Worked insurance claim exercises
Follow the numbers and evidence through three original fictional cases.
These are teaching examples, not customer claims, reported settlements or promises of recovery. Each states its assumptions so you can see where the conclusion comes from.
Reconcile an ACV payment and a potential holdback
Fictional teaching model: a covered replacement-cost estimate is $20,000, depreciation is $4,000, and the deductible is $1,000. Assume no limit restriction, prior payment or other adjustment.
Calculate ACV
$20,000 − $4,000 = $16,000 before the deductible.
Calculate the initial payment
$16,000 − $1,000 = $15,000 in this simplified model.
Identify the potential total
$20,000 − $1,000 = $19,000, if all replacement-cost requirements are met.
Reconcile the difference
$19,000 − $15,000 = $4,000 potentially recoverable depreciation. It is not an automatic additional payment.
Ask for the missing conditions
Check repair requirements, documentation, time limits, limits of insurance and any prior payments.
Check your reasoning
If the first payment were already $17,000, should you still request an automatic $4,000?
Read the explanation
No. Reconcile the actual payments and policy calculation first. The original model’s unpaid difference would no longer apply.
Find the reason two ceiling estimates disagree
Fictional exercise: both estimates describe the same 12-by-15-foot ceiling. Estimate A uses 180 square feet at $3.50, plus $120 protection and $80 disposal. Estimate B uses 200 square feet at $3.25, plus $120 protection and $0 disposal. Taxes and all other work are excluded.
Normalize the quantities
12 × 15 = 180 square feet. Ask what supports the additional 20 square feet in Estimate B.
Compare the totals
A: $630 + $120 + $80 = $830. B: $650 + $120 = $770. The difference is $60.
Isolate the quantity effect
At B’s $3.25 rate, 20 additional square feet adds $65.
Isolate the rate effect
For the common 180 square feet, the $0.25 rate difference adds $45 to A.
Reconcile the $60 difference
A minus B = $45 rate difference − $65 quantity difference + $80 disposal = $60. Verify whether disposal is already included in either unit price before adding it.
Check your reasoning
Does the larger total establish the correct repair amount?
Read the explanation
No. The exercise explains arithmetic differences; measurements, included operations, evidence and the actual assignment determine the supported scope.
Turn a disputed roof total into a usable appraisal packet
Fictional exercise: one estimate totals $18,000 and another $25,000. The $7,000 difference has three proposed components: $3,000 additional area, $2,500 additional operations and $1,500 price differences. No outcome or coverage determination is assumed.
Build three separate issues
Create rows for area, operations and price; confirm $3,000 + $2,500 + $1,500 = $7,000.
Attach evidence to the area issue
Include the measurement method, roof diagram, units and any adjustments.
Explain each operation
Describe the task, component and supporting record. Remove duplicate operations before comparing totals.
Support the price comparison
Identify comparable work, dates, location and what each price includes. A high bid alone does not prove the scope.
Separate process questions
Keep disputed coverage, authority, conflicts, fees and deadlines visible. An appraisal provision does not automatically resolve every type of disagreement.
Check your reasoning
What should the summary request ask the next reviewer to do?
Read the explanation
Address the three defined differences and their evidence. Do not request a guaranteed $7,000 increase simply because that is the gap between estimates.
Apply the method to a new problem
Change one quantity or assumption at a time. Recalculate the result, identify which supporting record would be needed, and explain what the calculation cannot establish. A mathematically correct total can still depend on unsupported scope or an inapplicable policy assumption.
For background, see the sources in our valuation guide and appraisal guide.
Watch the captioned walkthroughs