dwelling limit.
- Xactimate
- Estimating software widely used by insurers, adjusters and contractors to build line-item repair estimates with regional pricing.