Principles of Insurance Claims

Flashcards covering key terminology and concepts related to insurance claims.

Claim

The process by which an insured party requests payment for a loss from an insurer.

Loss

The amount an insurer must pay when an insured event occurs; often used interchangeably with "claim."

Direct Loss

Damage to property resulting from a peril insured against, rather than indirect damage.

Indirect Loss

Loss resulting from direct damage, such as income loss due to the inability to use damaged property.

Prejudice

A disadvantage experienced by an insurer due to late reporting of a claim.

Forfeiture

The loss of a right due to the non-performance of an obligation or condition.

Prescription

A time limit within which legal action must be taken or claims made.

Statute of limitations

A law that sets the maximum time after an event within which legal proceedings may be initiated.

Salvage

The remaining value of property after it has been damaged, which can be sold to reduce overall loss.

Subrogation

The legal process that allows an insurer to recover costs from parties responsible for a loss after paying a claim.

Contribution

An arrangement where multiple insurers share the payment of a claim based on their respective policies.

Coinsurance

A clause requiring insureds to carry a certain percentage of insurance relative to the value of the property.

Stated Amount Coinsurance

A coinsurance clause where a specific dollar amount is declared, avoiding penalties if the insured amount is maintained.

Sworn Statement

An oral or written assertion of fact stated under oath, serving as legal evidence.

Loss Adjuster

A professional who verifies policy coverage, investigates losses, and negotiates claim settlements.

Claims Supervisor

The individual responsible for overseeing the claims department and ensuring its efficient operation.

Public Adjuster

An independent adjuster employed by an insured to represent their interests during a claim.

Independent Adjuster

An adjuster who works for an independent firm rather than for a specific insurance company.

Telephone Adjuster

An adjuster who handles small, straightforward claims primarily through phone and mail communication.