Insurance Guide

Making sense of the insurance claims process can be challenging. When you need help understanding your policy coverage, we’ll help you find answers. Here are some common property insurance terms that come up when dealing with insurance claims:

Key Insurance Terms

Your deductible is how much money you are responsible for paying out of pocket for property damages before your insurance coverage kicks in. Your deductible is specified by your policy.

A coverage limit is the maximum dollar amount your insurer will payout for any property damages. If restoration expenses exceed that amount, the property owner is responsible for the difference between the total cost and their coverage limit.

Exclusions are the causes of damage that are not covered by a property insurance policy. If damage occurs to a property that falls under a policy exclusion, the property owner is financially responsible.

Depreciation is the decrease in the value of your property over time due to its age, wear, and tear. In many insurance policies, your payout can be influenced by your property’s loss in value from depreciation.

Non-recoverable depreciation is the portion of depreciation that is not covered by an insurance policy and has to be paid out of pocket by the property owner.

Replacement cost value (RCV) is what it would cost to replace an item with a new item that is of similar quality and kind. It does not take into account depreciation.

Actual cash value is the current value of damaged or destroyed property, taking into account depreciation.

Warranties are formal promises from manufacturers that they will replace an item free of charge if it is found to be defective within the warranty period. Warranties typically do not cover property damage. Some restoration contractors like Emergency Restoration Solutions also offer a warranty for their restoration services.

A Certificate of Completion is a formal document that restoration contractors and property owners sign after a restoration project’s completion saying that the work has been completed as promised.