Your Right to Know How Your Claim Was Calculated: The Insurer

Introduction

Most policyholders receive a check from their insurance company and have no idea how the number was calculated. They don’t know what estimate the carrier used, what depreciation rates were applied, whether the deductible was placed correctly, or what documents the carrier relied on to reach its number. They accept the payment because they don’t know they have the right to demand an explanation — or that the carrier has a legal obligation to provide one.

California has some of the strongest consumer protection regulations in the country when it comes to insurance claims handling. Among other things, those regulations require the carrier to explain every payment it makes and to share the documents it used to calculate that payment. These are not optional courtesies. They are legal obligations. And exercising them is the first step toward identifying whether you were underpaid.

The Regulatory Framework

California’s Fair Claims Settlement Practices Regulations (10 CCR §2695 et seq.) impose specific disclosure obligations on every insurer doing business in California. Three provisions are especially important for policyholders trying to understand how their claim was calculated.

10 CCR §2695.7(b)(1): The Duty to Explain Denials

When the carrier denies a claim in whole or in part, §2695.7(b) requires that the denial be in writing, listing all basesfor the denial with the factual and legal basis for each reason, citing the specific policy provisions relied upon. This applies to partial denials as well — if the carrier pays $200,000 on a claim the insured believes is worth $400,000, the carrier has effectively denied $200,000 and must explain why. A check accompanied by a vague letter that says “enclosed is payment for your claim” does not satisfy this obligation when the carrier has not paid the full amount claimed.

10 CCR §2695.9(d): The Insurer Must Share Its Estimate

This is one of the most powerful provisions in the California regulations for property claims. It provides that if losses are settled on the basis of a written scope and/or estimate prepared by or for the insurer, the insurer shall supply the claimant with a copy. If the carrier used an Xactimate estimate, a scope of loss, or any other written document to calculate the payment, the insured is entitled to a copy. The carrier cannot withhold the very documents it relied on to justify its number.

10 CCR §2695.4(a): The Duty to Disclose All Coverages

The carrier must affirmatively disclose to the insured all benefits, coverage, time limits or other provisionsof the policy that may apply to the claim. The duty is on the insurer to disclose — not on the insured to ask. If the carrier never mentions a coverage that applies to your loss, that silence is itself a regulatory violation.

For a full section-by-section breakdown of these regulations, see our California Fair Claims Settlement Practices guide.

What the Carrier Must Provide

Under these regulations, the carrier should provide all of the documents that formed the basis of its payment. Specifically, that includes:

• The Xactimate estimate(or whatever estimating tool was used) — this is the line-by-line calculation showing every repair item, its quantity, unit price, and total. See our guide on reading Xactimate line items.
• The depreciation scheduleshowing the useful life assumptions and depreciation rates applied to each item. This is where many underpayments hide — inflated depreciation rates, incorrect useful life figures, and depreciation applied to items that should not be depreciated at all.
• The statement of loss showing how payments were allocated across coverages (dwelling, other structures, personal property, loss of use). See our guide on reading your statement of loss.
• Any engineering reports, cause-and-origin reports, or expert reports the carrier relied on in evaluating the claim.
• The adjuster’s notes or reports that formed the basis of the coverage determination.
• Any scope of loss documents prepared during the inspection.
• The policy provisionsthe carrier relied on for any exclusion, limitation, or coverage determination — not just a citation, but the actual language.

If you have not received these documents, you have not received what the law requires. For more on how insurance payments are structured, see our guide on how insurance payments are calculated.

What the Estimate Disclosure Requirement Actually Means

Section 2695.9(d) deserves a closer look because it is one of the most powerful and underused provisions in California insurance regulation. The principle is straightforward: if the carrier settled on the basis of a written scope or estimate, you are entitled to see that document. The carrier cannot hide behind claims of “internal work product” when the document was the basis of the settlement.

Here is what this means in practice:

• If the carrier’s adjuster wrote an internal report recommending a lower payment, and the carrier used that recommendation to determine the settlement amount, the insured is entitled to see it.
• If the carrier used a depreciation schedule that assigned 25% depreciation to a 3-year-old roof, the insured is entitled to see that schedule and challenge those assumptions. A 3-year-old roof on a 30-year shingle has consumed roughly 10% of its useful life — not 25%.
• If the carrier’s Xactimate estimate omitted line items — for example, leaving out overhead and profit, or excluding removal and haul-off of damaged materials — the insured is entitled to see the estimate and identify what is missing.
• If the carrier hired an engineer to evaluate the cause of the damage, and the carrier’s coverage decision was based on that engineer’s report, the insured is entitled to a copy of the full report — not just a summary or conclusion.

The regulation does not contain exceptions for documents the carrier considers “proprietary” or “confidential.” If it was used as the basis of the settlement, it must be shared. Period.

The Right to Request Your Claim File

Beyond the specific regulatory requirements of §2695.7, the insured has broader rights to request copies of documents in the claim file. California Insurance Code §2071 and the Fair Claims Settlement Practices Regulations establish that the insured is entitled to examine the documents that relate to the handling of the claim.

For a detailed guide on this right, see our article on your right to request claim documents from your insurer.

Common Carrier Tactics to Avoid Disclosure

Despite these clear regulatory obligations, many carriers resist providing the documents that policyholders are entitled to. Watch for these common tactics:

• Sending a check with no accompanying estimate or explanation. The carrier issues payment with a generic letter that states the amount but provides no breakdown of how it was calculated.
• Providing a vague “settlement letter” that states the payment amount and references the claim number but contains no actual calculation, no estimate, and no depreciation detail.
• Claiming the estimate or depreciation schedule is “proprietary” or “internal.” This is not a valid basis for withholding documents that formed the basis of the settlement under California law.
• Delaying the response to document requests. The carrier acknowledges the request but takes weeks or months to produce the documents, hoping the insured will give up or accept the payment without reviewing them.
• Providing the Xactimate estimate but withholding the depreciation schedule or scope notes. This gives the appearance of transparency while still hiding the most consequential parts of the calculation.

None of these tactics are permissible under the California regulations. Every one of them constitutes a potential violation of the Fair Claims Settlement Practices Regulations and may be reported to the California Department of Insurance.

How to Exercise Your Rights

Here are the practical steps to obtain the documents you are entitled to:

1. Send a written request(email is fine) to your adjuster and the carrier’s claims department specifically asking for:
   • The complete Xactimate estimate or repair cost document
   • The depreciation schedule showing rates and methodology for each item
   • The statement of loss and settlement breakdown
   • Any engineering, cause-and-origin, or expert reports
   • The adjuster’s report or notes
   • The policy provisions relied on for any coverage determination, exclusion, or limitation
2. Cite the regulations.Include specific references to 10 CCR §2695.9(d) (estimate disclosure), §2695.7(b)(1) (denial explanation), and §2695.4(a) (duty to disclose all coverages). This signals to the carrier that you know your rights and that you are creating a record for potential regulatory action.
3. Set a deadline. State that you expect a response within 10 to 14 calendar days. This is reasonable and consistent with the timing expectations in the regulations.
4. Follow up in writing. If the carrier does not respond by your deadline, send a follow-up email reiterating the request and noting the original date. Every unanswered request strengthens a potential CDI complaint.
5. File a CDI complaint if necessary. If the carrier refuses to provide the documents or continues to delay, file a complaint with the California Department of Insurance. The CDI investigates regulatory violations and can impose penalties. See our guide on how to file a CDI complaint.
6. Consider hiring a public adjuster.A licensed public adjuster can review the carrier’s documents, identify errors in the estimate and depreciation schedule, and negotiate on your behalf. See our guide on what a public adjuster does and when to hire one.

Why This Matters

You cannot dispute what you cannot see. That is the fundamental reason these regulations exist. The insurance company has all the information — the estimate, the depreciation assumptions, the adjuster’s notes, the engineering reports, the policy analysis — and the insured has none of it. The duty to disclose levels the playing field.

Once you have the underlying documents, you can identify the specific errors that result in underpayment:

• Wrong depreciation rates— the carrier applied excessive depreciation that does not reflect the actual condition or remaining useful life of the damaged item.
• Missing line items— the carrier’s estimate omitted repair items that are clearly necessary to restore the property to its pre-loss condition.
• Incorrect measurements— the square footage, linear footage, or quantities in the estimate do not match the actual dimensions of the damaged areas.
• Deductible applied incorrectly— the deductible was applied twice, applied to the wrong coverage, or calculated on the wrong basis.
• Coverage misapplied— items were placed under the wrong coverage category, resulting in a lower limit or different deductible.

These errors are only visible if you have the underlying documents. Without them, you are trusting the carrier’s math — and the carrier has every financial incentive to pay less. For a detailed look at common estimating errors, see our guide on common Xactimate errors that reduce your payment.