AL Claims Adjuster key terms

A financial stake in the person or property insured such that the insured benefits from its continued existence and suffers a genuine economic loss if it is damaged or destroyed. It must exist at the time of loss for property insurance.

The idea that insurance should restore an insured to roughly the same financial position held before a loss, no better and no worse. It limits recovery to the actual amount of loss.

A heightened duty of honesty and fair dealing owed by both the insured and the insurer. The insured must disclose material facts, and the insurer must handle claims and policy transactions fairly.

An agreement in which the dollar amounts exchanged by the parties are unequal and depend on chance. The insured pays a fixed premium while the insurer may pay a much larger, uncertain loss amount.

The tendency of people with the greatest chance of loss to seek or keep insurance more eagerly than lower-risk people. Insurers counter it through underwriting, exclusions, waiting periods, and carefully set premiums.

The insurer's right, after paying a claim, to step into the insured's shoes and pursue reimbursement from the party that caused the loss. It supports the principle of indemnity by preventing double recovery.

The policy section that identifies the insured, the covered property or risks, policy dates, limits, deductibles, and premium. It provides the basic facts used to evaluate a claim.

The policy section that states the core promise of coverage, describing which perils or losses the insurer agrees to pay for and the general scope of protection.

Policy provisions that describe losses or situations the insurer will not cover. They narrow the insuring agreement and often signal risks that require separate coverage or a buy-back endorsement.

Policy provisions that set out duties and rules both parties must follow, such as providing prompt notice, cooperating in the investigation, and submitting a proof of loss.

A written amendment attached to an existing policy that adds, removes, or changes coverage, limits, or terms. It overrides conflicting language in the original policy form.

The amount of each loss the insured must absorb before the insurer pays. Deductibles reduce small claims, control premium, and are subtracted when calculating the claim payment.

A policy condition allowing either party to demand an independent evaluation when they disagree about the amount of a property loss. Each side selects a competent appraiser.

The value of damaged property at the time of loss, commonly calculated as replacement cost minus depreciation. Policies may define it differently, and some states use fair market value.

The amount needed to repair or replace damaged property with new property of similar kind and quality, without deducting depreciation. Payment is often withheld until replacement is actually completed.

A property policy condition requiring the insured to carry coverage equal to a stated percentage of the property's value. Failing that, a penalty reduces the claim payment proportionally.

Coverage that replaces lost net income and continuing normal expenses when a covered peril interrupts business operations. It usually applies during the period of restoration.

A condition that reduces or eliminates coverage when a building has been empty for a specified number of days, because vacant structures present greater risk of damage and theft.

An accident, including continuous or repeated exposure to substantially the same harmful conditions, that results in bodily injury or property damage during the policy period.

A liability policy that covers claims first reported during the policy period, regardless of when the injury happened, provided the retroactive date is respected.

The maximum total amount an insurer will pay for all covered claims during a policy period, in addition to any per-occurrence limit.

The insurer's obligation to provide and pay for legal counsel when a claim or suit alleges damages potentially covered by the policy. It is broader than the duty to indemnify.

Amounts the insurer pays in addition to policy limits, such as defense costs, bail bonds, and interest on judgments, typically listed in the liability coverage form.

Alabama follows a strict contributory negligence rule: if the injured person's own negligence contributed to the injury, recovery is generally barred, unlike states using comparative fault.

Coverage that pays an insured for damages caused by a driver who has no liability insurance or who cannot be identified, such as a hit-and-run driver.

Coverage that applies when the at-fault driver has liability insurance but its limits are too low to fully pay the insured's damages.

Auto coverage that pays reasonable medical and funeral expenses for the insured and passengers after an accident, regardless of who caused it.

Auto physical damage coverage that pays for damage to the insured vehicle from striking another object or overturning, usually subject to a deductible.

A vehicle or property damage situation where repair cost approaches or exceeds the item's value, so the insurer settles based on actual cash value rather than repairing.

The principle that workers' compensation benefits are the employee's only recovery against the employer for a work-related injury, barring most tort suits.

The test for compensability in workers' compensation: the injury must be connected to the work and must occur while the employee is performing job duties.

A calculation of the injured worker's earnings over a defined period before the injury, used to set the amount of wage-loss and disability benefits.

Benefits paid when a work injury leaves a lasting impairment or reduced earning capacity but the worker is not totally disabled.

A formal, usually sworn statement from the insured detailing the date, cause, and amount of loss, submitted within the time required by the policy.

A written notice from the insurer that it will defend a claim while continuing to investigate coverage, preserving its right to deny coverage later.

Damaged property the insurer takes ownership of after paying a total loss, then sells to recover some of the claim cost.

The state agency that licenses insurers, producers, and adjusters, examines financial condition, and enforces Alabama's insurance laws and market conduct rules.

An insurer licensed by the Alabama Department of Insurance to transact business in the state, subject to its regulation and protected by the guaranty association.

A statutory entity that pays certain covered claims of policyholders when an admitted insurer becomes insolvent, funded by assessments on member insurers.

A licensed professional hired by the insured, for a fee, to prepare, document, and negotiate a property claim with the insurer on the insured's behalf.