Hail Damage Glossary

Minnesota Hail Damage Glossary and Minnesota Storm Damage Term Guide

Hail damage claims in Minnesota and insurance adjuster lingo is confusing and frustrating. Understanding key terms and the meaning of phrases used by your insurance adjuster proves important to a complete and fair insurance settlement. Having helped hundreds of Minnesota homeowners navigate their hail damage and storm damage claims, we have gathered commonly used terms and phrases into our own Hail Damage Glossary. We hope you find this list both helpful and informative.

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Actual Cash Value or “A.C.V.”- Full replacement cost less depreciation.

Additional Living Expense- This is also known as A.L.E. or Loss of Use. It is additional expenses beyond what you would normally spend living at home.

Adjuster- A person who investigates and settles insurance claims.
Staff Adjuster- employee of the insurance company’s claim department.
Independent Adjuster- a person who charges a fee to an insurance company to adjust the company’s claims.
Public Adjuster- a person hired by you to settle the claim with the insurance company on your behalf.

Advance Payment- Funds provided to you to pay for immediate needs, to be deducted from the final settlement.

Agent- A person who sells the products of the insurance company. The person responsible for your insurance coverage needs and guides you the correct insurance coverages.

Ambiguities- Used interchangeably with “gray area.” These are parts or words of the policy that mean more than one thing or may be unclear.

Appearance Allowance- An argument used by adjusters to explain paying less than the full value of a repair or replacement because there is still some functional use of the property that is damaged.

Appraisal Clause- The way the policy provides to resolve disagreements over amounts and extent or scope of damage to property, also commonly called arbitration.

Bad Faith- These two words identify wrongdoing by the insurance company when the company fails to treat you fairly and in good faith.

Burden of Proof- The responsibility of one party to produce evidence to support his position.

By-Laws- Rules or regulations adopted by a condominium association.

Cash Out- An amount of money in lieu of the cost to properly repair or replace an item.

Conditions- A qualification, limitation, or obligation of a party to the insurance contract.

Contiguous- Adjoining or in close proximity.

Cosmetic Damage- A term explaining damage that does not affect the functional usage or structural stability of the property. Superficial damage.

Debris Removal Clauses- Additional coverage to pay for debris that must be removed but is not part of the repair process for damage to your property.

Declarations Page- The first page to an insurance policy that identifies the insured, the property insured, the address of the property, the agent, the amount of coverage, the coverage forms, and when coverage takes effect.

Deductible- A clause in the policy stating the amount of the loss you must absorb.

Depreciation- The loss in value of property due to age, use or obsolescence.

Duties of Insured After Loss- Your obligations under the policy that you must perform prior to the insurance company fulfilling its promise to pay.

Exclusions- usually a laundry list of things that can damage your property but are not covered by the policy.

F.E.M.A. - Federal Emergency Management Agency.

Fraud- Knowingly presenting false or fraudulent claims to the insurance company (knowingly implies consciously and intentionally).

Good Faith- Honesty of purpose and freedom from intention to defraud by either you or the insurance company.

Gray Areas- (see ambiguity)

Holdback Depreciation- the amount of money representing the depreciation of your property that is withheld from your initial settlement until the repairs of the damage are complete or the items are replaced.

Homeowners Policy- A package insurance policy with property and liability coverages.

HO-3 form- this is the most common type of Homeowners policy. It provides all risk coverage for the dwelling and other structures and named perils for personal property.

Late Claim- Filing a claim beyond a reasonable amount of time after the damage occurred.

Legal Department- A division within most insurance companies where coverage questions and coverage denials are reviewed.

Lien Waivers- A waiver of a subcontractor’s or material supplier’s right to make a claim against your property to secure payment for a debt.
Like Kind and Quality- The same kind and quality of product or as close to the same kind and quality of product that can be obtained to replace the property that was damaged or destroyed.

Local Building Codes- Building construction standards for safety set by local governmental authorities.

Negotiation- A process of communication between two parties to agree on the terms and conditions of a settlement.

Other Structures- Buildings or structures on your property that are not attached to your home.

Overhead and Profit- These terms are usually used together to represent the expenses and profit of a general contractor. Insurance companies try to limit these two items to 20% of the total cost of the repair job. It is designed to compensate General Contractors for multiple trade coordination.

Partial Payment- A payment for the agreed amount of the claim with the understanding it is only partial satisfaction of the claim.

Personal Property- Insurance lingo for anything you own that is not a structure or a building.

Power Surge- A spike or jump of electricity that may damage your personal property.

Price Guide- The list of prices an adjuster uses to write estimates, commonly using a computer program called Xactimte.

Promissory Note- A signed document promising to pay another a specified amount of money.

Proof of Claim- Insurance words having a special meaning in Minnesota.
When you state you are submitting your Proof of Claim, the adjuster must respond to your claim by a certain time.

Proof of Loss- Insurance words that have two meanings, generally the form (provided by the adjuster) you sign and submit for payment of your claim. It can also mean your documents that support your claim (such as estimates or receipts).

Recorded Statement- Questions asked by the adjuster over the phone or in person, recorded on tape. It preserves information regarding the claim.

Replacement Cost- Today’s cost to replace an item with “Like Kind and Quality.”

Replacement Cost Coverage- Insurance coverage which pays the total cost to replace the property with no deduction for depreciation.

Salvage- The useful portion of the property which remains after it has been damaged.

Scope of Repair- The extent of damage or type of repairs needed due to the disaster.

Settlement- An agreement between the insured and the insurance company on the amount to pay for the claim.

Square- A unit of measure used in roofing. One square is equal to one hundred square feet. An area ten feet by ten feet.

Stated Value- See Valued Policy Provision.

Statement Under Oath- Also referred to as an Examination Under Oath. A series of questions put to the insured, under oath, in front of a court reporter.

Supplemental Claim- An additional claim made after payment has already been made on the same claim.

Temporary Repairs- Any reasonable repair which protects the property from further damage.

Terminal Velocity- The greatest speed achieved by a free falling object. (Hail)

Total Loss- Constructive, the cost to repair exceeds the value.

Unfair Claim Practices Act- This is the generic term for the set of laws of each state that say an insurance company must fulfill its promises to the policyholder according to certain rules. These rules set the minimum standard of conduct.

Valued Policy Provisions- A policy provision required by state law which requires the insurance company, in the event the home is a total loss, to pay the full amount for which the home is insured.

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Berkeshire Exteriors is a Minneapolis Roofing Contractor based in the Twin Cities. Each year, hundreds of Minnesota homeowners realize the benefits of working with us on their roof replacement project. It would be our pleasure to demonstrate our capabilities and show you how our unique roof replacement systems will benefit you in replacing your roof. We are happy to schedule a complimentary quick roof evaluation when it’s convenient for you and your schedule, not ours. We are ready to meet any roofing challenge you face and will make your hail damage and or storm damage claim process and repair project easy!

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