MI Claims Adjuster key terms

The principle that insurance restores the insured to roughly the same financial position held before a loss, no better and no worse, rather than allowing a profit from insurance.

A financial stake in the property or person insured such that the insured would suffer a genuine economic loss if the covered event occurred. It must exist at the time of loss.

The mutual duty of applicant and insurer to deal honestly and disclose material facts. A material misrepresentation by the applicant can allow the insurer to rescind the policy.

A false statement on an application or claim that would have changed the insurer's decision to issue coverage or set the premium. It may support rescission or claim denial.

Intentional withholding of a fact material to the insurer's underwriting or claims decision. Unlike a misstatement, nothing false is said, but the omission is still actionable.

The dominant, uninterrupted cause that sets a loss in motion and produces the result without a new intervening force. It determines whether a loss is covered under a named-peril policy.

A situation where a covered and an excluded peril combine to produce one loss. Courts and policy wording differ on whether the entire loss is paid or only the covered portion.

Policy language stating that loss caused by an excluded peril is excluded even if a covered peril also contributed, and regardless of sequence. It bars payment when excluded and covered causes combine.

The amount of each loss the insured absorbs before the insurer pays. It may apply per occurrence, per claim, or as a percentage of the dwelling limit for certain perils such as wind.

A property policy condition requiring the insured to carry limits at least equal to a stated percentage of the property's value, or claims are reduced proportionally to the shortfall.

The value of damaged property calculated as replacement cost minus depreciation, reflecting its condition and age at the time of loss. Some policies define it as fair market value.

The cost to repair or replace damaged property with new property of like kind and quality, without deduction for depreciation. Payment is often limited to the policy limit.

The reduction in value of property from age, wear and tear, or obsolescence. Adjusters apply it when computing actual cash value settlements.

A policy arrangement in which the insurer and insured set a fixed value for insured property in advance, and that amount is paid for a total loss without a coinsurance penalty.

A policy, or a state valued-policy statute, under which the full stated limit is paid for a total loss of a building by a covered peril, regardless of actual value.

A loss where the property is destroyed or damaged beyond economical repair, or where repair cost exceeds the insured value. Settlement is based on the limit or valuation clause.

Damaged property that retains value after a loss. The insurer may take title to it, sell it, or let the insured keep it with the claim reduced by its value.

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

Coverage that pays reasonable costs to live elsewhere, and sometimes lost fair rental income, when a covered loss makes the residence uninhabitable. It is subject to its own limit and time period.

Homeowners coverage for the inability to use the residence because of a covered loss, including additional living expenses and lost fair rental value. It has a separate limit.

Commercial coverage replacing lost net income and continuing expenses while a business is shut down by a covered property loss. It often includes extra expense to resume operations.

Commercial property coverage paying lost net income plus necessary costs to continue or quickly resume operations after a covered loss. Extra expense applies even if it reduces the business income loss.

The time frame during which business income coverage applies, beginning at the loss and ending when the property should reasonably have been repaired or replaced with due diligence.

Policy language that removes specified perils, property, or persons from coverage. The insurer bears the burden of showing an exclusion applies to deny a claim.

A written amendment attached to a policy that adds, removes, or changes coverage terms. Endorsements control over conflicting policy language and must be read with the base form.

The policy section listing the named insured, insured property, policy period, coverage limits, deductibles, and premium. It is the starting point for any coverage analysis.

The maximum amount the insurer will pay for a covered loss under a given coverage. Limits may be per occurrence, per person, aggregate, or sublimits for specific property.

The maximum total the insurer pays for all covered losses during a policy period, regardless of how many occurrences. It is common in liability and commercial policies.

An accident or continuous or repeated exposure to substantially the same harmful conditions that causes injury or damage. Its definition drives how many limits apply.

The most the insurer pays for all claims arising from a single occurrence, no matter how many claimants are involved. It sits below any aggregate limit.

Failure to exercise the care a reasonable person would use under similar circumstances, resulting in harm. Liability claims generally require duty, breach, causation, and damages.

A doctrine that reduces a claimant's recovery in proportion to the claimant's own share of fault. Some states bar recovery entirely when the claimant is mostly at fault.

Legal responsibility of a property owner or occupier for injuries occurring on the premises due to unsafe conditions or inadequate maintenance. The duty owed varies with the visitor's status.

Homeowners coverage paying sums the insured becomes legally obligated to pay for bodily injury or property damage caused by an occurrence, plus defense costs. Defense is usually outside the limit.

Coverage paying reasonable medical expenses for others injured on the insured location or by the insured's activities, regardless of fault. Payment is subject to a per-person limit.

Auto coverage paying for damage to the insured vehicle from impact with another object or vehicle, or from overturn. A deductible usually applies to each claim.

Auto physical damage coverage for losses such as fire, theft, vandalism, hail, flood, or animal strikes. It is commonly called comprehensive coverage and carries its own deductible.

Auto coverage paying the insured's damages when injured by a driver with no liability insurance or by a hit-and-run driver. It may also cover underinsured drivers depending on state law.

No-fault auto coverage paying medical expenses, lost wages, and related costs for the insured and passengers after an accident, regardless of who caused it. Required in no-fault states.

A written notice telling the insured that the insurer is investigating a claim while preserving the right to deny coverage later. It must be timely and identify the coverage issues.

An insurer's unreasonable failure to investigate, defend, or pay a covered claim. It can expose the insurer to extra-contractual damages, penalties, or statutory remedies.

Acts prohibited by state law, such as misrepresenting policy terms, unreasonable delay, failing to investigate, or offering far less than the claim is worth. Regulators may fine violators.

A regulatory review of an insurer's sales, underwriting, and claims practices to test compliance with state law. Findings can lead to fines, refunds, or license restrictions.

Insurance placed with a non-admitted insurer when admitted carriers will not write the risk. It is regulated differently and usually offers no state guaranty fund protection.

An insurer licensed by the state to transact business there, subject to rate and form filing rules and backed by the state guaranty fund if it becomes insolvent.

The license a state insurance department issues to an insurer authorizing it to conduct specific lines of business in that state. Operating without one is unauthorized insurance.

The requirement that individuals who investigate or settle claims hold a state-issued adjuster license, often with prelicensing education, an exam, and continuing education. Exemptions vary by state.