MN Claims Adjuster key terms

The value of damaged property at the time of loss, usually replacement cost minus depreciation. Many Minnesota property policies use this as the default settlement basis unless replacement cost is endorsed.

The amount needed to repair or replace damaged property with new property of similar kind and quality, without deducting for depreciation. Insurers may withhold recoverable depreciation until replacement is completed.

A reduction in property value caused by age, wear and tear, or obsolescence. Adjusters subtract it from replacement cost to calculate actual cash value.

An improvement in the condition of property beyond its pre-loss state resulting from repair or replacement. Insurers generally do not pay for betterment because it gives the insured a windfall.

A property policy provision requiring the insured to carry coverage equal to a stated percentage of property value. If the limit is lower, the insurer reduces the claim payment proportionally.

The amount of a covered loss the insured must absorb before the insurer pays. Deductibles may be a flat dollar amount or a percentage of the dwelling or building limit.

A financial stake in property or a person such that the insured suffers a real economic loss if a covered event occurs. Minnesota requires insurable interest at the time of loss.

The core insurance concept that a claim payment should restore the insured to roughly the same financial position held before the loss, no better and no worse.

The mutual duty of insurer and insured to deal honestly and disclose material facts. Breach can support rescission or denial, and it underlies fair claims handling duties.

A false statement on an application or claim that would have affected the insurer's decision to issue coverage or pay a claim. It may allow rescission or denial under Minnesota law.

The intentional withholding of information material to an insurance application or claim. Like misrepresentation, it can void coverage when the insurer relied on the omitted fact.

The voluntary relinquishment of a known right, such as an insurer's right to deny a claim after unreasonably delaying its investigation. Once waived, the right generally cannot be reclaimed.

A legal doctrine preventing a party from asserting a right after its conduct led another party to reasonably rely on that conduct to their detriment. Common in coverage denial and delay disputes.

A written notice telling the insured that the insurer is investigating a claim while preserving the right to deny coverage later. It typically identifies the policy provisions in question.

A sworn statement from the insured detailing the amount, date, cause, and circumstances of a loss. Policies set a deadline for submitting it, and failure can prejudice the claim.

The insured's duty to notify the insurer of a loss within a reasonable time or the period stated in the policy. Late notice may reduce recovery if it prejudiced the insurer's investigation.

A policy condition requiring the insured to assist the insurer in investigating and defending a claim, including submitting to examination and producing records. Breach can bar recovery.

A formal, recorded interview of the insured or claimant conducted under oath during a claim investigation. Policies commonly require cooperation with an EUO when requested.

The insurer's right to recover claim payments from the party legally responsible for the loss, after paying its insured. It prevents double recovery and shifts loss to the at-fault party.

Property remaining after a loss that still has value, which the insurer may take or sell to offset claim costs. Salvage rights are often addressed in the policy's conditions.

Coverage that pays sums an insured becomes legally obligated to pay because of bodily injury or property damage to others, plus defense costs. It applies only when the insured is legally liable.

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 responds to claims first made against the insured during the policy period, regardless of when the act occurred, subject to any retroactive date.

The insurer's obligation to provide and pay for legal defense of covered claims, which is broader than the duty to indemnify. Defense may continue even when some allegations are uncovered.

A liability rule that reduces a claimant's recovery in proportion to their own share of fault. Minnesota uses a modified comparative fault system with a 51 percent bar.

A rule preventing reduction of a tortfeasor's liability because the injured party received compensation from another source, such as health insurance. It affects how liability claims are valued.

No-fault auto coverage that pays medical expenses, lost wages, and related losses for the insured and passengers after an accident, regardless of fault, subject to policy limits and state rules.

A system in which accident victims recover certain economic losses from their own insurer without proving fault, while tort claims are restricted. Minnesota operates a no-fault auto system.

Auto coverage that pays the insured for damages caused by a driver with no liability insurance or by a hit-and-run driver, up to policy limits and subject to state requirements.

Auto coverage that pays the insured when an at-fault driver's liability limits are insufficient to cover the loss. It typically applies after the other driver's limits are exhausted.

Auto or liability coverage that pays reasonable medical expenses for the insured and passengers after an accident, regardless of fault, usually without a deductible and subject to a limit.

A property policy covering a dwelling and its contents, often used for rental properties, secondary homes, or risks ineligible for a homeowners policy. It provides named-peril coverage.

Standardized policy packages designated HO-2 through HO-8, each varying in perils covered, covered property, and liability. Minnesota requires insurers to offer certain forms and coverages.

A cause of loss specifically listed in a policy as covered, such as fire, windstorm, or theft. Losses from causes not listed are excluded unless an endorsement adds them.

A coverage approach in which all causes of loss are covered except those expressly excluded. Also called all-risk, it shifts the burden to the insurer to show an exclusion applies.

A loss caused by a combination of covered and excluded perils. Courts and policies use anti-concurrent causation language to exclude losses where an excluded peril contributes to the damage.

Commercial property coverage that replaces lost net income and continuing expenses during the period a business is shut down by a covered loss, until operations resume.

Commercial property coverage that pays reasonable costs to continue operations or minimize shutdown after a covered loss, such as temporary relocation or expedited repairs.

A standard liability form covering bodily injury, property damage, personal and advertising injury, and medical payments arising from an insured's business operations, with exclusions for professional and auto exposures.

A person or organization added to another party's liability policy for protection related to that party's business, such as a landlord or general contractor. Coverage is usually limited to vicarious liability.

A no-fault statutory system requiring employers to pay for work-related injuries and illnesses of employees, in exchange for limited liability. Minnesota sets benefits and procedures by statute.

The principle that workers' compensation benefits are the employee's sole remedy against the employer for work injuries, barring most tort suits. Intentional acts and other exceptions may apply.

Prohibited insurer conduct in handling claims, such as unreasonable delay, failure to investigate, denial without a reasonable basis, or failure to explain coverage decisions. Minnesota regulates these acts by statute.

An insurer's unreasonable or dishonest handling of a claim, such as denying without a reasonable basis or failing to settle within limits. It can expose the insurer to extra-contractual damages.

Minnesota statutes and rules governing how insurers must investigate, communicate about, and pay claims, including timeframes for acknowledgment and decisions, and prohibiting unfair settlement conduct.