These definitions describe how the terms are commonly used in the United States. Policies differ, and your own policy's definitions control. When a term matters to your claim, ask your adjuster to explain it for your specific coverage and to put the answer in writing.

Insurance terms

Actual cash value (ACV)
What a damaged item or structure was worth at the time of loss, generally its replacement cost minus depreciation for age and wear.
Replacement cost value (RCV)
What it costs to replace the item or repair the structure with similar materials today, without subtracting depreciation.
Recoverable depreciation
Under many replacement cost policies, the amount held back from the first payment and released after you actually repair or replace.
Additional living expenses (ALE)
Coverage for the extra costs of living somewhere else while your home is unlivable. Also called loss of use.
Dwelling coverage
The part of a homeowner's policy that pays to repair the structure itself, including attached structures like an attached garage.
Ordinance or law coverage
Optional or limited coverage for the extra cost of meeting current building codes when repairing older construction.
Proof of loss
A formal, signed statement of what you are claiming, sometimes required by a deadline in the policy.
Public adjuster
A licensed adjuster you can hire to represent you, rather than the insurer, usually for a percentage of the settlement.

Restoration terms

Mitigation
Work done to stop damage from getting worse: board-up, tarping, water removal, drying and initial cleaning.
Scope of loss
The written, itemized list of damage and the work needed to repair it, often produced with estimating software such as Xactimate.
Pack-out
Inventorying, packing and moving contents off site for cleaning and storage during repairs.
Dry chemical sponge
A dry, vulcanized rubber sponge used to lift dry soot from surfaces without water.
Encapsulation
Sealing cleaned framing or surfaces with a coating that locks in remaining odor before they are covered.
Thermal fogging
Dispersing a heated deodorizer as a fine fog to reach places smoke went. Used after cleaning, not instead of it.
Hydroxyl generator
Equipment that produces hydroxyl radicals to break down odor compounds; generally considered safe to run with people present when used as directed.
Negative air
Using fans with HEPA filtration to keep a work area at lower pressure so dust and soot do not escape to clean rooms.

Common questions

Where do I find my policy's definitions?

Most policies have a definitions section near the front and coverage-specific terms within each section. If you do not have a copy, ask your agent or insurer to send the full policy, including endorsements.

General information for Centennial, not a quote or professional advice. In an emergency, call 911.