Adjuster Pro - Florida Certified Adjuster Glossary| 260 QUESTIONS| 19 PAGES

Adjuster Pro - Florida Certified Adjuster Glossary| 260 QUESTIONS| 19 PAGES Adjuster Pro - Florida Certified Adjuster Glossary| 260 QUESTIONS| 19 PAGES 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 (CropInsurance) 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 - express Correct Answer: Authority that is expressly given to the agent in writing. Allows agent to act on behalf of the principal. Aency Authority - implied Correct Answer: Authority that an agent possesses by implication of his behavior, regardless of whether this authority is expressly granted in writing. Agency Authority - apparent Correct Answer: Authority that an agent possesses based on the appearance of representing an insurer. 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. 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; means depending on an unknown future event." 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. Annual Depreciation Correct Answer: An item's Replacement cost divided by the number of years in its expected lifespan. Appraisal Correct Answer: 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 asettlement amount. If they cannot agree, the Umpire steps in. Agreement by any two of thethree is binding. Arbitration Correct Answer: A negotiation method in which the opposing parties each submit their evidence to a mutually-agreed-upon and neutral third party, called an arbitrator. The arbitrator reviews the positions ofeach opposing side, and makes a final and legally binding decision. Arbitrator Correct Answer: The mutually-agreed-upon and neutral third party in an arbitration who reviews the positions ofeach opposing side, and makes a final and legally binding decision. Auto Policy Correct Answer: Insurance policy designed to protect the policyholder while owning, occupying, or operating avehicle. Usually combines liability coverage and property coverage into one policy. Automobile Correct Answer: In Insurance policies, Automobile generally means any vehicle designed for use on publicroads. Automobile No-fault Laws Correct Answer: Insurance that indemnifies the insured regardless of who was at fault in an accident; also restrict the insured's right to sue the at-fault party. Aviation Correct Answer: Aviation insurance combines hull insurance for the aircraft and liability insurance for any damage to others' property or to people who are not passengers. Bailee Correct Answer: An individual or company that receives the property of someone else for a special purpose, and returns the product after use. BAP Correct Answer: The Business Auto Policy provides property damage and liability insurance for automobiles used by a business. Binder Correct Answer: A temporary contract provided by an insurer that ensures coverage until the complete, permanent policy is issued. BI Correct Answer: (Bodily Injury): Physical damage to someone's person. Body Language Correct Answer: The signals we give through posture, behaviour, apparel, etc., which are involved in communication. Boiler & Machinery Correct Answer: Insurance 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 Correct Answer: 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 Correct Answer: The failure or falsehood of a stated promise of a product stipulation. Business Personal Property Correct Answer: Moveable property used for business Catastrophe Correct Answer: An occurrence or a sequence of occurrences that causes enormous property losses; normally uninsurable by private insurers. Cause of Loss Correct Answer: 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 Correct Answer: A Commercial General Liability policy protects businesses against damages and injuries to thirdparties. Civil Law Correct Answer: Observes court cases of one citizen charging another citizen for damages caused by tort; it differs from criminal law. Claim Correct Answer: The "offer of settlement" that the policyholder files with an insurer after she experiences a loss. Claims-made Form Correct Answer: 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 Correct Answer: 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 Correct Answer: One who files a claim with an insurer for a loss. Claude the Clueless Adjuster Correct Answer: In this course, Claude the Clueless Adjuster represents an incompetent or unprofessionaladjuster. Coarse Grains Correct Answer: 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 Correct Answer: The portion of a covered claim that the insured is responsible for paying out-of-pocket after the deductible has been paid. Code of Ethics Correct Answer: A set of governing professional standards of conduct, usually created by regulatory bodies or government regulatory agencies. These standards may also be formally codified with statutes. Coercion Correct Answer: The practice of forcing another party to behave in an involuntary manner (whether through action or inaction) by use of threats or intimidation or some other form of pressure or force. Commerce Correct Answer: The exchange or transport of goods or property. Commercial Correct Answer: Having to do with commerce or business activity in general. Commercial Crime Insurance Correct Answer: Insurance that covers employee dishonesty and theft by employees or others. Commercial Lines Correct Answer: A variety of insurance coverages that protect those involved in the business of creating, selling,displaying, evaluating, or shipping, etc. Example include: Business Owner's Policy; CommercialProperty; Commercial General Liability; Workers Compensation; Professional Liability (D&O),Errors and Omissions (E&O) and EmploymentRelated Practices Liability. Commercial Property Floater Correct Answer: A means of protecting a business' property that is not in one fixed location. Common Law Correct Answer: Based on court decisions and customs when statutory law does not provide an answer; creates precedent. Compensatory Damages Correct Answer: Money awarded in civil court for tangible and intangible damages caused by a policyholder Compensatory damages -Special Correct Answer: Money awarded for the exact value of the physical damage caused to the plaintiff up to the trial date; objective value determined by receipts and medical bills. Compensatory damages -General Correct Answer: Money awarded for the emotional losses of the plaintiff that will continue after the trial date; subjective value determined by the court. Competence Correct Answer: One of the four qualifications of a legally binding contract. All parties must be competent, with the necessary legal and mental capacity. Complaint Correct Answer: Initiates a civil lawsuit by a claimant requesting financial relief from damages caused by a policyholder. Concealment Correct Answer: The act of withholding relevant material facts from an insurer. Conditions Correct Answer: The section of a policy that qualifies or limits an insurer's promise to pay or perform. Consideration Correct Answer: One of the four qualifications of a legally binding contract. All parties must bring something of value to the contract. Contract Correct Answer: An agreement entered into voluntarily by two parties or more with the intention of creating a legal obligation. Coverages Correct Answer: The amount and extent of protection provided by an insurance policy. Crime Correct Answer: An offense against the State or Federal Government, or a breach of law, for which the offender shall make satisfaction to the public. Criminal Correct Answer: Someone who has been convicted of a criminal act in a court of law. Crop Hail Insurance Correct Answer: A form of Crop Yield Insurance that is usually provided by private insurers without government subsidy. It offers named-peril protection on an acreage basis. Crop Insurance Correct Answer: Insurance coverage designed to protect a farmer's financial investment in his or her crops; covers losses to a crop's profitability. Crop Revenue Insurance Correct Answer: Crop insurance that combines crop-yield insurance and price insurance to protect against losses to crop value. Crop Yield Insurance Correct Answer: Crop insurance that covers losses to actual crops. Damages - general Correct Answer: Intangible losses such as pain and suffering, or mental anguish. Damages - special Correct Answer: Tangible, financial losses that can be documented. Dangerous Instrumentality Doctrine Correct Answer: States that anyone involved in the use of inherently dangerous products or machines is held100% liable for their own damages. Dec Page Correct Answer: First page of a policy, which provides a summary of the contract; includes names of insured, addresses, coverage limits, policy period, etc. Declined Coverage Correct Answer: Takes place when an insurance company rejects an application for coverage. Deductible Correct Answer: The amount the policyholder must pay out-of-pocket before the insurance company will pay the remaining costs. Deductible - fixed Correct Answer: A fixed deductible is one specific, predetermined amount that a policyholder must pay out-of-pocket before he can be indemnified. Deductible - percentage Correct Answer: A deductible that is calculated as a percentage of a covered loss. Deductible - franchise Correct Answer: States that the policyholder only pays for damages that are less than his deductible. If the cost of damages equals or exceeds his deductible, the insurer pays the full amount and the policyholder pays nothing. Defamation Correct Answer: Damage to another's name or reputation, whether by libel, which is in print or by slander, which is in speech. Default Judgement Correct Answer: Default Judgement is entered by the court against the party who failed to defend against a claim brought on by another party. In other words, if the person fails to show up and answer the claimthe court will find in favor of the other party. Definitions Correct Answer: Page in policy that gives specific limited meaning to terms used in policy. Depreciation Correct Answer: A decline in value of property caused by wear or loss of usefulness usually measured by aspecific formula. Direct Loss Correct Answer: Physical harm to tangible property caused by a peril. Discoverable Correct Answer: Capable of being demanded and handed over as evidence in a court of law; during litigationproceedings, the adjuster's claims file is discoverable. Eligiblity Correct Answer: Eligibility Requirements are found in some insurance policies. They identify the conditions thatmust be met by the policyholder in order to qualify for coverage under a policy. Endorsement(s) Correct Answer: An optional provision that can be added to a policy to increase, reduce, or modify coverage forspecific property types or perils. Errors and Omissions Correct Answer: Liability insurance that indemnifies professionals for errors or oversights on the part of theinsured that caused harm to their clients. Estoppel Correct Answer: A legal principle that bars a party from asserting something contrary to what has been impliedby his previous actions or statements. Ethical Correct Answer: Adhering to moral laws and to principles of fairness. Evaluation Correct Answer: Evaluation, determining the approximate value of damages relevant to a claim i.e. total ofmedical bills, costs of repair & replacement of damaged property and the consideration of thefinancial provisions of the insurance policy. Exclusions Correct Answer: A section of an insurance policy that reduces coverage by listing specific individuals, property,or perils that are NOT covered by the policy. Exposure Correct Answer: The extent to which an item is open to damage or loss. More exposure means a loss is morelikely. Fair Credit Reporting Correct Answer: Federal legislation that gives an applicant for insurance the right to investigate the reasons hisinsurance application was denied. Fall Down Case Correct Answer: A lawsuit brought against a property owner by someone who has fallen down on the property. False Advertising Correct Answer: Presenting something in a deceptive or untrue manner to the consumer; misrepresentations inadvertisements. Farm Correct Answer: A property where a farmer or rancher both resides and conducts commercial business. Farmer Correct Answer: Someone in the business of growing, harvesting, and selling crops for profit. In Farm insurance,a farmer must reside and do business on the same premises. FEMA Correct Answer: Federal Emergency Management Agency - a branch of homeland security that coordinatesrelief programs when disaster strikes an entire community. Fiduciary Correct Answer: One of the terms that describes the adjuster's relationship with the principal (the insurer). AsFiduciary Agent, the adjuster acts for the benefit of the principal, rather than for his own benefit. First Named Insured Correct Answer: The first person or entity named as insured on the declarations page of a policy. Floater Correct Answer: A term for Inland Marine policies that cover mobile property. Flood Correct Answer: An overflow of inland or tidal waters; an unusual or rapid accumulation of runoff or surfacewaters from any source; mud flows; collapse or subsidence of land along the shore of a lake orother body of water. Flood Insurance Correct Answer: provides relief following flood damage to communities who participate in the NFIP floodplainmanagement system; covers damages to the building and its contents Floodplain Management Correct Answer: maps out areas with high risk of flood, so that communities will avoid building in these areas Fraternal Benefit Societies Correct Answer: Fraternal Benefit Societies, or Fraternal Associations, are non-profit, mutual aid organizationsthat engage primarily in charitable or benevolent activities. They offer their members insuranceagainst death, disease, and disability. Fraud Correct Answer: The act of deceiving an insurance company in order to collect more money than one is legallyentitled to. Fraud, Hard Correct Answer: Deliberately faking or causing an incident in order to collect money. Fraud, Soft Correct Answer: Inflating the gravity or the extent of claims in order to receive a higher indemnification. Full and legal purpose Correct Answer: See also Legal Purpose." One of the four qualifications of a legally binding contract. Thepurpose of the contract must be legal (e.g. no contracts for illicit drug deals). " Good faith Correct Answer: Acting honestly and fairly, with good intentions and full disclosure. Group Risk Income Protection(Crop Insurance) Correct Answer: A form of Crop Revenue Insurance that protects a whole county or area instead of individualfarmers. Automatically indemnifies if county income falls below a certain level. Hazard, Moral Correct Answer: Hazard caused by insured persons deliberately engaging in risky behavior because they knowthat insurance will indemnify them for the losses. Hazard Correct Answer: Anything that increases the chance of loss. Hazard morale Correct Answer: Unconscious tendency of insured people to engage in riskier behavior. Hazard Physical Correct Answer: Any physical condition that increases the chance of a loss. HIPAA Correct Answer: Health Insurance Portability and Accountability Act, 1996 US law protecting consumer privacy,regulating collection, use and storage of private information. HO Forms 2 Correct Answer: The "broad" or "cheap" form of Homeowners Insurance; a basic, named-peril HO form that nevertheless is less limited than the HO-8. Correct Answer: HO Forms 3 Correct Answer: Special form" of Homeowners Insurance; all-peril coverage for structures named-perilcoverage for contents. HO Forms 4 Correct Answer: Contents broad form"; named-peril renter's policy covering only personal property and anystructural improvements made at tenant's own expense. " HO Forms 5 Correct Answer: Comprehensive form" of Homeowners Insurance; provides allperil coverage to both structuresand contents; the Cadillac of HO forms. " HO Forms 6 Correct Answer: Condo" or "unit owner's form"; named-peril homeowners policy covering personal property andthe surface structure of a condominium. " HO Forms 8 Correct Answer: Modified coverage form" of Homeowners Insurance; named-peril coverage for structures andcontents fewer perils covered; form for buildings with low value. Homeowner's Policy Correct Answer: An insurance policy that combines property coverage with liability coverage for a person'shome. IIPPA Correct Answer: The Insurance Information and Privacy Protection Act regulates how an insurance companycan use consumers' private information. Impaired Property Correct Answer: Property that is defective because the insured's deficient or incomplete additions or work. Income Protection (CropInsurance) Correct Answer: A form of Crop Revenue Insurance. One of the cheapest available; provides a fixed revenueguarantee based on early commodity prices for the crop type. Indemnification Correct Answer: Reimbursement for a loss, which leaves the claimant in the same financial position that she wasin before the loss. Indemnify Correct Answer: To restore by payment, repair, or replacement Indemnity Insurance Correct Answer: Insurance that indemnify's loss as opposed to liability Indirect Loss Correct Answer: An economic loss that results from the direct, or physical, loss. Inland Marine Correct Answer: Insurance that protects property being transported over land Insurance Correct Answer: A financial device used by people and organizations to protect themselves from unexpected,extraordinary financial losses. Insurance Company Correct Answer: Company which sells insurance policies to individuals or to other companies. Insurance Policy Correct Answer: A contract wherein an insured pays premiums to an insurer in exchange for financial protectionin the event of a covered loss. Insurance Rating Systems Correct Answer: Methods of evaluating the risk involved in insuring a person, property, or a corporation. Insurersuse rating systems to calculate premiums. Insured Correct Answer: A person or entity who is covered under an insurance policy. Insurer Correct Answer: The person or entity providing coverage to one or more insureds. Insuring Agreement Correct Answer: A section of an insurance policy that summarizes the insurer's promise to pay. Includes list ofcovered property and perils. Interest Correct Answer: Direct financial interest in protecting a unit. Intervening Cause Correct Answer: A separate occurrence that intervenes" between a defendant's actions and damage or loss toanother person. An intervening cause may decrease the defendant's liability if the defendantcan show that it was the intervening cause (rather than the defendant himself) that caused thedamage or loss. Joint Correct Answer: Liability shared by two or more persons. Judgement Correct Answer: An official court ruling forming a final decision resolving a dispute or forming a final decree. Kickbacks Correct Answer: Any sort of reward or remuneration for referrals or favors; for example, a body shop givingmoney to an adjuster for referring customers. Landlord Correct Answer: One who has leased property to a tenant. Leased worker Correct Answer: Worker hired through a labor leasing firm. Legal Purpose Correct Answer: One of the four qualifications of a legally binding contract. The purpose of the contract must belegal (e.g. no contracts for illicit drug deals) Liability Correct Answer: An obligation to do or not to do something; responsibility for an action. Liability Insurance Correct Answer: Liability insurance indemnifies a third party for damages caused by the insured's negligence. Liability - employer Correct Answer: Protects employers from damages and bodily injury caused to employees or by employeeswhile performing under the scope of their employment. Liability - product Correct Answer: Protects a policyholder from legal liability for damages to third parties caused by themanufacturing, merchandising, distributing, or operation of a product. Liability - public Correct Answer: Protects individuals and commercial venues from any property damage or personal injury theymay cause to the general public Liberalization Correct Answer: The liberalization clause in an insurance contract is a condition that states that the insurer can add or broaden coverage at any time without writing up a new contract. This clause guaranteesthat, in the case of legislative action that broadens insurance coverage without any increase inpremiums, this additional coverage must take effect in existing policies as well as in newpolicies. License Correct Answer: A document that shows that a person has been granted authority by the state to act as aninsurance agent, broker, or adjuster. Limits Correct Answer: The limits of an insurance policy represent the highest amount an insurer will pay. Any costabove the limits of insurance is the responsibility of the policyholder. Litigation Correct Answer: An action brought in court. Litigation takes place when an insurer and a policyholder disagreeabout a settlement amount and cannot resolve their differences through any sort of negotiation. Livestock Floater Correct Answer: Optional Farm Insurance coverage. Provides stand-alone protection for six kinds ofdomesticated animals on a scheduled or unscheduled basis. Includes coverage for animalswhile in transit. Loss Correct Answer: Bodily injury, property damage, or damage caused by the insured's negligent acts; loss is thethe basis for an insurance claim. Loss can also mean the sum the insurer will have to pay. Loss - direct Correct Answer: Physical loss or damage to property directly due to an incident; i.e. fire, wind, etc.. Machinery Correct Answer: Machines or the parts of a machine. Malpractice Correct Answer: Negligent or improper actions on the part of doctors, lawyers, and accountants etc., resulting indamage, injuries, or losses to the person receiving their services. Marine Correct Answer: Marine insurance covers items that are being transported, as well as the vehicles used fortransportation. Market Value Correct Answer: The price something will sell for in the open market, or fair market value." " McCarren-Ferguson Act Correct Answer: 1945 US Law exempting insurance from most federal regulation, and placing it under theauthority of the individual states. Mechanical Breakdown Correct Answer: Mechanical Breakdown Insurance (MBI) covers losses due to breakdown of motor vehicles. Mediation Correct Answer: A method of negotiation that utilizes a neutral third party adviser to reach a mutually-agreeablesolution. Mediation differs from Appraisal in that the decision is not binding to the opposingparties. Misrepresentation Correct Answer: Any false or misleading statement. Mr. Insurer Correct Answer: In this course, Mr. Insurer represents the entity providing insurance. Multi Peril Crop Insurance Correct Answer: A form of Crop Yield insurance that offers broad coverage for a multitude of perils. Because it issubsidized by the government, MPCI is subject to federal regulation. Mutual Correct Answer: A mutual insurance company is owned by its policyholders. They have no shareholders and arenot traded publicly. Negligence Correct Answer: The failure to exercise a reasonable degree of care in a particular situation. Negotiations Correct Answer: Negotiations take place when the insurer and the claimant do not agree about anindemnification amount. The insurance adjuster is often the one who will carry out thenegotiations. NFIP Correct Answer: National Flood Insurance Program - a program that provides insurance for communities thatsuffer flood damage and are willing to participate in the FEMA's floodplain management system. Non Commercial Correct Answer: Non-Commercial insurers are not-for-profit insurance companies that return profits topolicyholders by reducing premiums or expanding benefits. Occurence Correct Answer: An unexpected event or circumstance that causes injury or damage. Occurrence Form Policy Correct Answer: One of two forms of CGL: triggered by occurrence, so that if a loss occurred during the policyperiod, it is covered even if the claim is made much later. Ocean Marine Correct Answer: Insurance designed to protect property being transported overseas. Offer Correct Answer: The 'Offer' is a claim submitted to the insurance company for compensation due to a loss orlosses the claimant believes are covered by the insurance policy and is legally considered an'offer to settle' the claim. PAP Correct Answer: The Personal Auto Policy is a package policy that combines property damage and liabilityinsurance for motor vehicles. Paul the Policyholder Correct Answer: In this course, Paul the policyholder represents any and all persons or entities who hold apolicy. In other words, anyone who is insured. PD Correct Answer: Property Damage: damage or loss of use of personal property. Peril Correct Answer: The actual cause of loss or damage, such as lightning, fire, or theft. Personal Correct Answer: Personal Lines insurance protects the personal and real property of an individual. A PersonalAuto Policy and a Homeowners Policy are examples of Personal Lines of insurance, asopposed to Commercial Lines. Personal Injury Correct Answer: Damages to a third party's character, reputation, or standing in the community. Personal Property Floater Correct Answer: Protects property owners from damage or losses to personal articles while in the process of transport. PIP Correct Answer: Personal Injury Protection: a form of no-fault auto insurance utilized in some states. Policy Correct Answer: See Insurance Policy. Policy Period Correct Answer: The beginning and end dates of coverage. Found on declarations page. Policyholder Correct Answer: A person who has purchased an insurance policy - orcontractfrom an insurer. Power to bind Correct Answer: One manifestation of the authority given to insurance agents by the principal. The principal isbound by, or must adhere to, the guarantees and statements made by its agent. Premium Correct Answer: A scheduled and affordable fee, paid by the policyholder to the insurer, in return for coverage. Preponderance of Evidence Correct Answer: A preponderance of evidence is enough evidence to make it more likely that an argument is truethan that it is false. In a civil trial, the plaintiff needs to provide a preponderance of evidence inorder to win her case. Principal Correct Answer: The principal refers to an agent's employer (usually an insurance company, but it could alsomean anyone who contracts the agent to work on their behalf and gives her the authority to doso). Principle of Indemnity Correct Answer: The principle behind all insurance contracts. It states that, when a loss occurs, the insuredshould be restored to his or her financial condition before the loss occurred, no better, no worse. The insured cannot profit from a loss. Privacy Correct Answer: In insurance, the right of consumers to have their personal information protected. Private Correct Answer: Private insurance is the term for any insurance other than social insurance. Social insuranceprograms are run by the government instead of by private individuals. Professional Liability Correct Answer: Professional Liability Coverage is insurance that protects practitioners such as doctors, lawyers,engineers, architects, etc.. It includes two types of coverage: malpractice insurance and errorsand omissions insurance. Proof of Loss Correct Answer: The form or statement that the policyholder is required to submit to the insurer before she canbe indemnified for a loss. Proximate Cause Correct Answer: The original occurrence, the source, of all the subsequent damages. Punitive Damages Correct Answer: Intangible damages awarded to the plaintiff when the defendant's actions show intentionalheinous, antisocial behavior or extreme indifference to harm. They are determined by the court. Rating Systems Correct Answer: Measure hazards of individual risk in a given area, and sets premiums accordingly. RC Correct Answer: RC: Replacement Cost, It refers to the cost of repairing or replacing an insured item, based onthe item's value at the time of the loss. Rebates Correct Answer: Refunding of part of the premium, due to the creation of a new contract or change to an existing contract. Reciprocal Insurers Correct Answer: A Reciprocal Insurer is an unincorporated organization of subscribers that operates through anattorney-in-fact to provide insurance benefits for its members. Reinsurers Correct Answer: Companies which sell insurance to insurers to reduce the insurer's exposure to loss. Reporting Correct Answer: One of the adjuster's duties is to Report to the Principal. The adjuster must give the principalfrequent updates of her progress on any given claim. Replacement Cost (RC) Correct Answer: The cost of repairing or replacing an insured item, based on the item's value at the time of theloss. Reservation of Rights Correct Answer: A notification that an insurer might give to an insured, informing him that a reported loss mightnot be covered under his insurance policy. Retroactive date Correct Answer: Date preceding a policy period before which the policy will not cover occurrences. Revenue Assurance (CropInsurance) Correct Answer: A form of Crop Revenue Insurance that provides a fixed revenue guarantee based on averagecounty prices Revenue Protection (CropInsurance) Correct Answer: Also called Yield Protection, this is the most comprehensive form of Crop Revenue Insurance,offering higher coverage amounts than other types. The revenue guarantee is based on thehigher of: harvest-market price or early market price. Previously called Crop Revenue Coverage(CRC) Risk Correct Answer: In the insurance industry, risk can have two meanings: 1) the potential for financial loss; beingexposed or open to damage, 2) an insured item. Risk Avoidance Correct Answer: Insurers' practice of denying insurance applications that they believe would involve aninordinate amount of risk. Risk Management Correct Answer: Measures taken by an insurance company to ensure that their exposure is not too high and tocontrol the effect of a loss; for example, an insurer might charge higher premiums to drivers whohave received speeding tickets. Risk Purchasing Groups Correct Answer: Groups of people with similar insurance needs who form an organization to buy insurance as a group. Risk, Pure Correct Answer: Risk that does not entail the possibility of gain; the only possible outcomes are a loss or no loss. Risk Reduction Correct Answer: An insurer practices risk reduction when it takes precautions in order to reduce its exposure; forexample, requiring that all homes insured by a homeowners policy have fire alarms installed. Risk Retention Correct Answer: An insurer practices risk retention when it chooses to insure a risk instead of denying coverage. Risk Retention Groups Correct Answer: Groups where the members insure each other, using their own capital to write insurancepolicies. Risk, Speculative Correct Answer: Risk that might result in gain, loss, or no change in circumstance (as opposed to pure risk,which does not include the possibility of gain). Salvage Correct Answer: Salvage is damaged property that has cash value. In HO the policyholder has the option ofkeeping the salvage and accepting a smaller settlement from the insurer. The insurer has theoption of keeping the salvage if they have fully indeminified the insured, but in no case can theinsured insist the insurer keep the salvage. Scheduled payment release Correct Answer: Sometimes called open-ended release" or "rehabilitation settlement." The insurer agrees to payall of the special damages and general damages that have accumulated so far and agrees topay special damages in the future. Settlement Correct Answer: A resolution of a dispute, or an agreement. Settlement allows an insurer and a claimant to resolve a case before it reaches a court of law. Small Grains Correct Answer: In Crop Insurance, a provision that covers reduction in crop quality, as well as crop-yield losses.Small grains are wheat, barley, and oats. See also Coarse Grains" " Statute of Limitations Correct Answer: A statute based on the common law legal system that specifies the maximum period of time,after damages occur, that legal proceedings based on those damages may be initiated. Statutory Law Correct Answer: based on laws set forth by a governing authority; i.e. state legislature Stipulation Correct Answer: A stipulation is something specifically agreed to in a contract, such as an insurance contract. Stock Correct Answer: A Stock Insurance Company is owned by stockholders, as opposed to its own policyholders (asis the case with Mutual Insurance Companies). Strict Liability Correct Answer: Holds a party 100% liable for damages when the activity or instrument they are performing isinherently dangerous. Subrogation Correct Answer: The ceding of the insured rights to the insurer to seek reimbursement from liable parties. Supplementary payments Correct Answer: Payments by the insurer to the insured that exceed the insurance policy's limits of liability. Tort Correct Answer: Any civil wrongdoing, whether intentional or unintentional, resulting in a court action to remedy. Tort - negligent Correct Answer: When a negligent act causes unintentional damages to another party. Tort - intentional Correct Answer: A premeditated wrongful act that causes intentional or intentional damages to another party. Tort law Correct Answer: The body of law that addresses and provides remedies for any civil wrongdoing performed onanother party. Tortfeasor Correct Answer: The defendant in a court case who committed the tort. Trigger Correct Answer: An event that "triggers" the coverage provided under a CGL policy: in claims-made, it is a claim, in occurrence form, it is the "occurrence." Trustworthiness Correct Answer: The virtue of carrying out responsibilities reliably, worthy of being trusted. A necessary attributeof insurance adjusters. Umbrella Liability Policy Correct Answer: An unmbrella policy provides liability coverage over and above the normal or base limits ofliability in a policy. An umbrella policy is a type of Excess Liability. Underinsured Correct Answer: Not sufficiently insured against particular losses. For example, any home insured at less than80% of its value is considered underinsured. Unfair Claim Settlement Practices Correct Answer: Dishonest or unfair behavior related to settling insurance claims which is specifically proscribedby state law. Unilateral Correct Answer: A characteristic of insurance contracts. It means that only one of the parties (the insurer) makesa promise to perform. The insurer is obligated to fulfill this promise, whereas the insured is freeto void the contract at any time. Uninsurable Correct Answer: Risks are said to be uninsurable when they do not meet certain qualifications. For example, aninsurable risk cannot involve a loss that the insured deliberately causes. Again, certain perilsare too catastrophic to be insurable (like war or nuclear events). Unscheduled Correct Answer: Unscheduled property is property covered under an insurance contract that is not listed item byitem (as Scheduled" property would be listed). " Utmost Good Faith Correct Answer: A characteristic of insurance contracts: 'utmost' meaning the 'highest degree' and 'good faith'meaning, act with honesty fair dealing and full disclosure." All parties to an insurance contractmust act with utmost good faith. It also applies to a fiduciary agent's responsibility towards theprincipal. " 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 orindemnification amount. Valued policy Correct Answer: A policy in which the insurer and the insured agree to a specific value prior to the start of thepolicy. 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 toemployer 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 oran 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 doesnot exist. Waiver of Sovereign Immunity Correct Answer: Sovereign Immunity disallows an individual to sue a governmental entity; the waiver ofsovereign immunity allows individuals to sue governmental entities under specificcircumstances. Warranty Correct Answer: An ongoing assurance made by the insured that certain conditions in an insurance contract willbe 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, ordisability 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 anegligent act to sue the responsible party. Yield Protection Correct Answer: Crop Insurance