ADJUSTER PRO FLORIDA CERTIFIED ADJUSTER GLOSSARY

ADJUSTER PRO FLORIDA CERTIFIED ADJUSTER GLOSSARY 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 Employment-Related 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.