Glossary of Insurance Policy Terms

Licensed Public Insurance Adjuster

A public insurance adjuster within the meaning of this chapter is a person who, for compensation, acts on behalf of or aids in any manner, an insured in negotiating for or effecting the settlement of a claim or claims for loss or damage under any policy of insurance covering real or personal property or any person who advertises, solicits business, or holds himself or herself out to the public as an adjuster of those claims and any person who, for compensation, investigates, settles, adjusts, advises, or assists an insured with reference to claims for those losses on behalf of any public insurance adjuster.

Independent Insurance Appraiser

An independent insurance appraiser is a professional insurance claims expert that provides an estimate on the cost or value of an insured item under an appraisal of a disputed loss.

Actual Cash Value

Actual cash value (ACV) is a method of computing what an insurer will pay an insured, after a loss, for a specific insured item. ACV is calculated by subtracting depreciation from replacement cost and is part of the claims recovery process.


Depreciation is the decrease in value due to wear and tear, decay, decline in price or obsolescence. and must be taken into account in any insurance claim.

Replacement Cost

In the insurance industry, “replacement cost” is a method of computing the value of an item insured. Replacement cost is not market value, but is instead the cost to replace an item or structure at its pre-loss condition and is important for claims negotiation and recovery.

Business Interruption

Business interruption insurance protects individuals and companies from losses due to the interruption of operations impairing its business for a time. This type of insurance is frequently referred to as time element loss insurance.

Continued Expenses

Continued expenses are part of business interruption insurance claim and are the expenses that continue after a suspension of operations during the period of restoration.

Period of Restoration

The period of time in which insurance coverage is in effect beginning when the damage occurs and ending when operation or property damages are fully restored and recovered.

Business Income Insurance

Business Income insurance covers your loss of income sustained due to the necessary suspension of your operations during a period of restoration following an insured cause such as fire or storm damage.

Kacha v. Allstate Insurance Company

An insurance dispute in which Kevin Dawson of Professional Insurance Evaluations acted as public adjuster and successfully appealed wrongful conduct to the California Court of Appeal. The court ruled that an appraisal is limited to determining the actual cash value of the loss and that appraisers are not authorized to determine coverage for such loss, thus increasing the amount Dawson’s client received from Allstate Insurance Company and helping future insurance policy claimants. The full text of the decision can be found here.

Claims Mediation

Claims Mediation is a process by which you and the insurance company submit your dispute to a neutral third party to reach a settlement of the dispute.


A first or third party making claim under an insurance policy.

Compensatory Damages

Compensatory Damages, also referred to as actual damages, is the compensation for losses covered by insurance policies.

Punitive Damages

Punitive Damages are the damages awarded to a plaintiff in excess of compensatory damages in order to punish the defendant for a reckless or willful act.

Extra Expense

The expenses incurred in excess of normal expenses after a catastrophic loss or damage event.

Real Property

Real property refers to things permanently attached to the land or structure, the damage of which can be covered by insurance policies and recovered through property claims.

Personal Property

Personal property refers to things that are moveable and not attached to the land, the damage of which can be covered by insurance policies and recovered through property claims.

Unfair Claims Practices

Unfair claims practices are the abuses by an insurer in an effort to avoid paying an insurance claim or to unlawfully reduce the size of the payment.

Litigation Support

Litigation support is the aid provided by an insurance policy or claims expert in the lawsuit or contention of an insurance claim and often involves expert witness services.