A man whose book collection was severely damaged by a water assessed his loss and filed a claim with his insurance company for $2,900. The company came back with an offer of $150.

After consulting a colleague who had worked as a insurance adjuster, the man amended his claim. He asked for $1,800 and specified the importance of the books, which included scholarly works and professional reference texts. The man also threatened to seek arbitration if his amended claim wasn't paid promptly.

The company immediately sent him a check for $1,690.

"Adjusting is not an exact science," conceded Ron Vinson, a spokesman for the Insurance Information Institute, a trade association.

One agent said that a policy holder should routinely question the settlement offer.

"If you just take what the adjuster offers, he probaby will take a little advantage of you," the agent said.

A policy-holder who disputes his company's offer may appeal to the agent who sold the policy or seek arbitration, a process set out in most policies tht insure household goods and other personal property.

In arbitration, the individual with the claim retains his own adjuster to make an independent assessment of the damage. That adjuster then meets with the company's adjuster, and they hammer out an agreement.

In major cases, the differences can end up in court.

To prove ownership of lost or damaged property and to establish the value of that property, a policyholder needs as much documentation as possible of what he owns, when it was purchased and how much it cost.

Photographs of each room of the home, showing furniture and other valuables, help do that. A written inventory also helps, along with receipts for major appliances and furniture.

Insurers commonly assume that damaged goods have the smallest possible value unless their policyholders prove otherwise. Claims adjusting also relies on a judgement factor that can vary immensely from one company to another, on adjusters who often are under pressure to keep settlements as low as possible and on depreciation schedules that make sharp and sometimes arbitary distinctions.

One standard depreciation table, for example, shows "drapes" as having an average life of 10 years while "curtains" are useful for only five years.

At claim-settling time, a policyholder who bought coverings for his windows six years ago could end up with nothing if he called them curtains. But if the material hanging from the rod was classified as a drapery, he'd be eligible for about half of their cash value.

The depreciation table commonly assigns a life of 20 years to cotton blankets and 10 years to wool blankets. It has a three-year life for women's shoes and a two-year life for men's shoes. Lingerie for women is useful for one year, the table says, but underwear for men has a life of three years.

If lost or damaged property still has some value according to the schedule, the company may agree to to pay a pro-rata share of the repacement cost.

When items are older than the useful life shown on the depreciation schedule, the company may choose to pay nothing.

The depreciation tables's section on books offers a lesson to policyholders on how to file a claim.

Professional or reference books have a useful life of 25 years, the table says. That works out to be a depreciation rate of about 4 percent a year. But other books don't qualify for any depreciation on the chart.

Hardbound fiction and nonfiction books have a suggested maximum value of 60 percent of replacement cost. Paperback books are pegged at 50 percent.

That often work out to $1 a book or even less -- regardless of the book's age.

In the case of the man with the water-damaged books, "The company probably assumed he had a bunch of old books worth a buck a piece, so they offered him $150," said Vinson, the industry spokesman.

But depreciation shcedules, although they are widely used in determing payments, are not absolute, officials agree.

"It is a guide -- a starting place to adjust the loss," said Warren Wagner, assistant vice president of property claims for State Farm Insurance. "Take the elderly couple who moved into a new home and bought new furniture for that home will have a much longer life expectancy than for a young family with youngsters."

"Better quality items wear better than less expensive items," Wagner said.

But the tables don't take that into account.

Because of such wide difference, some companies say they have stopped using depreciation tables completely.

"We don't have an schedule; we have common sense," declared Don Tucker, property claims director for Allstate Insurance Co.

He said Allstate, in the absence of depreciation guidelines, depends on adjusters "who pretty well know how long things should last . . . who know from their own life experience."

Whether adjusters use personal knowledge or standard depreciation tables, they are inclined to recommend the cheapest possible settlements.

"It's just human nature," explains one veteran insurance agent familiar with claims adjusting. "It doesn't mean any direct benefits to the adjuster like a commission, but it does put him in good favor with the boss, and it can mean faster salary increases."

Companies and adjusters deny that they try to get by for as little as possible in settlements, but the system they use encourages that behavior.

As soon as a policyholder calls his comapny to report a loss, for example, the main office immediately sets up a file that includes an estimate of the loss and the amount the company will have to pay. That estimate, based on the most preliminary information, becomes something of a target figure.

The adjuster is dispatched to the scene to assess the damage, take any necessary photographs and collect information for the settlement. Ulitmately, he submits his estimate of what the company should pay.

But if he regularly submits estimates that exceed that original estimate,

Allstate's Tucker, asked what he would do with an adjuster who consistently exceeded the original office estimate, said:

"We'd take and have a talk with that person."

Tucker declined to say what the talk would cover -- "that's getting into a personnel area" -- but he said the adjuster, if he is unintentionally setting claim settlements too high, would be given additional training in making settlements.