Accumulated Depreciation - answer✔The total decrease in an item's value over a period of time.
Formula: (Annual Depreciation x Number of years used)
Acreage Reporting Date - answer✔The deadline for providing the insurer with an acreage report,
which is used to determine the amount of coverage needed and the premium charged for a
particular crop.
Actual Cash Value (ACV) - answer✔A valuation method used by insurers to reflect an item's
current market value right before being damaged or destroyed. Formula: (Replacement cost -
Accumulated Depreciation)
Actual Production History - answer✔A history of a farmer's crop yields over a multi-year period,
which is used to determine the normal production level of a farm.
Adhesion - answer✔Characteristic of an insurance contract. Means that one party (the insurer)
sets the terms, and the other (the policyholder) can "take it or leave it."
Adjusted Gross Revenue (Crop Insurance) - answer✔Narrowest (and least expensive) form of
Crop Revenue Insurance. Insures farm revenue as a whole instead of individual crops.
Guarantees a percentage of the insured farm's average revenue.
Adjuster - answer✔An agent who, for compensation, processes insurance claims. Can represent
either the insured or the insurer.
Adjuster - Emergency - answer✔Adjusters who are temporarily licensed by the insurance
commissioner to handle claims during catastrophes or emergencies that produce an
overwhelming number of claims in a short period of time.
Adjuster - Independent - answer✔Self-employed adjusters who contract with multiple insurers at
the same time. Paid on a commission or fee-plus-expenses basis for each claim. Also called: Fee
Adjuster, Bureau Adjuster
Adjuster - Public - answer✔An adjuster who is hired to represent the claimant and help
determine a fair indemnification. Usually specializes in appraisals and negotiation. Paid
commission, usually a percentage of final settlement.
Adjuster - Staff - answer✔Salaried employee of one insurance company who can work locally,
regionally, or nationally. Also called: Company Adjuster
Advance Payment Settlement - answer✔A settlement option that lets the insurer offer some
financial relief to the claimant before the claim has been fully settled. The insurer makes advance
payments to the claimant, which are then subtracted from the final settlement amount. Often used
when a claimant suffers bodily injury and is unable to work.
Agency Authority - answer✔The Agent's authority to act on behalf of someone else, usually an
insurer. This authority is derived from the agent's contract with the insurer.
Agency Authority - express - answer✔Authority that is expressly given to the agent in writing.
Allows agent to act on behalf of the principal.
Agency Authority - implied - answer✔Authority that an agent possesses by implication of her
behavior, regardless of whether this authority is granted in writing.
Agency Authority - apparent - answer✔Authority that an agent possesses based on the
appearance of representing the insurer.
Agent - answer✔Someone who has received authority from an insurer to sell or service
insurance policies.
Aggregate Limit - answer✔A type of policy limit found in some health, liability, and property
damage policies. It represents the total amount the insurer will pay for all losses (as opposed to
an occurrence limit, which denotes the total amount the insurer will pay per occurrence).
Agreement - answer✔One of the four requirements of a legally binding contract. All parties
involved must agree to the terms of the contract. Can also refer to a binder, which is the
preliminary substance of a contract.
Agricultural Producer - answer✔A business that grows, harvests, and sells crops for profit.
Aleatory - answer✔A characteristic of an insurance contract. Means "depending on an unknown
future event." An insurance contract will only pay IF and WHEN covered damages occur.
Neither party knows how much the contract will end up paying when they enter into the contract.
Answer - answer✔In liability cases, the defendant's response to a complaint. There are three
possible answers: 1) accept complaint and pay for damages, 2) deny the complaint, or 3) accept
the complaint with a right to insert evidence into the case.
Annual Depreciation - answer✔An item's Replacement cost divided by the number of years in its
expected lifespan.
Appraisal - answer✔A negotiation method which allows the claimant and the insurer each to
select an appraiser. The two appraisers in turn select an Umpire. The appraisers then work
together to determine a settlement amount. If they cannot agree, the Umpire steps in. Agreement
by any two of the three is binding.
Arbitration - answer✔A negotiation method in which the opposing parties each submit their
evidence to a mutually-agreed-upon and neutral third party, called an arbitrator. The arbitrator
reviews the positions of each opposing side, and makes a final and legally binding decision.
Arbitrator - answer✔The mutually-agreed-upon and neutral third party in an arbitration who
reviews the positions of each opposing side, and makes a final and legally binding decision.
Artificially Generated Current - answer✔Also called "artificial current." A peril covered in some
property insurance policies. It includes sudden and accidental damage from any electrical
current, except currents that are naturally generated, such as lightning or static electricity.
Auto Policy - answer✔Insurance policy designed to protect the policyholder while owning,
occupying, or operating a vehicle. Usually combines liability coverage and property coverage
into one policy.
Automobile - answer✔In Insurance policies, Automobile generally means any vehicle designed
for use on public roads.
Automobile No-Fault Laws - answer✔Laws in effect in some states that require any owner of a
vehicle to purchase no-fault insurance; that is, insurance that indemnifies the insured regardless
of who was at fault in an accident. No-fault laws also restrict the insured's right to sue the at-fault
party.
Aviation - answer✔Aviation insurance combines hull insurance for the aircraft and liability
insurance for any damage to others' property or to people who are not passengers.
Bailee - answer✔An individual or company that receives the property of someone else for a
special purpose, and returns the product after use.
BAP - answer✔The Business Auto Policy provides property damage and liability insurance for
automobiles used by a business.
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