Property Insurance Claims Process Terms to Know for Guidance on Optimizing a Better Outcome

Ryan Holliday
Ryan Holliday
Jun 30, 2023

If you’re new to the property insurance claims process, there are going to be some words that come up that may you’re unfamiliar with. To help make this process seem less foreign, familiarize yourself with the following key terms.

ACV. Actual Cash Value, as defined by the North Carolina Department of Insurance is the amount of money needed to fix a home, minus the decrease in value of the property because of age or use.

Adjusters Worksheet. Your insurance adjuster will prepare a document to itemize the damaged goods that need replacement or repair after there’s a disaster involving a business or home property.

Advance Funding. What we call our solutions that front property restoration funds while the property/house insurance claim check is going through the mortgage endorsement process and waiting on the claim check deposit. We offer two Advance Funding solutions: Monthly Rate (80% Cash Advance) and Flat Rate (100% Cash Advance).

Loss Draft. A check issued to a homeowner for natural disaster damages from an insurer. You may hear the term in reference to process delays. To give you some context, a big reason why the property/home insurance claim check process takes so long (three weeks to three months) is due to antiquated processes with mortgage companies and loss draft providers. Most of this delay is due to an antiquated process instituted by Fannie Mae and Freddie Mac, commonly referred to as loss draft or loss draft processing.

Monitored Claim. A claim is typically classified by a mortgage company, as monitored when the total amount is over $40,000 Replacement Cost Value (RCV). However, varying limits may apply as some mortgage companies have higher or lower thresholds based on investor guidelines. Mortgage companies will also consider an insurance claim monitored if the property owner has missed payments or received mortgage relief (like a forbearance or modification) within two years of the date of loss.

Plaid Partnership. iink uses Plaid to connect to our customers’ bank accounts without them having to store their financial information. Plaid supports over 12,000 financial institutions and over 7,000 digital financial services by making it easy, safe, and reliable for users to connect their financial data to apps and services.

Public Adjuster Estimate. A public adjuster is a licensed independent insurance professional who a policyholder may hire to help settle an insurance claim on their behalf. They will provide their own estimate based on their knowledge, experience, and inspection of damaged properties.

RCV. This stands for Replacement Cost Value. It’s the amount of money needed to repair a home at today's prices of building supplies or replace the owner’s belongings at today's cost of the similar or like item. (North Carolina Department of Insurance)

Settlement Agreement. A legal contract that resolves the disputes among all parties in the property/home insurance claim process by coming to an agreement. It is a legal document used by all parties in a court case in civil law, to agree to an outcome of any judgment being made in advance.

Scope of Loss. Usually provided by the insurance carrier, this is a document or a set of documents and measurements that describe the amount and type of damage that has been done to a structure. It also includes the quantity and quality of materials and the current cost of those materials and labor that will be needed to repair or rebuild that structure.

Terms of Service. Legal agreements between a service provider and a person who wants to use their service. This person must abide by the terms of service in order to use the offered service.

TPLOA. Third Party Letter of Authorization. Allows iink to communicate with the mortgage company and insurance carrier on the property owner’s behalf in for property claim check processing.

Unsecured Financing. In short, this is defined as borrowing without collateral. iink contractor customers can offer unsecured financing options to their clients to help cover ACV expenses. See: RCV Gap Financing

Waiver of Lien. A conditional lien waiver uses language that states the lien will be lifted upon the condition that the payment is received. Contractors and subcontractors assume less risk when signing a conditional waiver. If you they don’t receive payment or the check does not clear, their lien rights remain in place.

If you would like additional clarification on these terms or the property insurance claims process, contact us.