Basic Terms To Help You Understand Your Claim Estimate

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Handling home insurance claims can be an overwhelming task when trying to recover from water damage to your property in Ottertail, MN 56571. Between the insurance company, the cleanup services, and 3rd party billing companies, the claims process after a storm or flood can be a lot to take in. The estimate alone can be confusing and difficult to decipher. While it is always recommended to call your insurance provider for assistance, here are a few basic terms that may be helpful in decoding the language on your claims estimate:


1. Replacement Cost Value


Replacement Cost Value is the amount it would cost to replace your damaged items today. It is not the amount that you paid for the item on the original date of purchase. RCV does not account for depreciation, or reduction in your property value over time.


2. Labor Minimums

This item includes the total labor charges incurred to fix and restore your property. For example, a water cleanup and restoration company could charge the hourly rate for any hours worked, the cost of transportation, and any associated costs incurred by the contractor to repair your home.


3. Actual Cash Value


Also referred to as ACV, this value refers to the cost to replace your damaged items today (RCV) less any depreciation on your items.


4. Net Claim

The Net Claim is the amount paid to you, minus the deductible. You are responsible for meeting your home insurance deductible prior to any claims being paid out. You may also notice “Net Claim if Additional Amounts are Recovered.” If any depreciation is recoverable or any expenses are expected to be incurred later, you may be eligible for additional payments.


Dealing with storm damage is a hassle on its own and understanding your home insurance should not be a source of added stress. The key terms listed above will help you digest the basics. Remember, if you need additional help breaking down the information, you can always call your insurance company to ask for clarification.
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