IN Claims Adjuster key terms

A financial or legal relationship to the subject matter such that the insured gains from its safety and suffers loss from its damage; required at the time of loss for most general insurance claims.

The rule that a property claim restores the insured to the same financial position as before the loss, no better and no worse, subject to policy limits and deductibles.

The mutual duty of insurer and insured to deal openly and honestly, disclosing all material facts that would influence the other party's decision to accept or price the risk.

Any information that would affect a prudent insurer's judgment about accepting a risk, setting terms, or calculating the premium, and which the proposer is expected to reveal.

Failure by the insured to reveal a material fact when applying for or renewing cover, which may entitle the insurer to avoid the policy or reduce a claim.

A false or misleading statement made by the proposer, whether innocent or deliberate, that induces the insurer to issue cover it would otherwise have declined or rated differently.

The dominant, effective cause of a loss that sets the chain of events in motion without a new intervening cause; used to decide whether a policy responds.

A risk specifically named or described in the policy wording as covered, such as fire, lightning, storm, collision, or theft, so that loss from it triggers the insurer's obligation.

A risk or circumstance the policy expressly removes from cover, such as war, nuclear contamination, or wear and tear, so no payment arises even if loss occurs.

The insurer's right, after paying a claim, to stand in the insured's shoes and pursue recovery from the party responsible for the loss, up to the amount paid.

The principle allowing an insurer that has paid a loss to recover a proportionate share from other insurers covering the same interest against the same peril.

Situation where the same insured interest is covered against the same risk by more than one policy, so that the total sum insured exceeds the value at risk.

A policy condition that reduces a claim in proportion to underinsurance, calculated as sum insured divided by value at risk multiplied by the loss.

The maximum amount the insurer will pay under a policy for a covered loss, representing the declared value of the insured property or the chosen limit of liability.

Arises when the declared sum insured is lower than the full value at risk, exposing the insured to a shortfall on partial losses where average or proportional settlement applies.

The first amount of each loss that the insured must bear personally before the insurer pays, reducing the premium and discouraging small claims.

A stated sum deducted from the assessed loss before settlement, sometimes varied by peril, such as a higher excess for storm or escape of water damage.

The document forming part of the contract that records the insured's details, the property covered, the sum insured, the premium, the period, and the excesses applying.

The full contractual text setting out the insuring clause, definitions, exclusions, conditions, and claims obligations that govern how cover applies.

Policy terms that the insured must satisfy before the insurer's liability arises, such as giving prompt notice of loss or submitting a claim form.

A promise by the insured in the policy that something is or will be true, such as maintaining an alarm system, whose breach can affect the claim or the whole contract.

The basis of settlement under which the insurer pays to rebuild or replace damaged property with new equivalent items, usually subject to a sum insured and conditions.

The insured's duty to inform the insurer of a loss promptly, within any period stated in the policy, giving the circumstances, date, and an initial estimate of damage.

The person who investigates a reported loss, verifies cover, assesses damage, applies policy terms, and recommends or negotiates the settlement amount.

An independent specialist, often a chartered loss adjuster, appointed to investigate large or complex claims and report on cause, quantum, and the policy response.

A professional engaged by the insured, not the insurer, to prepare and negotiate the claim, which the adjuster should treat as an interested party's representative.

The improvement in the insured's position when repair or replacement leaves new-for-old value; adjusters typically apply a deduction to avoid breaching the indemnity principle.

Remaining property that retains value after a loss; the insurer may take it over or sell it and credit the proceeds against the claim.

The disposal of damaged goods or wreck by auction or tender, with the proceeds offsetting the claim so that the insured does not profit from the loss.

The reduction in an asset's value from age, use, and wear, which adjusters apply when settling on an indemnity rather than reinstatement basis.

A claim containing deliberately false statements, exaggerated loss, or invented damage, which can void the policy and entitle the insurer to recover payments already made.

The insured event of actual ignition by flame, including lightning and explosion of domestic boilers, but excluding damage by heat alone without ignition.

Ignition arising from internal chemical or biological heating of goods without an external flame source; often excluded or restricted in fire policies for specified materials.

Financial loss following physical damage, such as lost profit, reduced turnover, or extra costs, covered only where a separate consequential loss or business interruption section applies.

Cover that indemnifies lost gross profit or revenue during the period needed to restore normal trading after insured physical damage, subject to an indemnity period.

The maximum period, starting from the date of damage, over which business interruption loss is measured and paid, chosen to reflect realistic recovery time.

Reasonable additional expenditure, such as hiring temporary premises or overtime, incurred to maintain business operations and reduce interruption loss, usually subject to a limit.

The sea risks named in a marine policy, classically perils of the seas, fire, pirates, jettison, barratry, and similar dangers, from which insured losses must arise.

A partial loss accidentally suffered by one insured interest, such as cargo damaged by seawater, which is borne by that interest alone rather than shared.

The ancient maritime principle that sacrifices and expenses deliberately incurred to save ship and cargo from common peril are shared proportionately among the saved interests.

The deliberate throwing overboard of cargo or ship's gear to lighten or stabilise a vessel in peril, giving rise to a general average contribution from saved parties.

A marine hull clause extending cover to losses from accidents in loading, discharging, or moving cargo, and from latent defects in machinery or the hull.

Arises when insured property is destroyed, so damaged it ceases to be the thing insured, or is irretrievably lost, such as a vessel sinking in deep water.

Arises when a vessel or cargo is not destroyed but recovery or repair costs would exceed its insured value, allowing the insured to claim as for a total loss.

In marine insurance, the insured's notice surrendering the wreck or cargo to the insurer when claiming a constructive total loss, with acceptance by the insurer optional.

A marine clause obliging or entitling the insured to take reasonable steps to avert or minimise a loss, with the insurer reimbursing those expenses in addition to the sum insured.