Abandonment
the relinquishing ownership of damaged property to the insurance company on a partial loss.
Actual Cash Value (ACV)
the replacement cost of like kind and quality at the time of loss, less a reasonable amount of depreciation due to age and condition.
Additional Living Expenses (ALE)
the necessary increase in living expenses resulting from a loss by a covered peril, and incurred by the insured, to continue the normal standard of living of the named insured's household.
Agent
an individual who sells insurance, either an independent agent who represents many insurance companies or an exclusive agent who represents one insurance company.
Amendment
an addition, deletion, or change to a legal document or policy. All parties to the agreement must formally consent to an amendment by signing it. Only then does the amendment become an integral part of the document, binding on all parties to the original
Appeal Bonds
required of the defendant in a lawsuit who elects to appeal a verdict
Appraisal
the process of involving a third party appraiser, or umpire, to govern a dispute of a claim settlement amount.
Assumption of Liability
the act of taking responsibility through agreement for something that person may not be legally liable
Bail Bonds
used to guarantee that an accused will appear at a date assigned by the court
Bailor
a person who voluntarily gives up possession of the property
Barratry
willful and illegal sinking of a ship at sea or its cargo
Bid Bonds
used as a promise to accept a bid if awarded to a company and to guarantee that a performance bond will be obtained prior to commencement of a job
Business Interruption Insurance
a form of insurance for direct losses under commercial property insurance policies that protect against loss of income as the result of an insured peril.
Claim
any request or demand for payment under the terms of the insurance contract.
Class Action Lawsuit
a legal action filed by one or more persons on behalf of themselves and others having an identical interest in the alleged wrongdoing
Commissioner
a state officer who administers the state's insurance laws and regulations
Completion Bonds
required by lenders to guarantee that outstanding loans against a job are paid upon completion
Contents
personal property that is not part of the dwelling or structure
Contract
a reciprocal agreement
Coverage
The specific protection that the insurer provides to a policy holder.
Damages
the result of an insured's tort or wrongdoing. Consequences of a loss or amount and type of losses suffered.
Declarations
the section of an insurance policy identifying the insured, endorsements, coverages, limits, and premiums.
Dealer's Property
merchandise on consignment
Deductible
amount of loss paid by the policyholder
Direct Damages
a loss covered by a specific named peril
Endorsement
a written agreement attached to the policy expanding or limiting the benefits otherwise payable under the policy.
Estimates
an approximate calculation of amount, extent, quantity, magnitude, position, degree or worth of something
Estoppel
the result of a waiver, or of the conduct from which a waiver can be implied
Exclusions
A loss or risk that a policy does not cover.
Fidelity Bonds
bonds that protect an employer for losses by an employee
Field Adjuster
an insurance adjuster who works primarily outside of an office and often meets personally with the public
First Party
the party buying the protection of the contract and using it to transfer the risk (insured)
Fraud
filing of a fabricated or exaggerated claim to an insurance company by a policyholder or third party claimant.
Hazard
A condition that increases the frequency or severity of a loss.
Homeowners Policy
a package insurance policy that combines both property and casualty coverages into a single policy.
Indemnification
legal term applying to third party claims meaning " to pay back or to make whole
Independent Adjuster
an individual who contracts with an adjusting/staffing firm as an independent contractor and handles claims for insurance companies
Inland Marine
a type of insurance associated with the risks or perils of transportation.
Insurable Interest
something of value that, if lost, would cause you financial harm
Insurance
technique used to transfer the risk of a person, business, or organization to another through the use of two-party contract.
Insurance Contract
a legal two-party document describing the relationship between the first party (insured) and the second party (insurance company)
Insured
a person or organization covered by insurance.
Insurer
an organization that provides insurance products
Law of Large Numbers
a mathematical concept used by insurance companies that works upon the principal that the more times an event is repeated, the more predictable the outcome of a specified event.
Legislative Act
an act (statue) passed by a legislative body
Liability
damages for which any insured becomes legally responsible and that the insured is legally obligated to pay.
Liability Insurace
designed to protect the insured and/or policyholder from financial loss due to liability resulting from injuries to others and/or damages to their property.
Loss
required payment by a company because of a specific insured incident based on the reduction in value prior to application of a deductible.
Negligence
failure to use the care that a reasonable and prudent person would have used under that same or similar circumstances.
Non-Recoverable Depreciation (NRD)
the depreciation from the total Replacement Cost due to age, use, and condition. The resulting dollar amount is Actual Cash Value.
Obligee
the entity that is the "recipient" to the Principal
Package Policy
a combination of property and liability coverages of two or more separate policies in one premium
Peril
Specific covered cause of a loss
Principal
the entity that has agreed to fulfill an obligation
Proof of Loss (POL)
A statement of facts about a loss for which the insured is making a claim.
Provider
an individual or organization offering continuing education courses for license and/or pre-licensing instruction for adjusters.
Public Adjuster
an individual hired by the insured to settle a claim with the insurance company on behalf of the insured.
Recoverable Depreciation (RD)
depreciation that is initially held back, then disbursed after proof of repairs being performed to bring property back to whole
Reciprocity
granting of the privileges and licensing in a state based on having a license in another state that is deemed equivalent by the granting state.
Replacement Cost (RC)
the cost associated with replacing property at current market value. Actual cash value + depreciation = ?
Reservation of Rights
a letter sent by the insurance company to avoid "waiver and estoppels" of a right to deny a claim while permitting the insurance company to make an investigation into the circumstances of the claim.
Risk
uncertainty concerning the occurrence of a loss
Salvage
damaged property that an insurer takes over to reduce their loss after paying a claim
Second Party
the insurance company to which the risk is transferred to by the contract
Special Investigation Unit (SIU)
a subset of the claims function whereby suspicious losses are investigated separately from the normal claims adjuster's activities.
Statutes
Written laws made by legislatures
Subrogation
The process by which an insurer can, after it has paid a loss under the policy, recover the amount paid from any party (other than the insured) who caused the loss or is otherwise legally liable for the loss.
Surety Bonds
An agreement by an insurance or bonding company to be responsible for certain possible defaults, debts, or obligations incurred by an insured party; in essence, a policy insuring one's personal and/or financial integrity. In the real estate business, this
TDI License Number
an identification number that the department assigns to the licensee and located on the license certificate
Texas Department of Insurance (TDI)
department of the government of Texas responsible for regulation, education, adherence, and control of insurance related issues.
Third Party
a beneficiary of a contract only as a result of the First Party's negligence and liability.
Tort
Civil wrong based on common law
Trespasser
someone who intrudes on the privacy or property of another without permission
Umpire
an individual that is used when a claim has been questioned by either the insured or the insurer; an unbiased third party is required to resolve the dispute
Underwriting
to access the eligibility of a customer to receive their products, decide how much coverage the client should receive, and how much they should pay for it.
Vicarious Liability (aka Imputed Negligence)
Legal doctrine under which a party can be held liable for the wrongful actions of another party.
Strict Liability (aka Absolute Liability)
based on the theory of the duty of making something safe that is inherently dangerous
Intentional Tort
A tort committed by one who intends to do the act that creates the harm.