Chapter 2 AD Claims Adjuster

Short Rate Cancellation ( insured cancels the policy before its expiration date), a short-rate cancellation is issued. (can be charged a financial penalty) Flat Cancellation A cancellation of insurance that is retroactive to the effective date of the policy. (No coverage is provided insurer provides a refund.) 00:02 01:34 Non-renewal The termination of a policy at the expiration of its term. The policy does not renew and no coverage is provided after the expiration date. Proximate Cause The primary cause of loss. Hostile Fire A fire that burns (outside its intended boundaries) or becomes uncontrollable. Friendly Fire A fire that was intentionally set and stays (within its intended boundaries) Inherent Vice A quality within property that causes it to damage or destroy itself. Examples include rust, rot and the fading of paint. Inherent vice is not covered by a property policy. Binder A legal agreement issued by an insurance company or a producer that provides (temporary proof of insurance until the insurer is able to issue an insurance policy.) end when the policy is issued. Binders contain the name of the insurer, the amount and type of insurance, and the perils insured against. Arbitration Process whereby a disputed claim is decided by a neutral third party. The disputing the arbitrator, who makes a decision after a hearing where both parties offer evidence. Right of Salvage The right of the insurer to take possession of damaged property after paying for its loss. The salvage belongs to the insurer. Salvage Value The amount for which property can be sold at the end of its useful life. In property insurance, the salvage value is the scrap value of damaged property. Concurrent Causation A principal holding that when two perils simultaneously cause a loss the insurer must pay the loss even if one of the perils is excluded by the policy. 00:00 01:34 Concurrent Policies The existence of two or more policies covering the same exposures, having the same policy periods, and the same coverage triggers. Non-concurrent Policies The existence of two or more policies covering the same exposures that don't have the same policy periods. Deductible The specified amount of each loss that the insured must bear. Definitions Words, terms, and phrases that are clearly described and used in an insurance policy for the purpose of clarifying the intent of the insurer and to avoid coverage disputes with respect to the extent of coverage provided by the policy. Bailee A person or any organization to which property has been entrusted, usually for repairs, servicing or storage. Bailor A person or organization that entrusts property to a bailee. Primary Insurance Any type of coverage that responds to a loss before all other coverage responds. Excess Insurance Any form of insurance coverage that provides protection against certain perils or causes of loss ONLY after loss or damage exceeds a stated amount or the limits stated in specific policies or self-insurance. Burglary The taking of property from inside the premises or a locked safe or vault by a person who commits forcible entry into, or exit from, the property of another while trespassing. Robbery The taking of property from the care and custody of a person who has been caused or threatened with bodily harm.