Insurance & Xactimate Glossary

The replacement cost of damaged property minus depreciation. ACV represents what the item is worth at the time of loss, factoring in age, wear, and condition.

Coverage that pays for temporary housing, meals, and other costs when a policyholder cannot live in their home due to a covered loss. Also called Loss of Use.

A professional who investigates insurance claims, determines the extent of damage, and calculates the appropriate settlement amount. Can be a staff adjuster (employed by the carrier), independent adjuster, or public adjuster.

A dispute resolution process in insurance where each party (insured and insurer) hires an appraiser, and an umpire breaks any tie. Used when parties disagree on the loss amount but not coverage.

A legal agreement where the policyholder transfers claim rights to a third party (usually a contractor), allowing the contractor to bill and collect directly from the insurer.

The insurance company that underwrites and issues the policy. The carrier is financially responsible for paying covered claims up to policy limits.

A two-to-four letter code in Xactimate that groups line items by trade or area (e.g., DRY = Drywall, PLM = Plumbing, RFG = Roofing, FLR = Flooring).

IICRC classification of water contamination: Category 1 (clean — supply line), Category 2 (gray — dishwasher, washing machine), Category 3 (black — sewage, flooding). Category determines scope of remediation.

A formal request by a policyholder to their insurance company for payment or coverage after a loss event. The claim triggers the adjustment process.

IICRC classification of water intrusion severity: Class 1 (least — partial room), Class 2 (significant — entire room, wicking up walls), Class 3 (most — ceiling, walls, floors saturated), Class 4 (specialty — hardwood, concrete).

Physical barriers (polyethylene sheeting, negative air) erected to isolate a work area during mold remediation or asbestos abatement, preventing cross-contamination of unaffected areas.

A claim for personal property (furniture, electronics, clothing) damaged or destroyed in a covered loss. Contents are covered under Coverage C of a homeowner's policy, separate from the structure.

The portion of a homeowner's policy that covers the physical structure of the home, including attached structures like a garage. Does not include land value.

The amount a policyholder must pay out of pocket before insurance coverage kicks in. Common deductibles range from $500 to $5,000 for property claims.

The decrease in value of property over time due to age, wear, and obsolescence. In insurance, depreciation is subtracted from replacement cost to determine ACV.

An adjuster who handles claims remotely without visiting the loss site. They review photos, contractor estimates, and documentation to make coverage and payment decisions.

Industrial dehumidifiers, air movers, and air scrubbers used in water damage restoration. Equipment charges are billed per unit per day in Xactimate (e.g., WTRDRY line items).

The process of a carrier or TPA reviewing a submitted estimate for accuracy, scope appropriateness, and pricing compliance before approving payment. Common review platforms include XactAnalysis and ClaimXperience.

Xactimate's native project file format. Contains estimate data (line items, pricing), room sketches, photos, and project metadata in a compressed, encrypted XML package.

The initial report of a claim to the insurance company. FNOL begins the claims process and typically includes the date of loss, type of damage, and policyholder information.

Institute of Inspection, Cleaning and Restoration Certification. The non-profit body that sets industry standards (S500 for water, S520 for mold) and certifies restoration professionals.

A claims adjuster who works as a contractor for insurance companies rather than as a direct employee. IAs handle overflow claims, catastrophe work, and specialized losses.

A single entry in an Xactimate estimate representing a specific task or material, identified by a selector code. Each line item has a quantity, unit of measure, and calculated price.

The date when the damage occurred. The loss date determines which policy is in effect, which price list applies, and starts any applicable filing deadlines.

A saved template in Xactimate containing a pre-built list of line items for common repair scenarios. Macros speed up estimating by auto-populating standard items for typical damages.

An insurance program where the carrier directs policyholders to pre-approved contractors. The carrier negotiates rates, and the contractor works under program guidelines and pricing constraints.

Emergency actions taken immediately after a loss to prevent further damage — tarping a roof, extracting standing water, boarding up windows. Mitigation is typically a separate claim from the repair estimate.

The process of documenting moisture readings throughout a structure using moisture meters and thermal imaging. Creates a visual record of affected areas to determine drying scope.

A markup (typically 10% overhead + 10% profit = 20%) added to an estimate when a general contractor manages multiple subcontractors. O&P compensates the GC for coordination, supervision, and business costs.

The process of inventorying, packing, and removing a policyholder's personal belongings (contents) from a damaged structure for cleaning, storage, or disposal.

A contractor or restoration company on an insurance carrier's approved list. Preferred vendors agree to carrier pricing schedules and response time requirements in exchange for steady claim referrals.

A database of labor, material, and equipment costs specific to a geographic area and time period. Xactimate price lists are updated monthly and vary by state/region.

A licensed adjuster who works exclusively for the policyholder (not the insurance company) to negotiate claim settlements. PAs typically charge 10–20% of the settlement.

The repair and rebuild phase after mitigation and demolition are complete. Reconstruction returns the property to pre-loss condition and is estimated separately from emergency services.

The portion of depreciation that can be recovered by the policyholder after repairs are completed. With an RCV policy, the insured receives the withheld depreciation upon proof of completed work.

The cost to replace or repair damaged property with materials of similar kind and quality at current prices, without deduction for depreciation.

A detailed list of all repairs, materials, and tasks needed to restore a property to pre-loss condition. The scope drives the estimate and defines what work the contractor will perform.

The unique alphanumeric code that identifies a specific line item within a category in Xactimate (e.g., DRYWLL for standard drywall). Combined with the category code, it forms the full item identifier.

Xactimate's built-in floor plan tool that calculates room measurements (wall area, floor area, perimeter) used to quantity line items. Sketches define room geometry with walls, openings, and ceiling heights.

The process by which an insurance company seeks reimbursement from a third party responsible for causing the loss, after paying the policyholder's claim.

An additional claim submission for damages or repairs discovered after the initial estimate. Supplements are common when hidden damage is found during restoration work.

A company that handles claims processing on behalf of an insurance carrier. TPAs manage adjuster networks, review estimates, and administer payments without underwriting risk.

When repair costs exceed a certain percentage (often 70–80%) of the property's insured value, making it more economical to pay the policy limit than to repair. The threshold varies by state and policy.

Verisk's claim assignment and workflow platform. Insurance carriers use XactAnalysis to assign claims to adjusters, track estimate status, and manage the review process.

The industry-standard estimating software by Verisk (formerly Xactware) used by insurance carriers, adjusters, and contractors to create repair cost estimates for property claims.

The cloud-based version of Xactimate accessible through a web browser. Offers the same estimating functionality as the desktop version with automatic updates and anywhere access.