ADJUSTER PRO TERMS Questions and Answers 2023

ADJUSTER PRO TERMS Questions and Answers 2023 Accumulated Depreciation The total decrease in an item's value over a period of time. Formula: (Annual Depreciation x Number of years used) Actual Cash Value (ACV) A valuation method used by insurers to reflect an item's current market value right before being damaged or destroyed. Formula: (Replacement cost - Accumulated Depreciation) Adhesion One of the characteristics of an insurance contract. Means that one party (the insurer) sets the terms, and the other (the insured) can 'take it or leave it.' Adjusted Gross Revenue (Crop Insurance) Narrowest (and least expensive) form of Crop Revenue Insurance. Insures farm revenue as a whole instead of individual crops. Guarantees a percentage of the insured farm's average revenue. Adjuster An agent who, for compensation, processes insurance claims. Can represent either the insured or the insurer. Adjuster - Emergency Adjusters who are temporarily licensed by the insurance commissioner to handle claims during catastrophes or emergencies that produce an overwhelming number of claims in a short period of time. Adjuster - Independent Self-employed adjusters who contract with multiple insurers at the same time. Paid on a commission or fee-plus-expenses basis for each claim. Also called: Fee Adjuster, Bureau Adjuster Adjuster - Staff Salaried employee of one insurance company who can work locally, regionally, or nationally. Also called: Company Adjuster Adjuster - Public An adjuster who is hired to represent the claimant and help determine a fair indemnification. Usually specializes in appraisals and negotiation. Paid commision, usually a percentage of final settlement. Advance Payment Settlement A settlement option that lets the insurer offer some financial relief to the claimant before the claim has been fully settled. The insurer makes advance payments to the claimant, which are then subtracted from the final settlement amount. Often used when a claimant suffers bodily injury and is unable to work. Agency Authority The Agent's authority to act on behalf of someone else, usually an insurer. This authority is derived from the agent's contract with the insurer. Agency Authority - express Authority that is expressly given to the agent in writing. Allows agent to act on behalf of the principal. Aency Authority - implied Authority that an agent possesses by implication of his behavior, regardless of whether this authority is expressly granted in writing. Agency Authority - apparent Authority that an agent possesses based on the appearance of representing an insurer. Agent Someone who has received authority from an insurer to sell or service insurance policies. Aggregate Limit A type of policy limit found in some health, liability, and property damage policies. It represents the total amount the insurer will pay for all losses (as opposed to an occurrence limit, which denotes the total amount the insurer will pay per occurrence). Agreement One of the four requirements of a legally binding contract. All parties involved must agree to the terms of the contract. Can also refer to a binder, which is the preliminary substance of a contract. Agricultural Producer A business that grows, harvests, and sells crops for profit. Aleatory A characteristic of insurance contracts. Aleatory means "depending on an unknown future event." An insurance contract will only pay IF and WHEN covered damages occur. Neither party knows how much the contract will end up paying when they enter into the contract. Answer In liability cases, the defendant's response to a complaint. There are three possible answers: 1) accept complaint and pay for damages, 2) deny the complaint, or 3) accept the complaint with a right to insert evidence into the case. Annual Depreciation An item's Replacement cost divided by the number of years in its expected lifespan. Appraisal A negotiation method which allows the claimant and the insurer each to select an appraiser. The two appraisers in turn select an Umpire. The appraisers then work together to determine a settlement amount. If they cannot agree, the Umpire steps in. Agreement by any two of the three is binding. Arbitration A negotiation method in which the opposing parties each submit their evidence to a mutuallyagreed- upon and neutral third party, called an arbitrator. The arbitrator reviews the positions of each opposing side, and makes a final and legally binding decision. Arbitrator The mutually-agreed-upon and neutral third party in an arbitration who reviews the positions of each opposing side, and makes a final and legally binding decision. Auto Policy Insurance policy designed to protect the policyholder while owning, occupying, or operating a vehicle. Usually combines liability coverage and property coverage into one policy. Automobile In Insurance policies, Automobile generally means any vehicle designed for use on public roads. Automobile No-fault Laws Laws in effect in some states that require any owner of a vehicle to purchase no-fault insurance; that is, insurance that indemnifies the insured regardless of who was at fault in an accident. Nofault laws also restrict the insured's right to sue the at-fault party. Aviation A characteristic of insurance contracts. Aleatory means "depending on an unknown future event." An insurance contract will only pay IF and WHEN covered damages occur. Neither party knows how much the contract will end up paying when they enter into the contract. Bailee An individual or company that receives the property of someone else for a special purpose, and returns the product after use. BAP The Business Auto Policy provides property damage and liability insurance for automobiles used by a business. Binder A temporary contract provided by an insurer that ensures coverage until the complete, permanent policy is issued. BI (Bodily Injury): Physical damage to someone's person. Liability insurance covers bodily injury that the insured might cause to another person through negligence. Body Language The signals we give through posture, behaviour, apparel, etc., which are involved in communication. Boiler & Machinery Boiler and machinery insurance is designed to indemnify a business for damages to, and damages by, boilers, machinery, motors, generators and a variety of other electrical devices and appliances. Bond A contract wherein one party guarantees the performance of a third party. Bonds involve three parties: (1) the surety agrees to pay the second party (2) the obligee if the third party (3) the principal neglects to carry out an obligation it has to the obligee. Breach of Product Warranty The failure or falsehood of a stated promise of a product stipulation. Business Personal Property Moveable property used for business Catastrophe An occurrence or a sequence of occurrences that causes enormous property losses. Catastrophes are normally uninsurable by private insurers. Cause of Loss A form included in a Commercial Package Policy or a Commercial Property Policy that lists the causes of loss from which the insured property is covered. CGL A Commercial General Liability policy protects businesses against damages and injuries to third parties. Civil Civil law observes court cases of one citizen charging another citizen for damages caused by tort; it differs from criminal law. Claim The "offer of settlement" that the policyholder files with an insurer after she experiences a loss. Claims-made Form A liability policy in which the insurer pays only those claims arising during the policy period (as opposed to those claims arising after the policy period is over, regardless of whether the incident took place during the policy period). Claims Management The practice of the insurance adjuster of managing a claim by processing it in a prompt and effective manner from the time the claim is filed until a settlement is reached, while adhering to all local and federal laws. Claimant One who files a claim with an insurer for a loss. Claude the Clueless Adjuster In this course, Claude the Clueless Adjuster represents an incompetent or unprofessional adjuster. Coarse Grains In Crop Insurance, a provision that covers reduction in crop quality, as well as crop-yield losses. Coarse grains are corn, grain sorghum, and soybeans. See also "Small Grains" Coinsurance The Coinsurance Clause applies to policyholders who purchase an inadequate amount of property insurance. These policyholders must pay a percentage of the claim. In health insurance, coinsurance refers to the portion of a covered claim that the insured is responsible for paying out-of-pocket, after the deductible has been paid.