Texas All-Lines Adjusting Questions and Correct Solutions

Accumulated Depresciation - 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) - An item's current market value right before being damaged or destroyed. Formula: (Replacement Cost-Accumulated Depreciation) Adhesion - One of the characteristics of an insurance contract. One party sets the terms and the other party can "take it or leave". 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 % of the insured farm's average revenue. Adjuster - an agent who, for compensation, processes insurance claims. Emergency Adjuster - Adjusters who are temporarily licensed by the insurance commissioner to handle claims during catastrophes or emergencies. Independent Adjuster - Self-Employed adjusters who contract with multiple insurers at the same time. Paid on a commission or fee-plus-expenses basis for each claim. Public Adjuster - An adjuster who is hired to represent the claimant and help determine a fair indemnification. Paid commission, usually a % of final settlement. Staff Adjuster - Salaried employee of one insurance company who can work locally, regionally, or nationally. Advance Payment Settlement - A settlement option that lets the insurer offer some financial relief to the claimant before the claim has been fully settled. Agency Authority - The agent's authority to act on behalf of someone else (an insurer) Express Agency Authority - Authority that is expressly given to the agent in writing. Implied Agency Authority - Authority that an agent possesses by implication of his behavior, regardless of whether this authority is expressly granted in writing. Apparent Agency Authority - Authority that an agent possesses based on the appearance of representing an insurer. Agent - Someone who has received authority from an insurer to sell or service insurance policies. Aggregate Limit - It represents the total amount the insurer will pay for all losses. Agreement - One of the four requirements of a legally binding contract. All parties involved must agree to the terms of the contract. Agricultural Producer - A business that grows, harvests, and sells crops for profit. Aleatory - "depending on an unknown future event" An insurance contract will only pay IF and WHEN covered damages occur. Answer - the defendants response to a complaint Annual Depreciation - item's replacement cost / #of years in its expected lifespan. Appraisal - Insurer and insured each choose an appraiser, the two appraisers in turn choose an umpire. Appraisers work toward settlement amount...if they cannot agree...umpire steps in. Agreement by any two (one appraiser and umpire) is binding. Arbitration - Each party submit evidence to the third party arbitrator. Arbitrator makes final legal binding decision. Arbitrator - Third party negotiator, makes final legal binding decision for two parties. Auto Policy - designed to protect the policyholder while owning, occupying, or operating a vehicle. Automobile - any vehicle designed for use on public roads. Auto No-Fault Laws - some states require vehicle owners to purchase no-fault insurance Aviation - haul insurance for aircraft, liability insurance for any others property or people who are not passengers Bailee - individual or company that receives the property of someone else for a special purpose, and returns the product after use. BAP (Business Auto Policy) - provides property damage and liability insurance for auto used by business. Binder - a temporary contract, provided by an insurer, that insures coverage until the complete permanent policy is issued. BI (Bodily Injury) - Physical damage to someone. liability insurance covers bodily injury that the insured might cause to another person through negligence. Body language - the signals we give through posture, behavior, apparel Boiler & Machinery - designed to indemnify a business for damages to, and damages by, boilers, machinery, motors, generators, and others. Bond - a contract, where one party guarantees the performance of a third party.