ALABAMA ADJUSTERS LICENSE QUESTIONS AND
ANSWERS
1.Accident Insurance: Covers expenses associated with a covered
accident and can extend to ambulance and emergency room
expenses, intensive care, and hospital costs. Accident insurance also
provides for loss of income, and a
death benefit if injuries prove fatal
2.Accumulated Depreciation: The total decrease in an item's value over a
period of time. Formula: (annual depreciation x number of
years used). Subtract this number from the item's replacement cost to
get its actual cash value (ACV).
3.Acreage Reporting Date: In crop insurance, the deadline for providing
the insur- er with an acreage report, which is used to
determine the amount of coverage needed and the premium charged fo
a particular crop.
4.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)
5.Actual Production History: A history of a farmer's crop yields over a
multi-year period, which is used to determine the normal
production level of a farm.
6.Adhesion: Characteristic of an insurance contract. Means that one
party (the insurer) sets the terms, and the other
(the policyholder) can "take it or leave it.
7.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.
8.Adjuster: An agent who, for compensation, processes insurance
claims. The adjuster investigates the damages,
evaluates the claim, and makes a fair and equitable settlement based on
the insurance contract. Can
represent either the insured or the insurer.
9.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.
10.Adjuster - Independent: Self-employed adjusters who contract with
multiple insurers at the same time. Paid on a commission or
, ALABAMA ADJUSTERS LICENSE QUESTIONS AND
fee-plus-expenses
ANSWERS basis for each claim. Also called: Fee Adjuster, Bureau
Adjuster.
, ALABAMA ADJUSTERS LICENSE QUESTIONS AND
ANSWERS
11.Adjuster - Public: 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.
12.Adjuster - Staff: Salaried employee of one insurance company who
can work locally, regionally, or nationally. Also called:
Company Adjuster
13.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.
14.Agency Authority: The agent's authority to act on behalf of someone
else (the principal), usually an insurer. This authority is
derived from the agent's contract with the principal. It can be apparent,
express, or implied
15.Agency Authority -
Apparent: Indirect authority that the agent can reasonably be assumed
to have, based on appearances. If an
adjuster is equipped to represent an insurer (with the insurer's
permission), then an individual can assume
that the adjuster has the authority to act on the insurer's behalf.
16.Agency Authority -
Express: Authority that is expressly given to the agent in writing. Allows
the agent to act on behalf of the principal.
17.Agency Authority - Implied: Authority that an agent possesses by
implication of her behavior, regardless of whether this authority is
granted in writing. For example, a person portraying herself as a
representative for an insurance
company, even though she is not employed by that company.
18.Agent (Insurance): Someone who has received authority from an
insurer to sell or service insurance policies.
19.Agreed Value: A valued policy in which the insurer and the insured
agree to a specific value for an item, appraised at the
inception of the policy. Often used to insure items whose value is difficul
to quantify, such as antiques or
fine art. Also called a Guaranteed Value policy.
, ALABAMA ADJUSTERS LICENSE QUESTIONS AND
ANSWERS
20.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.
21.Agricultural Producer: A business that grows, harvests, and sells
crops for profit.
22.Aleatory: A characteristic of an insurance contract. 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.
23.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.
24.Annual Depreciation: An item's replacement cost divided by the
number of years in its expected lifespan.
25.Annual Transit: An uncontrolled inland marine form that covers loss
of goods in transit. It applies to all of the insured's
shipments during the year.
26.Appraisal: A dispute resolution 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.
27.Arbitration: A dispute resolution 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.
28.Arbitrator: The mutually-agreed-upon and neutral third party in an
arbitration who reviews the positions of each
opposing side before making a final and legally binding decision.
29.Artificially Generated
Current: Also called "artificial current." A peril covered in some property
insurance policies. It includes sudden and
accidental damage from any electrical current, except currents that are
ANSWERS
1.Accident Insurance: Covers expenses associated with a covered
accident and can extend to ambulance and emergency room
expenses, intensive care, and hospital costs. Accident insurance also
provides for loss of income, and a
death benefit if injuries prove fatal
2.Accumulated Depreciation: The total decrease in an item's value over a
period of time. Formula: (annual depreciation x number of
years used). Subtract this number from the item's replacement cost to
get its actual cash value (ACV).
3.Acreage Reporting Date: In crop insurance, the deadline for providing
the insur- er with an acreage report, which is used to
determine the amount of coverage needed and the premium charged fo
a particular crop.
4.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)
5.Actual Production History: A history of a farmer's crop yields over a
multi-year period, which is used to determine the normal
production level of a farm.
6.Adhesion: Characteristic of an insurance contract. Means that one
party (the insurer) sets the terms, and the other
(the policyholder) can "take it or leave it.
7.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.
8.Adjuster: An agent who, for compensation, processes insurance
claims. The adjuster investigates the damages,
evaluates the claim, and makes a fair and equitable settlement based on
the insurance contract. Can
represent either the insured or the insurer.
9.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.
10.Adjuster - Independent: Self-employed adjusters who contract with
multiple insurers at the same time. Paid on a commission or
, ALABAMA ADJUSTERS LICENSE QUESTIONS AND
fee-plus-expenses
ANSWERS basis for each claim. Also called: Fee Adjuster, Bureau
Adjuster.
, ALABAMA ADJUSTERS LICENSE QUESTIONS AND
ANSWERS
11.Adjuster - Public: 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.
12.Adjuster - Staff: Salaried employee of one insurance company who
can work locally, regionally, or nationally. Also called:
Company Adjuster
13.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.
14.Agency Authority: The agent's authority to act on behalf of someone
else (the principal), usually an insurer. This authority is
derived from the agent's contract with the principal. It can be apparent,
express, or implied
15.Agency Authority -
Apparent: Indirect authority that the agent can reasonably be assumed
to have, based on appearances. If an
adjuster is equipped to represent an insurer (with the insurer's
permission), then an individual can assume
that the adjuster has the authority to act on the insurer's behalf.
16.Agency Authority -
Express: Authority that is expressly given to the agent in writing. Allows
the agent to act on behalf of the principal.
17.Agency Authority - Implied: Authority that an agent possesses by
implication of her behavior, regardless of whether this authority is
granted in writing. For example, a person portraying herself as a
representative for an insurance
company, even though she is not employed by that company.
18.Agent (Insurance): Someone who has received authority from an
insurer to sell or service insurance policies.
19.Agreed Value: A valued policy in which the insurer and the insured
agree to a specific value for an item, appraised at the
inception of the policy. Often used to insure items whose value is difficul
to quantify, such as antiques or
fine art. Also called a Guaranteed Value policy.
, ALABAMA ADJUSTERS LICENSE QUESTIONS AND
ANSWERS
20.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.
21.Agricultural Producer: A business that grows, harvests, and sells
crops for profit.
22.Aleatory: A characteristic of an insurance contract. 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.
23.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.
24.Annual Depreciation: An item's replacement cost divided by the
number of years in its expected lifespan.
25.Annual Transit: An uncontrolled inland marine form that covers loss
of goods in transit. It applies to all of the insured's
shipments during the year.
26.Appraisal: A dispute resolution 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.
27.Arbitration: A dispute resolution 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.
28.Arbitrator: The mutually-agreed-upon and neutral third party in an
arbitration who reviews the positions of each
opposing side before making a final and legally binding decision.
29.Artificially Generated
Current: Also called "artificial current." A peril covered in some property
insurance policies. It includes sudden and
accidental damage from any electrical current, except currents that are
