Chapter 1 Flashcards
Define adjuster
One who investigates insurance claims, making recommendations regarding the payment of benefits from insurance policies and negotiates payments and settlements
Define public adjuster
An insurance claims adjuster representing an insured on a fee basis in this claims settlement
Define independent adjuster
One who adjust losses on behalf of the insurance companies, but is not employed by any one insurance company
Define subrogation
Legal process by which an insurance company after the payment of a loss is assigned the rights of the insured to recover the amount of the loss from those who are legally liable for it
Define salvage
The remaining value of property after severe damage by fire or other peril. The overall loss is reduced by the salvage value. Undamaged property may be quite saleable and some property may be only partially damaged thus repairable and then saleable
Define claims handler
A claims person involved in any aspect of the claims adjusting process. May work for brokers, agents or insurers. Can perform any duty in the adjusting process, including taking the initial report of a loss, adjusting the loss, or handling the salvage or subrogation aspects of the claim.
Define claims examiner
An employee of an insurance company who directs the investigators of staff adjusters and independent adjusters, reviews the reports and, approves claim settlements
Define precedent
A legal decision that serves as a basis to resolve subsequent disputes in similar cases
Define tort
A legal wrong arising from a duty fixed by law. A breach of the duty that causes injury to persons or property is repressible by legal action for damages. Liability for tort involves a private or civil wrong or injury and is distinct from that under contract in that the duty is owed to people generally, rather than to a specified individual
Define privity of contract
Relationship exists between two parties or more by virtue of their having entered into a contract
Define fortuitous loss
A loss that occurs by chance. An accidental occurrence.
Define voidable contract
A contract that can be affirmed or rejected at the option of the aggrieved party
Define void contract
An illegal contract. In the law of contract that was never made or never existed.
Define principle of indemnity
The concept that insured will be reimbursed for her loss. If there is no loss, there can be no indemnity.
Define insurable interest
An interest that the insured must have in the subject matter of the insurance purchased so that the event insured against occurs, the insured will suffer an economic loss
Define utmost good faith
A legal principal, calling for the highest standards of integrity on the part of the insured and insurer
Define punitive damages
Damages in excess of those required to compensate the plaintiff for the wrong done, which are imposed in order to punish the defendant because of the particularly wanton or wilful nature of his or her wrongdoing
Also called exemplary damages
Define representation
A statement or conduct made to influence insure to decide on a risk. The decision includes declining or accepting the risk and deciding the rate and premium to be charged.
Define misrepresentation
Incorrect or missing information about material fact that is offered or not by an applicant or insured with or without the intent to mislead
Define material change
Those changes that would influence a reasonable and prudent insurer to decide whether to stay on the risk or influence the terms on which the risk is retained
Define non-disclosure
A contract of insurance is based on utmost good faith. An applicant for insurance is required to disclose to the company all material facts are necessary to underwrite a policy.
Define warranty
Statement or stipulation or promise, an insurance contract, the breach of which may nullify the contract
Define promissory warranty
I promise not only the fact is presently true, but they will continue to be true during the policy period
Define breach
Failure to meet the conditions or warranties contained in a specific policy of insurance
Define absolute liability
Liability associated with very dangerous actions. Often found in cases involving explosives and a mini automobile laws. Negligence does not have to be proven
Define forfeiture
The loss of a right as a result of the non-performance of some obligation or condition
Define proof of loss
A formal statement of facts about a loss, attested to by the claimant in a form specified by the insurer. A proof of loss may need to be notarized.
Define principle of equity
The principle that cases be considered in the spirit of fairness and justice, as well as the strictly formulated rules of precedent
Define termination of obligations
The principle that the insurers obligations under a policy terminate at a stated point in time
Define waiver
The intentional and voluntary relinquishment of a known right
Define estoppel
A bar created when someone by his actions or lack of it indicates that he will not exercise a right he has
Define notice of loss
Notification received by the insurance company from the insured that a loss has occurred. Failure to give such notice has been held to be a bar against recovery.
Define actual cash value
The fair market value of property taking into account factors that might argument or reduce the value of the property in question
Explain common law
Concerns the private rights of individuals
Legal precedents: form basis for deciding court cases
Hierarchy of precedent: judges must follow if facts of case similar
Explain civil code of Quebec
Concerns the private rights of individuals
Judicial discretion: judges may use prior decisions for guidance but reasoning doesn’t have to be followed
Explain contract law
Claims are adjudicated according to terms, conditions of insurance policy
What are the 5 essential elements in a contract
Agreement
Capacity to contract
Consideration
Genuine intention
Legality of object
Under the civil code or Quebec what four elements are essential in a contract
Consent
Capacity to contract
Cause of contracts
Objects of contracts
What are the additional elements required in an insurance contract
Principle of indemnity
Insurable interest
Utmost good faith
