Important Terms

Terms are important to understand because once your property has been documented for a roof repair or replacement, the estimate has been written and the claims process is well underway. Understanding the important terms is good to have when communicating with the an insurance adjuster.

Computed by subtracting depreciation from the replacement cost. The depreciation is usually calculated by establishing a useful life of the item and determining what percentage of that life remains. This percentage times the replacement cost gives the ACV.

The amount that the insurance company is holding on to until you declare that the work has been completed. If all the rules are followed, this amount will be released to the property owner and contractor after the project is complete.

When the insurance policy contract does not allow for the recoverable depreciation to be collected on the claim.

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