Insurance Terms and Concepts, Exams of Nursing

Download Insurance Terms and Concepts and more Exams Nursing in PDF only on Docsity! TEXAS ALL LINE ADJUSTER EXAM VERSION ACTUAL TEST BANK 378 QUESTION AND DETAILED ANSWERS WITH RATIONALE. Accumulated Depreciation - ansThe total decrease in an item's value over a period of time. Formula: (Annual Depreciation x Number of years used) Acreage Reporting Date - ansThe 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. Actual Cash Value (ACV) - ansA 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 - ansA history of a farmer's crop yields over a multi-year period, which is used to determine the normal production level of a farm. Adhesion - ansCharacteristic of an insurance contract. Means that one party (the insurer) sets the terms, and the other (the policyholder) can "take it or leave it." Adjusted Gross Revenue (Crop Insurance) - ansNarrowest (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 - ansAn agent who, for compensation, processes insurance claims. Can represent either the insured or the insurer. Adjuster - Emergency - ansAdjusters 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 - ansSelf-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 - ansAn 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 - ansSalaried employee of one insurance company who can work locally, regionally, or nationally. Also called: Company Adjuster Advance Payment Settlement - ansA 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 - ansThe 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 - apparent - ansAuthority that an agent possesses based on the appearance of representing the insurer. Agency Authority - express - ansAuthority that is expressly given to the agent in writing. Allows agent to act on behalf of the principal. TEXAS ALL LINE ADJUSTER EXAM VERSION ACTUAL TEST BANK 378 QUESTION AND DETAILED ANSWERS WITH RATIONALE. Agency Authority - implied - ansAuthority that an agent possesses by implication of her behavior, regardless of whether this authority is granted in writing. Agent - ansSomeone who has received authority from an insurer to sell or service insurance policies. Aggregate Limit - ansA 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). Agreement - ansOne 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 - ansA business that grows, harvests, and sells crops for profit. Aleatory - ansA 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. Annual Depreciation - ansAn item's Replacement cost divided by the number of years in its expected lifespan. Answer - ansIn 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. Appraisal - ansA 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. Arbitration - ansA 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. Arbitrator - ansThe mutually-agreed-upon and neutral third party in an arbitration who reviews the positions of each opposing side, and makes a final and legally binding decision. Artificially Generated Current - ansAlso 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. Auto Policy - ansInsurance policy designed to protect the policyholder while owning, occupying, or operating a vehicle. Usually combines liability coverage and property coverage into one policy. Automobile - ansIn Insurance policies, Automobile generally means any vehicle designed for use on public roads. Automobile No-Fault Laws - ansLaws 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 to sue the at-fault party. TEXAS ALL LINE ADJUSTER EXAM VERSION ACTUAL TEST BANK 378 QUESTION AND DETAILED ANSWERS WITH RATIONALE. Competence - ansOne of the four qualifications of a legally binding contract. All parties must be competent, with the necessary legal and mental capacity. Complaint - ansA complaint initiates a civil lawsuit by a claimant requesting financial relief from damages caused by a policyholder. Concealment - ansThe act of withholding relevant material facts from an insurer. Conditions - ansThe section of a policy that qualifies or limits an insurer's promise to pay or perform. Consideration - ansOne of the four qualifications of a legally binding contract. All parties must bring something of value to the contract. Contract - ansAn agreement entered into voluntarily by two parties or more with the intention of creating a legal obligation. Coverages - ansThe amount and extent of protection provided by an insurance policy. Crime - ansAn offense against the State or Federal Government, or a breach of law, for which the offender shall make satisfaction to the public. Criminal - ansSomeone who has been convicted of a criminal act in a court of law. Crop Hail Insurance - ansA 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 - ansInsurance coverage designed to protect a farmer's financial investment in his or her crops. Covers losses to a crop's profitability. Crop Revenue Insurance - ansCrop insurance that combines crop-yield insurance and price insurance to protect against losses to crop value. Crop Yield Insurance - ansCrop insurance that covers physical losses to actual crops. Damages - general - ansIntangible losses such as pain and suffering, or mental anguish. Damages - special - ansTangible, financial losses that can be documented. Dangerous Instrumentality Doctrine - ansStates that anyone involved in the use of inherently dangerous products or machines is held 100% liable for their own damages. Dec Page - ansAlso called the Declarations Page. First page of a policy, which provides a summary of the contract; includes names of insured, addresses, coverage limits, policy period, etc. Declined Coverage - anstakes place when an insurance company rejects an application for coverage. Deductible - ansDeductible: the amount the policyholder must pay out-of-pocket before the insurance company will pay the remaining costs. TEXAS ALL LINE ADJUSTER EXAM VERSION ACTUAL TEST BANK 378 QUESTION AND DETAILED ANSWERS WITH RATIONALE. Deductible - fixed - ansA fixed deductible is one specific, predetermined amount that a policyholder must pay out-of-pocket before he can be indemnified. Deductible - franchise - ansA franchise deductible 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. Deductible - percentage - ansA deductible that is calculated as a percentage of the value of the insured risk. Defamation - ansDamage to another's name or reputation, whether by libel, which is in print, or by slander, which is in speech. Default Judgement - ansDefault Judgement 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 - ansPage in policy that gives specific limited meaning to terms used in policy. Depreciation - ansA decline in value of property caused by wear or loss of usefulness usually measured by a specific formula. Direct Loss - ansPhysical harm to tangible property caused by a peril. Discoverable - ansCapable of being demanded and handed over as evidence in a court of law; during litigation proceedings, the adjuster's claims file is discoverable. Eligiblity - ansEligibility 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. End of Insurance Date - ansThe 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 crop type. Endorsement(s) - ansAn optional provision that can be added to a policy to increase, reduce, or modify coverage for specific property types or perils. Errors and Omissions - ansLiability insurance that indemnifies professionals for errors or oversights on the part of the insured that caused harm to their clients. Estoppel - ansA legal principle that bars a party from asserting something contrary to what has been implied by his previous actions or statements. Ethical - ansAdhering to moral laws and to principles of fairness. Evaluation - ansEvaluation, 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. Exclusions - ansA section of an insurance policy that reduces coverage by listing specific individuals, property, or perils that are NOT covered by the policy. TEXAS ALL LINE ADJUSTER EXAM VERSION ACTUAL TEST BANK 378 QUESTION AND DETAILED ANSWERS WITH RATIONALE. Exposure - ansThe extent to which an item is open to damage or loss. More exposure means a loss is more likely. Fair Credit Reporting - ansFederal legislation that gives an applicant for insurance the right to investigate the reasons his insurance application was denied. Fall Down Case - ansA lawsuit brought against a property owner by someone who has fallen down on the property. False Advertising - ansPresenting something in a deceptive or untrue manner to the consumer; misrepresentations in advertisements. Farm - ansA property where a farmer or rancher both resides and conducts commercial business. Farm Liability Coverage Form - ansA form added to a farm insurance policy that provides coverage for injury and damage to a third party. Farm Property Coverage Form - ansA form added to a farm insurance policy that provides coverage for the dwelling, other structures, farm structures, and both household and farm personal property. Farmer - ansSomeone in the business of growing, harvesting, and selling crops for profit. In Farm insurance, a farmer must reside and do business on the same premises. Federal Crop Insurance Act - ansLegislation passed by Congress that established the Federal crop insurance program. Federal Crop Insurance Corporation (FCIC) - ansA government-owned corporation that manages the Federal crop insurance program. FEMA - ansFederal Emergency Management Agency - a branch of homeland security that coordinates relief programs when disaster strikes an entire community. Fiduciary - ansOne 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 - ansThe last day to plant crops in order to receive the full insurance yield and/or revenue guarantee selected. First Named Insured - ansThe first person or entity named as insured on the declarations page of a policy. Floater - ansA term for Inland Marine policies that cover mobile property. Flood - ansAn 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 the shore of a lake or other body of water. Flood Insurance - ansprovides relief following flood damage to communities who participate in the NFIP floodplain management system; covers damages to the building and its contents TEXAS ALL LINE ADJUSTER EXAM VERSION ACTUAL TEST BANK 378 QUESTION AND DETAILED ANSWERS WITH RATIONALE. Intervening Cause - ansA 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 - ansLiability shared by two or more persons. Judgement - ansAn official court ruling forming a final decision resolving a dispute or forming a final decree. Kickbacks - ansAny sort of reward or remuneration for referrals or favors; for example, a body shop giving money to an adjuster for referring customers. Landlord - ansOne who has leased property to a tenant. Late planting period - ans25 days after the final planting date, during which the yield and/or revenue guarantee drops by one percent per day. Leased worker - ansWorker hired through a labor leasing firm. Legal Purpose - ansOne 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 - ansAn obligation to do or not to do something; responsibility for an action. Liability - employer - ansProtects employers from damages and bodily injury caused to employees or by employees while performing under the scope of their employment. Liability - product - ansProtects a policyholder from legal liability for damages to third parties caused by the manufacturing, merchandising, distributing, or operation of a product. Liability - public - ansProtects individuals and commercial venues from any property damage or personal injury they may cause to the general public Liability Insurance - ansLiability insurance indemnifies a third party for damages caused by the insured's negligence. Liberalization - ansThe 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 - ansA document that shows that a person has been granted authority by the state to act as an insurance agent, broker, or adjuster. Limits - ansThe 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. TEXAS ALL LINE ADJUSTER EXAM VERSION ACTUAL TEST BANK 378 QUESTION AND DETAILED ANSWERS WITH RATIONALE. Litigation - ansAn 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 - ansOptional 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 - ansBodily injury, property damage, or damage caused by the insured's negligent acts; loss is the the basis for an insurance claim. Loss can also mean the sum the insurer will have to pay. Loss - direct - ansPhysical loss or damage to property directly due to an incident; i.e. fire, wind, etc.. Machinery - ansMachines or the parts of a machine. Malpractice - ansNegligent 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 - ansMarine insurance covers items that are being transported, as well as the vehicles used for transportation. Market Value - ansThe price something will sell for in the open market, or "fair market value." McCarren-Ferguson Act - ans1945 US Law exempting insurance from most federal regulation, and placing it under the authority of the individual states. Mechanical Breakdown - ansMechanical Breakdown Insurance (MBI) covers losses due to breakdown of motor vehicles. Mediation - ansA method of negotiation that utilizes a neutral third party adviser to reach a mutually- agreeable solution. Mediation differs from Appraisal in that the decision is not binding to the opposing parties. Misrepresentation - ansAny false or misleading statement. Mobile Agricultural Machinery and Equipment Coverage Form - ansA commercial property form that provides coverage for farm machinery and equipment when it is the only exposure, or when coverage must be written separately. Mr. Insurer - ansIn this course, Mr. Insurer represents the entity providing insurance. Multi Peril Crop Insurance - ansA form of Crop Yield insurance that offers broad coverage for a multitude of perils. Because it is subsidized by the government, MPCI is subject to federal regulation. Mutual - ansA mutual insurance company is owned by its policyholders. They have no shareholders and are not traded publicly. National Association of State Departments of Agricultural Research Foundation - ansA non-profit association of public officials representing the Commissioners, Secretaries, and Directors of Agriculture in the fifty states and four territories. TEXAS ALL LINE ADJUSTER EXAM VERSION ACTUAL TEST BANK 378 QUESTION AND DETAILED ANSWERS WITH RATIONALE. National Center for Agricultural Law Research and Information - ansIndependent agricultural and food law research and information center created to address the complex legal issues affecting American agriculture. National Crop Insurance Services - ansA non-profit international organization specializing in statistical data analysis and reporting related to crop insurance risk management. National Resources Conservation Service - ansA federal agency within the USDA that works with private landowners and operators to help them protect their natural resources. Negligence - ansThe failure to exercise a reasonable degree of care in a particular situation. Negotiations - ansNegotiations take place when the insurer and the claimant do not agree about an indemnification amount. The insurance adjuster is often the one who will carry out the negotiations. NFIP - ansNational Flood Insurance Program - a program that provides insurance for communities that suffer flood damage and are willing to participate in the FEMA's floodplain management system. Non Commercial - ansNon-Commercial insurers are not-for-profit insurance companies that return profits to policyholders by reducing premiums or expanding benefits. Occurence - ansAn unexpected event or circumstance that causes injury or damage. Occurrence Form Policy - ansOne 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 much later. Ocean Marine - ansInsurance designed to protect property being transported overseas. Offer - ansThe 'Offer' is a claim submitted to the insurance company for compensation due 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 - ansThe Personal Auto Policy is a package policy that combines property damage and liability insurance for motor vehicles. Paul the Policyholder - ansIn this course, Paul the policyholder represents any and all persons or entities who hold a policy. In other words, anyone who is insured. PD - ansProperty Damage: damage or loss of use of personal property. Peril - ansThe actual cause of loss or damage, such as lightning, fire, or theft. Personal - ansPersonal Lines insurance protects the personal and real property of an individual. A Personal Auto Policy and a Homeowners Policy are examples of Personal Lines of insurance, as opposed to Commercial Lines. Personal Injury - ansDamages to a third party's character, reputation, or standing in the community. Personal Property Floater - ansProtects property owners from damage or losses to personal articles while in the process of transport. TEXAS ALL LINE ADJUSTER EXAM VERSION ACTUAL TEST BANK 378 QUESTION AND DETAILED ANSWERS WITH RATIONALE. Risk Retention Groups - ansGroups where the members insure each other, using their own capital to write insurance policies. Risk, Pure - ansRisk that does not entail the possibility of gain; the only possible outcomes are a loss or no loss. Risk, Speculative - ansRisk 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 - ansThe last date on which an insurance application for a particular crop can be completed and signed. Salvage - ansSalvage 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 - ansSometimes 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 - ansA 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 - ansIn 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 - ansA statute based on the common law legal system that specifies the maximum period of time, after damages occur, that legal proceedings based on those damages may be initiated. Statutory Law - ansbased on laws set forth by a governing authority; i.e. state legislature Stipulation - ansA stipulation is something specifically agreed to in a contract, such as an insurance contract. Stock - ansA Stock Insurance Company is owned by stockholders, as opposed to its own policyholders (as is the case with Mutual Insurance Companies). Strict Liability - ansHolds a party 100% liable for damages when the activity or instrument they are performing is inherently dangerous. Subrogation - ansThe 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 the indemnity from the guilty party. Sudden and Accidental Tearing Apart - ansA peril covered in some property insurance policies. It refers to damage caused by rupture, cracking, burning, or bulging of a steam or hot water 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 - ans TEXAS ALL LINE ADJUSTER EXAM VERSION ACTUAL TEST BANK 378 QUESTION AND DETAILED ANSWERS WITH RATIONALE. Tort - ansAny civil wrongdoing, whether intentional or unintentional, resulting in a court action to remedy. Tort - intentional - ansA premeditated wrongful act that causes intentional or intentional damages to another party. Tort - negligent - ansWhen a negligent act causes unintentional damages to another party. Tort law - ansThe body of law that addresses and provides remedies for any civil wrongdoing performed on another party. Tortfeasor - ansThe defendant in a court case who committed the tort. Transitional yield - ansCounty 10-year yield average as determined by the National Agricultural 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 - ansAn event that "triggers" the coverage provided under a CGL policy: in claims-made, it is a claim, in occurrence form, it is the "occurrence." Trustworthiness - ansThe virtue of carrying out responsibilities reliably, worthy of being trusted. A necessary attribute of insurance adjusters. U.S. Environmental Protection Agency - ansFederal agency primarily responsible for the implementation of most federal laws designed to protect, enhance, and conserve the nation's natural resources. Umbrella Liability Policy - ansAn umbrella policy provides liability coverage over and above the normal or base limits of liability in a policy. An umbrella policy is a type of Excess Liability. Underinsured - ansNot sufficiently insured against particular losses. For example, any home insured at less than 80% of its value is considered underinsured. Unfair Claim Settlement Practices - ansDishonest or unfair behavior related to settling insurance claims which is specifically proscribed by state law. Unilateral - ansA 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 this promise, whereas the insured is free to void the contract at any time. Uninsurable - ansRisks are said to be uninsurable when they do not meet certain qualifications. 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 or nuclear events). Unscheduled - ansUnscheduled property is property covered under an insurance contract that is not listed item by item (as "Scheduled" property would be listed). Utmost Good Faith - ansA 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 - ansThe processes of estimating what an item is worth. TEXAS ALL LINE ADJUSTER EXAM VERSION ACTUAL TEST BANK 378 QUESTION AND DETAILED ANSWERS WITH RATIONALE. Value - ansThe estimated or appraised worth of an item, used to determine the replacement cost or indemnification amount. Valued policy - ansA policy in which the insurer and the insured agree to a specific value prior to the start of the policy. If the item is lost or destroyed, the insurer pays the amount agreed upon. Vicarious Liability - ansWhen an act of negligence is transferred from one party to another, such as from employee to employer or from child to parent. Waiver - ansA waiver is a voluntary act of relinquishing a known right, claim or privilege. Either an insured or an insurer may waive rights. Waiver - Express - ansAn explicit relinquishment of a right. Waiver - Implied - ansAn implicit relinquishment of a right through behavior that seems to assume that the right does not exist. Waiver of Sovereign Immunity - ansSovereign Immunity disallows an individual to sue a governmental entity; the waiver of sovereign immunity allows individuals to sue governmental entities under specific circumstances. Warranty - ansAn ongoing assurance made by the insured that certain conditions in an insurance contract will be met (for example, that the insured will maintain functional fire alarms). Workers Compensation - ansform of insurance that covers medical costs and lost wages in the event of injury, disease, or disability sustained by an employee in the course of his work/ Purchased by employers. Wrongful Death Act - ansallows the individuals who are associated with a deceased person who was killed because of a negligent act to sue the responsible party. Yield Protection (Crop Insurance) - ansSee Revenue Protection (Crop Insurance)