Louisiana Auto Adjuster Exam Questions and Correct Answers

Diminished value a concept that states an automobile's market value has decreased, even though it's been repaired after an accident; occurs because of the theory that repairs can't be made to put the vehicle into its exact pre-loss condition Market value a concept, which takes into account, what the property would sell for on the open marketplace; utilized frequently when selling property such as homes and auto Agreed value the difference is that the agreed value provision states that it will not pay any amount other than what's shown in the schedule in the event of a total loss; this method of valuation is commonly used with items of significant value, such as jewelry or furs Stated amount most often used in auto insurance; requires a limit of insurance to be listed for each vehicle; states that the insurer will pay the lesser of the actual cash value of the loss, the amount necessary to repair or replace with property of like kind and quality or the amount scheduled in the policy Actual cash value a concept, which is based on the current cost new of the property at the time of loss, with a deduction for depreciation on the property; this value cannot exceed the limit of insurance on the property Estoppel something is allowed to continue because all defenses against it are stopped Waiver giving up of any known right or advantage Reasonable expectations a rule regarding insurance policies; since policies can include complicated and technical language, many average consumers could not understand them Aleatory the performance of the contract is based on chance, rather than certainty Direct losses losses that occur when tangible property is damaged by a peril Insurance A means to transfer risk from one person or organization to a company, thereby allowing a sharing of losses among all the insured persons or organizations Loss a reduction in quality, quantity or value of an asset