Insurance Glossary: Terms and Definitions, Exams of Nursing

Download Insurance Glossary: Terms and Definitions and more Exams Nursing in PDF only on Docsity! Adjuster Pro- Florida Certified Adjuster Glossary Final Test Questions with Answers 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 answers 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 (Crop Insurance) - 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 is 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 answers Authority that is expressly given to the agent in writing. Allows agent to act on behalf of the principal. Agency 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. Lavatory - 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 appraiser’s then work together to determine settlement amount. If they cannot agree, the Umpire steps in. Agreement by any two of the three 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 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 coverage’s that protect those involved in the 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 - 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. Concealment - Correct answer the act of withholding relevant material facts from an insurer. Conditions - Correct answer the section of a policy that qualifies or limits an insurer's promise to pay or perform. Consideration - Correct answer one of the four qualifications of a legally binding contract. All parties must bring something of value to the contract. Contract - Correct answer an agreement entered into voluntarily by two parties or more with the intention of creating a legal obligation. Coverage’s - Correct answer the amount and extent of protection provided by an insurance policy. Crime - Correct 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 - Correct answer someone who has been convicted of a criminal act in a court of law. Crop Hail Insurance - Correct answer 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. Crop Insurance - Correct answer Insurance coverage designed to protect a farmer's financial investment in his or her crops; covers losses to a crop's profitability. Crop Revenue Insurance - Correct answer Crop insurance that combines crop-yield insurance and price insurance to protect against losses to crop value. Crop Yield Insurance - Correct answer Crop insurance that covers losses to actual crops. Damages - general - Correct answer Intangible losses such as pain and suffering, or mental anguish. Damages - special - Correct answer Tangible, financial losses that can be documented. Dangerous Instrumentality Doctrine - Correct answer States that anyone involved in the use of inherently dangerous products or machines is held100% liable for their own damages. Dec Page - Correct answer First page of a policy, which provides a summary of the contract; includes names of insured, addresses, coverage limits, policy period, etc. Declined Coverage - Correct answer Takes place when an insurance company rejects an application for coverage. Deductible - Correct answer the amount the policyholder must pay out-of-pocket before the insurance company will pay the remaining costs. Deductible - fixed - Correct answer a fixed deductible is one specific, predetermined amount that a policyholder must pay out-of-pocket before he can be indemnified. Deductible - percentage - Correct answer a deductible that is calculated as a percentage of a covered loss. Deductible - franchise - Correct answer States that the policyholder only pays for damages that are less than his deductible. If the cost of damages equals or exceeds his deductible, the insurer pays the full amount and the policyholder pays nothing. Defamation - Correct answer Damage to another's name or reputation, whether by libel, which is in print or by slander, which is in speech. Default Judgment - Correct answer Default Judgment is 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. Definitions - Correct answer Page in policy that gives specific limited meaning to terms used in policy. Depreciation - Correct answer a decline in value of property caused by wear or loss of usefulness usually measured by specific formula. Direct Loss - Correct answer Physical harm to tangible property caused by a peril. Discoverable - Correct answer Capable of being demanded and handed over as evidence in a court of law; during litigation proceedings, the adjuster's claims file is discoverable. Eligibility - Correct 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 coverage under a policy. Endorsement(s) - Correct 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 - Correct answer Liability insurance that indemnifies professionals for errors or oversights on the part of the insured that caused harm to their clients. Estoppel - Correct answer A legal principle that bars a party from asserting something contrary to what has been implied by his previous actions or statements. HIPAA - Correct answer Health Insurance Portability and Accountability Act, 1996 US law protecting consumer privacy, regulating collection, use and storage of private information. HO Forms 2 - Correct answer the "broad" or "cheap" form of Homeowners Insurance; a basic, named-peril HO form that Nevertheless is less limited than the HO-8. - Correct answer HO Forms 3 - Correct answer Special form" of Homeowners Insurance; all-peril coverage for structures named-peril coverage for contents. HO Forms 4 - Correct answer Contents broad form"; named-peril renter's policy covering only personal property and any structural improvements made at tenant's own expense. " HO Forms 5 - Correct answer Comprehensive form" of Homeowners Insurance; provides all-peril coverage to both structures and contents; the Cadillac of HO forms. " HO Forms 6 - Correct answer Condo" or "unit owner's form"; named-peril homeowner’s policy covering personal property and the surface structure of a condominium. " HO Forms 8 - Correct 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 - Correct answer an insurance policy that combines property coverage with liability coverage for a person’s home. IIPPA - Correct answer The Insurance Information and Privacy Protection Act regulates how an insurance company can use consumers' private information. Impaired Property - Correct answer Property that is defective because the insured's deficient or incomplete additions or work. Income Protection (Crop Insurance) - Correct answer a form of Crop Revenue Insurance. One of the cheapest available; provides a fixed revenue guarantee based on early commodity prices for the crop type. Indemnification - Correct answer Reimbursement for a loss, which leaves the claimant in the same financial position that she, was in before the loss. Indemnify - Correct answer to restore by payment, repair, or replacement Indemnity Insurance - Correct answer Insurance that indemnity’s loss as opposed to liability Indirect Loss - Correct answer an economic loss that results from the direct, or physical, loss. Inland Marine - Correct answer Insurance that protects property being transported over land Insurance - Correct answer a financial device used by people and organizations to protect themselves from unexpected, extraordinary financial losses. Insurance Company - Correct answer Company which sells insurance policies to individuals or to other companies. Insurance Policy - Correct answer a contract wherein an insured pays premiums to an insurer in exchange for financial protection in the event of a covered loss. Insurance Rating Systems - Correct answer Methods of evaluating the risk involved in insuring a person, property, or a corporation. Insurers use rating systems to calculate premiums. Insured - Correct answer a person or entity that is covered under an insurance policy. Insurer - Correct answer the person or entity providing coverage to one or more insured’s. Insuring Agreement - Correct answer a section of an insurance policy that summarizes the insurer's promise to pay. Includes list of covered property and perils. Interest - Correct answer direct financial interest in protecting a unit. Intervening Cause - Correct 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. Joint - Correct answer Liability shared by two or more persons. Judgment - Correct answer an official court ruling forming a final decision resolving a dispute or forming a final decree. Kickbacks - Correct answer any sort of reward or remuneration for referrals or favors; for example, a body shop giving money to an adjuster for referring customers. Landlord - Correct answer one who has leased property to a tenant. Leased worker - Correct answer Worker hired through a labor leasing firm. Legal Purpose - Correct answer one of the four qualifications of a legally binding contract. The purpose of the contract must be legal (e.g. no contracts for illicit drug deals) Liability - Correct answer an obligation to do or not to do something; responsibility for an action. Liability Insurance - Correct answer Liability insurance indemnifies a third party for damages caused by the insured's negligence. Liability - employer - Correct answer Protects employers from damages and bodily injury caused to employees or by employees while performing under the scope of their employment. Liability - product - Correct answer protects a policyholder from legal liability for damages to third parties caused by the manufacturing, merchandising, distributing, or operation of a product. Liability - public - Correct answer Protects individuals and commercial venues from any property damage or personal injury they may cause to the general public Liberalization - Correct answer the liberalization clause in an insurance contract is a condition that states 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 insurance coverage without any increase in premiums, this additional coverage must take effect in existing policies as well as in new policies. License - Correct answer a document that shows that a person has been granted authority by the state to act as an insurance agent, broker, or adjuster. Limits - Correct answer the limits of an insurance policy represent the highest amount an insurer will pay. Any cost above the limits of insurance is the responsibility of the policyholder. Litigation - Correct answer an action brought in court. Litigation takes place when an insurer and a policyholder disagree about a settlement amount and cannot resolve their differences through any sort of negotiation. Livestock Floater - Correct answer Optional Farm Insurance coverage. Provides stand- alone protection for six kinds of domesticated animals on a scheduled or unscheduled basis. Includes coverage for animals while in transit. Loss - Correct answer Bodily injury, property damage, or damage caused by the insured's negligent acts; loss is the basis for an insurance claim. Loss can also mean the sum the insurer will have to pay. Policy - Correct answer See Insurance Policy. Policy Period - Correct answer the beginning and end dates of coverage. Found on declarations page. Policyholder - Correct answer a person who has purchased an insurance policy - or contract- from an insurer. Power to bind - Correct answer one manifestation of the authority given to insurance agents by the principal. The principal is bound by, or must adhere to, the guarantees and statements made by its agent. Premium - Correct answer a scheduled and affordable fee, paid by the policyholder to the insurer, in return for coverage. Preponderance of Evidence - Correct answer a preponderance of evidence is enough evidence to make 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 - Correct answer the 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 and gives her the authority to dose). Principle of Indemnity - Correct 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 - Correct answer in insurance, the right of consumers to have their personal information protected. Private - Correct answer Private insurance is the term for any insurance other than social insurance. Social insurance programs are run by the government instead of by private individuals. Professional Liability - Correct answer Professional Liability Coverage is insurance that protects practitioners such as doctors, lawyers, engineers, architects, etc... It includes two types of coverage: malpractice insurance and errors and omissions insurance. Proof of Loss - Correct answer the form or statement that the policyholder is required to submit to the insurer before she can be indemnified for a loss. Proximate Cause - Correct answer the original occurrence, the source, of all the subsequent damages. Punitive Damages - Correct answer Intangible damages awarded to the plaintiff when the defendant's actions show intentional heinous, antisocial behavior or extreme indifference to harm. They are determined by the court. Rating Systems - Correct answer Measure hazards of individual risk in a given area, and sets premiums accordingly. RC - Correct answer RC: Replacement Cost, It refers to the cost of repairing or replacing an insured item, based on the item's value at the time of the loss. Rebates - Correct answer Refunding of part of the premium, due to the creation of a new contract or change to an existing contract. Reciprocal Insurers - Correct answer A Reciprocal Insurer is an unincorporated organization of subscribers that operates through an attorney-in-fact to provide insurance benefits for its members. Reinsurers - Correct answer Companies which sell insurance to insurers to reduce the insurer's exposure to loss. Reporting - Correct answer one of the adjuster's duties is to Report to the Principal. The adjuster must give the principal frequent updates of her progress on any given claim. Replacement Cost (RC) - Correct answer the cost of repairing or replacing an insured item, based on the item's value at the time of the loss. Reservation of Rights - Correct 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 - Correct answer Date preceding a policy period before which the policy will not cover occurrences. Revenue Assurance (Crop Insurance) - Correct answer a form of Crop Revenue Insurance that provides a fixed revenue guarantee based on average county prices Revenue Protection (Crop Insurance) - Correct 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 - Correct answer in the insurance industry, risk can have two meanings: 1) the potential for financial loss; being exposed or open to damage, 2) an insured item. Risk Avoidance - Correct answer Insurers' practice of denying insurance applications that they believe would involve an inordinate amount of risk. Risk Management - Correct answer Measures taken by an insurance company to ensure that their exposure 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 Purchasing Groups - Correct answer Groups of people with similar insurance needs who form an organization to buy insurance as a group. Risk, pure - Correct answer Risk that does not entail the possibility of gain; the only possible outcomes are a loss or no loss. Risk Reduction - Correct 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 homeowners policy have fire alarms installed. Risk Retention - Correct answer an insurer practices risk retention when it chooses to insure a risk instead of denying coverage. Risk Retention Groups - Correct answer Groups where the members insure each other, using their own capital to write insurance policies. Risk, Speculative - Correct 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). Salvage - Correct answer Salvage is damaged property that has cash value. In HO the policyholder has 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 - Correct answer sometimes called open-ended release" or "rehabilitation settlement." The insurer agrees to pay all of the special damages and general damages that have accumulated so far and agrees to pay special damages in the future. Settlement - Correct answer a resolution of a dispute, or an agreement. Settlement allows an insurer and a claimant to resolve a case before it reaches a court of law. Small Grains - Correct 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" "