Texas All Lines Adjuster Test 2023

Texas All Lines Adjuster Test 2023 Accumulated Depreciation - ANSWER The total decrease in an item's value over a period oftime. Formula: (Annual Depreciation x Number of years used) Acreage Reporting Date - ANSWER The deadline for providing the insurer with an acreage report, which is used to determine the amount of coverage needed and the premium chargedfor a particular crop. Actual Cash Value (ACV) - 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) Actual Production History - ANSWER A history of a farmer's crop yields over a multi-yearperiod, which is used to determine the normal production level of a farm. Adhesion - ANSWER Characteristic of an insurance contract. Means that one party (theinsurer) sets the terms, and the other (the policyholder) can "take it or leave it." Adjusted Gross Revenue (Crop Insurance) - 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 - ANSWER An agent who, for compensation, processes insurance claims. Canrepresent either the insured or the insurer. Adjuster - Emergency - ANSWER Adjusters who are temporarily licensed by the insurancecommissioner to handle claims during catastrophes or emergencies that produce an overwhelming number of claims in a short period of time. Adjuster - Independent - 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 - ANSWER An adjuster who is hired to represent the claimant and helpdetermine a fair indemnification. Usually specializes in appraisals and negotiation. Paid commission, usually a percentage of final settlement. Adjuster - Staff - ANSWER Salaried employee of one insurance company who can worklocally, regionally, or nationally. Also called: Company Adjuster Advance Payment Settlement - 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 - ANSWERThe Agent's authority to act on behalf of someone else, usuallyan insurer. This authority is derived from the agent's contract with the insurer. Agency Authority - express - ANSWER Authority that is expressly given to the agent inwriting. Allows agent to act on behalf of the principal. Agency Authority - implied - ANSWER Authority that an agent possesses by implication ofher behavior, regardless of whether this authority is granted in writing. Agency Authority - apparent - ANSWER Authority that an agent possesses based on theappearance of representing the insurer. Agent - ANSWER Someone who has received authority from an insurer to sell or serviceinsurance policies. Aggregate Limit - ANSWER A type of policy limit found in some health, liability, and propertydamage policies. It represents the total amount the insurer will pay for all losses (as opposed to an occurrence limit, which denotes the total amount the insurer will pay per occurrence). Agreement - ANSWEROne of the four requirements of a legally binding contract. All partiesinvolved must agree to the terms of the contract. Can also refer to a binder, which is the preliminary substance of a contract. Agricultural Producer - ANSWER A business that grows, harvests, and sells crops for profit. Aleatory - ANSWER A characteristic of an insurance contract. Means "depending on an unknown future event." An insurance contract will only pay IF and WHEN covered damagesoccur. Neither party knows how much the contract will end up paying when they enter intothe contract. Answer - 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 - ANSWER An item's Replacement cost divided by the number of yearsin its expected lifespan. Appraisal - ANSWERA 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 worktogether to determine a settlement amount. If they cannot agree, the Umpire steps in. Agreement by any two of the three is binding. Arbitration - 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 of each opposing side, and makes a final and legally bindingdecision. Arbitrator - ANSWER The mutually-agreed-upon and neutral third party in an arbitrationwho reviews the positions of each opposing side, and makes a final and legally binding decision. Artificially Generated Current - ANSWER Also called "artificial current." A peril covered insome property insurance policies. It includes sudden and accidental damage from any electrical current, except currents that are naturally generated, such as lightning or static electricity. Auto Policy - ANSWER Insurance policy designed to protect the policyholder while owning, occupying, or operating a vehicle. Usually combines liability coverage and property coverageinto one policy. Automobile - ANSWER In Insurance policies, Automobile generally means any vehicledesigned for use on public roads. Automobile No-Fault Laws - ANSWER Laws in effect in some states that require any owner of a vehicle to purchase no-fault insurance; that is, insurance that indemnifies the insured regardless of who was at fault in an accident. No-fault laws also restrict the insured's right tosue the at-fault party. Aviation - 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 - ANSWER An individual or company that receives the property of someone else for aspecial purpose, and returns the product after use. BAP - ANSWER The Business Auto Policy provides property damage and liability insurancefor automobiles used by a business. Binder - ANSWER A temporary contract provided by an insurer that ensures coverage untilthe complete, permanent policy is issued. Bl - ANSWER (Bodily Injury): Physical damage to someone's person. Liability insurancecovers bodily injury that the insured might cause to another person through negligence. Body Language - ANSWER The signals we give through posture, behaviour, apparel, etc.,which are involved in communication. Boiler & Machinery - ANSWER Boiler and machinery insurance is designed to indemnify abusiness for damages to, and damages by, boilers, machinery, motors, generators and a variety of other electrical devices and appliances. Bond - 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 - ANSWER The failure or falsehood of a stated promise of aproduct stipulation. Business Personal Property - ANSWER Moveable property used for business Catastrophe - ANSWERAn occurrence or a sequence of occurrences that causes enormousproperty losses. Catastrophes are normally uninsurable by private insurers. Cause of Loss - ANSWER A form included in a Commercial Package Policy or a CommercialProperty Policy that lists the causes of loss from which the insured property is covered. CGL - ANSWER A Commercial General Liability policy protects businesses against damagesand injuries to third parties. Civil - ANSWER Civil law observes court cases of one citizen charging another citizen fordamages caused by tort; it differs from criminal law. Claim - ANSWER The "offer of settlement" that the policyholder files with an insurer aftershe experiences a loss. Claims-Made Form - 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 - ANSWER The practice of the insurance adjuster of managing a claimby 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 - ANSWER One who files a claim with an insurer for a loss. Claude the Clueless Adjuster - ANSWER In this course, Claude the Clueless Adjusterrepresents an incompetent or unprofessional adjuster. Coarse Grains - ANSWERIn Crop Insurance, a provision that covers reduction in crop quality, as well as crop-yield losses. Coarse grains are corn, grain sorghum, and soybeans. Coinsurance - ANSWER The Coinsurance Clause applies to policyholders who purchase an inadequate amount of property insurance. These policyholders must pay a percentage of theclaim. In health insurance, coinsurance refers to 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 - ANSWERA set of governing professional standards of conduct, usually created by regulatory bodies or government regulatory agencies. These standards may also beformally codified with statutes. Coercion - 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 otherform of pressure or force. Commerce - ANSWERThe exchange or transport of goods or property. Commercial - ANSWER Having to do with commerce or business activity in general. Commercial Crime Insurance - ANSWER Commercial insurance that covers employeedishonesty and theft by employees or others. Commercial Lines - ANSWER A variety of insurance coverages that protect those involved inthe business of creating, selling, displaying, evaluating, or shipping, etc. Example include: Business Owner's Policy; Commercial Property; Commercial General Liability; Workers Compensation; Professional Liability (D&O), Errors and Omissions (E&O) and Employment-Related Practices Liability. Commercial Property Floater - ANSWER A means of protecting a business' property that isnot in one fixed location. Common Crop Insurance Policy - ANSWER A single uniform policy that combines Crop Revenue Coverage, Revenue Assurance, Income Protection, and Indexed Income Protection. Common Law - ANSWER Based on court decisions and customs when statutory law does notprovide an answer; creates precedent. Compensatory Damages - ANSWER Money awarded in civil court for tangible and intangibledamages caused by a policyholder. Compensatory damages - Special - ANSWER Money awarded for the exact value of thephysical damage caused to the plaintiff up to the trial date. This is an objective value determined by receipts and medical bills. Compensatory damages - General - ANSWERMoney awarded for the emotional losses ofthe plaintiff that will continue after the trial date. These are a subjective value and are determined by the court. Competence - ANSWER One of the four qualifications of a legally binding contract. Allparties must be competent, with the necessary legal and mental capacity. Complaint - ANSWER A complaint initiates a civil lawsuit by a claimant requesting financialrelief from damages caused by a policyholder. Concealment - ANSWERThe act of withholding relevant material facts from an insurer. Conditions - ANSWER The section of a policy that qualifies or limits an insurer's promise topay or perform. Consideration - ANSWEROne of the four qualifications of a legally binding contract. Allparties must bring something of value to the contract. Contract - ANSWER An agreement entered into voluntarily by two parties or more with theintention of creating a legal obligation. Coverages - ANSWER The amount and extent of protection provided by an insurance policy. Crime - 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 - ANSWER Someone who has been convicted of a criminal act in a court of law. Crop Hail Insurance - ANSWER A form of Crop Yield Insurance that is usually provided by private insurers without government subsidy. It offers named-peril protection on an acreagebasis. Crop Insurance - ANSWER Insurance coverage designed to protect a farmer's financialinvestment in his or her crops. Covers losses to a crop's profitability. Crop Revenue Insurance - ANSWER Crop insurance that combines crop-yield insurance andprice insurance to protect against losses to crop value. Crop Yield Insurance - ANSWER Crop insurance that covers physical losses to actual crops. Damages - general - ANSWER Intangible losses such as pain and suffering, or mentalanguish. Damages - special - ANSWER Tangible, financial losses that can be documented. Dangerous Instrumentality Doctrine - ANSWER States that anyone involved in the use ofinherently dangerous products or machines is held 100% liable for their own damages. Dec Page - ANSWERAlso called the Declarations Page. First page of a policy, which providesa summary of the contract; includes names of insured, addresses, coverage limits, policy period, etc. Declined Coverage - ANSWER takes place when an insurance company rejects an applicationfor coverage. Deductible - ANSWER Deductible: the amount the policyholder must pay out-of- pocketbefore the insurance company will pay the remaining costs. Deductible - fixed - ANSWER A fixed deductible is one specific, predetermined amount thata policyholder must pay out-of-pocket before he can be indemnified. Deductible - percentage - ANSWER A deductible that is calculated as a percentage of thevalue of the insured risk. Deductible - franchise - ANSWER A franchise deductible states that the policyholder only pays for damages that are less than his deductible. If the cost of damages equals or exceedshis deductible, the insurer pays the full amount and the policyholder pays nothing. Defamation - ANSWER Damage to another's name or reputation, whether by libel, which isin print, or by slander, which is in speech. Default Judgement - ANSWER Default Judgement is entered by the court against the partywho failed to defend against a claim brought on by another party. In other words, if the person fails to show up and answer the claim the court will find in favor of the other party. Definitions - ANSWER Page in policy that gives specific limited meaning to terms used inpolicy. Depreciation - ANSWER A decline in value of property caused by wear or loss of usefulnessusually measured by a specific formula. Direct Loss - ANSWER Physical harm to tangible property caused by a peril. Discoverable - ANSWER Capable of being demanded and handed over as evidence in a courtof law; during litigation proceedings, the adjuster's claims file is discoverable. Eligiblity - ANSWER Eligibility Requirements are found in some insurance policies. They identify the conditions that must be met by the policyholder in order to qualify for coverageunder a policy. End of Insurance Date - ANSWER The date that crop insurance coverage will end. It is theearliest of: total crop destruction, harvest of the crop, final adjustment of a loss, abandonment of a crop, or a date predesignated by crop type. Endorsement(s) - ANSWER An optional provision that can be added to a policy to increase,reduce, or modify coverage for specific property types or perils. Errors and Omissions - ANSWER Liability insurance that indemnifies professionals for errorsor oversights on the part of the insured that caused harm to their clients. Estoppel - ANSWER A legal principle that bars a party from asserting something contrary towhat has been implied by his previous actions or statements. Ethical - ANSWER Adhering to moral laws and to principles of fairness. Evaluation - ANSWER Evaluation, determining the approximate value of damages relevantto a claim i.e. total of medical bills, costs of repair & replacement of damaged property and the consideration of the financial provisions of the insurance policy. Exclusions - ANSWER A section of an insurance policy that reduces coverage by listingspecific individuals, property, or perils that are NOT covered by the policy. Exposure - ANSWER The extent to which an item is open to damage or loss. More exposuremeans a loss is more likely. Fair Credit Reporting - ANSWERFederal legislation that gives an applicant for insurance theright to investigate the reasons his insurance application was denied. Fall Down Case - ANSWER A lawsuit brought against a property owner by someone who hasfallen down on the property. False Advertising - ANSWER Presenting something in a deceptive or untrue manner to theconsumer; misrepresentations in advertisements. Farm - ANSWER A property where a farmer or rancher both resides and conductscommercial business. Farm Liability Coverage Form - ANSWER A form added to a farm insurance policy that provides coverage for injury and damage to a third party. Farm Property Coverage Form - ANSWER A form added to a farm insurance policy that provides coverage for the dwelling, other structures, farm structures, and both household andfarm personal property. Farmer - ANSWERSomeone in the business of growing, harvesting, and selling crops forprofit. In Farm insurance, a farmer must reside and do business on the same premises. Federal Crop Insurance Act - ANSWER Legislation passed by Congress that established theFederal crop insurance program. Federal Crop Insurance Corporation (FCIC) - ANSWER A government-owned corporation thatmanages the Federal crop insurance program. FEMA - ANSWER Federal Emergency Management Agency - a branch of homeland securitythat coordinates relief programs when disaster strikes an entire community. Fiduciary - ANSWER One of the terms that describes the adjuster's relationship with the principal (the insurer). As Fiduciary Agent, the adjuster acts for the benefit of the principal,rather than for his own benefit. Final planting date - ANSWER The last day to plant crops in order to receive the fullinsurance yield and/or revenue guarantee selected. First Named Insured - ANSWER The first person or entity named as insured on thedeclarations page of a policy. Floater - ANSWER A term for Inland Marine policies that cover mobile property. Flood - ANSWER An overflow of inland or tidal waters; an unusual or rapid accumulation of runoff or surface waters from any source; mud flows; collapse or subsidence of land along theshore of a lake or other body of water. Flood Insurance - ANSWER provides relief following flood damage to communities who participate in the NFIP floodplain management system; covers damages to the building and itscontents Floodplain Management - ANSWER maps out areas with high risk of flood, so thatcommunities will avoid building in these areas Fraternal Benefit Societies - ANSWER Fraternal Benefit Societies, or Fraternal Associations,are non-profit, mutual aid organizations that engage primarily in charitable or benevolent activities. They offer their members insurance against death, disease, and disability. Fraud - ANSWER The act of deceiving an insurance company in order to collect more moneythan one is legally entitled to. Fraud, Hard - ANSWERDeliberately faking or causing an incident in order to collect money. Fraud, Soft - ANSWERInflating the gravity or the extent of claims in order to receive ahigher indemnification. Full and legal purpose - ANSWER See also "Legal Purpose." One of the four qualifications ofa legally binding contract. The purpose of the contract must be legal (e.g. no contracts for illicit drug deals). Good faith - ANSWER Acting honestly and fairly, with good intentions and full disclosure. Group Risk Income Protection (Crop Insurance) - ANSWER A form of Crop Revenue Insurance that protects a whole county or area instead of individual farmers. Automaticallyindemnifies if county income falls below a certain level. Hazard, Moral - ANSWERHazard caused by insured persons deliberately engaging in riskybehavior because they know that insurance will indemnify them for the losses. Hazard - ANSWER Anything that increases the chance of loss. Hazard morale - ANSWER Unconscious tendency of insured people to engage in riskierbehavior. Hazard Physical - ANSWER Any physical condition that increases the chance of a loss. HIPAA - ANSWER Health Insurance Portability and Accountability Act, 1996 US law protecting consumer privacy, regulating collection, use and storage of private information. HO Forms 2 - ANSWER The "broad" or "cheap" form of Homeowners Insurance; a basic,named-peril HO form that nevertheless is less limited than the HO-8. HO Forms 3 - ANSWER "Special form" of Homeowners Insurance; all-peril coverage forstructures, named-peril coverage for contents. HO Forms 4 - ANSWER "Contents broad form"; named-peril renter's policy covering onlypersonal property and any structural improvements made at tenant's own expense. HO Forms 5 - ANSWER "Comprehensive form" of Homeowners Insurance; provides all-perilcoverage to both structures and contents; the Cadillac of HO forms. HO Forms 6 - ANSWER "Condo" or "unit owner's form"; named-peril homeowners policycovering personal property and the surface structure of a condominium. HO Forms 8 - ANSWER "Modified coverage form" of Homeowners Insurance; named-peril coverage for structures and contents, fewer perils covered; form for buildings with low value. Homeowner's Policy - ANSWER An insurance policy that combines property coverage withliability coverage for a person's home. IIPPA - ANSWER The Insurance Information and Privacy Protection Act regulates how aninsurance company can use consumers' private information. Impaired Property - ANSWER Property that is defective because the insured's deficient orincomplete additions or work. Income Protection (Crop Insurance) - ANSWER A form of Crop Revenue Insurance. One of the cheapest available; provides a fixed revenue guarantee based on early commodity pricesfor the crop type. Indemnification - ANSWER Reimbursement for a loss, which leaves the claimant in the samefinancial position that she was in before the loss. Indemnify - ANSWER To restore by payment, repair, or replacement Indemnity Insurance - ANSWER Insurance that indemnity's loss as opposed to liability Indirect Loss - ANSWER An economic loss that results from the direct, or physical, loss. Inland Marine - ANSWER Insurance that protects property being transported over land Insurable acreage - ANSWER All of the acreage of the insured crop, for which a premium rate is provided in the actuarial documents, in which the insured has a financial interest, andwhich is planted in the county listed on the application. Insurance - ANSWERA financial device that transfers the risk of unexpected, catastrophiclosses from one party to another. Insurance Company - ANSWER Company which sells insurance policies to individuals or toother companies. Insurance Policy - ANSWER A contract wherein an insured pays premiums to an insurer inexchange for financial protection in the event of a covered loss. Insurance Rating Systems - ANSWER Methods of evaluating the risk involved in insuring aperson, property, or a corporation. Insurers use rating systems to calculate premiums. Insured - ANSWER A person or entity who is covered under an insurance policy. Insured crop - ANSWER The crop in the county for which coverage is available as specifiedby the policy. Insurer - ANSWERThe person or entity providing coverage to one or more insureds. Insuring Agreement - ANSWER A section of an insurance policy that summarizes theinsurer's promise to pay. Includes list of covered property and perils. Interest - ANSWER Direct financial interest in protecting a unit. Intervening Cause - ANSWER A separate occurrence that "intervenes" between a defendant's actions and damage or loss to another person. An intervening cause may decrease the defendant's liability, if the defendant can show that it was the intervening cause(rather than the defendant himself) that caused the damage or loss. For example, say your neighbor asked you to watch his Yorkshire terrier during his weekend vacation. As the dog explores the ravine behind your house, a red tailed hawk swoops down and carries the little dog away. When your neighbor sues you for negligence, you could argue that the hawk (and not your own negligence) was the real cause of loss. Joint - ANSWER Liability shared by two or more persons. Judgement - ANSWERAn official court ruling forming a final decision resolving a dispute orforming a final decree. Kickbacks - ANSWER Any sort of reward or remuneration for referrals or favors; forexample, a body shop giving money to an adjuster for referring customers. Landlord - ANSWEROne who has leased property to a tenant. Late planting period - ANSWER 25 days after the final planting date, during which the yieldand/or revenue guarantee drops by one percent per day. Leased worker - ANSWER Worker hired through a labor leasing firm. Legal Purpose - ANSWER 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) Liability - ANSWER An obligation to do or not to do something; responsibility for an action. Liability Insurance - ANSWER Liability insurance indemnifies a third party for damagescaused by the insured's negligence. Liability - employer - ANSWER Protects employers from damages and bodily injury caused toemployees or by employees while performing under the scope of their employment. Liability - product - ANSWER Protects a policyholder from legal liability for damages to thirdparties caused by the manufacturing, merchandising, distributing, or operation of a product. Liability - public - ANSWER Protects individuals and commercial venues from any propertydamage or personal injury they may cause to the general public Liberalization - ANSWER The liberalization clause in an insurance contract is a condition thatstates that the insurer can add or broaden coverage at any time without writing up a new contract. This clause guarantees that, in the case of legislative action that broadens insurancecoverage without any increase in premiums, this additional coverage must take effect in existing policies as well as in new policies. License - ANSWER A document that shows that a person has been granted authority by thestate to act as an insurance agent, broker, or adjuster. Limits - ANSWER The limits of an insurance policy represent the highest amount an insurerwill pay. Any cost above the limits of insurance is the responsibility of the policyholder. Litigation - ANSWER An action brought in court. Litigation takes place when an insurer and apolicyholder disagree about a settlement amount and cannot resolve their differences through any sort of negotiation. Livestock Floater - ANSWER Optional Farm Insurance coverage. Provides stand-aloneprotection for six kinds of domesticated animals on a scheduled or unscheduled basis. Includes coverage for animals while in transit. Loss - ANSWERBodily injury, property damage, or damage caused by the insured's negligentacts; loss is the the basis for an insurance claim. Loss can also mean the sum the insurer will have to pay. Loss - direct - ANSWER Physical loss or damage to property directly due to an incident; , wind, etc.. Machinery - ANSWER Machines or the parts of a machine. Malpractice - ANSWER Negligent or improper actions on the part of doctors, lawyers, and accountants etc., resulting in damage, injuries, or losses to the person receiving their services. Marine - ANSWER Marine insurance covers items that are being transported, as well as thevehicles used for transportation. Market Value - ANSWER The price something will sell for in the open market, or "fairmarket value." McCarren-Ferguson Act - ANSWER 1945 US Law exempting insurance from most federalregulation, and placing it under the authority of the individual states. Mechanical Breakdown - ANSWER Mechanical Breakdown Insurance (MBI) covers lossesdue to breakdown of motor vehicles. Mediation - ANSWER A method of negotiation that utilizes a neutral third party adviser to reach a mutually-agreeable solution. Mediation differs from Appraisal in that the decision isnot binding to the opposing parties. Misrepresentation - ANSWER Any false or misleading statement. Mobile Agricultural Machinery and Equipment Coverage Form - ANSWER A commercial property form that provides coverage for farm machinery and equipment when it is the onlyexposure, or when coverage must be written separately. Mr. Insurer - ANSWER In this course, Mr. Insurer represents the entity providing insurance. Multi Peril Crop Insurance - ANSWER A form of Crop Yield insurance that offers broad coverage for a multitude of perils. Because it is subsidized by the government, MPCI is subjectto federal regulation. Mutual - ANSWER A mutual insurance company is owned by its policyholders. They have noshareholders and are not traded publicly. National Association of State Departments of Agricultural Research Foundation - ANSWER Anon-profit association of public officials representing the Commissioners, Secretaries, and Directors of Agriculture in the fifty states and four territories. National Center for Agricultural Law Research and Information - ANSWER Independent agricultural and food law research and information center created to address the complex legal issues affecting American agriculture. National Crop Insurance Services - ANSWER A non-profit international organizationspecializing in statistical data analysis and reporting related to crop insurance risk management. National Resources Conservation Service - ANSWER A federal agency within the USDA thatworks with private landowners and operators to help them protect their natural resources. Negligence - ANSWERThe failure to exercise a reasonable degree of care in a particularsituation. Negotiations - ANSWER Negotiations take place when the insurer and the claimant do notagree about an indemnification amount. The insurance adjuster is often the one who will carry out the negotiations. NFIP - ANSWER National Flood Insurance Program - a program that provides insurance for communities that suffer flood damage and are willing to participate in the FEMA's floodplainmanagement system. Non Commercial - ANSWER Non-Commercial insurers are not-for-profit insurance companies that return profits to policyholders by reducing premiums or expanding benefits. Occurence - ANSWERAn unexpected event or circumstance that causes injury or damage. Occurrence Form Policy - ANSWER One of two forms of CGL: triggered by occurrence, so that if a loss occurred during the policy period, it is covered even if the claim is made muchlater. Ocean Marine - ANSWER Insurance designed to protect property being transportedoverseas. Offer - ANSWER The 'Offer' is a claim submitted to the insurance company for compensationdue to a loss or losses the claimant believes are covered by the insurance policy and is legally considered an 'offer to settle' the claim. PAP - ANSWER The Personal Auto Policy is a package policy that combines property damageand liability insurance for motor vehicles. Paul the Policyholder - ANSWER In this course, Paul the policyholder represents any and allpersons or entities who hold a policy. In other words, anyone who is insured. PD - ANSWER Property Damage: damage or loss of use of personal property. Peril - ANSWER The actual cause of loss or damage, such as lightning, fire, or theft. Personal - ANSWERPersonal Lines insurance protects the personal and real property of an individual. A Personal Auto Policy and a Homeowners Policy are examples of Personal Lines ofinsurance, as opposed to Commercial Lines. Personal Injury - ANSWER Damages to a third party's character, reputation, or standing inthe community. Personal Property Floater - ANSWER Protects property owners from damage or losses topersonal articles while in the process of transport. PIP - ANSWER Personal Injury Protection: a form of no-fault auto insurance utilized in some states. Policy - ANSWER See Insurance Policy. Policy Period - ANSWER The beginning and end dates of coverage. Found on declarationspage. Policyholder - ANSWERAlso called the "insured", a policyholder is a person who haspurchased an insurance policy - or contract-from an insurer. Power to bind - ANSWER One manifestation of the authority given to insurance agents bythe principal. The principal is bound by, or must adhere to, the guarantees and statements made by its agent. Premium - ANSWERA scheduled and affordable fee, paid by the policyholder to the insurer,in return for coverage. Preponderance of Evidence - ANSWER A preponderance of evidence is enough evidence tomake it more likely that an argument is true than that it is false. In a civil trial, the plaintiff needs to provide a preponderance of evidence in order to win her case. Principal - ANSWERThe principal refers to an agent's employer (usually an insurance company, but it could also mean anyone who contracts the agent to work on their behalf andgives her the authority to do so). Principle of Indemnity - ANSWER The principle behind all insurance contracts. It states that, when a loss occurs, the insured should be restored to his or her financial condition before the loss occurred, no better, no worse. The insured cannot profit from a loss. Privacy - ANSWER In insurance, the right of consumers to have their personal informationprotected. Private - ANSWER Private insurance is the term for any insurance other than social insurance. Social insurance programs are run by the government instead of by privateindividuals. Private Crop Insurance - ANSWER Crop insurance that does not fall under the Federal CropInsurance Program and is provided directly to farmers by private insurers. Professional Liability - ANSWERProfessional Liability Coverage is insurance that protectspractitioners such as doctors, lawyers, engineers, architects, etc.. It includes two types of coverage: malpractice insurance and errors and omissions insurance. Proof of Loss - ANSWER The form or statement that the policyholder is required to submitto the insurer before she can be indemnified for a loss. Proximate Cause - ANSWER The original occurrence, the source, of all the subsequentdamages. Punitive Damages - ANSWER Intangible damages awarded to the plaintiff when the defendant's actions show intentional heinous, antisocial behavior or extreme indifference toharm. They are determined by the court. Rating Systems - ANSWER Measure hazards of individual risk in a given area, and setspremiums accordingly. RC - ANSWER RC: Replacement Cost, It refers to the cost of repairing or replacing an insureditem, based on the item's value at the time of the loss. Rebates - ANSWER Refunding of part of the premium, due to the creation of a new contractor change to an existing contract. Reciprocal Insurers - ANSWER A Reciprocal Insurer is an unincorporated organization of subscribers that operates through an attorney-in-fact to provide insurance benefits for itsmembers. Reinsurers - ANSWER Companies which sell insurance to insurers to reduce the insurer'sexposure to loss. Reporting - ANSWER One of the adjuster's duties is to Report to the Principal. The adjustermust give the principal frequent updates of her progress on any given claim. Replacement Cost (RC) - ANSWER The cost of repairing or replacing an insured item, basedon the item's value at the time of the loss. Reservation of Rights - ANSWER A notification that an insurer might give to an insured, informing him that a reported loss might not be covered under his insurance policy. Retroactive date - ANSWERDate preceding a policy period before which the policy will notcover occurrences. Revenue Assurance (Crop Insurance) - ANSWER A form of Crop Revenue Insurance thatprovides a fixed revenue guarantee based on average county prices Revenue Protection (Crop Insurance) - 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 the higher of: harvest- market price or early market price. Previously called Crop Revenue Coverage (CRC) Risk - ANSWER In the insurance industry, risk can have two meanings: 1) the potential forfinancial loss; being exposed or open to damage, 2) an insured item. Risk Avoidance - ANSWER Insurers' practice of denying insurance applications that theybelieve would involve an inordinate amount of risk. Risk Management - ANSWER Measures taken by an insurance company to ensure that theirexposure is not too high and to control the effect of a loss; for example, an insurer might charge higher premiums to drivers who have received speeding tickets. Risk Management Agency - ANSWER A federal agency under the USDA that administers theFederal Crop Insurance Program. Risk Purchasing Groups - ANSWER Groups of people with similar insurance needs who forman organization to buy insurance as a group. Risk, Pure - ANSWER Risk that does not entail the possibility of gain; the only possibleoutcomes are a loss or no loss. Risk Reduction - ANSWER An insurer practices risk reduction when it takes precautions in order to reduce its exposure; for example, requiring that all homes insured by a homeownerspolicy have fire alarms installed. Risk Retention - ANSWER An insurer practices risk retention when it chooses to insure a riskinstead of denying coverage. Risk Retention Groups - ANSWER Groups where the members insure each other, using theirown capital to write insurance policies. Risk, Speculative - 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). Sales closing date - ANSWER The last date on which an insurance application for a particularcrop can be completed and signed. Salvage - ANSWERSalvage is damaged property that has cash value. In HO the policyholderhas the option of keeping the salvage and accepting a smaller settlement from the insurer. The insurer has the option of keeping the salvage if they have fully indemnified the insured,but in no case can the insured insist the insurer keep the salvage. Scheduled payment release - ANSWERSometimes called "open-ended release" or "rehabilitation settlement." The insurer agrees to pay all of the special damages and generaldamages that have accumulated so far, and agrees to pay special damages in the future. Settlement - ANSWER A resolution of a dispute, or an agreement. Settlement allows aninsurer and a claimant to resolve a case before it reaches a court of law. Small Grains - 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 - ANSWER A statute based on the common law legal system that specifies the maximum period of time, after damages occur, that legal proceedings based onthose damages may be initiated. Statutory Law - ANSWER based on laws set forth by a governing authority; i.e. statelegislature Stipulation - ANSWER A stipulation is something specifically agreed to in a contract, such asan insurance contract. Stock - ANSWER A Stock Insurance Company is owned by stockholders, as opposed to itsown policyholders (as is the case with Mutual Insurance Companies). Strict Liability - ANSWER Holds a party 100% liable for damages when the activity orinstrument they are performing is inherently dangerous. Subrogation - ANSWERThe transfer of rights that occurs when an insurer indemnifies a claimant for a loss. The claimant transfers to the insurer his right to collect the amount of theindemnity from the guilty party. Sudden and Accidental Tearing Apart - ANSWER A peril covered in some property insurancepolicies. It refers to damage caused by rupture, cracking, burning, or bulging of a steam or hotwater heating system, an air conditioning or automatic fire sprinkler system, or an appliance for heating water. Unlike Accidental Discharge, this peril includes coverage for the system or appliance itself. Supplementary payments - ANSWER Tort - ANSWER Any civil wrongdoing, whether intentional or unintentional, resulting in acourt action to remedy. Tort - negligent - ANSWER When a negligent act causes unintentional damages to anotherparty. Tort - intentional - ANSWER A premeditated wrongful act that causes intentional or intentional damages to another party. Tort law - ANSWER The body of law that addresses and provides remedies for any civilwrongdoing performed on another party. Tortfeasor - ANSWER The defendant in a court case who committed the tort. Transitional yield - ANSWER County 10-year yield average as determined by the NationalAgricultural Statistical Service. Used when issuing a crop insurance policy to a farmer who lacks four years of yield records on which to base coverage and premium amounts. Trigger - ANSWER An event that "triggers" the coverage provided under a CGL policy: inclaims-made, it is a claim, in occurrence form, it is the "occurrence." Trustworthiness - ANSWER The virtue of carrying out responsibilities reliably, worthy ofbeing trusted. A necessary attribute of insurance adjusters. Umbrella Liability Policy - ANSWER An umbrella policy provides liability coverage over andabove the normal or base limits of liability in a policy. An umbrella policy is a type of Excess Liability. Underinsured - ANSWERNot sufficiently insured against particular losses. For example, anyhome insured at less than 80% of its value is considered underinsured. Unfair Claim Settlement Practices - ANSWER Dishonest or unfair behavior related to settlinginsurance claims which is specifically proscribed by state law. Unilateral - ANSWER A characteristic of insurance contracts. It means that only one of the parties (the insurer) makes a promise to perform. The insurer is obligated to fulfill thispromise, whereas the insured is free to void the contract at any time. Uninsurable - ANSWERRisks are said to be uninsurable when they do not meet certainqualifications. For example, an insurable risk cannot involve a loss that the insured deliberately causes. Again, certain perils are too catastrophic to be insurable (like war ornuclear events). Unscheduled - ANSWERUnscheduled property is property covered under an insurancecontract that is not listed item by item (as "Scheduled" property would be listed). U.S. Environmental Protection Agency - ANSWER Federal agency primarily responsible forthe implementation of most federal laws designed to protect, enhance, and conserve the nation's natural resources. Utmost Good Faith - ANSWERA 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 contract must act with utmost good faith. It also applies to a fiduciary agent's responsibility towards the principal. Valuation - ANSWER The processes of estimating what an item is worth. Value - ANSWER The estimated or appraised worth of an item, used to determine thereplacement cost or indemnification amount. Valued policy - ANSWER A policy in which the insurer and the insured agree to a specificvalue prior to the start of the policy. If the item is lost or destroyed, the insurer pays the amount agreed upon. Vicarious Liability - ANSWER When an act of negligence is transferred from one party to another, such as from employee to employer or from child to parent. Waiver - ANSWER A waiver is a voluntary act of relinquishing a known right, claim orprivilege. Either an insured or an insurer may waive rights. Waiver - Express - ANSWER An explicit relinquishment of a right. Waiver - Implied - ANSWER An implicit relinquishment of a right through behavior thatseems to assume that the right does not exist. Waiver of Sovereign Immunity - ANSWER Sovereign Immunity disallows an individual to suea governmental entity; the waiver of sovereign immunity allows individuals to sue governmental entities under specific circumstances. Warranty - ANSWER An ongoing assurance made by the insured that certain conditions in an insurance contract will be met (for example, that the insured will maintain functional firealarms). Workers Compensation - ANSWER form of insurance that covers medical costs and lost wages in the event of injury, disease, or disability sustained by an employee in the course ofhis work/ Purchased by employers. Wrongful Death Act - ANSWER allows the individuals who are associated with a deceasedperson who was killed because of a negligent act to sue the responsible party. Yield Protection (Crop Insurance) - ANSWER See Revenue Protection (Crop Insurance)