Keep this page open while you read an estimate or a contract. When a term is used differently in your own policy, the policy's definition is the one that counts. Ask your agent or adjuster to explain anything that still is not clear, and ask for the explanation in writing when it affects money.

Insurance and claim terms

Replacement cost value (RCV)
The estimated cost to repair or replace damaged property with materials of like kind and quality, without a deduction for age.
Actual cash value (ACV)
Replacement cost minus depreciation. Often the first amount paid on a replacement cost policy.
Recoverable depreciation
The part of depreciation that may be paid after repairs are completed, under policies that allow it.
Supplement
A request to add scope or cost to an approved estimate, usually after hidden damage is found.
Ordinance or law coverage
Coverage, often limited, that may pay for upgrades required by current building codes when damaged property is repaired.
Additional living expense
Coverage for extra costs of living elsewhere while the home cannot be lived in.
Deductible
The amount of a covered loss the policyholder pays before insurance pays. It is subtracted from the claim payment.
Overhead and profit (O&P)
An allowance some estimates include when a general contractor coordinates multiple trades.
Loss draft
An insurance check that includes the mortgage lender as payee, often handled by the lender's claims department.

Construction and estimate terms

Scope of work
The written description of what will be repaired, replaced or built.
Line item
One entry in an estimate: a task or material with a quantity and unit.
Detach and reset
Removing an item that is not damaged so work can be done, then reinstalling it.
Flood cut
Removing drywall at a set height above the floor after water damage so the cavity can dry.
Rough-in
Installing wiring, piping or ductwork inside open walls before they are inspected and covered.
Punch list
The list of small items to correct or finish before a job is considered complete.
Change order
A signed document that changes the scope, cost or schedule of a contract.
Lien waiver
A document in which a contractor or supplier gives up lien rights for amounts that have been paid.
Natural break
A doorway, corner or transition where a new finish can meet an old one without an awkward seam.
Sistering
Fastening a new framing member alongside a damaged one to restore strength.

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