FREQUENTLY ASKED QUESTION
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What is a Supplement?
Any additional costs, work, or materials not included in the original estimate provided by the restoration or repair company. Supplements typically arise when unforeseen issues are discovered during the course of the project, such as hidden damage, code upgrades, or other circumstances that were not apparent during the initial assessment.
When a supplement is identified, the restoration or repair company needs to submit the additional costs and documentation to the insurance company, which will review and adjust the claim to account for the increased expenses. In some cases, this may result in an increase in the insurance payout to the homeowner to cover the additional costs.
What does "RCV" & "ACV" stand for?
ACV (Actual Cash Value): Actual Cash Value is a method of determining the value of damaged property by taking the current replacement cost and subtracting depreciation. Depreciation accounts for the age, wear and tear, or obsolescence of the property. The ACV payout is typically less than what it would cost to buy new or fully repair the property because it takes into account the reduction in value due to depreciation. In other words, ACV is the amount it would cost to replace the damaged property, minus the depreciation.
RCV (Replacement Cost Value): Replacement Cost Value is a method of calculating the value of damaged property based on the cost to replace it with a new item of the same kind and quality, without taking depreciation into account. This means that the insurance payout under an RCV policy would be sufficient to cover the cost of replacing the damaged property with a new, similar item or fully repairing the property. RCV generally provides more comprehensive coverage and results in a higher payout than ACV.
What is a "Deductible"?
A deductible is the amount you agree to pay out-of-pocket for a covered loss before your insurance policy takes over. For instance, with a $1,000 deductible, if you have a $5,000 claim, you'll pay the first $1,000 and the insurance will cover the remaining $4,000.
Do I have to pay the deductible to the contracting company?
Yes. When a contractor repairs damages covered by insurance, you pay the deductible amount to them. The insurance then pays the contractor the remaining balance. However, this can vary:
You may pay the contractor your deductible directly, and the insurance covers the rest.
The insurance may send you a check for the repair cost minus the deductible. You then pay the full amount to the contractor.
Beware of contractors offering to "waive" your deductible. This is illegal and viewed as insurance fraud in many areas.
What is D&R (Detach And Reset)?
This term is used when an item or component needs to be temporarily removed or detached to facilitate repairs, adjustments, or replacement of either the item itself or something else in it's vicinity. After the necessary work is completed, the item is then reset or reinstalled in its original position.
EXAMPLE: A window frame needs to be detached to repair or replace a damaged window sill, this would be a case of D&R. The window frame is carefully removed, the repair or replacement is carried out, and then the frame is reset back into its original place.
What is R&R (Remove and Replace)?
This involves completely removing a damaged or outdated component and replacing it with a new one. It's a straightforward process used when the item in question is irreparable or outdated, and a new installation is required.
EXAMPLE: A section of flooring is damaged beyond repair, it would be entirely removed and replaced with new flooring.
What is Mitigation?
Mitigation is the actions taken to reduce or minimize the severity of damage and prevent further loss. It's a key concept in managing and recovering from incidents such as natural disasters, accidents, or other damaging events.
Examples of Mitigation Actions:
Water Damage: If a property is flooded, immediate actions like removing water, drying out the premises, and preventing the growth of mold are considered mitigation.
Fire Damage: After a fire, mitigation might include covering damaged roofs or walls with tarps to prevent further exposure to elements.
Storm Damage: Securing loose items, boarding up broken windows, and reinforcing structures before a predicted storm can also be forms of mitigation.
Insurance Implications: Insurance polices often require policyholders to take reasonable mitigation steps after a loss to prevent further damage. Failure to do so can sometimes lead to a reduction in the amount the insurer will cover!