Glossary of Commonly Used Terms

 

Glossary

 

C.O.D.R. – Central Oregon Disaster Restoration, the region’s largest locally owned Disaster Restoration company.

Mitigation – The act of stopping a problem before it gets worse. Most insurance policies state that in order for the loss to be considered for coverage, the owner must do everything in their power to mitigate the damage as soon as they realize it is happening. In most cases, home and business owners satisfy that obligation by contacting C.O.D.R.  as soon as possible. The term can also be used to describe the first major phase in an insurance claim.  Mitigation services are anything related to: emergency service calls, water extraction, emergency board up (fire loss), demolition of unsalvageable materials, moving or protecting personal property, setting up and running drying equipment, monitoring equipment, and anything else related to getting the structure ready for repairs.

Repairs – The process of returning the structure to pre-loss condition, or, the construction phase of the project. This is the second major phase of an insurance claim following Mitigation.

Pre-Loss Condition – This term is used by insurance companies to help define what they owe for in the event of a loss. In most cases, insurance companies will only pay for the same type and quality of materials that were damaged in the loss.

Like Kind and Quality – A description of the materials being used to replace the ones that were damaged. The quality of materials that insurance owes for to bring the structure back to pre-loss condition. Materials that are the same size, type, and quality as the ones that existed before the loss.

Agreed Estimate – The estimate used by insurance to issue payment. Sometimes referred to as “Agreed Cost”. This estimate contains the initial scope of work required to properly mitigate and repair your structure to pre-loss condition. There may be more than one Agreed Estimate in a claim. Generally, there is at least one for Mitigation and one for Repairs. There may be additional Agreed Estimates for Contents or Personal Property, depending on the nature and size of the claim.

Deductible – The amount of money that must be paid in out-of-pocket expenses by the insured before an insurer will pay any expenses. Deductibles are collected by, and paid directly to, C.O.D.R. The total amount is defined by your policy.

Agent – The insurance individual or brokerage who sells the policy. They may be independent or work directly for a specific carrier. They can assist in filing the claim, but usually do not manage the claim once it is filed.

Adjuster – The insurance individual who manages the claim on behalf of the carrier once a claim is filed. They may be independent or work directly for a specific carrier. They are usually authorized to make claim determination, and they work directly with C.O.D.R. to reach agreed estimates.

Work Authorization – C.O.D.R.’s contract with the Owner or Authorized Agent of the building where restoration services are needed. All projects require a signed Work Authorization by the Owner or Authorized Agent before any work can begin to protect both parties. The Work Authorization also includes all of the documents the State of Oregon requires before C.O.D.R. can begin work on a new project.

Supplemental Estimate – An estimate containing additional work necessary to return the structure to pre-loss condition that was not captured in the initial Agreed Estimate. A Supplemental Estimate is covered as part of the original claim and is paid for by the insurance carrier.

Additional Work Authorization – The document used to authorize any elective work the Owner or Authorized Agent orders that is not paid for by insurance, including material upgrades or changes in the scope of work defined by the Agreed Estimate. This covers any out-of-pocket expenses for work for that the Owner would like to add to the project above and beyond what insurance owes for.

Depreciation – The decrease in value of building materials as they age. As a dollar figure, the difference in value between what the damaged materials are worth versus what they cost to replace them with new materials of like kind and quality.  If the policy owned is a Cash Value policy, the depreciated amount is not paid to the insured.

Recoverable Depreciation – See Depreciation, with the difference being the depreciated amount is paid back to the insurer at the end of the job; hence the term “Recoverable”.  Payment of Recoverable Depreciation is made to the insured if the policy owned is a Replacement Value policy versus Cash Value, and is for services C.O.D.R. provided.

Certificate of Completion – The document used to facilitate the release of any recoverable depreciation amount the carrier has withheld until the end of the project. Must be signed by the insured, and is submitted to the carrier by C.O.D.R..

Estimator – The individual at C.O.D.R. responsible for writing and submitting estimates to the insurance adjuster. Negotiates on behalf of the insured to ensure that the agreed estimate includes entire scope of work to return the structure to pre-loss condition. Also writes and submits supplemental and additional work requests for approval.

Project Manager (PM) – The individual at C.O.D.R. responsible for scheduling and coordinating the repairs portion of the project. Once the carrier agrees to the scope of work, the estimator will assign the claim to a PM who handles the construction work up to project completion. The PM is the main point of contact at C.O.D.R. for the insured for all stages of Repairs.

Loss Draft – The process of obtaining the endorsement of any lien holder listed as a payee on an insurance funds check. Many carriers have policies dictating that a lien holder or mortgage company gets listed as a co-payee on property insurance funds. C.O.D.R. is well versed in obtaining the necessary endorsements so the check can be deposited. Contact C.O.D.R. immediately.

Notice of Lien – This is a requirement set by the State of Oregon on any construction related contracts or Work Authorizations signed in the state, and is included in C.O.D.R.’s Work Authorization. Insureds may even receive them from C.O.D.R.’s sub-contractors that are delivering labor or materials to the job. IT IS NOT A LIEN. It is a preliminary step, required by the State of Oregon, to protect the rights of those providing construction goods or services in relation to the claim.

Xactimate – The software that C.O.D.R. uses to write estimates and scopes of work. It is the same estimating software used by most major insurance carriers, which makes reaching Agreed Estimates with carriers much easier and seamless than contractors that use other methods of estimating.

Material Allowance – The “material only” value of the materials needed to return the structure to pre-loss condition. It is also the value that the carrier will pay up to to replace those materials, and does not include the labor to install the materials. It usually refers to “finish” materials and is most commonly used to establish allowances for floor coverings. All relevant material allowances are given to the insured before the Repairs begin. This allows the insured to choose the material going back into the structure, and is used to establish any difference in cost if a different material is selected than what was existing at the time of the loss.

Scope of Work – The basis for how C.O.D.R.’s estimates are written. Sometimes referred to as the “Agreed Estimate”. The Scope of Work defines what the insurance carrier is paying for to return the structure to pre-loss condition. Any work performed or requested outside the Scope of Work may not be covered by insurance and may become the financial responsibility of the insured.

Contents – A term used to describe the portion of the claim not related to the structure itself. Any salvageable item that is not a permanent part of the structure that needs to be stored, cleaned, repaired, or transported. This may include: furniture, soft goods, electronics, tools, firearms, cabinet contents, etc. Most fire and smoke losses, and some water losses, require a Contents claim. Contents handling is a service provided by C.O.D.R..

Personal Property – Any portion of a claim that is paid to reimburse the insured for out-of-pocket expenses or for non-salvageable contents that need to be replaced. Some examples of these types of expenses are: meals, lodging, increased utility bills, loss of income, etc. Payments made under Personal Property damage are usually for the insured to keep instead of paying to C.O.D.R..

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