What is an Estimate? - Insurance Navy. In insurance, an estimate is used by insurance companies as an approximate calculation of an approximate repair cost or replacement cost associated with property loss, damage, or an insurance claim. An insurance estimate is a professional assessment made by an insurance adjuster or repair professional to obtain a repair estimate. The estimate considers various factors, such as coverage type, labor and material costs, coverage limits, replacement cost or potential cost of repair, depreciation, location, and market conditions. It serves as a basis for the insurance company to determine the compensation the policyholder is entitled to under their insurance policy.
It’s important to note that an estimate is not a final or exact amount but rather an initial estimate that can be subject to change based on further inspection, negotiation, or unforeseen costs.