Actual Cash Value (ACV) – the current market or replacement value of an insured property at the time it is damaged or otherwise subject to a covered loss; taking into account the item’s original cost, age, wear and tear, and depreciation. ACV is the value of the property in its used condition, not its brand new or replacement cost.

Adjuster’s Approved Estimate – the final assessment or valuation of the damages or losses associated with an insurance claim, as determined by an insurance claims adjuster.

Certificate of Completion (COC) – See Certificate of Satisfaction.

Certificate of Satisfaction (COS) – a formal document provided by the property owner or client to the contractor to confirm that they are satisfied with the completed work. It serves as evidence that the restoration or construction project has been successfully completed according to the terms of the contract, and the client has no further claims or concerns regarding the work. Sometimes referred to as Certificate of Completion.

Change Order – a written document that formalizes changes or modifications to an existing contract or construction project. It is typically used when there is a need to alter the original scope of work, specifications, or terms of the contract after it has been agreed upon by the contracting parties.

Claim Amount – the total amount of the cost of repairs for a claim.

Claim Check – a check for insurance claim funds issued by an insurance carrier that is intended to pay for the restoration of a damaged property.

Claim Number – number designation of claim at insurance company.

Claim Tracking Number (aka ILD#) –  a designation some mortgage lenders use to keep track of claims internally.

Contractor’s Bid (Contract) – a formal written proposal submitted by a restoration contractor to a property owner, outlining the contractor’s plan for performing restoration work, including details such as the scope of work, materials to be used, labor costs, project timeline, and the total estimated cost of the project.

Contractor’s Estimate – A contractor’s estimate, also referred to as a construction estimate, is a detailed document provided by a construction professional (contractor) to a potential client or project owner. This document outlines the anticipated costs, materials, labor, and timeline associated with a construction project.

Contractor’s License – A contractor’s license is a legal document or certification issued by a government authority, typically at the state or local level, that grants individuals or businesses the legal right to engage in construction-related activities for compensation within a specific jurisdiction. The issuance of contractor’s licenses is a regulatory measure aimed at ensuring that construction work is performed safely, competently, and in compliance with relevant building codes and regulations. Note, this is not required by all states and/or municipalities.

Contractor’s W-9 form – IRS Form W-9, officially titled “Request for Taxpayer Identification Number and Certification,” is a document used in the United States for tax-related purposes. It is typically provided by individuals or entities, such as independent contractors, freelancers, vendors, and other payees, to request or verify the taxpayer identification number (TIN) of the person or business who will be receiving income, making payments, or performing certain financial transactions.

Contractor’s Waiver of Lien (WoL) – a legal document signed by a contractor or subcontractor involved in a construction project. This document effectively waives or relinquishes the contractor’s right to place a lien on the property or assets of the project owner (usually the property owner) in exchange for payment.

Declaration of Intent to Repair – document signed by contractor where the contractor agrees that they intend to repair the property to a state of equal or greater value to before the damage occurred.

Depreciation – the reduction in the value of an insured property over time due to factors such as wear and tear, age, and obsolescence calculated as the difference between the Actual Cash Value (ACV) and Replacement Cost Value (RCV).

Disbursement Check – a check for funds issued from the mortgage lender from the original claim funds that are disbursed to pay the contractor for the cost of repairs.

Escrow Account – an account at the mortgage lender that is used to hold insurance claim funds while they are awaiting disbursement.

Insurance Adjuster’s Approved Estimate (ADJ EST) – document made by insurance adjuster that details the estimated cost of repairs for the property of loss. This estimate serves as a crucial component of the claims process, as it helps determine the amount of compensation or reimbursement that the policyholder is entitled to receive.

Large Loss Agreement – a contractual arrangement or agreement made between an insurance company and a policyholder (or their representative) in situations where the insured property has sustained extensive damage or loss. This type of agreement is more commonly found in commercial insurance, particularly in property and casualty insurance, and it addresses the handling of claims for significant or catastrophic losses.

Lien – A lien is a legal claim or encumbrance placed on a person’s property or assets as collateral to secure the payment of a debt or the fulfillment of an obligation. In essence, it gives the creditor the right to take possession of or sell the property if the debtor fails to meet their financial obligations. Liens are commonly used in various contexts, including mortgages, car loans, and unpaid taxes, to protect the interests of the party owed money.

Loan Number – number designation of loan or account with mortgage lender. Required to gain access to your account with a mortgage lender.

Mitigation – the actions taken to reduce or minimize the immediate and long-term impact of a disaster, such as fire, flood, storm, or other catastrophic events. Mitigation measures are typically implemented to prevent or lessen damage to properties and to promote safety. Mitigation efforts can vary widely depending on the type of disaster and the specific circumstances but generally aim to reduce the severity of the event’s effects.

Monitored Claim – typically refers to a situation where the lender actively oversees and tracks the progress of an insurance claim made by the property owner or homeowner. This monitoring process is often conducted to ensure that insurance proceeds received from the claim are used to repair or rebuild the damaged property, which serves as collateral for the mortgage.

Overage Check – a payment issued by the mortgage lender to the property owner or the property owner’s insurance company when the amount of insurance proceeds for property damage exceeds the remaining balance of the mortgage on the property.

Property Inspection – a property inspection is a comprehensive examination and assessment of a real estate property’s condition, typically conducted by a qualified inspector or inspection team. The primary goal of a property inspection is to provide an objective and detailed report on the property’s condition, identifying any existing issues, defects, or potential concerns.

Repair Affidavit – a repair affidavit is a legal document in which a party, often a contractor or a property owner, affirms or declares specific facts related to repairs or improvements made to a property. It is commonly used in real estate and construction contexts to provide a formal record of the repair work completed.

Replacement Cost value (RCV) – the cost required to replace or repair an insured property with a similar item of like kind and quality at current market prices, without deducting for depreciation.

Statement of Loss – a document that outlines the extent of damage or loss that has occurred to a property or structure, as well as the associated costs and details related to the restoration or repair work needed to return the property to its pre-loss condition. Restoration contractors often prepare and use this document when working with property owners, insurance companies, or other parties involved in the restoration process.

Supplemental Check – an additional payment issued by an insurance company to a policyholder or beneficiary after an initial claim payment has been made. Supplemental checks are typically issued when the original claim payment does not fully cover the expenses or losses incurred by the insured party.

Third Party Authorization (TPA) – documentation authorizing a third party to act on behalf of a policyholder/property owner/borrower.

Unmonitored Claim – refers to a situation where the lender does not actively oversee or track the progress of an insurance claim made by the property owner or homeowner. In such cases, the property owner is responsible for managing the entire insurance claim process independently, including filing the claim, handling communications with the insurance company, and overseeing the repair or rebuilding of the damaged property.

Work Authorization (WA) – in the context of restoration contracting, a work authorization, sometimes called a Contractor’s Bid, typically refers to a document or agreement that grants a restoration contractor permission to perform specific restoration work on a property. This type of work authorization is commonly used in the field of property restoration and repair, such as after damage from natural disasters, fires, floods, or other events.