Insurance Claims Glossary

The value of damaged or destroyed property at the time of loss, calculated as replacement cost minus depreciation.

Coverage that reimburses policyholders for the reasonable extra costs incurred to maintain their normal standard of living while their home is uninhabitable after a covered loss.

A policy provision fixing the value of insured property in advance, eliminating disputes over ACV at loss time for that property.

A classic or specialty auto policy that sets a fixed value for the vehicle in advance of a total loss.

A policy provision for resolving disputes over the amount of loss through neutral appraisers instead of litigation.

A binding or non-binding process where an arbitrator or panel decides a dispute outside of court, per contract or agreement.

A legal transfer of insurance claim rights or benefits from a policyholder to a third party, such as a contractor or restoration vendor.

Unreasonable insurer conduct in handling a claim, potentially creating extracontractual liability beyond the policy limits in some jurisdictions.

A deduction from a claim payment when new parts improve the vehicle's condition beyond pre-loss state.

Physical injury, sickness, or disease sustained by a person, including death resulting therefrom, in liability policies.

Short-term property insurance covering a building under construction or renovation against damage during the project.

Coverage for lost income and continuing operating expenses when a covered peril suspends business operations.

An adjuster deployed to a disaster zone to handle high volumes of claims after hurricanes, wildfires, or other catastrophes.

A policy that covers claims first made against the insured and reported to the insurer during the policy period, subject to retroactive date rules.

The cost to bring repaired or rebuilt property into compliance with current building codes, often covered only under ordinance or law coverage.

A policy provision requiring the insured to carry insurance up to a stated percentage of the property value, with a penalty for underinsurance at claim time.

First party auto coverage for damage to your vehicle from collision with another object or vehicle or rollover.

An injury or illness that arises out of and in the course of employment and qualifies for workers compensation benefits.

First party coverage for damage to your vehicle from non-collision events such as theft, fire, vandalism, hail, and animal strikes.

A loss resulting from two or more causes operating together, where at least one cause is covered and another may be excluded.

Indirect financial loss that follows from direct physical damage, such as lost profits or extra expenses, often limited or excluded unless separately insured.

Liability assumed by contract, such as hold harmless agreements, which may be covered by GL only when the contract is insured contract.

A disagreement over whether the policy applies to a particular loss or claim.

A legal or technical analysis of whether a policy covers a particular loss or claim scenario.

Coverage for the cost to remove damaged property and rubble from the premises after a covered loss.

The amount the insured must pay out of pocket before the insurer pays on a covered claim, or the amount subtracted from each loss.

A structured submission from a claimant or attorney setting forth liability, damages, and settlement demand before litigation.

The reduction in the value of property over time due to age, wear and tear, and obsolescence, used to calculate actual cash value.

A licensing state an adjuster declares as home when residing in a state that does not issue adjuster licenses, used for non-resident licensing elsewhere.

An adjuster who manages claims primarily from the office using photos, estimates, and phone interviews without field inspection.

The reduction in market value of a repaired vehicle because it now has a significant damage history.

Coverage for personal liability of corporate directors and officers for alleged wrongful acts in managing the organization.

Coverage for lawsuits by employees excluded from workers comp or alleging employer intentional or gross negligence, depending on policy.

Coverage for claims by employees alleging discrimination, harassment, wrongful termination, and similar workplace issues.

Professional liability coverage for negligence, mistakes, or failure to perform professional duties.

Additional estimate amounts requested after hidden damage, code requirements, or scope changes are discovered after initial inspection.

A formal, sworn interview of the insured by the insurer's counsel regarding the claim, required by many property policies when requested.

Liability insurance that pays only after underlying primary limits are exhausted, often following the terms of the primary policy.

An endorsement that pays a stated percentage above the dwelling limit if reconstruction costs exceed the policy limit due to demand surge or inflation.

An adjuster who inspects loss sites in person, measures damage, and prepares estimates on location.

A claim by the policyholder against their own insurer for benefits under their policy.

Settlement basis that replaces damaged property with modern, functionally equivalent materials that may differ from original ornate or obsolete construction.

Coverage that pays the difference between ACV on a totaled vehicle and the remaining loan or lease balance.

Commercial insurance covering third party bodily injury, property damage, and personal and advertising injury arising from business operations.

A percentage estimate of permanent loss of function assigned using medical guidelines after MMI.

The principle of restoring the insured to the same financial position as before the loss, without profit.

A claims adjuster who contracts with insurers or TPAs to handle claims but is not an employee of a single carrier.

Workers compensation typically does not cover true independent contractors; misclassification creates coverage and penalty exposure.

A medical exam of a claimant by a physician chosen by the insurer to verify injury, treatment, or disability.

A legal claim against a settlement or award for reimbursement, such as a workers comp carrier's lien on a third party recovery.

Modified work within medical restrictions offered by the employer during recovery from a work injury.

Coverage for bodily injury or property damage arising from serving alcohol, especially for businesses in the liquor trade.

Coverage paying for rental transportation while your vehicle is repaired from a covered claim.

An intermediary with underwriting authority from an insurer to bind coverage, price risks, and appoint retail agents in a territory.

The point when an injured worker's condition has stabilized and is not expected to improve further with treatment.

A voluntary dispute resolution process where a neutral mediator helps parties settle without binding authority.

Optional auto coverage paying reasonable medical expenses for you and passengers after an accident, regardless of fault, usually with low limits.

States where workers compensation insurance must be purchased only from the state fund, not private carriers.

Coverage form that insures only against the specific perils listed in the policy, such as fire, windstorm, or vandalism.

A registered nurse who coordinates medical care and return-to-work for an injured worker, often hired by the carrier or employer.

In liability insurance, an accident or harmful event during the policy period; in property, an event causing loss.

Coverage form that insures against all causes of loss except those specifically excluded in the policy.

Coverage that pays the additional cost to repair or rebuild a structure to comply with current building codes following a covered loss.

A work-related injury or illness that meets OSHA criteria for recording on the employer's OSHA 300 log.

Benefits for permanent impairment that limits but does not eliminate ability to work.

Benefits when a worker cannot return to any gainful employment after maximum medical improvement.

In liability insurance, offenses such as false arrest, libel, slander, invasion of privacy — not physical bodily injury.

No-fault medical and wage loss benefits for you and passengers after an auto accident, regardless of fault, in no-fault states.

Coverage for third party claims and cleanup costs from pollution releases, excluded or limited in standard GL.

Liability for injuries occurring on property owned or occupied by the insured due to dangerous conditions.

Legal liability for bodily injury or property damage caused by a product after it leaves the insured's control.

Coverage for financial loss to others caused by negligent acts, errors, or omissions in professional services.

A formal statement signed by the insured documenting the amount and details of a claim, often required before the insurer pays.

Coverage for physical damage to tangible property of others for which the insured is legally liable.

The dominant or legally recognized cause that sets a chain of events in motion and is sufficiently related to the resulting loss.

A licensed adjuster hired by the policyholder to document, present, and negotiate a property insurance claim.

An optional auto coverage that reimburses rental car costs during a covered repair period.

The cost to repair or replace damaged property with materials of like kind and quality at current prices, without any deduction for depreciation.

Informal shorthand for a reservation of rights communication from insurer to insured about potential coverage limitations.

A letter from an insurer stating it is investigating or defending a claim without waiving the right to later deny coverage.

The residual value of damaged property sold as scrap or rebuildable after a total loss.

The written description of damaged property and operations needed to return the insured to pre-loss condition.

An employee adjuster who handles claims solely for one insurance company.

A law limiting the time within which a lawsuit must be filed after a claim accrues.

The insurer's right to pursue a third party who caused the loss, after paying the insured, to recover amounts paid.

Vehicle repairs that fail to restore the vehicle to pre-loss condition in quality, safety, or appearance.

A proof of loss given under oath, often notarized, attesting to the accuracy of the claim; required by some policies or states.

Benefits when an injured worker cannot work at all for a limited period while recovering.

A company that handles claims processing and benefits administration on behalf of insurers or self-insured employers.

A claim by someone who is not the policyholder against the insured, typically covered by liability insurance.

Pausing or extending a legal deadline so the remaining time can run later.

When repair cost exceeds a threshold relative to actual cash value, or the vehicle is structurally unsalvageable, so the insurer pays ACV and takes salvage.

Excess liability insurance that sits above primary policies and may broaden coverage for certain claims.

Coverage that applies when the at-fault driver's liability limits are too low to cover your damages.

Coverage for your bodily injury (and sometimes property damage) when an at-fault driver has no liability insurance.

Policy language that limits or excludes coverage when a building has been unoccupied or vacant for a specified period.

A policy that agrees in advance on the value of insured property, so that amount is payable in full in the event of a total loss.

Services to help an injured worker return to suitable employment, including retraining and job placement.

Insurance providing medical benefits and wage replacement to employees injured in the course of employment, and protecting employers from most tort suits.

Industry-standard estimating software using localized unit pricing for property repair and reconstruction scopes.