Study 10: Claims Key Terms

Question 1

loss

Answer 1

A word often used in place of the word “claim.” It refers to the amount an insurer must pay because on of the possibilities of loss insured against under a policy has happened.

Question 2

statement of claim

Answer 2

A written statement by a plaintiff detailing the facts that support the claims against the defendant and the relief sought.

Question 3

statement of defense

Answer 3

In a high court action, a plea in reply to a statement of claim. It responds with admissions or denials to the allegations and sets out additional facts, perhaps even including a counterclaim.

Question 4

concurrent

Answer 4

All policies covering the same property are identical as to cover, language, and term.

Question 5

claims examiner

Answer 5

An employee of an insurance company who directs the investigations of staff adjusters and independent adjuster, reviews their reports, and approves claims settlements.

Question 6

adjuster

Answer 6

One who investigates insurance claims, makes recommendations regarding the payment of benefits from insurance policies, and negotiates payments and settlements.

Question 7

salvage

Answer 7

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, this repairable and then saleable.

Question 8

forfeiture

Answer 8

The loss of a right as a result of the non-performance of some obligation or condition.

Question 9

statute of limitations

Answer 9

A law that determines the time period within which parties can take a specific legal action to enforce their rights, This time period usually begins to run when the injury or damage occurs or was discovered.

Question 10

contribution

Answer 10

When more than one policy has been issued to insure a given risk, a loss must be divided equitably among the various polices. According to their amount and terms, each “contributes” its share of the loss.

Question 11

attest

Answer 11

To swear or declare, either verbally or in writing, that a particular document or testimony about an event is a true and accurate representation of the facts. The witness of signatures. Where a document is signed, a witness who has seen the document signed before her may “attest” that the signatures on the document are genuine.

Question 12

sworn statement

Answer 12

Oral or written assertion of fact(s) sated under oath. An affidavit, for example, is a sworn statement.

Question 13

waiver

Answer 13

The intentional and voluntary relinquishment of a known right. A waiver under a policy is required to be clearly expressed and in writing.

Question 14

non-waiver agreement

Answer 14

An agreement signed by the policyholder after a loss, agreeing that the investigation and determination of the amount of damage by the insurance company shall not be construed as an admission of liability. It is used when the insured is in violation of a policy condition and there is a question as to whether or not the company is liability. It is used when the insured is in violation of policy condition and there is a question as to whether or not the company is liable for a loss but it wishes to investigate the loss and determine the amount of damage.

Question 15

reservation of rights letter

Answer 15

An insurer’s notification to an insured that coverage for a claim may not apply. Such notification allows an insured to investigate (or even defend) a claim to determine whether coverage applies (in whole or in part) without waiving its right to later deny coverage based on information revealed by the investigation.