Insurance claims adjusting

CGL (Commercial General Liability)

A Commercial General Liability policy protects businesses against damages and injuries to third parties.

Agricultural Producer

A business that grows, harvests, and sells crops for profit.

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.

Complaint

A complaint initiates a civil lawsuit by a claimant requesting financial relief from damages caused by a policyholder.

Bond

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

Depreciation

A decline in value of property caused by wear or loss of usefulness usually measured by a specific formula.

Deductible- percentage

A deductible that is calculated as a percentage of the value of the insured risk.

Cause of Loss

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.

Crop Hail Insurance

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.

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.

Estoppel

A legal principle that bars a party from asserting something contrary to what has been implied by his previous actions or statements.

Claims-made Form

A liability policy in which the insurer pays only those claims a raising during the policy period (as opposed to those claims a raising after the policy period is over, regardless of whether the incident took place during the policy period).

Commercial Property Floater

A means of protecting a business' property that is not in one fixed location.

Arbitration

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 binding decision.

Appraisal

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 a settlement amount. If they cannot agree, the Umpire steps in. Agreement by any two of the three is binding.

Exclusions

A section of an insurance policy that reduces coverage by listing specific individuals, property, or perils that are NOT covered by the policy.

Code of Ethics

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.

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.

Common Crop Insurance Policy

A single uniform policy that combines Crop Revenue Coverage, Revenue Assurance, Income Protection, and Indexed Income Protection.

Binder

A temporary contract provided by an insurer that ensures coverage until the complete, permanent policy is issued.

Aggregate Limit

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 (as opposed to an occurrence limit, which denotes the total amount the insurer will pay per occurrence.)

Commercial Lines

A variety of insurance coverages that protect those involved in the business of creating, selling, displaying, evaluating, or shipping, etc. Example: 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.

Ethical

Adhering to moral laws and to principles of fairness.

Adjuster- Emergency

Adjuster who are temporarily licensed by the insurance commissioner to handle claims during catastrophes or emergencies that can produce an overwhelming number of claims in a short period of time.

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 naturally generated, such as lightning or static electricity.

Dec Page

Also called the Declarations Page. First, page of a policy, which provides a summary of the contract; includes names of insured, addresses, coverage limited, policy period, etc.

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 a final settlement.

Adjuster

An agent, who, for compensation, processes insurance claims. Can represent either the insured or the insurer.

Contract

An agreement entered into voluntarily by two parties or more with the intention of creating a legal obligation.

Bailee

An individual or company that receives the property of someone else for a special purpose, and returns the product after use.

Annual Depreciation

An item's Replacement cost divided by the number of years in its expected lifespan. Formula: Replacement cost/the item's useful life

Catastrophe

An occurrence or a sequence of occurrences that causes enormous property losses. Catastrophes are normally uninsurable by private insurers.

Crime

An offense against the State or Federal Government, or a breach of law, for which the offender shall make satisfaction to the public.

Endorsement(s)

An optional provision that can be added to a policy to increase, reduce, or modify coverage for specific property types or perils.

Coinsurance

Applies to policyholders who purchase an inadequate amount of property insurance. These policyholders must pay a percentage of the claim. 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. By means of this clause, the proper relationship between premiums and payouts is achieved. This maintains both the insurer's financial health and the insured's financial obligation.

Eligibility

Are found in some insurance policies. They identify the conditions that must be met by the policy holder in order to qualify for coverage under a policy.

Agency Authority- apparent

Authority that an agent possesses based on the appearance of representing the insurer.

Agency Authority- implied

Authority that an agent possesses by implication of behavior, regardless of whether this authority is granted in writing.

Agency Authority- express

Authority that is expressly given to the agent in writing. Allows agent to act on behalf of the principal.

Aviation

Aviation insurance combines hull insurance for the aircraft and liability insurance for any damage to others' property or to people who are not passengers.

Common Law

Based on court decisions and customs when statutory law does not provide an answer; creates precedent.

Boiler & Machinery

Boiler and machinery insurance is designed to indemnify a business for damages to, and damages by, boilers, machinery, motors, generators and a variety of other electrical devices and appliances.

Discoverable

Capable of being demanded and handed over as evidence in a court of law; during litigation proceedings, the adjuster's claims file is discoverable.

Adhesion

Characteristic of an insurance contract. Means that one party (the insurer) sets the terms, and the other (the policy holder) can "take it or leave it."

Civil

Civil law observes court cases of one citizen charging another citizen for damages caused by tort; it differs from criminal law.

Commercial Crime Insurance

Commercial insurance that covers employee dishonesty and theft by employees or others.

Crop Revenue Insurance

Crop insurance that combines crop-yield insurance and price insurance to protect against losses to crop value.

Crop Yield Insurance

Crop insurance that covers physical losses to actual crops.

Defamation

Damage to another's name or reputation, whether by libel, which is in print, or by slander, which is in speech.

Evaluation

Determining the approximate value of damages relevant to 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.

Default Judgement

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 claim the court will find in favor of the other party.

Fair Credit Reporting

Federal legislation that gives an applicant for insurance the right to investigate the reasons his insurance application was denied.

Commercial

Having to do with commerce or business activity in general.

Coarse Grains

In Crop Insurance, a provision that covers reduction in crop quality, as well as crop-yield losses. Coarse grans are corn, gran sorghum, and soybeans.

Automobile

In insurance policies, Automobile generally means any vehicle designed for use on public roads.

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 3) accept the complaint with a right to insert evidence into the case

Crop Insurance

Insurance coverage designed to protect a farmer's financial investment in his or her crops. Covers losses to a crop's profitability.

Auto Policy

Insurance policy designed to protect the policyholder while owning, occupying, or operating a vehicle. Usually combines liability coverage and property coverage into one policy.

Damages- general

Intangible losses such as pain and suffering, or mental anguish.

Automobile No-Fault Laws

Laws in effect in some states that require any owner of a vehicle to purchase no-fault insurance; that is, insurance that indemnified the insured regardless of who was at fault in an accident. No-fault laws also restrict the insured's right to sue the at-fault party.

Errors and Omissions

Liability insurance that indemnified professionals for errors or oversights on the part of the insured that caused harm to their clients.

Compensatory damages- General

Money awarded for the emotional losses of the plaintiff that will continue after the trial date. These are a subjective value and are determined by the court.

Compensatory damages- Special

Money awarded for the exact value of the physical damage caused to the plaintiff up to the trial date. This is an objective value determined by receipts and medical bills.

Compensatory Damages

Money awarded in civil court for tangible and intangible damages caused by a policyholder.

Business Personal Property

Moveable property used for business.

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.

Actual Cash Value

Often expressed as ACV. A valuation method used by insurers to reflect an item's current market value right before being damaged or destroyed. To use the formula, we need estimates for both the replacement cost and the depreciate on the insured property. Formula: Replacement cost - Depreciation Because ACV coverage does not pay fully to replace or repair an item, ACV policies have lower premiums.

Competence

One of four qualifications of a legally binding contract. All parties must be competent, with the necessary legal and mental capacity.

Consideration

One of the four qualifications of a legally binding contract. All parties must bring something of value to the contract.

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.

Deductible- fixed

One specific, predetermined amount that a policyholder must pay out-of-pocket before he can be indemnified

Claimant

One who files a claim with an insurer for a loss.

Definitions

Page in policy that gives specific limited meaning to terms used in policy.

BI (Bodily Injury)

Physical damage to someone's person. Liability insurance covers bodily injury that the insured might cause to another person through negligence.

Direct Loss

Physical harm to tangible property caused by a peril.

False Advertising

Presenting something in a deceptive or untrue manner to the consumer; misrepresentations in advertisements.

Adjuster- Staff

Salaried employee of one insurance company who can work locally, regionally, or nationally. Also called Company Adjuster.

Adjuster- Independent

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

Criminal

Someone who has been convicted of a criminal act in a court of law.

Agent

Someone who has received authority from an insurer to sell or service insurance policies.

Dangerous Instrumentality Doctrine

States that anyone invoiced in the use of inherently dangerous products or machines is held 100% liable for their own damages.

Deductible- franchise

States that the policyholder only pays for damages that are less than his deductible. If the cost of damages equals or exceed his deductible, the insurer pays the full amount and the policyholder pays nothing.

Declined Coverage

Takes place when an insurance company rejects an application for coverage.

Damages- special

Tangible, financial losses that can be documented.

Agency Authority

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.

BAP

The Business Auto Policy provides property damage and liability insurance for automobiles used by a business.

Concealment

The act of withholding relevant material facts from an insurer.

Coverages

The amount and extent of protection provided by an insurance policy.

Deductable

The amount the policy holder must pay out-of-pocket before the insurance company will pay the remaining costs.

End of Insurance Date

The date that crop insurance coverage will end. It is the earliest of: total crop destruction, harvest of the crop, final adjustment of a loss, abandonment of a crop, or a date predesignated by the crop type.

Acreage Reporting Date

The deadline for providing the insurer with an acreage report, which is used to determine the amount of coverage needed and the premium charged for a particular crop.

Commerce

The exchange or transport of goods or property.

Exposure

The extent to which an item is open to damage or loss. More exposure means a loss is more likely.

Breach of Product Warranty

The failure or falsehood of a stated promise of a product stipulation.

Arbitrator

The mutually-agreed-upon and neutral third party in an arbitration who reviews the positions of each opposing side, and makes s final and legally binding decision.

Coercion

The practice of forcing another party to behave in a n involuntary manner (whether through action or inaction) by use of threats or intimidation or some other form of pressure or force.

Claims Management

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.

Claim

The request for settlement that the policyholder files with an insurer after experiencing a loss.

Conditions

The section of a policy that qualifies or limits an insurer's promise to pay or perform.

Accumulated Depreciation

The total decrease in an item's value over time. Formula: Annual depreciation x number of years used (its age)