Claims Adjuster Glossary of Terms -
Questions with Verified Answers
Valuation - CORRECT ANSWER- The processes of estimating what an item is
worth.
Value - CORRECT ANSWER- The estimated or appraised worth of an item, used
to determine the replacement cost or indemnification amount.
Valued policy - CORRECT ANSWER- A policy in which the insurer and the
insured agree to a specific value prior to the start of the policy. If the item is lost or
destroyed, the insurer pays the amount agreed upon.
Vicarious Liability - CORRECT ANSWER- When an act of negligence is
transferred from one party to another, such as from employee to
employer or from child to parent.
Waiver - CORRECT ANSWER- A waiver is a voluntary act of relinquishing a known
right, claim or privilege. Either an insured or an insurer may waive rights.
Waiver - Express - CORRECT ANSWER- An explicit relinquishment of a right.
Waiver - Implied - CORRECT ANSWER- An implicit relinquishment of a right
through behavior that seems to assume that the right does not exist.
Waiver of Sovereign Immunity - CORRECT ANSWER- Sovereign Immunity
disallows an individual to sue a governmental entity; the waiver of sovereign immunity
allows individuals to sue governmental entities under specific circumstances.
Warranty - CORRECT ANSWER- An ongoing assurance made by the insured that
certain conditions in an insurance contract will be met (for example, that the insured will
maintain functional fire alarms).
Workers Compensation - CORRECT ANSWER- form of insurance that covers
medical costs and lost wages in the event of injury, disease, or disability sustained by
an employee in the course of his work/ Purchased by employers.
Wrongful Death Act - CORRECT ANSWER- allows the individuals who are
associated with a deceased person who was killed because of a
negligent act to sue the responsible party.
,Yield Protection (Crop Insurance) - CORRECT ANSWER- Also called Revenue
Protection (Crop Insurance), this is the most comprehensive form of Crop Revenue
Insurance, offering higher coverage amounts than other types. The revenue guarantee
is based on the higher of: harvest-market price or early market price. Previously called
Crop Revenue Coverage
(CRC)
Accumulated Depreciation - CORRECT ANSWER- 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) - CORRECT ANSWER- 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 - CORRECT ANSWER- 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) - CORRECT ANSWER- 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 - CORRECT ANSWER- An agent who, for compensation, processes
insurance claims. Can represent either the insured or the insurer.
Adjuster - Emergency - CORRECT ANSWER- 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 - CORRECT ANSWER- 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-Public - CORRECT ANSWER- An adjuster who is hired to represent the
claimant and help determine a fair indemnification. Usually specializes in appraisals and
negotiation. Paid commission, usually a percentage of final settlement.
Adjuster-Staff - CORRECT ANSWER- Salaried employee of one insurance
company who can work locally, regionally, or nationally. Also called: Company Adjuster
Advance Payment Settlement - CORRECT ANSWER- 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 - CORRECT ANSWER- 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 - apparent - CORRECT ANSWER- Authority that an agent
possesses based on the appearance of representing an insurer.
Agency Authority - express - CORRECT ANSWER- Authority that is expressly
given to the agent in writing. Allows agent to act on behalf of the principal.
Agency Authority - implied - CORRECT ANSWER- Authority that an agent
possesses by implication of his behavior, regardless of whether this authority is
expressly granted in writing.
Agent - CORRECT ANSWER- Someone who has received authority from an
insurer to sell or service insurance policies.
Aggregate Limit - CORRECT ANSWER- 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 - CORRECT ANSWER- 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 - CORRECT ANSWER- A business that grows, harvests,
and sells crops for profit.
Aleatory - CORRECT ANSWER- 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.
Annual Depreciation - CORRECT ANSWER- An item's Replacement cost divided
by the number of years in its expected lifespan.
Answer - CORRECT 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.
Appraisal - CORRECT ANSWER- A negotiation method which allows the claimant
and the insurer each to select an appraiser.
Questions with Verified Answers
Valuation - CORRECT ANSWER- The processes of estimating what an item is
worth.
Value - CORRECT ANSWER- The estimated or appraised worth of an item, used
to determine the replacement cost or indemnification amount.
Valued policy - CORRECT ANSWER- A policy in which the insurer and the
insured agree to a specific value prior to the start of the policy. If the item is lost or
destroyed, the insurer pays the amount agreed upon.
Vicarious Liability - CORRECT ANSWER- When an act of negligence is
transferred from one party to another, such as from employee to
employer or from child to parent.
Waiver - CORRECT ANSWER- A waiver is a voluntary act of relinquishing a known
right, claim or privilege. Either an insured or an insurer may waive rights.
Waiver - Express - CORRECT ANSWER- An explicit relinquishment of a right.
Waiver - Implied - CORRECT ANSWER- An implicit relinquishment of a right
through behavior that seems to assume that the right does not exist.
Waiver of Sovereign Immunity - CORRECT ANSWER- Sovereign Immunity
disallows an individual to sue a governmental entity; the waiver of sovereign immunity
allows individuals to sue governmental entities under specific circumstances.
Warranty - CORRECT ANSWER- An ongoing assurance made by the insured that
certain conditions in an insurance contract will be met (for example, that the insured will
maintain functional fire alarms).
Workers Compensation - CORRECT ANSWER- form of insurance that covers
medical costs and lost wages in the event of injury, disease, or disability sustained by
an employee in the course of his work/ Purchased by employers.
Wrongful Death Act - CORRECT ANSWER- allows the individuals who are
associated with a deceased person who was killed because of a
negligent act to sue the responsible party.
,Yield Protection (Crop Insurance) - CORRECT ANSWER- Also called Revenue
Protection (Crop Insurance), this is the most comprehensive form of Crop Revenue
Insurance, offering higher coverage amounts than other types. The revenue guarantee
is based on the higher of: harvest-market price or early market price. Previously called
Crop Revenue Coverage
(CRC)
Accumulated Depreciation - CORRECT ANSWER- 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) - CORRECT ANSWER- 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 - CORRECT ANSWER- 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) - CORRECT ANSWER- 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 - CORRECT ANSWER- An agent who, for compensation, processes
insurance claims. Can represent either the insured or the insurer.
Adjuster - Emergency - CORRECT ANSWER- 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 - CORRECT ANSWER- 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-Public - CORRECT ANSWER- An adjuster who is hired to represent the
claimant and help determine a fair indemnification. Usually specializes in appraisals and
negotiation. Paid commission, usually a percentage of final settlement.
Adjuster-Staff - CORRECT ANSWER- Salaried employee of one insurance
company who can work locally, regionally, or nationally. Also called: Company Adjuster
Advance Payment Settlement - CORRECT ANSWER- 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 - CORRECT ANSWER- 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 - apparent - CORRECT ANSWER- Authority that an agent
possesses based on the appearance of representing an insurer.
Agency Authority - express - CORRECT ANSWER- Authority that is expressly
given to the agent in writing. Allows agent to act on behalf of the principal.
Agency Authority - implied - CORRECT ANSWER- Authority that an agent
possesses by implication of his behavior, regardless of whether this authority is
expressly granted in writing.
Agent - CORRECT ANSWER- Someone who has received authority from an
insurer to sell or service insurance policies.
Aggregate Limit - CORRECT ANSWER- 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 - CORRECT ANSWER- 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 - CORRECT ANSWER- A business that grows, harvests,
and sells crops for profit.
Aleatory - CORRECT ANSWER- 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.
Annual Depreciation - CORRECT ANSWER- An item's Replacement cost divided
by the number of years in its expected lifespan.
Answer - CORRECT 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.
Appraisal - CORRECT ANSWER- A negotiation method which allows the claimant
and the insurer each to select an appraiser.
