Property and Liability Insurance Principles Chp 6

studentdavid's version from 2016-12-21 22:27

Section 1

Question Answer
First Party Claim Demand made by policyholder against insurer to recover from a loss
Third Party ClaimDemand made against policyholder by a claimant seeking to recover from a loss due to policyholder
ClaimantAnyone that seeks to recover from a loss
Claim representativeInvestigates, evaluates, and settles claims
Third Party Administrator (TPA)Organization provides administrative services associated with risk financing and insurance

Section 2

Question Answer
Staff Claim RepresentativesEmployees of the insurer that handle most claims and are a combination of inside/outside claim representatives
Field Claim RepresentativesAKA - Outside claim representatives handle claims that require investigating the scene of a loss; meet with insureds, claimants, inspect damage, etc.
Inside Claim RepresentativesHandle claims only from insurer's office
Independent AdjustersMay be contracted with an insurer for field claim work and handle claims in strategic areas
ProducersAnyone that sells insurance such as brokers, agents, insurers, intermediaries(middleman)
Public AdjusterHired to handle complex claims and time consuming claims for insurer. Prepares insured's claim and negotiates a settlement with staff rep or independent adjuster.

Section 3

Question Answer
Nonwaiver AgreementA signed agreement indicating during investigation process both the insurer and insured do not drop their rights under policy
Reservation of rights letterInsurer's letter that specifies coverage issues and informs the insured that the insurer is checking their policy and may not provide coverage if loss is not covered in policy
SubrogationA process that allows insurer (once insureds loss has been paid) to recover from any party other than insured who caused a loss or is otherwise legally liable for the loss
Insurable InterestA person seeking if their policy is in effect for future damages due to possibility of their property being damaged

Section 4

Question Answer
Mediation Alt dispute resolution method by which disputing parties use a neutral outside party to examine any issues and develop a mutually agreeable sttlement
ArbitrationAlt dispute method uses neutral party to examine issues of disputing parties and arrange settlement which may be final and binding
AppraisalsMethod of resolving disputes of insurer/insured over amount owed on a covered loss
Mini-trialAlt. dispute resolution method by which a case undergoes an abbrv. trial before an adviser that gives questions and offers opinions on the outcome of trial based on presented evidence
Summary Jury TrialAlt dispute resolution method by which a case undergoes an abbrv. trial, presenting evidence of a few witnesses to a panel of abbrv. jurors that decide case

Section 5

Question Answer
Actual Cash ValueCost to replace property with new property of similar quality with little depreciation
DepreciationThe reduction of value caused by physical wear
Replacement CostThe cost to repair or replace property using new materials of similar quality with no deduction for depreciation
Agreed Value MethodA method of valuing property in which the insurer/insured agree at the time the policy is written, on the maximum amount that will be paid in the event of a total loss
Salvage RightsThe insurer's rights to recover and sell or dispose of insured property on which the insurer has paid a total loss or a constructive total loss
Constructive LossA loss that occurs when property cannot be repaired for less than its actual cash value minus the anticipated salvage value

Section 6

Question Answer
Damagesmoney claimed or a monetary award to a party who has suffered a bodily injury or property damage for which another party is legally responsible
Compensatory DamagesA payment awarded by a court to reimburse a victim for actual harm suffered( includes special and general damages)
Special Damages(Out of pocket expenses) Awards a sum of money for specific expenses associated with a person's loss Examples are hospital expenses, ambulance charges, prescriptions
General Damagescompensatory damages awarded for losses that do not have a specific economic value Examples are compensation for pain and suffering, disfigurement; loss of limbs, sight, or hearing
Punitive DamagesA payment given to defendant as a punishment for reckless, cruel, or deceitful act in order to prevent similar conduct in the future