Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

54 Cards in this Set

  • Front
  • Back
A loss adjustment/settlement measure. The insured is entitled to receive the replacement value of his property, less depreciation.
ACV (Actual Cash Value)
These refer to the process of concluding an insurance claim. The handling of a claim by an insurer is called claims adjusting or claims or loss adjustment. The person representing the insured is called a claims adjuster, adjuster, or many times a Claim Representative, or similar term.
Adjusting, Adjustment, Adjuster
A term sometimes used to refer to sales function or department of the insurance company
An insurance intermediary that represents the insurance company
Coverage for extra expenses for substitute living arragnements made necessary by a loss
ALE (Additional Living Expenses)
An insurance policy drafted to provide broad coverage, and to cover most things, unless specifically excluded. Compare with named perils coverage.
All Risk (Open Perils)
The basis of a lawsuite against an insurer for not handling an insurance claim properly. Some states recognize this legal theory, some don't (California does, in first-party cases). To prevail, usually the plaintiff has to prove that the insurer failed to pay a claim, or didn't pay it in full, unfairly or without proper cause.
Bad Faith
An insurance intermediary that represents the customer - the person or entity seeking insurance.
The person or entity making a liability claim against the insured.
Typically, this is the first-line manager who has supervisory responsibility over the claim adjust and the claim file.
Claim manager or superintendent
A portion of the auto policy that provides payment to insureds whose cars sustain physical damage.
This is a section of the auto policy that provides coverage for physical damage to automobiles from nearly all other causes than collision. It used to be termed "fire and theft," coverage, but now is much broader.
Comprehensive (comp.) [or Physical Damage Other Than Collision]
The act of determining the meaning of policy phrases or terms. This is also called "Policy Interpretation."
Construction or Construe
Someone who has died.
A means of risk retention where the insured has to pay a certain portion of the loss.
A person or entity being sued
Reduction in value due to wear and tear or age
Policy provisions that deny or restrict coverage under the policy.
An amendment to an insurance policy that changes the policy in some way - usually to enhance or restrict coverage under the policy.
Endorsement (also Rider)
The concept that a loss could occur, given one's circumstances. For example, if I drive a car, I am exposed to the possibility of a legal liability loss, whether or not I drive safely.
Insurance contracs, or parts of contracts, that provide for payment to insured person. Examples are Commercial Property policies, dwelling coverage under Homeowner policy, and Medical Payments Coverage under the Auto policy. Contrast to third-party insurance.
First Party Insurance or Coverage
A personal articles policy covering the property wherever it's located, anywhere in the world.
How often losses can be expected to occur.
Something that increases the chance of loss, e.g. leaving oily rags around the shop floor. A hazard increases the frequency or severity of a peril - the contingency that may bring about the loss.
The person or organization covered by the policy of insurance. In many cases this is the one who purchased the insurance contract, but it is not limited to the purchase.
The insurance company
This is the part of the insurance policy setting out who and what is covered, and under what circumstances. The part that grants coverage.
Insuring Agreement
Being found legally responsible for loss - usually some type of injury or damage.
Liability or Legal Liability
Various insurance policies provide protection from being found legally liable to someone else for their injury or damages. If the insured is found legally liable, liability insurance steps in and pays on the insured's behalf sums the insured has been determined to owe the other party.
Liability Coverage or Liability Insurance
Syndicates of person, and now entities, which underwrite mostly unusual or high-risk exposures to loss.
Lloyds Companies
Some reduction in value. Insurance covers loss. The process of settling an insurance claim is many times called "adjusting the loss." "The loss" is generally injury to a person or some damage to property, or loss of its economic value.
the insured's initial statement of facts of the claim - generally presented on a form prepared by the insurer.
Loss Report
The tendency of a particular person to intentionally cause a loss.
Moral Hazard
The tendency of a particular person to cause a loss through careless behavior.
Morale Hazard
Medical Payments Coverage under the auto insurance policy.
An insurance company technically owned by its policy holders - it has no stockholders.
Mutual Company
Insurance that states specifically the perils it covers. If they're not specifically named, there's no coverage.
Names (or Specified) Perils Policy
Some specific contingency that may cause a loss. Examples are fire, earthquake, theft, flood, wind, and there are many, many more!
A person that initiates a lawsuit.
The contract between the insured and the insurer. It's standardized, and drafted by the insurer.
Someone who is an intermediary in a transaction of procuring insurance
Insurance sales
Uncertainties with only two possible outcomes - loss or no loss.
Pure Risk
Generally, uncertainty concerning loss
The possibility of injury or damage following an unforeseen event, e.g. floods, tornadoes, auto accidents, as contrasted with business risks.
Risk Of Accidental Loss
Property that has been redered a total loss. What is left over, after the damage.
The Salvage
The size of the loss. Compare with loss frequency, which is how often losses occur.
Uncertainties with three possible outcomes - loss, no loss, or gain.
Speculative Risk
The activity of one who has paid for damage chieving reimbursement from someone else who is responsible for the damage.. For example, if you have an auto accident that's someone else's fault, but you decide to receive payment for your car damages under your own auto policy, your insurer will proceed in subrogation against the responsible party, or his insurer (if he has one).
The act of going initiating subrogation.
This describes policies, or portions of policies, where payment is issued to third-parties. Liability insurance is third-party insurance. Importantly, the policy still covers the insured person or entity. It's just that the payment is made to third-party to protect insured from having to pay that party.
Third-Party Insurance or Coverage
A loss to property that is so severe to render the property economically useless. The loss consumes the full value of the property.
Total Loss or Totaled
A portion of the auto policy that compensates insured for damages due to the fault of a motorist who has liability insurance, but with too low a limit to adequately compensate the insured for his damages.
Underinsured Moterist (UIM) Coverage
A portion of the auto policy that compensates insureds for damages due to the fault of a motorist without insurance.
Uninsured Motorist (UM) Coverage