This glossary is an essential tool for individuals engaged in the complex domain of insurance claims and property damage evaluation. It offers precise definitions and explanations of critical terms utilized in Public Adjusting, Appraisal and Umpire roles, as well as Consulting or Estimation Services. By comprehending these terms, both policyholders and professionals can more effectively navigate the intricacies of insurance procedures with enhanced confidence and understanding. The glossary is systematically categorized to facilitate easy access, ensuring users can swiftly locate the information necessary to make informed decisions. It is important to note that these definitions are supplementary and do not supersede the definitions found within policy language, which take precedence.
Adjuster - A representative who evaluates the extent of an insurer's liability for a loss; includes staff adjusters (employed by insurers), independent adjusters (contractors for insurers), and public adjusters (for policyholders).
Public Adjuster - An independent, licensed professional who represents and adjusts losses on behalf of the insured policyholder, typically paid on a contingency fee basis from the settlement. This contrasts with staff or independent adjusters who work for insurers.
Independent Adjuster - A contractor hired by insurers to evaluate claims, often on a fee basis, distinct from staff adjusters.
Staff Adjuster - an employee of an insurer's claims department responsible for settling claims.
Coverage - The scope of protection under a policy, including perils insured against, properties covered, and coverage limits.
Claim - A policyholder's request for reimbursement from an insurer for a covered loss to property.
Indemnity - The process of restoring the insured to their financial state before the loss occurred, achieved through payment, repair, or replacement.
Replacement Cost - Coverage that compensates for the repair or replacement of damaged property at current market prices without accounting for depreciation.
Actual Cash Value (ACV) - The value of damaged property determined by subtracting depreciation from the replacement cost, considering factors like age and condition.
Depreciation - A decrease in property value over time due to wear, tear, or age.
Deductible - The amount the insured must pay out-of-pocket before the insurer covers the remaining loss.
Settlement - The final resolution of an insurance claim, where the insurer agrees to compensate the policyholder for a covered loss. This settlement is negotiated to restore the policyholder to their pre-loss condition, taking into account policy terms such as coverage limits, deductibles, and valuation methods like ACV or replacement cost.
Demand for Appraisal - A written request to initiate the appraisal process, typically required within a policy timeline (e.g., 20 days to name an appraiser).
Appraisal - A structured evaluation method to settle disagreements over property value or damage amount, where each party appoints an appraiser, and an umpire may be involved if necessary.
Appraiser - A certified professional who evaluates property value or damage during the appraisal process; each party (insured and insurer) selects their own expert.
Umpire - A neutral third-party appraiser chosen by the two appraisers to resolve disagreements in the appraisal process; their decision is binding on the loss amount.
Umpire Clause - A policy provision that allows an impartial third party to resolve disputes over claim payments when the insurer and insured cannot reach an agreement.
Demand for Appraisal - A formal request to initiate the appraisal process when there is a disagreement over the loss value.
Amount of Loss - The contested value of damage or property in a claim, which the appraisal process aims to establish.
Constructive Change - An informal change to the work that might necessitate appraisal if it impacts the valuation of the loss.
Estimate - A document detailing the projected costs to repair or replace damaged property, forming the basis for claims demands or payments.
Cost Estimation - The process of predicting the dollar cost to perform a defined scope of work, often using historical data or parametric methods.
Scope of Work - A description of the facility, product,or service requirements, including activities and deliverables.
Damage Assessment - Evaluation of property loss to determine necessary repairs and associated costs, often included in consulting services.
Direct Cost - Costs specifically tied to a project,such as labor, materials, and equipment.
Indirect Cost - Overhead expenses not directlyattributable to a specific project, like administrative or general conditionscosts.
Contingency - A budgeted amount to cover uncertainties,incomplete designs, or unforeseen conditions in estimates.
Budget - The estimated costs and expenditures for aproject, integrated with scope and schedule.
Overhead - Ongoing business expenses not directlylinked to profit generation, such as utilities or accounting.
Disruption - An alteration in the planned sequence ofwork that hinders operations and increases costs.
Loss of Productivity - When actual labor hours exceedplanned amounts per unit of work, often due to changes or interferences.
General Conditions - Indirect costs for projectoperations, including pre-construction, organization, and site managementexpenses
Our glossary demystifies claims processing, but every situation is unique. Get expert guidance on how these terms relate to your insurance claim for accurate and fair resolution.
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