STUDY 9-ADJUSTING AND THE CLAIMS PROCESS

Question 1

statute of limitations

Answer 1

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 2

sworn statement

Answer 2

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

Question 3

direct loss (or damage)

Answer 3

Damage to property by direct action of a peril insured against, as distinguished from contingent or indirect damage.

Question 4

claims examiner

Answer 4

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

Question 5

release

Answer 5

An oral or written discharge from an obligation, duty, or demand. To let go of, or give up a legal claim or right to one against whom it could be enforced.

Question 6

forfeiture

Answer 6

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

Question 7

prescription

Answer 7

(1) In law, a limitation of time within which legal action can be taken by a claimant. (2) In insurance, the period of time in which a claim may be brought by the policyholder.

Question 8

third party

Answer 8

A claimant under a liability policy, so called because that party is not one of the two parties (insured and insurer) who has entered into the insurance contract that pays the claim.

Question 9

reservation of rights letter

Answer 9

An insurer’s notification to an insured that coverage for a claim may not apply. Such notification allows an insurer 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.
In reserving its rights to later deny coverage, the insurer is merely telling the insured of its concerns that the claim, in whole or in part, may not be covered under the policy, pending further investigation.

Question 10

proof of loss

Answer 10

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. An insurer must respond to a proof of loss after a specified time period with a formal disposition of the claim (approved or denied).

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 witnessing 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

indirect loss

Answer 12

Loss resulting from direct damage to property; for example, income and expense loss resulting from the inability to use damaged property.