Property claims glossary
This property claims glossary defines the thirty-six terms that run a US property claims operation, in plain language, each with its own page and a worked example in dollars. Reuse them freely with attribution. They're also available as clean JSON at /api/glossary.json.
- Actual cash value (ACV)
- The value of damaged property at the time of loss: replacement cost minus depreciation. Many policies settle at ACV first and release the depreciation later, once repairs are complete. Roof surfacing endorsements often convert older roofs from replacement cost to ACV, one of the most commonly missed settlement changes in property claims.
- Actual cash value (ACV): definition and example →How ClaimVision follows settlement basis →
- Adjuster
- The professional who investigates a claim, establishes the facts, applies the policy, and recommends or makes the payment decision. Staff adjusters are employed by the carrier; the role carries both the technical work of coverage and the human work of guiding a policyholder through the worst week of their year.
- Adjuster: definition and example →For claims managers →
- Bad faith
- The legal exposure a carrier faces for handling a claim unfairly: unreasonable delay, inadequate investigation, or denial without proper basis. The strongest protection is a consistent, documented, evidence-backed process: the same careful check applied to every claim, with the reasoning preserved.
- Bad faith: definition and example →Audit trail and defensibility →
- CAT event
- A catastrophe (hurricane, hailstorm, wildfire) that produces a surge of claims in a short window. CAT volume is the stress test of a claims operation: the same coverage rigor is owed on a multiple of the usual files, with the same headcount and regulatory clock.
- CAT event: definition and example →CAT surge without surge headcount →
- Claim file
- Everything the carrier holds on a claim: FNOL, reports, estimates, photos, policy and endorsements, correspondence, internal notes, and decisions. The file is the institution's memory of the claim. In a dispute, the file is the evidence.
- Claim file: definition and example →Audit trail →
- Claims leakage
- The gap between what a carrier should have paid under the policy and what it actually paid, through missed exclusions, unapplied limits, arithmetic that doesn't reconcile, and coverage granted by default under time pressure. Leakage is rarely one large error; it is thousands of small ones that were never visible.
- Claims leakage: definition and example →Claims leakage and missed coverage →
- Coverage determination
- The structured judgment of whether, and to what extent, a policy responds to a loss: verifying the loss event, the policy in force, the property and peril, exclusions, conditions, limits, and the resulting settlement basis. Done well it is sequential and consistent; done under pressure it becomes intuition: usually right, expensively wrong.
- Coverage determination: definition and example →How ClaimVision checks coverage →
- Cycle time
- The elapsed time from FNOL to resolution. Long cycle times are a common source of complaints, and complaints escalate: to regulators, to public adjusters, to counsel. Time spent locating information inside documents is the most compressible part of cycle time.
- Cycle time: definition and example →Cycle time and disputes →
- Declarations page
- The front page of the policy: named insured, property address, coverage limits, deductibles, policy period, and, critically, the list of endorsements attached. Experienced adjusters read it first, because it announces which promises in the base form have been amended.
- Declarations page: definition and example →Ask your claims data →
- Deductible
- The amount the policyholder bears before coverage responds. Property policies increasingly carry separate, percentage-based deductibles for wind/hail or hurricane (calculated on the dwelling limit, not the loss), which is a frequent source of settlement arithmetic errors.
- Deductible: definition and example →Findings with a number attached →
- Depreciation
- The reduction in property value from age, wear, and condition. In claims it is the bridge between RCV and ACV, and it must be applied line by line: a roof depreciates differently from a water heater. Whether depreciation is recoverable after repairs is governed by the policy and, in some states, by statute.
- Depreciation: definition and example →What we’ve proven →
- DP-3 policy
- A dwelling fire form commonly used for rental and non-owner-occupied properties. Structurally similar to an HO-3 for the dwelling, but with narrower contents and liability provisions, and its own endorsement patterns.
- DP-3 policy: definition and example →What policy forms does ClaimVision support? →
- Endorsement
- A document that amends the base insurance policy: adding, removing, or narrowing coverage. Real property policies carry dozens. Because endorsements can override both the base form and each other, coverage cannot be determined from the policy form alone; you must follow the full chain of amendments.
- Endorsement: definition and example →Coverage and endorsements →
- Endorsement chain
- The layered sequence of endorsements as they apply to a specific policy and peril: which amendment overrides which, and what remains of the base promise once all layers apply. Following the chain correctly is the difference between reading the policy and understanding it. ClaimVision resolves the chain and shows the reasoning.
- Endorsement chain: definition and example →Endorsements as a chain, not a pile →
- Exclusion
- Policy language that removes coverage for specified causes, property, or circumstances: wear and tear, neglect, flood, earth movement, and many more. Missed exclusions are a principal source of claims leakage; misapplied exclusions are a principal source of bad-faith exposure. Both failure modes come from reading under time pressure.
- Exclusion: definition and example →Claims leakage →
- First notice of loss (FNOL)
- The initial report that a loss has occurred: the moment a claim is born. Everything the carrier later knows about the claim accumulates from FNOL onward as documents: reports, estimates, photos, correspondence. Cycle time is usually measured from FNOL to payment.
- First notice of loss (FNOL): definition and example →Cycle time and disputes →
- Fraud signal
- A pattern that warrants investigation before payment: losses inconsistent with the reported peril, no corroborating storm activity at the location, patterns across claims. A signal is not an accusation. It is a reason for a human to look closer.
- Fraud signal: definition and example →How it works →
- HO-3 policy
- The most common US homeowners form: open-perils coverage on the dwelling (everything is covered unless excluded) and named-perils coverage on contents. The 'unless excluded' clause is what makes exclusion analysis decisive on HO-3 claims.
- HO-3 policy: definition and example →What policy forms does ClaimVision support? →
- Independent adjuster (IA)
- A contract adjuster engaged by carriers, most heavily during CAT surges. Surge volume brings many adjusters onto one book at once, which is precisely when a consistent coverage check earns its keep: every IA file gets the same careful review.
- Independent adjuster (IA): definition and example →CAT surge →
- Large loss
- A claim large enough to warrant senior review, often six figures and up, with hundreds of estimate line items and complex coverage. Large losses concentrate leakage risk: more lines, more endorsements, more places for the arithmetic to drift.
- Large loss: definition and example →What we’ve proven →
- Loss run
- A report of a policyholder's claims history: dates, causes, amounts paid, and status. Underwriters use loss runs to price risk; claims teams use them to spot patterns. A third claim on the same street in three years is information.
- Loss run: definition and example →How it works →
- Ordinance & law coverage
- Coverage for the extra cost of rebuilding to current building codes rather than to the property's original construction. Many homeowners forms include a limited amount, often a percentage of the dwelling limit, and an endorsement can raise it; either way it carries its own sub-limit. Frequently missed in both directions: not applied when owed, or paid beyond what the policy grants.
- Ordinance & law coverage: definition and example →Coverage and endorsements →
- Peril
- The cause of loss: wind, hail, fire, water, theft. Coverage often turns on the peril's precise identity: wind-driven rain and rising water can produce identical living-room damage with opposite coverage outcomes.
- Peril: definition and example →Coverage determination →
- Prompt-pay laws
- State statutes setting deadlines for acknowledging, deciding, and paying claims, with penalties and interest for missing them. They convert cycle time from a service metric into a compliance obligation with a clock attached.
- Prompt-pay laws: definition and example →Cycle time and disputes →
- Proof of loss
- A sworn statement from the policyholder setting out the amount claimed and the supporting facts. Policies typically set a deadline for it, and disputes over its completeness are a common source of friction and litigation in property claims.
- Proof of loss: definition and example →Audit trail and defensibility →
- Public adjuster
- An adjuster engaged by the policyholder to negotiate their claim. Rising public-adjuster involvement on a carrier's book usually signals that policyholders don't trust the first answer. It's a lagging indicator of cycle time and communication quality.
- Public adjuster: definition and example →Customer experience →
- Recoverable depreciation
- Depreciation withheld from the initial ACV payment that the policyholder can claim back after completing repairs within the policy's (or state's) deadline. Whether it was flagged in the decision letter often determines whether the policyholder ever recovers it.
- Recoverable depreciation: definition and example →Ask your claims data →
- Replacement cost value (RCV)
- The cost to repair or replace damaged property with materials of like kind and quality, without deduction for depreciation. RCV is what the estimate totals; what the carrier actually owes depends on the policy's settlement provisions, endorsements, and deductible, which is where reconciliation errors creep in.
- Replacement cost value (RCV): definition and example →Findings with a number attached →
- Reserve
- The carrier's running estimate of what a claim will ultimately cost, set early and adjusted as facts develop. Inaccurate reserves distort everything downstream (reinsurance, pricing, and financial reporting), and reserves set on unread files are guesses.
- Reserve: definition and example →For executives →
- Salvage
- The carrier's right to take ownership of damaged property it has paid for (a totaled roof's materials, damaged contents) and recover residual value. Small per claim, meaningful at portfolio scale, routinely forgotten.
- Salvage: definition and example →Claims leakage →
- Scope of loss
- The itemized account of what was damaged and what work is required: the factual foundation under the estimate. Disputes about scope (what's damaged) are distinct from disputes about price (what it costs), and conflating them prolongs claims.
- Scope of loss: definition and example →Cycle time and disputes →
- Statement of loss
- The document that itemizes what the carrier proposes to pay: line items, deductions, depreciation, deductible, and net payable. When the statement of loss doesn't reconcile with the estimate and the policy, money leaks. Reconciling it by hand across hundreds of lines is a working session; it is exactly the arithmetic ClaimVision reconciles.
- Statement of loss: definition and example →What we’ve proven →
- Straight-through processing
- Claims that complete without human touch because every check has passed: coverage clear, figures reconciled, no fraud signals, documentation complete. In property claims it is earned, not declared: ClaimVision proposes, people decide, and the routine tier widens as trust accumulates.
- Straight-through processing: definition and example →Routine claims, straight through →
- Subrogation
- The carrier's right to recover what it paid on a claim from a third party who caused the loss: a negligent contractor, a product manufacturer, another insurer. Missed subrogation opportunities are a quieter form of leakage: money that was recoverable and never pursued.
- Subrogation: definition and example →Claims leakage →
- Supplement
- An addition to the original estimate for damage or costs discovered after initial approval. They are common, legitimate, and a known leakage channel when supplements aren't re-checked against the policy with the same rigor as the original estimate.
- Supplement: definition and example →Claims leakage →
- Wind/hail deductible
- A separate deductible for wind and hail losses, typically a percentage of the dwelling limit rather than a flat dollar amount. A 2% deductible on a $500,000 dwelling is $10,000. Applying the standard deductible instead is a four-figure error, per claim.
- Wind/hail deductible: definition and example →Findings with a number attached →
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