Public adjusting is a language as much as a skill. The faster you learn these terms, the faster you can read a policy, argue a claim, and pass the exam. Here are the essentials.

Core Claims Terms

ACV (Actual Cash Value)

The value of damaged property after depreciation. Replacement cost minus wear and tear.

RCV (Replacement Cost Value)

What it costs to replace or repair the damage with new materials of like kind and quality, before depreciation.

Depreciation

The loss in value of property due to age and wear. The gap between RCV and ACV.

Recoverable Depreciation

The withheld depreciation an insurer pays back once repairs are completed and documented.

Deductible

The amount the policyholder pays out of pocket before coverage applies.

Scope of Loss

The detailed list of everything damaged and what it takes to repair or replace it. The heart of a claim.

Policy & Coverage Terms

Peril

The cause of a loss, such as wind, hail, fire, or water. Covered perils are those the policy insures against.

Endorsement

An amendment that adds, removes, or changes coverage on a policy.

Exclusion

Something the policy specifically does not cover.

Coinsurance

A clause requiring the insured to carry coverage up to a set percentage of value, or share in the loss.

Loss of Use / ALE

Additional Living Expense coverage that pays for temporary costs when a home is uninhabitable.

Ordinance or Law Coverage

Coverage for the extra cost of rebuilding to current building codes.

Process & People

First Notice of Loss (FNOL)

The initial report of a claim to the insurer. The start of the claims process.

Proof of Loss

A sworn statement of the amount and details of a claim, often required by the insurer.

Public Adjuster

The only licensed adjuster who represents the policyholder, paid a percentage of the recovery.

Company / Staff Adjuster

An adjuster employed by the insurance company to represent the insurer.

Independent Adjuster

An adjuster the insurer hires to handle claims on its behalf, still working for the carrier.

Appraisal

A dispute-resolution process in many policies where each side names an appraiser to settle the amount of loss.

Subrogation

The insurer’s right to recover a paid claim from a third party responsible for the loss.

Bad Faith

An insurer’s unreasonable failure to honor its obligations to the policyholder.

Xactimate

The estimating software widely used to price claims, line item by line item.

The Bottom Line

Learn the language and the rest of public adjusting gets easier: you read policies faster, argue claims better, and walk into the exam prepared. When you are ready to put these terms to work, we will get you licensed.

Next: how to become a public adjuster, or the exam guide.