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83 Cards in this Set
- Front
- Back
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What is Insurance?
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A risk management technique that transfers the potential financial consequences of certain specified loss exposures.
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What is a Loss Exposure?
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Any condition or situation that presents a possibility of loss, whether or not an actual loss occurs.
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What is an Insurer?
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A company that sells insurance policies to protect insureds against financial hardship caused by financial losses.
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What is a Claim?
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A demand by a person or business seeking to recover from an insurer for a loss that may be covered by an insurance policy.
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What is Loss Control?
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A risk management technique that attempts to decrease the frequency or severity of losses.
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What is an Opportunity Cost?
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The difference between the maximum profit that an investor could ave made from an alternative investment and the profit the investor has actually made from the investment.
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What is a Moral Hazard?
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A condition that increases the likelihood that a person will intentionally cause or exaggerate a loss.
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What is the Principle of Indemnity?
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The principle that insurance policies should provide a benefit no greater than the loss suffered by an insured.
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What is an Insurable Interest?
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An interest in the subject of an insurance policy that is not unduly remote and that would cause the interested party to suffer financial loss if an insured event occurred.
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What is Personal Insurance?
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Insurance that covers the financial consequences of losses to individuals and families caused by death, illness, injury, disability, and unemployment.
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What is Commercial Insurance?
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Insurance that covers for-profit businesses or not-for-profit organizations against the adverse financial effects of property and liability losses.
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What is a 3rd Party Claim?
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A demand against an insured by a person or organization other than the insured or the insurer. seeking to recover damages that may be payable by the insured's liability insurance.
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What is Adverse Selection?
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In general, the tendency for people with the greatest probability of loss to be the ones most likely to purchase insurance.
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What is a Producer?
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Any of several kinds of insurance personnel who place insurance business with insurers and who represent either insurers or insureds, or both.
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What is Independent agent?
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A producer who works for an independent agency who can be either the owner or employee of the agency.
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What is an Exclusive Agent?
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An agent that has a contract to sell insurance exclusively for one insurer or a group of related insurers.
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What is an Actuary?
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A person who uses mathematical methods to analyze loss data and develop insurance rates.
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What is a Claim Representative?
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A person responsible for investigating, evaluating and settling claims.
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What is the Special Investigative Unit?
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A division set up to investigate suspicious claims, premium fraud, or application fraud.
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What are Definitions in a contract?
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A preliminary section of a homeowners policy identifying the insured, the insurance company, and the commonly used terms found throughout the policy.
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What are Exclusions in a contract?
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A policy provision that eliminates coverage for specified exposures.
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What are Endorsements?
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A document that amends an insurance policy
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What is Property Damage?
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Physical injury to. destruction of. or loss of use of tangible property.
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What is Bodily Injury?
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Physical injury to a person, including sickness, disease, and death.
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What is a Claim File?
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A paper or an electronic file that contains information for a loss.
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What is a Telephone Claim Representative (or Inside Claim Representative)?
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An Insurer employee who handles claims that can be settled by phone, mail, or email from inside the insurer's office.
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What is a Field Claim Representative (or Outside Claim Representative)?
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An insurer's employee who handles claims that are best handled in person; much of the field claim representative's time is spent visiting the scene of a loss; interviewing witnesses; investigating damages; and meeting with insured, claimants, lawyers and other persons involved in the claim.
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What is a Crash Manual (Or Estimating Guide)?
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A book that describes procedures for estimating the cost to repair damage to vehicles and that lists auto part prices and typical labor times to repair or replace the part
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What is a Total Loss?
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A loss that exists when the cost to repair a damaged vehicle (or other property) equals or exceeds the value of the vehicle.
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What is a Constructive Total Loss?
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A loss that occurs when the cost to repair damaged property plus its remaining salvage value equals or exceeds the property's pre-loss value.
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What is Salvage?
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The process by which an insurer takes possession of damaged property for which it has paid a total loss and recovers a portion of the loss payment by selling the damaged property.
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What is Draft Authority?
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The Authority expressly given to an agent by an insurer allowing the agent to settle and pay certain types of claims up to a specified limit.
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What is a Third-Part Administrator?
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An organization that provides administrative services associated with risk financing and insurance.
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What is the 'Situation-Based' Approach?
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An approach to ethical decision making that is based on the best possible outcome, given the circumstances.
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What is the 'Rule-Based' Approach?
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An approach to ethical decision making that is based on rules that apply regardless of the effect.
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What is the 'People-Based' Approach?
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An approach to ethical decision making that is based on how the decision maker would want to be treated in the same situation.
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What is a Conflict of Interest?
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A situation that occurs when a decision maker's personal interests interfere to the extent that he or she makes decisions that adversely affect customers or employers.
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What is Criminal Law?
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The branch of the law that imposes penalties for wrongs against society.
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What is Civil Law?
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A classification of law that applies to legal matters not governed by criminal law and the protects rights and provides remedies for breaches of duties owed to others.
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What is Common Law (Case Law)?
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Laws that develop out of court decisions in particular cases and establish precedents for future cases.
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What is Contract Law?
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The branch of civil law that deals with contracts and settles contract disputes.
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What is Contract of Adhesion?
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Any contract in which one party must either accept the agreement as written by the other party or reject it.
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What is Statutory Law?
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The formal laws, or statutes, enacted by federal, state, or local legislative bodies.
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What is Administrative Law?
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The statutory law that grants power to the administrative agencies to act and the body of law that is created by administrative agencies themselves.
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What is Jurisdiction?
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A particular court's power or authority to decide a lawsuit of a certain type or within a certain territory.
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What is Arbitration?
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An alternative dispute resolution (ADR) method by which disputing parties use a neutral outside party to examine the issues and develop a settlement, which can be final and binding.
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What is Mediation?
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An alternative dispute resolution (ADR) method by which disputing parties use a neutral outside party to examine issues and develop a mutually agreeable settlement.
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What is a Plaintiff?
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The person or entity who files a lawsuit and is named as a party.
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What is the Defendant?
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The party in a lawsuit against whom a complaint is filed.
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What is Discovery (Lawsuits)?
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A pretrial exchange of all relevant information between the plaintiff and defendant.
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What is Pleading (Lawsuits)?
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A formal written statement of the facts and claims of each party to a lawsuit.
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What is a Complaint (Lawsuits)?
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The allegations made by a plaintiff in a lawsuit.
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What is a Summons (Lawsuits)?
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A document that directs a sheriff or another court-designated officer to notify the defendant named in the lawsuit that a lawsuit has been started and that the defendant has a specified amount of time to answer the complaint.
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What is a Plaintiff?
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The person or entity who files a lawsuit and is named as a party.
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What is an Answer (Lawsuits)?
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A document filed in court by a defendant responding to a plaintiff's complaint and explaining why the plaintiff should not win the case
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What is the Defendant?
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The party in a lawsuit against whom a complaint is filed.
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What is Default Judgement (Lawsuits)?
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An automatic judgement against a party to a lawsuit who fails to appear in court or to answer a pleading.
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What is Discovery (Lawsuits)?
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A pretrial exchange of all relevant information between the plaintiff and defendant.
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What is Pleading (Lawsuits)?
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A formal written statement of the facts and claims of each party to a lawsuit.
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What are the Rules of Civil Procedure?
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The conventions that govern the litigation process and the form and substance of all documents that must be filed with the court.
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What is a Complaint (Lawsuits)?
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The allegations made by a plaintiff in a lawsuit.
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What are the Statutes of Limitations?
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A statute that requires a plaintiff to file a lawsuit within a specific time period after the cause of action has accrued, which is often when the injury occurred or was discovered.
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What is a Summons (Lawsuits)?
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A document that directs a sheriff or another court-designated officer to notify the defendant named in the lawsuit that a lawsuit has been started and that the defendant has a specified amount of time to answer the complaint.
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What is an Answer (Lawsuits)?
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A document filed in court by a defendant responding to a plaintiff's complaint and explaining why the plaintiff should not win the case
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What is Default Judgement (Lawsuits)?
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An automatic judgement against a party to a lawsuit who fails to appear in court or to answer a pleading.
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What are the Rules of Civil Procedure?
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The conventions that govern the litigation process and the form and substance of all documents that must be filed with the court.
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What are the Statutes of Limitations?
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A statute that requires a plaintiff to file a lawsuit within a specific time period after the cause of action has accrued, which is often when the injury occurred or was discovered.
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What is Evidence?
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The information presented at trial by way of witnesses, records, documents, exhibits, or other concrete objects to persuade the court or jury to believe the arguments of the opposing parties.
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What is Relevance (Lawsuits)?
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A quality of evidence that suggest the evidence is more or less likely to be true.
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What is Competence (Lawsuits)?
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A quality of evidence that suggests the source is reliable and the evidence is adequate to justify admission in court.
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What is Materiality (Lawsuits)?
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A quality of evidence that tends to establish a particular element of the claim that has legal significance.
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What is Hearsay?
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Secondhand information that a witness testifying in court heard from someone else but did not personally see or hear.
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What is a Counterclaim?
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A complaint brought by the defendant against the plaintiff.
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What is Good-Faith Claim Handling?
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The manner of handling claims that requires an insurer to give consideration to the insured's interests that is at least equal to the consideration it gives its own interests.
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What are Claim Guidelines?
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A set of guidelines and instructions that specify how certain claim-handling tasks should be performed by settling policies and procedures for claim handling.
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What is a Diary?
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A system to remind claim personnel to perform a particular task on a claim.
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What is an Activity Log?
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A record of all the activities and analyses that occur while handling a claim.
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What is Access Security?
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A security setting that controls an individual computer user's ability to review, enter, and change information in a claim information system.
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What is an Authority Level?
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A designated dollar amount assigned to claim personnel to limit the reserve amounts they can set and the payment amounts they can make.
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What is a Claim Audit?
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A review of claim files to examine the technical details of claim settlements; ensure that claim procedures are followed; and verify that appropriate, thorough documentation is included.
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What is an Internal Claim Audit?
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A review of claim files conducted by an insurer's staff to examine the technical details of claim settlements; ensure that that claim procedures are followed; and verify that appropriate, thorough documentation is included.
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What is an External Claim Audit?
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A review of claim files conducted by organizations other than the insurer that involves reviewing overall claim-handling practices; reviewing reserves and other technical details of claim settlements; investigating consumer complaints;ensure that that claim procedures are followed; and verify that appropriate, thorough documentation is included.
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What is an Annual Statement?
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A report to the state insurance department on the insurer's financial results, including premiums, losses, expenses, assets, and liabilities.
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