Roofing Insurance Glossary

Plain-English definitions of the Xactimate and insurance-claim terms that come up on a roofing supplement.

• RCV (Replacement Cost Value)

  The cost to replace damaged property with new materials of similar kind and quality, before any depreciation is subtracted. Most homeowner policies are written on an RCV basis, but the insurer typically pays the depreciated amount (ACV) first and releases the rest (recoverable depreciation) after repairs are completed and documented.

• ACV (Actual Cash Value)

  Replacement cost value (RCV) minus depreciation for the damaged item's age, wear, and condition. On an RCV policy, the initial insurer payment is usually the ACV amount — the depreciated "holdback" (recoverable depreciation) is paid afterward once the homeowner shows the repair was completed.

• Depreciation

  The reduction applied to a damaged item's value to account for its age and condition at the time of loss. Depreciation is either recoverable (paid back to the homeowner after repairs are documented, on an RCV policy) or non-recoverable (never paid), depending on the policy's terms.

• Supplement

  An additional claim submitted to the insurer after its initial estimate — covering line items, quantities, or damage the original adjuster's estimate missed, underscoped, or that only became visible once repair work was underway (concealed/hidden damage). Supplements are common on complex claims like full roof replacements.

• F9 Note (Continuous Comment)

  Xactimate's feature for attaching an explanatory note to a line item, named for the function key that opens it. Used to document why a line item or quantity is included — e.g. citing a building-code requirement or a specific area of damage — so an adjuster reviewing the estimate can see the reasoning, not just the number.

• Overhead & Profit (O&P)

  A percentage markup added on top of a repair estimate's line-item costs, meant to cover a general contractor's job-management overhead and profit margin. Commonly applied when a repair requires coordinating three or more trades, though the exact threshold, percentage, and whether it's included at all varies by carrier and jurisdiction — it is not a fixed, universal number.

• Line Item

  A single priced entry in a Xactimate estimate: a code, a description of the work or material, a quantity, a unit of measure (e.g. SQ for roofing squares, LF for linear feet), and a unit price.

• Xactimate

  Estimating software published by Xactware (a Verisk business) used across most of the U.S. property insurance industry to price and document repair estimates after a covered loss.

• ESX File

  Xactimate's native export/exchange file format for a saved estimate — a ZIP archive containing the estimate's data as XML. Carriers and contractors exchange ESX files (or a PDF export of the same estimate) when handing off an estimate for review or revision.

• Adjuster

  The person who inspects a loss and produces the insurer's estimate. Most residential claims use a staff or independent adjuster working for the insurance company; a public adjuster is hired by the homeowner instead and represents their interests — a distinct, separately licensed role in most states.