KY Claims Adjuster key terms

A financial stake in the person or property insured such that the policyholder would suffer a genuine economic loss if a covered loss occurred. It must exist when the loss happens and it supports the principle of indemnity.

The idea that an insurance recovery should restore the insured to roughly the same financial position held before the loss, no better and no worse. It explains why insurers pay actual cash value and why recoveries are capped by policy limits.

The mutual duty of the insured and the insurer to deal honestly and to disclose material facts during underwriting and claims. A breach by the insured, such as concealing a material fact, can give the insurer grounds to rescind or deny coverage.

A false or misleading statement on an application or a claim that would have influenced the insurer's decision to issue the policy or pay the claim. Materiality turns on whether the truth would have changed that decision.

A specific cause of loss, such as fire, windstorm, theft, or collision. Policies either list the covered perils or, in open-peril forms, cover all risks of direct physical loss subject to stated exclusions.

A condition that increases the likelihood or severity of a loss from a given peril, such as faulty wiring or careless storage of flammables. A hazard is distinct from the peril that actually causes the damage.

The portion of a covered loss the insured must absorb before the insurer pays anything. It is subtracted from the loss or applied to the limit, and it lowers both the premium and the number of small claims filed.

The insurer's right, after paying a claim, to step into the insured's shoes and pursue the responsible third party for the amount paid. It prevents double recovery by the insured and helps hold down premiums.

A written amendment attached to and made part of a policy that adds, removes, or changes coverage, limits, or conditions. Endorsement language controls over conflicting printed policy wording.

A temporary written or oral agreement that provides coverage before the policy is formally issued. It is subject to the terms of the policy to be issued and ends once the permanent policy takes effect.

A policy provision that removes specific losses, perils, persons, or property from coverage. In most coverage disputes the insurer bears the burden of showing that a loss falls within an exclusion.

A property valuation equal to replacement cost minus depreciation, reflecting what the damaged item was worth in its used condition at the time of loss. Some policies substitute fair market value or another method.

A valuation that pays what it costs today to repair or replace damaged property with new material of like kind and quality, with no deduction for depreciation. Full payment often depends on the insured actually completing the repairs.

A property provision requiring the insured to carry insurance equal to a stated percentage of the property's value to collect a partial loss in full. Carrying less than that amount reduces the claim payment by a proportional penalty.

A policy that covers only the perils specifically listed, such as fire, lightning, windstorm, hail, and theft. The insured generally has the burden of showing that the loss was caused by a listed peril.

Also called special form or all-risk, this policy covers risks of direct physical loss except those expressly excluded. Because the grant of coverage is broad, the exclusion wording usually decides the claim outcome.

Homeowners coverage that pays the extra cost of temporarily living elsewhere, such as hotel and restaurant bills above normal expenses, while the dwelling is being repaired after a covered loss.

A loss where property is not completely destroyed but repair is impractical or would cost more than the item is worth, so the insurer treats it as a total loss and pays the limit less deductible and salvage.

A policy provision letting the insured and insurer each choose a competent appraiser when they disagree only about the amount of a loss. The two appraisers may select an umpire to resolve their differences.

Failure to use the degree of care an ordinary, reasonable person would use under similar circumstances, resulting in unintended harm. A liability claim normally requires duty, breach of duty, causation, and damages.

Kentucky's rule that reduces a claimant's recovery by the claimant's own percentage of fault, with no bar to recovery however great that percentage is. Each defendant pays only its share of the total fault.

An accident, or continuous or repeated exposure to harmful conditions, that causes bodily injury or property damage during the policy period. It normally excludes intentional acts and injuries that were expected or intended.

Physical injury, sickness, disease, or death sustained by a person, together with the resulting pain, disability, and medical costs. The term normally does not reach emotional distress unless the policy language says otherwise.

Injury other than bodily injury, such as libel, slander, invasion of privacy, wrongful eviction, or false arrest. Liability policies covering personal injury usually define and limit the covered offenses precisely.

The maximum amount the insurer will pay for a covered claim under a policy or coverage part. Limits may apply per person, per occurrence, per claim, or in the aggregate, and more than one limit can cap a single loss.

Coverage that pays reasonable medical and funeral expenses for injured persons regardless of who was at fault, up to a stated limit. It is often used to resolve small injury claims without litigation.

Coverage that compensates the insured for damages caused by a driver who has no liability insurance or by a hit-and-run driver, up to the policy limits. In Kentucky it generally extends to underinsured drivers as well.

A person or organization granted insured status under another party's liability policy by endorsement, typically for liability arising from their relationship with the named insured, such as a landlord or general contractor.

The state agency that regulates insurers, agents, and adjusters in Kentucky, enforces the insurance code, and handles consumer complaints. Its head, the Commissioner of Insurance, is appointed by the Governor.

The credential Kentucky requires before a person may investigate or settle insurance claims for an insurer or for the public. Obtaining one involves an application, an examination or reciprocity, and continuing education.

An adjuster hired by the insured rather than the insurer to prepare, present, and negotiate a first-party property or casualty claim for a fee or a percentage of the settlement. Kentucky licenses and regulates this role.

The insured's required report of a loss to the insurer, made promptly or within the period the policy states. Late notice can jeopardize coverage when it prejudices the insurer's ability to investigate.

A written notice from the insurer telling the insured that it is investigating or defending a claim while preserving the right to deny coverage later. It protects the insurer from later being found to have waived a coverage defense.

A formal, usually sworn statement the insured submits describing the date, cause, and amount of a loss, often due within a period the policy sets. Failing to submit it can bar the claim when the insurer is prejudiced.

A policy condition that lets the insurer question the insured formally, under oath and often with counsel present, about the claim. An unreasonable refusal to submit can bar recovery under the policy.

The complete record of a claim, including notes, correspondence, photographs, estimates, recorded statements, and payment records. Contemporaneous, objective notes support the claim decision and are discoverable in bad faith litigation.

The legal deadline for filing a lawsuit on a claim, set by statute or by a valid policy suit-limitation clause. Missing the deadline usually bars the claim permanently, so adjusters track it from the date of loss.

Kentucky statute KRS 304.12-230, which lists prohibited claim practices such as misrepresenting policy provisions, failing to investigate promptly, and refusing to pay without a reasonable basis. Violations can support bad faith claims and regulatory penalties.

An insurer's unreasonable, reckless, or intentional failure to honor its obligations to its insured, such as denying a valid claim without a reasonable basis. Kentucky courts recognize bad faith claims by insureds and, in some circumstances, by third-party claimants.

A signed agreement in which a claimant gives up all claims against the insured or insurer in exchange for payment. Broad releases can extinguish unknown claims, so the terms must match exactly what the settlement covers.