Restoration & Insurance Glossary

ACV RCV ALE Deductible IICRC Xactimate Peril Mitigation Sub-limit Endorsement Cat 1/2/3 Class 1-4 Adjuster Scope Supplement Proof of loss

ACV (Actual Cash Value)

Actual Cash Value

What your damaged stuff is worth today — today's market price minus depreciation for age and wear. ACV settles tend to feel low because they take depreciation upfront.

Real-world example: Your 8-year-old carpet had a replacement cost of $4,000. After depreciation, the insurer's ACV value is $1,200. You'd collect the rest after repairs if you have RCV coverage.

RCV (Replacement Cost Value)

Replacement Cost Value

What it costs to replace your damaged property at today's prices, without subtracting depreciation. Most modern Indiana HO-3 policies include RCV for the dwelling, but personal property RCV may require an endorsement.

Why it matters: RCV usually gets paid in two checks — the ACV piece up front, then the depreciation "holdback" after you complete the repairs.

ALE (Additional Living Expenses)

Additional Living Expenses / Loss of Use

Coverage that pays the extra costs to live somewhere else while your home is unlivable — hotel, meals, pet boarding, laundry, extra mileage. Coverage is usually a percentage of your dwelling limit (20-30% is typical) and can run out faster than you'd think on a serious restoration.

Reality check: 90 days in a Carmel or Fishers extended-stay hotel can run $14,000-$22,000. Confirm your ALE limit BEFORE you need it.

Deductible

The amount you pay out of pocket before insurance starts paying. Standard Indiana deductibles range $500-$2,500, but many policies have separate higher deductibles for wind/hail (sometimes 1-5% of dwelling value).

Important: A 2% wind/hail deductible on a $400K Hamilton County home is $8,000 — not $1,000. Read your dec page.

IICRC

Institute of Inspection, Cleaning and Restoration Certification

The industry-standard certifying body for water damage restoration, fire and smoke restoration, mold remediation, applied structural drying, and more. When you hire IICRC-certified technicians, you're hiring someone who has tested in to the same baseline standards every reputable carrier expects.

Ask any contractor: "Are your technicians WRT and ASD certified?" If they don't know what those acronyms mean, that's your answer.

Xactimate

The pricing and estimating software almost every major insurance carrier uses to value restoration work. Line items, regional pricing, depreciation schedules — the whole claim economy runs on it. A "Xactimate-grade scope" means an estimate the adjuster can review line-by-line.

Why it matters: If your restoration contractor doesn't speak Xactimate fluently, the adjuster will reduce or deny line items you actually need.

Peril

An event your policy covers (or excludes). "Named peril" policies only cover specifically listed events. Most modern HO-3 policies are "open peril" for the dwelling — everything except what's specifically excluded is covered.

Mitigation

Emergency action to stop damage from getting worse. Water extraction, drying, board-up, tarping, contents removal. Insurance carriers require you to mitigate — if you let damage spread because you waited, they can deny part of the claim. We start mitigation the moment we arrive, before any adjuster has been on site.

Sub-limit

A cap inside your policy for a specific category of loss. Common ones in Hamilton County HO-3 policies: $1,500 jewelry, $2,500 firearms, $5,000-$10,000 mold, $5,000-$25,000 water/sewer backup.

Heads-up: If your mold sub-limit is $5,000 and your remediation costs $9,000, that delta comes out of your pocket unless you bought higher mold coverage.

Endorsement

An add-on to your standard policy that expands, restricts, or modifies coverage. Examples: water/sewer backup endorsement, scheduled personal property endorsement, ordinance-or-law endorsement, extended dwelling replacement cost.

Category 1, 2, 3 water

IICRC classifies water damage by contamination level.

Category 1 (clean): Supply line, fresh-water faucet, water heater. Treated quickly, returns lowest contamination risk.
Category 2 (grey): Washing machine, dishwasher, aquarium. Has some contamination — still requires antimicrobial treatment.
Category 3 (black): Sewage, river/storm intrusion, toilet overflow with feces. Considered biohazardous. Specialized PPE, OSHA disposal, full sanitization required.

Class 1, 2, 3, 4 (drying)

IICRC's drying classes describe how much material is wet and how hard it'll dry. Drives equipment count and dry time.

Class 1: Small area, low-porosity materials. Easiest to dry.
Class 2: Whole room or larger; carpet and pad wet.
Class 3: Water came from overhead — ceilings, walls, insulation, floors. Most equipment-intensive.
Class 4: Specialty drying for hardwood, plaster, concrete, dense materials. Long dry times, specialty equipment.

Adjuster

The insurance-company employee (or independent contractor) who inspects your loss, builds the claim scope, and decides what's covered. You can request a reinspection or a different adjuster if you feel undervalued.

You can also hire: A public adjuster works for you, not the carrier — they take a percentage but advocate on your behalf for complex claims.

Scope (of loss)

The line-item list of what got damaged and what it'll take to repair. Both the carrier's adjuster and your restoration contractor build scopes — and they don't always match. When they don't, your contractor submits a "supplement."

Supplement

An additional claim filing for damage or scope items the adjuster missed or initially declined. Hidden water damage discovered after demo, additional drying time, required code upgrades — all common supplements. A good restoration company files supplements aggressively when warranted.

Proof of loss

A sworn written statement from you to the carrier listing the loss, the damage, and the amount you're claiming. Usually due within 60 days. Don't blow off the deadline — carriers can deny claims for failure to submit on time.

Term you didn't see here?

We'll explain anything in your policy or claim paperwork in plain English. No charge, no commitment.

Call Michael