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Insurance Terms Explained
Here are some insurance terms you’ll probably come across during your roof claim process.
Allow us to explain them for you!
RCV Policy
Replacement Cost Policy (RCV) – pays the full amount for coverage of damage resulted from a covered peril. The first check is typically the depreciated amount and once the repairs are completed and proper documentation is submitted then the insured is given the “recoverable depreciation” which provides the remaining portion necessary to pay for the new roof.
ACV Policy
Actual Cash Value (ACV) – pays the depreciated amount for coverage of damage resulted from a covered peril. No “Recoverable Depreciation” is paid for these repairs/ replacement. Even on a RCV policy there may be certain aspects of the claim that do not qualify for replacement cost coverage (ie. many fence repairs or “other structure” are considered ACV.
Depreciation
This is the difference between RCV (new market price) less the ACV (aged market price).
Property Coverage Insurance
Protects personal property and land against loss or damage, as outlined in a home insurance policy.
Peril
The exposure to or cause of a possible loss, such as an injury, destroyed or lost property, etc.
Deductible
The amount a home insurance policyholder must pay out of pocket for a covered claim.
Adjuster
A person trained professionally to assess damage and settle your claim. The adjuster may be a company employee or under contract with your insurance company.
Betterment
An improvement that increases the value of a property or facility.
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