Mass Automotive Damage Appraiser
Principle of Indemnity
Restoration to approximate previous financial condition, no more no less.
Peril
The actual cause of a loss
Loss
reduction in value/financial loss/amount paid out in claim settlement
Direct Loss
physical harm to a tangible property
indirect loss/consequential Loss
an economic loss that results from a direct loss
Proximate Cause
when there is an unbroken chain of events between an occurrence and a loss, then that
occurrence is the proximate cause of loss
Occurrence
an event, incident, or condition that causes damage
Original Occurence
causes damage that then leads to more, proximate of all resulting losses
Damages are covered if:
caused by covered peril, or if their proximate cause was a covered peril
risk
potenial for loss, insured item
hazard
anything that increases exposure
peril
exposure to injury, loss, or destruction; grave risk; jeopardy; danger
valuation
The process of estimating what an item is worth
1. actual cash value/market(ACV)
2. replacement cost(RC)
3. functional replacement cost
4. stated amount
5. valued' guaranteed value
actual cash value
-ACV- a valuation method that takes into account depreciation
-same as market and depreciated value
-ACV offers lower premiums for less coverage
Acv Formula
acv=replacement cost-depreciation
replacement cost
todays price
depreciation
an items estimated for loss value due to wear and tear/age
Replacement Cost(RC)
, based on replacing an mite at current market prices regardless of depreciation
Functional Replacement Cost
Pays to replace an outdated obsolete item with a functionally equivalent item not
identical
-level of coverage falls between RC and ACV
Stated Amount
Property value is stated by the insured when applying for insurance
-When loss occurs, policy pays up to the stated amount or ACV, whichever is less
valued policy
guaranteed value- determined prior to the issuance of policy
Avoids the confusion of assessing appreciation or depreciation
ACV Actual Cash Value
usually beneficial to the policy holder
ACV
generally reflects current market value of an item
policy limits
establish the maximum payout of an insurance policy. in auto each type of coverage
has a limit
salvage
portion or value property that remains after loss
handling salvage
1. insurer deducts salvage from settlement amount
2. insurer takes ownership of damaged property after paying full value of damaged
prop.
3. insurers often take ownership of vehicles after total loss
abandonment clause
insured is prohibited from forcing the insurer to take possession of damaged property
for the purpose of repair or disposal
different than salvage, where the insurer chooses to take possession of the damaged
property after paying to replace it
A pre-defined monetary potion of an insurance claim paid by a policy holder is a
deductible
Loss Payable Clause
ensures the lender will be listed as a payee under the policy if damages occurs to the
insured property
deductible
pre defined monetary portion of an insurance claim paid by a policy holder
declarations page
names of insured party
subrogation
the transfer of rights that allows the insurer to recover its losses after it has indemnified
a policy
Only applies up to the amount paid by insurer
settlement
Principle of Indemnity
Restoration to approximate previous financial condition, no more no less.
Peril
The actual cause of a loss
Loss
reduction in value/financial loss/amount paid out in claim settlement
Direct Loss
physical harm to a tangible property
indirect loss/consequential Loss
an economic loss that results from a direct loss
Proximate Cause
when there is an unbroken chain of events between an occurrence and a loss, then that
occurrence is the proximate cause of loss
Occurrence
an event, incident, or condition that causes damage
Original Occurence
causes damage that then leads to more, proximate of all resulting losses
Damages are covered if:
caused by covered peril, or if their proximate cause was a covered peril
risk
potenial for loss, insured item
hazard
anything that increases exposure
peril
exposure to injury, loss, or destruction; grave risk; jeopardy; danger
valuation
The process of estimating what an item is worth
1. actual cash value/market(ACV)
2. replacement cost(RC)
3. functional replacement cost
4. stated amount
5. valued' guaranteed value
actual cash value
-ACV- a valuation method that takes into account depreciation
-same as market and depreciated value
-ACV offers lower premiums for less coverage
Acv Formula
acv=replacement cost-depreciation
replacement cost
todays price
depreciation
an items estimated for loss value due to wear and tear/age
Replacement Cost(RC)
, based on replacing an mite at current market prices regardless of depreciation
Functional Replacement Cost
Pays to replace an outdated obsolete item with a functionally equivalent item not
identical
-level of coverage falls between RC and ACV
Stated Amount
Property value is stated by the insured when applying for insurance
-When loss occurs, policy pays up to the stated amount or ACV, whichever is less
valued policy
guaranteed value- determined prior to the issuance of policy
Avoids the confusion of assessing appreciation or depreciation
ACV Actual Cash Value
usually beneficial to the policy holder
ACV
generally reflects current market value of an item
policy limits
establish the maximum payout of an insurance policy. in auto each type of coverage
has a limit
salvage
portion or value property that remains after loss
handling salvage
1. insurer deducts salvage from settlement amount
2. insurer takes ownership of damaged property after paying full value of damaged
prop.
3. insurers often take ownership of vehicles after total loss
abandonment clause
insured is prohibited from forcing the insurer to take possession of damaged property
for the purpose of repair or disposal
different than salvage, where the insurer chooses to take possession of the damaged
property after paying to replace it
A pre-defined monetary potion of an insurance claim paid by a policy holder is a
deductible
Loss Payable Clause
ensures the lender will be listed as a payee under the policy if damages occurs to the
insured property
deductible
pre defined monetary portion of an insurance claim paid by a policy holder
declarations page
names of insured party
subrogation
the transfer of rights that allows the insurer to recover its losses after it has indemnified
a policy
Only applies up to the amount paid by insurer
settlement
