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How to read your homeowners claim estimate

How to read your homeowners claims estimate

Video Duration: 2 minutes 21 seconds

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When your home needs repairs, it's important to understand how the claims process will work. At USAA, our goal is to make sure you fully understand what to expect at every step throughout your claim. From the minute you file, until your repairs are complete, we're here to help!

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After you file a claim, you'll receive an initial estimate summary showing what your insurance will pay for repairs covered by your policy.

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The approach is simple, but what does it mean? Let's start by defining a few terms.

First is the “replacement cost value,” or RCV. This is how much the insurance adjuster expects it will cost to complete the covered repairs. Your adjuster calculates the RCV using a current price list for materials and cost of labor in your area for the items shown in your estimate.

Under RCV there could be “less depreciation.” What does that mean? Depreciation is a deduction based on the age and condition of the materials making up the damaged property or the damaged item at the time of the loss. The depreciation may be recoverable after repairs are completed based on the terms of your policy.

The actual cash value is the amount your homeowners insurance policy will pay in advance of you having the repairs completed. In many states, the depreciation will be “held back” and paid separately as a second payment after proof of repairs have been received.

Finally, before we get to the dollar amount for your initial ACV payment, we will need to consider your deductible. Remember, a deductible is the out-of-pocket amount you have agreed to pay in the event of a loss and you'll pay this to your contractor as part of your claim.

The net claim is the amount you'll receive initially from your insurance to cover your repairs and help you get started.

As we discussed earlier, if you have a recoverable depreciation clause in your policy, the amount that was subtracted earlier could come back to you as a second payment. This would come after your repairs are completed and you've provided proof of payment.

Now that you know the terms, the steps are pretty simple: Replacement cost value minus depreciation and deductible equals first payment.

USAA is here to help you protect the place you call home. So when you file a claim, we want you to feel comfortable and confident throughout the process.

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Related footnotes:

  1. Coverage descriptions are brief and subject to the terms and conditions of your insurance policy. Read your insurance policy for details. Applications subject to underwriting.

  2. Property and casualty insurance underwritten by United Services Automobile Association (USAA), USAA Casualty Insurance Company, USAA General Indemnity Company, Garrison Property and Casualty Insurance Company, NOBLR Reciprocal Exchange, based in San Antonio, Texas; USAA S.A. (Europe), and USAA S.A. UK Branch (United Kingdom) and is available only to persons eligible for property and casualty group membership. Each company has sole financial responsibility for its own products.

    Coverages subject to the terms and conditions of the policy.

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