Texas All Lines Adjuster Test Questions and Answers, Exams of Health sciences

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Accumulated Depreciation - CORRECT ANSWERThe total decrease in an item's value over a period of time. Formula: (Annual Depreciation x Number of years used) Acreage Reporting Date - CORRECT ANSWERThe deadline for providing the insurer with an acreage report, which is used to determine the amount of coverage needed and the premium charged for a particular crop. Actual Cash Value (ACV) - CORRECT ANSWERA valuation method used by insurers to reflect an item's current market value right before being damaged or destroyed. Formula: (Replacement cost - Accumulated Depreciation) Actual Production History - CORRECT ANSWERA history of a farmer's crop yields over a multi-year period, which is used to determine the normal production level of a farm. Adhesion - CORRECT ANSWERCharacteristic of an insurance contract. Means that one party (the insurer) sets the terms, and the other (the policyholder) can "take it or leave it." Adjusted Gross Revenue (Crop Insurance) - CORRECT ANSWERNarrowest (and least expensive) form of Crop Revenue Insurance. Insures farm revenue as a whole instead of individual crops. Guarantees a percentage of the insured farm's average revenue. Adjuster - CORRECT ANSWERAn agent who, for compensation, processes insurance claims. Can represent either the insured or the insurer. Adjuster - Emergency - CORRECT ANSWERAdjusters who are temporarily licensed by the insurance commissioner to handle claims during catastrophes or emergencies that produce an overwhelming number of claims in a short period of time. Adjuster - Independent - CORRECT ANSWERSelf-employed adjusters who contract with multiple insurers at the same time. Paid on a commission or fee-plus-expenses basis for each claim. Also called: Fee Adjuster, Bureau Adjuster Adjuster - Public - CORRECT ANSWERAn adjuster who is hired to represent the claimant and help determine a fair indemnification. Usually specializes in appraisals and negotiation. Paid commission, usually a percentage of final settlement. Adjuster - Staff - CORRECT ANSWERSalaried employee of one insurance company who can work locally, regionally, or nationally. Also called: Company Adjuster

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Advance Payment Settlement - CORRECT ANSWERA settlement option that lets the insurer offer some financial relief to the claimant before the claim has been fully settled. The insurer makes advance payments to the claimant, which are then subtracted from the final settlement amount. Often used when a claimant suffers bodily injury and is unable to work. Agency Authority - CORRECT ANSWERThe Agent's authority to act on behalf of someone else, usually an insurer. This authority is derived from the agent's contract with the insurer. Agency Authority - express - CORRECT ANSWERAuthority that is expressly given to the agent in writing. Allows agent to act on behalf of the principal. Agency Authority - implied - CORRECT ANSWERAuthority that an agent possesses by implication of her behavior, regardless of whether this authority is granted in writing. Agency Authority - apparent - CORRECT ANSWERAuthority that an agent possesses based on the appearance of representing the insurer. Agent - CORRECT ANSWERSomeone who has received authority from an insurer to sell or service insurance policies. Aggregate Limit - CORRECT ANSWERA type of policy limit found in some health, liability, and property damage policies. It represents the total amount the insurer will pay for all losses (as opposed to an occurrence limit, which denotes the total amount the insurer will pay per occurrence). Agreement - CORRECT ANSWEROne of the four requirements of a legally binding contract. All parties involved must agree to the terms of the contract. Can also refer to a binder, which is the preliminary substance of a contract. Agricultural Producer - CORRECT ANSWERA business that grows, harvests, and sells crops for profit. Aleatory - CORRECT ANSWERA characteristic of an insurance contract. Means "depending on an unknown future event." An insurance contract will only pay IF and WHEN covered damages occur. Neither party knows how much the contract will end up paying when they enter into the contract.

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Answer - CORRECT ANSWERIn liability cases, the defendant's response to a complaint. There are three possible answers: 1) accept complaint and pay for damages,

2. deny the complaint, or 3) accept the complaint with a right to insert evidence into the case. Annual Depreciation - CORRECT ANSWERAn item's Replacement cost divided by the number of years in its expected lifespan. Appraisal - CORRECT ANSWERA negotiation method which allows the claimant and the insurer each to select an appraiser. The two appraisers in turn select an Umpire. The appraisers then work together to determine a settlement amount. If they cannot agree, the Umpire steps in. Agreement by any two of the three is binding. Arbitration - CORRECT ANSWERA negotiation method in which the opposing parties each submit their evidence to a mutually-agreed-upon and neutral third party, called an arbitrator. The arbitrator reviews the positions of each opposing side, and makes a final and legally binding decision. Arbitrator - CORRECT ANSWERThe mutually-agreed-upon and neutral third party in an arbitration who reviews the positions of each opposing side, and makes a final and legally binding decision. Artificially Generated Current - CORRECT ANSWERAlso called "artificial current." A peril covered in some property insurance policies. It includes sudden and accidental damage from any electrical current, except currents that are naturally generated, such as lightning or static electricity. Auto Policy - CORRECT ANSWERInsurance policy designed to protect the policyholder while owning, occupying, or operating a vehicle. Usually combines liability coverage and property coverage into one policy. Automobile - CORRECT ANSWERIn Insurance policies, Automobile generally means any vehicle designed for use on public roads. Automobile No-Fault Laws - CORRECT ANSWERLaws in effect in some states that require any owner of a vehicle to purchase no-fault insurance; that is, insurance that indemnifies the insured regardless of who was at fault in an accident. No-fault laws also restrict the insured's right to sue the at-fault party.

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Aviation - CORRECT ANSWERAviation insurance combines hull insurance for the aircraft and liability insurance for any damage to others' property or to people who are not passengers. Bailee - CORRECT ANSWERAn individual or company that receives the property of someone else for a special purpose, and returns the product after use. BAP - CORRECT ANSWERThe Business Auto Policy provides property damage and liability insurance for automobiles used by a business. Binder - CORRECT ANSWERA temporary contract provided by an insurer that ensures coverage until the complete, permanent policy is issued. Bl - CORRECT ANSWER(Bodily Injury): Physical damage to someone's person. Liability insurance covers bodily injury that the insured might cause to another person through negligence. Body Language - CORRECT ANSWERThe signals we give through posture, behaviour, apparel, etc., which are involved in communication. Boiler & Machinery - CORRECT ANSWERBoiler and machinery insurance is designed to indemnify a business for damages to, and damages by, boilers, machinery, motors, generators and a variety of other electrical devices and appliances. Bond - CORRECT ANSWERA contract wherein one party guarantees the performance of a third party. Bonds involve three parties: (1) the surety agrees to pay the second party, (2) the obligee, if the third party, (3) the principal, neglects to carry out an obligation it has to the obligee. Breach of Product Warranty - CORRECT ANSWERThe failure or falsehood of a stated promise of a product stipulation. Business Personal Property - CORRECT ANSWERMoveable property used for business Catastrophe - CORRECT ANSWERAn occurrence or a sequence of occurrences that causes enormous property losses. Catastrophes are normally uninsurable by private insurers.

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Cause of Loss - CORRECT ANSWERA form included in a Commercial Package Policy or a Commercial Property Policy that lists the causes of loss from which the insured property is covered. CGL - CORRECT ANSWERA Commercial General Liability policy protects businesses against damages and injuries to third parties. Civil - CORRECT ANSWERCivil law observes court cases of one citizen charging another citizen for damages caused by tort; it differs from criminal law. Claim - CORRECT ANSWERThe "offer of settlement" that the policyholder files with an insurer after she experiences a loss. Claims-Made Form - CORRECT ANSWERA liability policy in which the insurer pays only those claims arising during the policy period (as opposed to those claims arising after the policy period is over, regardless of whether the incident took place during the policy period). Claims Management - CORRECT ANSWERThe practice of the insurance adjuster of managing a claim by processing it in a prompt and effective manner from the time the claim is filed until a settlement is reached, while adhering to all local and federal laws. Claimant - CORRECT ANSWEROne who files a claim with an insurer for a loss. Claude the Clueless Adjuster - CORRECT ANSWERIn this course, Claude the Clueless Adjuster represents an incompetent or unprofessional adjuster. Coarse Grains - CORRECT ANSWERIn Crop Insurance, a provision that covers reduction in crop quality, as well as crop-yield losses. Coarse grains are corn, grain sorghum, and soybeans. Coinsurance - CORRECT ANSWERThe Coinsurance Clause applies to policyholders who purchase an inadequate amount of property insurance. These policyholders must pay a percentage of the claim. In health insurance, coinsurance refers to the portion of a covered claim that the insured is responsible for paying out-of-pocket, after the deductible has been paid.

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Code of Ethics - CORRECT ANSWERA set of governing professional standards of conduct, usually created by regulatory bodies or government regulatory agencies. These standards may also be formally codified with statutes. Coercion - CORRECT ANSWERThe practice of forcing another party to behave in an involuntary manner (whether through action or inaction) by use of threats or intimidation or some other form of pressure or force. Commerce - CORRECT ANSWERThe exchange or transport of goods or property. Commercial - CORRECT ANSWERHaving to do with commerce or business activity in general. Commercial Crime Insurance - CORRECT ANSWERCommercial insurance that covers employee dishonesty and theft by employees or others. Commercial Lines - CORRECT ANSWERA variety of insurance coverages that protect those involved in the business of creating, selling, displaying, evaluating, or shipping, etc. Example include: Business Owner's Policy; Commercial Property; Commercial General Liability; Workers Compensation; Professional Liability (D&O), Errors and Omissions (E&O) and Employment-Related Practices Liability. Commercial Property Floater - CORRECT ANSWERA means of protecting a business' property that is not in one fixed location. Common Crop Insurance Policy - CORRECT ANSWERA single uniform policy that combines Crop Revenue Coverage, Revenue Assurance, Income Protection, and Indexed Income Protection. Common Law - CORRECT ANSWERBased on court decisions and customs when statutory law does not provide an answer; creates precedent. Compensatory Damages - CORRECT ANSWERMoney awarded in civil court for tangible and intangible damages caused by a policyholder. Compensatory damages - Special - CORRECT ANSWERMoney awarded for the exact value of the physical damage caused to the plaintiff up to the trial date. This is an objective value determined by receipts and medical bills.

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Compensatory damages - General - CORRECT ANSWERMoney awarded for the emotional losses of the plaintiff that will continue after the trial date. These are a subjective value and are determined by the court. Competence - CORRECT ANSWEROne of the four qualifications of a legally binding contract. All parties must be competent, with the necessary legal and mental capacity. Complaint - CORRECT ANSWERA complaint initiates a civil lawsuit by a claimant requesting financial relief from damages caused by a policyholder. Concealment - CORRECT ANSWERThe act of withholding relevant material facts from an insurer. Conditions - CORRECT ANSWERThe section of a policy that qualifies or limits an insurer's promise to pay or perform. Consideration - CORRECT ANSWEROne of the four qualifications of a legally binding contract. All parties must bring something of value to the contract. Contract - CORRECT ANSWERAn agreement entered into voluntarily by two parties or more with the intention of creating a legal obligation. Coverages - CORRECT ANSWERThe amount and extent of protection provided by an insurance policy. Crime - CORRECT ANSWERAn offense against the State or Federal Government, or a breach of law, for which the offender shall make satisfaction to the public. Criminal - CORRECT ANSWERSomeone who has been convicted of a criminal act in a court of law. Crop Hail Insurance - CORRECT ANSWERA form of Crop Yield Insurance that is usually provided by private insurers without government subsidy. It offers named-peril protection on an acreage basis. Crop Insurance - CORRECT ANSWERInsurance coverage designed to protect a farmer's financial investment in his or her crops. Covers losses to a crop's profitability.

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Crop Revenue Insurance - CORRECT ANSWERCrop insurance that combines crop- yield insurance and price insurance to protect against losses to crop value. Crop Yield Insurance - CORRECT ANSWERCrop insurance that covers physical losses to actual crops. Damages - general - CORRECT ANSWERIntangible losses such as pain and suffering, or mental anguish. Damages - special - CORRECT ANSWERTangible, financial losses that can be documented. Dangerous Instrumentality Doctrine - CORRECT ANSWERStates that anyone involved in the use of inherently dangerous products or machines is held 100% liable for their own damages. Dec Page - CORRECT ANSWERAlso called the Declarations Page. First page of a policy, which provides a summary of the contract; includes names of insured, addresses, coverage limits, policy period, etc. Declined Coverage - CORRECT ANSWERtakes place when an insurance company rejects an application for coverage. Deductible - CORRECT ANSWERDeductible: the amount the policyholder must pay out-of-pocket before the insurance company will pay the remaining costs. Deductible - fixed - CORRECT ANSWERA fixed deductible is one specific, predetermined amount that a policyholder must pay out-of-pocket before he can be indemnified. Deductible - percentage - CORRECT ANSWERA deductible that is calculated as a percentage of the value of the insured risk. Deductible - franchise - CORRECT ANSWERA franchise deductible states that the policyholder only pays for damages that are less than his deductible. If the cost of damages equals or exceeds his deductible, the insurer pays the full amount and the policyholder pays nothing.

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Defamation - CORRECT ANSWERDamage to another's name or reputation, whether by libel, which is in print, or by slander, which is in speech. Default Judgement - CORRECT ANSWERDefault Judgement is entered by the court against the party who failed to defend against a claim brought on by another party. In other words, if the person fails to show up and answer the claim the court will find in favor of the other party. Definitions - CORRECT ANSWERPage in policy that gives specific limited meaning to terms used in policy. Depreciation - CORRECT ANSWERA decline in value of property caused by wear or loss of usefulness usually measured by a specific formula. Direct Loss - CORRECT ANSWERPhysical harm to tangible property caused by a peril. Discoverable - CORRECT ANSWERCapable of being demanded and handed over as evidence in a court of law; during litigation proceedings, the adjuster's claims file is discoverable. Eligiblity - CORRECT ANSWEREligibility Requirements are found in some insurance policies. They identify the conditions that must be met by the policyholder in order to qualify for coverage under a policy. End of Insurance Date - CORRECT ANSWERThe date that crop insurance coverage will end. It is the earliest of: total crop destruction, harvest of the crop, final adjustment of a loss, abandonment of a crop, or a date predesignated by crop type. Endorsement(s) - CORRECT ANSWERAn optional provision that can be added to a policy to increase, reduce, or modify coverage for specific property types or perils. Errors and Omissions - CORRECT ANSWERLiability insurance that indemnifies professionals for errors or oversights on the part of the insured that caused harm to their clients. Estoppel - CORRECT ANSWERA legal principle that bars a party from asserting something contrary to what has been implied by his previous actions or statements. Ethical - CORRECT ANSWERAdhering to moral laws and to principles of fairness.

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Evaluation - CORRECT ANSWEREvaluation, determining the approximate value of damages relevant to a claim i.e. total of medical bills, costs of repair & replacement of damaged property and the consideration of the financial provisions of the insurance policy. Exclusions - CORRECT ANSWERA section of an insurance policy that reduces coverage by listing specific individuals, property, or perils that are NOT covered by the policy. Exposure - CORRECT ANSWERThe extent to which an item is open to damage or loss. More exposure means a loss is more likely. Fair Credit Reporting - CORRECT ANSWERFederal legislation that gives an applicant for insurance the right to investigate the reasons his insurance application was denied. Fall Down Case - CORRECT ANSWERA lawsuit brought against a property owner by someone who has fallen down on the property. False Advertising - CORRECT ANSWERPresenting something in a deceptive or untrue manner to the consumer; misrepresentations in advertisements. Farm - CORRECT ANSWERA property where a farmer or rancher both resides and conducts commercial business. Farm Liability Coverage Form - CORRECT ANSWERA form added to a farm insurance policy that provides coverage for injury and damage to a third party. Farm Property Coverage Form - CORRECT ANSWERA form added to a farm insurance policy that provides coverage for the dwelling, other structures, farm structures, and both household and farm personal property. Farmer - CORRECT ANSWERSomeone in the business of growing, harvesting, and selling crops for profit. In Farm insurance, a farmer must reside and do business on the same premises. Federal Crop Insurance Act - CORRECT ANSWERLegislation passed by Congress that established the Federal crop insurance program.

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Federal Crop Insurance Corporation (FCIC) - CORRECT ANSWERA government- owned corporation that manages the Federal crop insurance program. FEMA - CORRECT ANSWERFederal Emergency Management Agency - a branch of homeland security that coordinates relief programs when disaster strikes an entire community. Fiduciary - CORRECT ANSWEROne of the terms that describes the adjuster's relationship with the principal (the insurer). As Fiduciary Agent, the adjuster acts for the benefit of the principal, rather than for his own benefit. Final planting date - CORRECT ANSWERThe last day to plant crops in order to receive the full insurance yield and/or revenue guarantee selected. First Named Insured - CORRECT ANSWERThe first person or entity named as insured on the declarations page of a policy. Floater - CORRECT ANSWERA term for Inland Marine policies that cover mobile property. Flood - CORRECT ANSWERAn overflow of inland or tidal waters; an unusual or rapid accumulation of runoff or surface waters from any source; mud flows; collapse or subsidence of land along the shore of a lake or other body of water. Flood Insurance - CORRECT ANSWERprovides relief following flood damage to communities who participate in the NFIP floodplain management system; covers damages to the building and its contents Floodplain Management - CORRECT ANSWERmaps out areas with high risk of flood, so that communities will avoid building in these areas Fraternal Benefit Societies - CORRECT ANSWERFraternal Benefit Societies, or Fraternal Associations, are non-profit, mutual aid organizations that engage primarily in charitable or benevolent activities. They offer their members insurance against death, disease, and disability. Fraud - CORRECT ANSWERThe act of deceiving an insurance company in order to collect more money than one is legally entitled to.

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Fraud, Hard - CORRECT ANSWERDeliberately faking or causing an incident in order to collect money. Fraud, Soft - CORRECT ANSWERInflating the gravity or the extent of claims in order to receive a higher indemnification. Full and legal purpose - CORRECT ANSWERSee also "Legal Purpose." One of the four qualifications of a legally binding contract. The purpose of the contract must be legal (e.g. no contracts for illicit drug deals). Good faith - CORRECT ANSWERActing honestly and fairly, with good intentions and full disclosure. Group Risk Income Protection (Crop Insurance) - CORRECT ANSWERA form of Crop Revenue Insurance that protects a whole county or area instead of individual farmers. Automatically indemnifies if county income falls below a certain level. Hazard, Moral - CORRECT ANSWERHazard caused by insured persons deliberately engaging in risky behavior because they know that insurance will indemnify them for the losses. Hazard - CORRECT ANSWERAnything that increases the chance of loss. Hazard morale - CORRECT ANSWERUnconscious tendency of insured people to engage in riskier behavior. Hazard Physical - CORRECT ANSWERAny physical condition that increases the chance of a loss. HIPAA - CORRECT ANSWERHealth Insurance Portability and Accountability Act, 1996 US law protecting consumer privacy, regulating collection, use and storage of private information. HO Forms 2 - CORRECT ANSWERThe "broad" or "cheap" form of Homeowners Insurance; a basic, named-peril HO form that nevertheless is less limited than the HO-8. HO Forms 3 - CORRECT ANSWER"Special form" of Homeowners Insurance; all-peril coverage for structures, named-peril coverage for contents.

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HO Forms 4 - CORRECT ANSWER"Contents broad form"; named-peril renter's policy covering only personal property and any structural improvements made at tenant's own expense. HO Forms 5 - CORRECT ANSWER"Comprehensive form" of Homeowners Insurance; provides all-peril coverage to both structures and contents; the Cadillac of HO forms. HO Forms 6 - CORRECT ANSWER"Condo" or "unit owner's form"; named-peril homeowners policy covering personal property and the surface structure of a condominium. HO Forms 8 - CORRECT ANSWER"Modified coverage form" of Homeowners Insurance; named-peril coverage for structures and contents, fewer perils covered; form for buildings with low value. Homeowner's Policy - CORRECT ANSWERAn insurance policy that combines property coverage with liability coverage for a person's home. IIPPA - CORRECT ANSWERThe Insurance Information and Privacy Protection Act regulates how an insurance company can use consumers' private information. Impaired Property - CORRECT ANSWERProperty that is defective because the insured's deficient or incomplete additions or work. Income Protection (Crop Insurance) - CORRECT ANSWERA form of Crop Revenue Insurance. One of the cheapest available; provides a fixed revenue guarantee based on early commodity prices for the crop type. Indemnification - CORRECT ANSWERReimbursement for a loss, which leaves the claimant in the same financial position that she was in before the loss. Indemnify - CORRECT ANSWERTo restore by payment, repair, or replacement Indemnity Insurance - CORRECT ANSWERInsurance that indemnity's loss as opposed to liability Indirect Loss - CORRECT ANSWERAn economic loss that results from the direct, or physical, loss.

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Inland Marine - CORRECT ANSWERInsurance that protects property being transported over land Insurable acreage - CORRECT ANSWERAll of the acreage of the insured crop, for which a premium rate is provided in the actuarial documents, in which the insured has a financial interest, and which is planted in the county listed on the application. Insurance - CORRECT ANSWERA financial device that transfers the risk of unexpected, catastrophic losses from one party to another. Insurance Company - CORRECT ANSWERCompany which sells insurance policies to individuals or to other companies. Insurance Policy - CORRECT ANSWERA contract wherein an insured pays premiums to an insurer in exchange for financial protection in the event of a covered loss. Insurance Rating Systems - CORRECT ANSWERMethods of evaluating the risk involved in insuring a person, property, or a corporation. Insurers use rating systems to calculate premiums. Insured - CORRECT ANSWERA person or entity who is covered under an insurance policy. Insured crop - CORRECT ANSWERThe crop in the county for which coverage is available as specified by the policy. Insurer - CORRECT ANSWERThe person or entity providing coverage to one or more insureds. Insuring Agreement - CORRECT ANSWERA section of an insurance policy that summarizes the insurer's promise to pay. Includes list of covered property and perils. Interest - CORRECT ANSWERDirect financial interest in protecting a unit. Intervening Cause - CORRECT ANSWERA separate occurrence that "intervenes" between a defendant's actions and damage or loss to another person. An intervening cause may decrease the defendant's liability, if the defendant can show that it was the intervening cause (rather than the defendant himself) that caused the damage or loss. For example, say your neighbor asked you to watch his Yorkshire terrier during his

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weekend vacation. As the dog explores the ravine behind your house, a red tailed hawk swoops down and carries the little dog away. When your neighbor sues you for negligence, you could argue that the hawk (and not your own negligence) was the real cause of loss. Joint - CORRECT ANSWERLiability shared by two or more persons. Judgement - CORRECT ANSWERAn official court ruling forming a final decision resolving a dispute or forming a final decree. Kickbacks - CORRECT ANSWERAny sort of reward or remuneration for referrals or favors; for example, a body shop giving money to an adjuster for referring customers. Landlord - CORRECT ANSWEROne who has leased property to a tenant. Late planting period - CORRECT ANSWER25 days after the final planting date, during which the yield and/or revenue guarantee drops by one percent per day. Leased worker - CORRECT ANSWERWorker hired through a labor leasing firm. Legal Purpose - CORRECT ANSWEROne of the four qualifications of a legally binding contract. The purpose of the contract must be legal (e.g. no contracts for illicit drug deals) Liability - CORRECT ANSWERAn obligation to do or not to do something; responsibility for an action. Liability Insurance - CORRECT ANSWERLiability insurance indemnifies a third party for damages caused by the insured's negligence. Liability - employer - CORRECT ANSWERProtects employers from damages and bodily injury caused to employees or by employees while performing under the scope of their employment. Liability - product - CORRECT ANSWERProtects a policyholder from legal liability for damages to third parties caused by the manufacturing, merchandising, distributing, or operation of a product.

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Liability - public - CORRECT ANSWERProtects individuals and commercial venues from any property damage or personal injury they may cause to the general public Liberalization - CORRECT ANSWERThe liberalization clause in an insurance contract is a condition that states that the insurer can add or broaden coverage at any time without writing up a new contract. This clause guarantees that, in the case of legislative action that broadens insurance coverage without any increase in premiums, this additional coverage must take effect in existing policies as well as in new policies. License - CORRECT ANSWERA document that shows that a person has been granted authority by the state to act as an insurance agent, broker, or adjuster. Limits - CORRECT ANSWERThe limits of an insurance policy represent the highest amount an insurer will pay. Any cost above the limits of insurance is the responsibility of the policyholder. Litigation - CORRECT ANSWERAn action brought in court. Litigation takes place when an insurer and a policyholder disagree about a settlement amount and cannot resolve their differences through any sort of negotiation. Livestock Floater - CORRECT ANSWEROptional Farm Insurance coverage. Provides stand-alone protection for six kinds of domesticated animals on a scheduled or unscheduled basis. Includes coverage for animals while in transit. Loss - CORRECT ANSWERBodily injury, property damage, or damage caused by the insured's negligent acts; loss is the the basis for an insurance claim. Loss can also mean the sum the insurer will have to pay. Loss - direct - CORRECT ANSWERPhysical loss or damage to property directly due to an incident; i.e. fire, wind, etc.. Machinery - CORRECT ANSWERMachines or the parts of a machine. Malpractice - CORRECT ANSWERNegligent or improper actions on the part of doctors, lawyers, and accountants etc., resulting in damage, injuries, or losses to the person receiving their services. Marine - CORRECT ANSWERMarine insurance covers items that are being transported, as well as the vehicles used for transportation.

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Market Value - CORRECT ANSWERThe price something will sell for in the open market, or "fair market value." McCarren-Ferguson Act - CORRECT ANSWER1945 US Law exempting insurance from most federal regulation, and placing it under the authority of the individual states. Mechanical Breakdown - CORRECT ANSWERMechanical Breakdown Insurance (MBI) covers losses due to breakdown of motor vehicles. Mediation - CORRECT ANSWERA method of negotiation that utilizes a neutral third party adviser to reach a mutually-agreeable solution. Mediation differs from Appraisal in that the decision is not binding to the opposing parties. Misrepresentation - CORRECT ANSWERAny false or misleading statement. Mobile Agricultural Machinery and Equipment Coverage Form - CORRECT ANSWERA commercial property form that provides coverage for farm machinery and equipment when it is the only exposure, or when coverage must be written separately. Mr. Insurer - CORRECT ANSWERIn this course, Mr. Insurer represents the entity providing insurance. Multi Peril Crop Insurance - CORRECT ANSWERA form of Crop Yield insurance that offers broad coverage for a multitude of perils. Because it is subsidized by the government, MPCI is subject to federal regulation. Mutual - CORRECT ANSWERA mutual insurance company is owned by its policyholders. They have no shareholders and are not traded publicly. National Association of State Departments of Agricultural Research Foundation - CORRECT ANSWERA non-profit association of public officials representing the Commissioners, Secretaries, and Directors of Agriculture in the fifty states and four territories. National Center for Agricultural Law Research and Information - CORRECT ANSWERIndependent agricultural and food law research and information center created to address the complex legal issues affecting American agriculture.

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National Crop Insurance Services - CORRECT ANSWERA non-profit international organization specializing in statistical data analysis and reporting related to crop insurance risk management. National Resources Conservation Service - CORRECT ANSWERA federal agency within the USDA that works with private landowners and operators to help them protect their natural resources. Negligence - CORRECT ANSWERThe failure to exercise a reasonable degree of care in a particular situation. Negotiations - CORRECT ANSWERNegotiations take place when the insurer and the claimant do not agree about an indemnification amount. The insurance adjuster is often the one who will carry out the negotiations. NFIP - CORRECT ANSWERNational Flood Insurance Program - a program that provides insurance for communities that suffer flood damage and are willing to participate in the FEMA's floodplain management system. Non Commercial - CORRECT ANSWERNon-Commercial insurers are not-for-profit insurance companies that return profits to policyholders by reducing premiums or expanding benefits. Occurence - CORRECT ANSWERAn unexpected event or circumstance that causes injury or damage. Occurrence Form Policy - CORRECT ANSWEROne of two forms of CGL: triggered by occurrence, so that if a loss occurred during the policy period, it is covered even if the claim is made much later. Ocean Marine - CORRECT ANSWERInsurance designed to protect property being transported overseas. Offer - CORRECT ANSWERThe 'Offer' is a claim submitted to the insurance company for compensation due to a loss or losses the claimant believes are covered by the insurance policy and is legally considered an 'offer to settle' the claim. PAP - CORRECT ANSWERThe Personal Auto Policy is a package policy that combines property damage and liability insurance for motor vehicles.

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Paul the Policyholder - CORRECT ANSWERIn this course, Paul the policyholder represents any and all persons or entities who hold a policy. In other words, anyone who is insured. PD - CORRECT ANSWERProperty Damage: damage or loss of use of personal property. Peril - CORRECT ANSWERThe actual cause of loss or damage, such as lightning, fire, or theft. Personal - CORRECT ANSWERPersonal Lines insurance protects the personal and real property of an individual. A Personal Auto Policy and a Homeowners Policy are examples of Personal Lines of insurance, as opposed to Commercial Lines. Personal Injury - CORRECT ANSWERDamages to a third party's character, reputation, or standing in the community. Personal Property Floater - CORRECT ANSWERProtects property owners from damage or losses to personal articles while in the process of transport. PIP - CORRECT ANSWERPersonal Injury Protection: a form of no-fault auto insurance utilized in some states. Policy - CORRECT ANSWERSee Insurance Policy. Policy Period - CORRECT ANSWERThe beginning and end dates of coverage. Found on declarations page. Policyholder - CORRECT ANSWERAlso called the "insured", a policyholder is a person who has purchased an insurance policy - or contract-from an insurer. Power to bind - CORRECT ANSWEROne manifestation of the authority given to insurance agents by the principal. The principal is bound by, or must adhere to, the guarantees and statements made by its agent. Premium - CORRECT ANSWERA scheduled and affordable fee, paid by the policyholder to the insurer, in return for coverage.

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Preponderance of Evidence - CORRECT ANSWERA preponderance of evidence is enough evidence to make it more likely that an argument is true than that it is false. In a civil trial, the plaintiff needs to provide a preponderance of evidence in order to win her case. Principal - CORRECT ANSWERThe principal refers to an agent's employer (usually an insurance company, but it could also mean anyone who contracts the agent to work on their behalf and gives her the authority to do so). Principle of Indemnity - CORRECT ANSWERThe principle behind all insurance contracts. It states that, when a loss occurs, the insured should be restored to his or her financial condition before the loss occurred, no better, no worse. The insured cannot profit from a loss. Privacy - CORRECT ANSWERIn insurance, the right of consumers to have their personal information protected. Private - CORRECT ANSWERPrivate insurance is the term for any insurance other than social insurance. Social insurance programs are run by the government instead of by private individuals. Private Crop Insurance - CORRECT ANSWERCrop insurance that does not fall under the Federal Crop Insurance Program and is provided directly to farmers by private insurers. Professional Liability - CORRECT ANSWERProfessional Liability Coverage is insurance that protects practitioners such as doctors, lawyers, engineers, architects, etc.. It includes two types of coverage: malpractice insurance and errors and omissions insurance. Proof of Loss - CORRECT ANSWERThe form or statement that the policyholder is required to submit to the insurer before she can be indemnified for a loss. Proximate Cause - CORRECT ANSWERThe original occurrence, the source, of all the subsequent damages. Punitive Damages - CORRECT ANSWERIntangible damages awarded to the plaintiff when the defendant's actions show intentional heinous, antisocial behavior or extreme indifference to harm. They are determined by the court.

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Rating Systems - CORRECT ANSWERMeasure hazards of individual risk in a given area, and sets premiums accordingly. RC - CORRECT ANSWERRC: Replacement Cost, It refers to the cost of repairing or replacing an insured item, based on the item's value at the time of the loss. Rebates - CORRECT ANSWERRefunding of part of the premium, due to the creation of a new contract or change to an existing contract. Reciprocal Insurers - CORRECT ANSWERA Reciprocal Insurer is an unincorporated organization of subscribers that operates through an attorney-in-fact to provide insurance benefits for its members. Reinsurers - CORRECT ANSWERCompanies which sell insurance to insurers to reduce the insurer's exposure to loss. Reporting - CORRECT ANSWEROne of the adjuster's duties is to Report to the Principal. The adjuster must give the principal frequent updates of her progress on any given claim. Replacement Cost (RC) - CORRECT ANSWERThe cost of repairing or replacing an insured item, based on the item's value at the time of the loss. Reservation of Rights - CORRECT ANSWERA notification that an insurer might give to an insured, informing him that a reported loss might not be covered under his insurance policy. Retroactive date - CORRECT ANSWERDate preceding a policy period before which the policy will not cover occurrences. Revenue Assurance (Crop Insurance) - CORRECT ANSWERA form of Crop Revenue Insurance that provides a fixed revenue guarantee based on average county prices Revenue Protection (Crop Insurance) - CORRECT ANSWERAlso called Yield Protection, this is the most comprehensive form of Crop Revenue Insurance, offering higher coverage amounts than other types. The revenue guarantee is based on the higher of: harvest-market price or early market price. Previously called Crop Revenue Coverage (CRC)

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Risk - CORRECT ANSWERIn the insurance industry, risk can have two meanings: 1) the potential for financial loss; being exposed or open to damage, 2) an insured item. Risk Avoidance - CORRECT ANSWERInsurers' practice of denying insurance applications that they believe would involve an inordinate amount of risk. Risk Management - CORRECT ANSWERMeasures taken by an insurance company to ensure that their exposure is not too high and to control the effect of a loss; for example, an insurer might charge higher premiums to drivers who have received speeding tickets. Risk Management Agency - CORRECT ANSWERA federal agency under the USDA that administers the Federal Crop Insurance Program. Risk Purchasing Groups - CORRECT ANSWERGroups of people with similar insurance needs who form an organization to buy insurance as a group. Risk, Pure - CORRECT ANSWERRisk that does not entail the possibility of gain; the only possible outcomes are a loss or no loss. Risk Reduction - CORRECT ANSWERAn insurer practices risk reduction when it takes precautions in order to reduce its exposure; for example, requiring that all homes insured by a homeowners policy have fire alarms installed. Risk Retention - CORRECT ANSWERAn insurer practices risk retention when it chooses to insure a risk instead of denying coverage. Risk Retention Groups - CORRECT ANSWERGroups where the members insure each other, using their own capital to write insurance policies. Risk, Speculative - CORRECT ANSWERRisk that might result in gain, loss, or no change in circumstance (as opposed to pure risk, which does not include the possibility of gain). Sales closing date - CORRECT ANSWERThe last date on which an insurance application for a particular crop can be completed and signed. Salvage - CORRECT ANSWERSalvage is damaged property that has cash value. In HO the policyholder has the option of keeping the salvage and accepting a smaller

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settlement from the insurer. The insurer has the option of keeping the salvage if they have fully indemnified the insured, but in no case can the insured insist the insurer keep the salvage. Scheduled payment release - CORRECT ANSWERSometimes called "open-ended release" or "rehabilitation settlement." The insurer agrees to pay all of the special damages and general damages that have accumulated so far, and agrees to pay special damages in the future. Settlement - CORRECT ANSWERA resolution of a dispute, or an agreement. Settlement allows an insurer and a claimant to resolve a case before it reaches a court of law. Small Grains - CORRECT ANSWERIn Crop Insurance, a provision that covers reduction in crop quality, as well as crop-yield losses. Small grains are wheat, barley, and oats. See also "Coarse Grains" Statute of Limitations - CORRECT ANSWERA statute based on the common law legal system that specifies the maximum period of time, after damages occur, that legal proceedings based on those damages may be initiated. Statutory Law - CORRECT ANSWERbased on laws set forth by a governing authority; i.e. state legislature Stipulation - CORRECT ANSWERA stipulation is something specifically agreed to in a contract, such as an insurance contract. Stock - CORRECT ANSWERA Stock Insurance Company is owned by stockholders, as opposed to its own policyholders (as is the case with Mutual Insurance Companies). Strict Liability - CORRECT ANSWERHolds a party 100% liable for damages when the activity or instrument they are performing is inherently dangerous. Subrogation - CORRECT ANSWERThe transfer of rights that occurs when an insurer indemnifies a claimant for a loss. The claimant transfers to the insurer his right to collect the amount of the indemnity from the guilty party. Sudden and Accidental Tearing Apart - CORRECT ANSWERA peril covered in some property insurance policies. It refers to damage caused by rupture, cracking, burning, or

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bulging of a steam or hot water heating system, an air conditioning or automatic fire sprinkler system, or an appliance for heating water. Unlike Accidental Discharge, this peril includes coverage for the system or appliance itself. Supplementary payments - CORRECT ANSWER Tort - CORRECT ANSWERAny civil wrongdoing, whether intentional or unintentional, resulting in a court action to remedy. Tort - negligent - CORRECT ANSWERWhen a negligent act causes unintentional damages to another party. Tort - intentional - CORRECT ANSWERA premeditated wrongful act that causes intentional or intentional damages to another party. Tort law - CORRECT ANSWERThe body of law that addresses and provides remedies for any civil wrongdoing performed on another party. Tortfeasor - CORRECT ANSWERThe defendant in a court case who committed the tort. Transitional yield - CORRECT ANSWERCounty 10-year yield average as determined by the National Agricultural Statistical Service. Used when issuing a crop insurance policy to a farmer who lacks four years of yield records on which to base coverage and premium amounts. Trigger - CORRECT ANSWERAn event that "triggers" the coverage provided under a CGL policy: in claims-made, it is a claim, in occurrence form, it is the "occurrence." Trustworthiness - CORRECT ANSWERThe virtue of carrying out responsibilities reliably, worthy of being trusted. A necessary attribute of insurance adjusters. Umbrella Liability Policy - CORRECT ANSWERAn umbrella policy provides liability coverage over and above the normal or base limits of liability in a policy. An umbrella policy is a type of Excess Liability. Underinsured - CORRECT ANSWERNot sufficiently insured against particular losses. For example, any home insured at less than 80% of its value is considered underinsured.

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Unfair Claim Settlement Practices - CORRECT ANSWERDishonest or unfair behavior related to settling insurance claims which is specifically proscribed by state law. Unilateral - CORRECT ANSWERA characteristic of insurance contracts. It means that only one of the parties (the insurer) makes a promise to perform. The insurer is obligated to fulfill this promise, whereas the insured is free to void the contract at any time. Uninsurable - CORRECT ANSWERRisks are said to be uninsurable when they do not meet certain qualifications. For example, an insurable risk cannot involve a loss that the insured deliberately causes. Again, certain perils are too catastrophic to be insurable (like war or nuclear events). Unscheduled - CORRECT ANSWERUnscheduled property is property covered under an insurance contract that is not listed item by item (as "Scheduled" property would be listed). U.S. Environmental Protection Agency - CORRECT ANSWERFederal agency primarily responsible for the implementation of most federal laws designed to protect, enhance, and conserve the nation's natural resources. Utmost Good Faith - CORRECT ANSWERA characteristic of insurance contracts: 'utmost' meaning the 'highest degree' and 'good faith' meaning, "act with honesty, fair dealing and full disclosure." All parties to an insurance contract must act with utmost good faith. It also applies to a fiduciary agent's responsibility towards the principal. Valuation - CORRECT ANSWERThe processes of estimating what an item is worth. Value - CORRECT ANSWERThe estimated or appraised worth of an item, used to determine the replacement cost or indemnification amount. Valued policy - CORRECT ANSWERA policy in which the insurer and the insured agree to a specific value prior to the start of the policy. If the item is lost or destroyed, the insurer pays the amount agreed upon. Vicarious Liability - CORRECT ANSWERWhen an act of negligence is transferred from one party to another, such as from employee to employer or from child to parent.