Texas All Lines Adjuster Ch 1 Exam
Questions and Answers
Punitive Damage - ANSWER-Amount awarded by the court to the defendant in order to
deter them from engaging in similar conduct in the future.
Comparitive Negligence - ANSWER-Partial legal defense that reduces the amount of
damages that a person can recover because their own negligence contributed to the
loss.
Contributory Negligence - ANSWER-A law defense where a person's own negligence
contributed to the harm that he or she had.
Incurred Expense - ANSWER-Expenses that have already been used and have not yet
been paid. ALE claim is a reimbursement of Incurred Expense.
Loss Payee - ANSWER-The party that money is to be paid in the event of a loss. Ex:
Mortgage company, lien holder
Notice of Loss - ANSWER-Notice required by insurance companies immediately after
an accident or other loss. Part of the standard provisions defining a policyholder's
responsibilities after a loss.
Overhead and Profit - ANSWER-Amount of money dedicated to a General Contractor's
cost of doing business and earning a profit.
The INS standard is typically 10% overhead and 10% profit.
Usually added to a loss that involves at least 3 trades and the repair process requires
coordination by a General Contractor.
Ex: A house floods. They need water mitigation, mold, and reconstruction. 3 trades.
Personal Lines - ANSWER-Insurance protection for individuals and families, such as
Homeowner's and Auto.
Premiums - ANSWER-Amount of money paid by the insured to obtain or maintain an
insurance policy.
Reserves - ANSWER-A company's best estimate of what it will pay for claims.
Salvage - ANSWER-Left over value of a claim when an INS company recovers and
sells property to reduce its financial loss.
"Salvage Title"
, Subrogation * - ANSWER-The process by which an insurer can, after it has paid a loss
under the policy, recover the amount paid from any party (other than the insured) who
caused the loss or is otherwise legally liable for the loss.
Ex: You buy a dishwasher, the valve malfunctioned, you pay $5000 for damages to your
home. If you can prove that the defective valve from the manufacturer is responsible,
then you may be reimbursed all your money.
Umbrella Insurance - ANSWER-A liability policy that protects more than one property.
Usually purely liability coverage covering both auto and home. You may get a lower
premium for insuring both under the same policy.
Also provides coverage for claims that may be excluded by other liability policies
including: False arrest, slander, invasion of privacy, and liability coverage for units you
own.
Umpire - ANSWER-A person hired when two Appraisers cannot come to a final
determination during the Appraisal process.
Underinsurance - ANSWER-Inadequate coverage by the policyholder. May result in
economic losses to the policyholder since the claim would exceed the max amount that
can be paid out by the insurance company.
Uninsured Motorist Coverage - ANSWER-Pays if you are struck by someone who does
not have insurance. Also will pay if you are a victim in a hit-and-run.
Elements of a Legal Contract - ANSWER-- Offer and Acceptance
- Competent Parties (minors, mentally ill, or under the influence are not competent)
- Legal Object (must be drawn for legal purpose and not against public policy. A
contract that insures stolen property is not a legal contract)
- Consideration (Mutual giving & taking. The insured's is the premium they pay, and the
insurer's is the promise to pay for a loss caused by a covered peril)
Offer and Acceptance - ANSWER-An element of a Legal Contract in which one party
offers something and the other accepts.
Competent Parties - ANSWER-An element of a Legal Contract in which minors,
mentally ill, or under the influence are not competent.
Legal Object - ANSWER-An element of a legal contract that states it must be drawn for
legal purpose and not against public policy. A contract that insures stolen property is not
a legal contract.
Consideration - ANSWER-An element of a legal contract with mutual giving & taking.
The insured's is the premium they pay, and the insurer's is the promise to pay for a loss
caused by a covered peril.
Questions and Answers
Punitive Damage - ANSWER-Amount awarded by the court to the defendant in order to
deter them from engaging in similar conduct in the future.
Comparitive Negligence - ANSWER-Partial legal defense that reduces the amount of
damages that a person can recover because their own negligence contributed to the
loss.
Contributory Negligence - ANSWER-A law defense where a person's own negligence
contributed to the harm that he or she had.
Incurred Expense - ANSWER-Expenses that have already been used and have not yet
been paid. ALE claim is a reimbursement of Incurred Expense.
Loss Payee - ANSWER-The party that money is to be paid in the event of a loss. Ex:
Mortgage company, lien holder
Notice of Loss - ANSWER-Notice required by insurance companies immediately after
an accident or other loss. Part of the standard provisions defining a policyholder's
responsibilities after a loss.
Overhead and Profit - ANSWER-Amount of money dedicated to a General Contractor's
cost of doing business and earning a profit.
The INS standard is typically 10% overhead and 10% profit.
Usually added to a loss that involves at least 3 trades and the repair process requires
coordination by a General Contractor.
Ex: A house floods. They need water mitigation, mold, and reconstruction. 3 trades.
Personal Lines - ANSWER-Insurance protection for individuals and families, such as
Homeowner's and Auto.
Premiums - ANSWER-Amount of money paid by the insured to obtain or maintain an
insurance policy.
Reserves - ANSWER-A company's best estimate of what it will pay for claims.
Salvage - ANSWER-Left over value of a claim when an INS company recovers and
sells property to reduce its financial loss.
"Salvage Title"
, Subrogation * - ANSWER-The process by which an insurer can, after it has paid a loss
under the policy, recover the amount paid from any party (other than the insured) who
caused the loss or is otherwise legally liable for the loss.
Ex: You buy a dishwasher, the valve malfunctioned, you pay $5000 for damages to your
home. If you can prove that the defective valve from the manufacturer is responsible,
then you may be reimbursed all your money.
Umbrella Insurance - ANSWER-A liability policy that protects more than one property.
Usually purely liability coverage covering both auto and home. You may get a lower
premium for insuring both under the same policy.
Also provides coverage for claims that may be excluded by other liability policies
including: False arrest, slander, invasion of privacy, and liability coverage for units you
own.
Umpire - ANSWER-A person hired when two Appraisers cannot come to a final
determination during the Appraisal process.
Underinsurance - ANSWER-Inadequate coverage by the policyholder. May result in
economic losses to the policyholder since the claim would exceed the max amount that
can be paid out by the insurance company.
Uninsured Motorist Coverage - ANSWER-Pays if you are struck by someone who does
not have insurance. Also will pay if you are a victim in a hit-and-run.
Elements of a Legal Contract - ANSWER-- Offer and Acceptance
- Competent Parties (minors, mentally ill, or under the influence are not competent)
- Legal Object (must be drawn for legal purpose and not against public policy. A
contract that insures stolen property is not a legal contract)
- Consideration (Mutual giving & taking. The insured's is the premium they pay, and the
insurer's is the promise to pay for a loss caused by a covered peril)
Offer and Acceptance - ANSWER-An element of a Legal Contract in which one party
offers something and the other accepts.
Competent Parties - ANSWER-An element of a Legal Contract in which minors,
mentally ill, or under the influence are not competent.
Legal Object - ANSWER-An element of a legal contract that states it must be drawn for
legal purpose and not against public policy. A contract that insures stolen property is not
a legal contract.
Consideration - ANSWER-An element of a legal contract with mutual giving & taking.
The insured's is the premium they pay, and the insurer's is the promise to pay for a loss
caused by a covered peril.
