41 terms
- Actual cash value (ACV)
- Replacement cost minus depreciation. Many policies pay ACV first, then pay the depreciation once repairs are made.
- Additional living expense (ALE)
- Coverage for the extra cost of living elsewhere while a home is being repaired after a covered loss. Often called Coverage D or loss of use.
- Amount of loss
- The dollar value of covered damage. This is what an appraisal panel decides.
- Appraisal award
- The written decision of an appraisal panel setting the amount of loss, signed by at least two of the three panel members.
- Appraisal clause
- The policy condition that lets either party demand appraisal when they disagree on the amount of loss.
- Atmospheric river
- A long, narrow band of moisture that brings heavy, sustained rain. Western Washington sees several each winter.
- Bomb cyclone
- A storm whose pressure drops very quickly, producing strong winds. The November 2024 storm that hit Puget Sound was one.
- Code upgrade
- Work needed to bring repairs up to current building codes. Usually paid under ordinance or law coverage.
- Collapse
- A sudden falling down of a building or part of it. Policies define it narrowly and cover it only in certain situations.
- Contents
- Personal belongings, covered under Coverage C in most homeowner policies.
- Coverage A
- Dwelling coverage for the house itself and attached structures.
- Coverage B
- Other structures coverage for detached garages, sheds, fences and similar.
- Debris removal
- Coverage for removing damaged property and debris after a covered loss, often with a separate limit.
- Declarations page
- The summary page of your policy showing coverages, limits, deductibles and the policy period.
- Depreciation
- The reduction in value because of age, wear or obsolescence. Subtracted from replacement cost to get ACV.
- Earthquake deductible
- A separate deductible for earthquake coverage, usually a percentage of the dwelling limit.
- Extended replacement cost
- An endorsement that pays above the dwelling limit, such as 25% or 50% more, if rebuilding costs exceed it.
- Flood exclusion
- The standard policy exclusion for damage from surface water, rising rivers and similar. Flood needs separate coverage.
- HO-3
- The most common homeowner policy form, covering the dwelling on an open-perils basis and contents on a named-perils basis.
- HO-6
- A policy for condominium unit owners covering unit improvements, contents and liability.
- Holdback
- Recoverable depreciation the insurer withholds until repairs are completed.
- Ice dam
- A ridge of ice at the roof edge that traps melting snow, which can back up under shingles and leak inside.
- IFCA
- Washington’s Insurance Fair Conduct Act, which provides legal remedies for unreasonable denial of coverage or benefits.
- Independent appraiser
- An appraiser with no financial interest in the outcome or the repair contract, as most appraisal clauses require.
- Line item
- A single entry in an estimate, such as removing and replacing a square of shingles.
- Master policy
- The insurance policy a condominium or homeowners association buys to cover common areas and building elements.
- Matching
- Whether replacement materials must match undamaged ones so the repair looks uniform. A common source of dispute.
- Mitigation
- Steps taken to prevent further damage after a loss, such as tarping or water extraction. Policies require it.
- OIC
- The Washington Office of the Insurance Commissioner, the state regulator of insurance companies and agents.
- Ordinance or law coverage
- Coverage for extra costs caused by building codes or laws when repairing or rebuilding.
- Overhead and profit (O&P)
- A general contractor’s charge for coordinating multiple trades, often 10% overhead plus 10% profit.
- Proof of loss
- A sworn statement of the amount claimed, which the insurer may request within a set time.
- Recoverable depreciation
- Depreciation you can collect after completing repairs under a replacement cost policy.
- Replacement cost value (RCV)
- The cost to repair or replace damaged property with materials of like kind and quality, without deducting depreciation.
- Scope of loss
- The list of everything that is damaged and how it must be repaired. The foundation of any estimate.
- Steep charge
- Extra labor cost for working on roofs with a steep pitch, often 7/12 and above.
- Suit limitation
- The policy clause setting how long you have to file a lawsuit. Washington law sets a one-year minimum.
- Supplement
- A request to the insurer to add items or money to an estimate, supported by documentation.
- Surplus lines
- Insurance from carriers not licensed in the state but allowed to write coverage that the standard market won’t.
- Umpire
- The neutral third member of an appraisal panel who decides items the two appraisers can’t agree on.
- Xactimate
- Estimating software used by most insurers and contractors, with regional price lists.