South Carolina Property, Casualty, Surety, Marine Exam

Accumulated Depreciation - The total decrease in an item's value over a period of time. Formula:(Annual Depreciation x Number ofyears used) 1-J Acreage Reporting Date - 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. 3-E Actual Cash Value (ACV) - 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) 1-J Actual Production History - 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. 3-E Adhesion - 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."1-B Adjusted Gross Revenue (Crop Insurance) - 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. 3-E Adjuster - An agent who, for compensation, processes insurance claims. Can represent either the insured or the insurer. 2-B Adjuster - Emergency - 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. 2-B Adjuster - Independent - 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 2-B Adjuster - Public - 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. 2-B Adjuster - Staff - Salaried employee of one insurance company who can work locally, regionally, or nationally. Also called: Company Adjuster 2-B Advance Payment Settlement - 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.2-D Agency Authority - 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. 2-A Agency Authority - express - Authority that is expressly given to the agent in writing. Allows agent to act on behalf of the principal. 2-A Agency Authority - implied - Authority that an agent possesses by implication of her behavior, regardless of whether this authority is granted in writing. 2-A Agency Authority - apparent - Authority that an agent possesses based on the appearance of representing the insurer. 2-A Agent - Someone who has received authority from an insurer to sell or service insurance policies. 2-A Aggregate Limit - 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). 1-K Agreement - 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. 1-A Agricultural Producer - A business that grows, harvests, and sells crops for profit. 3-E Aleatory - 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. 1-B 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. 1-L Annual Depreciation - An item's Replacement cost divided by the number of years in its expected lifespan. 1-J Appraisal - 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. 2-D Arbitration - 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 - 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. 2-D Artificially Generated Current - 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.3-A Auto Policy - Insurance policy designed to protect the policyholder while owning, occupying, or operating a vehicle. Usually combines liability coverage and property coverage into one policy. 3-C Automobile In Insurance policies - Automobile generally means any vehicle designed for use on public roads. 3-C Automobile No-Fault Laws - 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.3-C Aviation - Aviation insurance combines hull insurance for the aircraft and liability insurance for any damage toothers' property or to people who are not passengers. 5-F Bailee - An individual or company that receives the property of someone else for a special purpose, and returns the product after use. 5-E BAP - The Business Auto Policy provides property damage and liability insurance for automobiles used by a business. 4-F Binder - A temporary contract provided by an insurer that ensures coverage until the complete, permanent policy is issued. 1-F BI - (Bodily Injury): Physical damage to someone's person. Liability insurance covers bodily injury that the insured might cause to another person through negligence. 1-K Boiler & Machinery - Boiler and machinery insurance is designed to indemnify a business for damages to, and damages by, boilers, machinery, motors, generators and a variety of other electrical devices and appliances. 4-H Bond - A contract wherein one party guarantees the performance of a third party. Bonds involve three parties:(1) the surety agrees to pay the second party, (2) the obligee, if the third party, (3) the principal, neglects to carry out an obligation it has to the obligee.4-D Breach of Product Warranty - The failure or falsehood of a stated promise of a product stipulation. 1-L Business Personal Property - Moveable property used for business 4-A Catastrophe - An occurrence or a sequence of occurrences that causes enormous property losses. Catastrophes are normally uninsurable by private insurers. 2-B Cause of Loss - A form included in a Commercial Package Policy or a Commercial Property Policy that lists the causes of loss from which the insured property is covered. 1-H CGL - A Commercial General Liability policy protects businesses against damages and injuries to third parties. 4-B Civil - Civil law observes court cases of one citizen charging another citizen for damages caused by tort; it differs from criminal law. 1-L Claim - The request for settlement that the policyholder files with an insurer after she experiences a loss. 2-C Claims-Made Form - A liability policy in which the insurer pays only those claims arising during the policy period (as opposed to those claims arising after the policy period is over, regardless of whether the incident took place during the policy period).4-B Claims Management - The practice of the insurance adjuster of managing a claim by processing it in a prompt and effective manner from the time the claim is filed until a settlement is reached, while adhering to all local and federal laws.2-B Claimant - One who files a claim with an insurer for a loss. 2-B Coarse Grains - In Crop Insurance, a provision that covers reduction in crop quality, as well as crop-yield losses. Coarse grains are corn, grain sorghum, and soybeans. 3-E Coinsurance - The Coinsurance Clause applies to policyholders who purchase an inadequate amount of property insurance. These policyholders must pay a percentage of the claim. In health insurance, coinsurance refers to the portion of a covered claim that the insured is responsible for paying out-of-pocket, after the deductible has been paid. 1-J Code of Ethics - A set of governing professional standards of conduct, usually created by regulatory bodies or government regulatory agencies. These standards may also be formally codified with statutes. 6-C Coercion - The practice of forcing another party to behave in an involuntary manner (whether through action or inaction) by use of threats or intimidation or some other form of pressure or force. 6-D Commerce - The exchange or transport of goods or property. 4-A Commercial - Having to do with commerce or business activity in general. 4-A Commercial Crime Insurance - Commercial insurance that covers employee dishonesty and theft by employees or others. 4-G Commercial Lines - A variety of insurance coverages that protect those involved in the business of creating, selling, displaying, evaluating, or shipping, etc. Example include: Business Owner's Policy; Commercial Property; Commercial General Liability; Workers Compensation; Professional Liability (D&O), Errors and Omissions(E&O) and Employment-Related Practices Liability.4-A Commercial Property Floater - A means of protecting a business' property that is not in one fixed location. 5-E Common Crop Insurance Policy - A single uniform policy that combines Crop Revenue Coverage, Revenue Assurance, Income Protection, and Indexed Income Protection. 3-E Common Law - Based on court decisions and customs when statutory law does not provide an answer; creates precedent. 1-L Compensatory Damages - Money awarded in civil court for tangible and intangible damages caused by a policyholder. 1-L Compensatory damages - Special - Money awarded for the exact value of the physical damage caused to the plaintiff up to the trial date.This is an objective value determined by receipts and medical bills. 1-L Compensatory damages - General - Money awarded for the emotional losses of the plaintiff that will continue after the trial date. These are a subjective value and are determined by the court. 1-L Competence - One of the four qualifications of a legally binding contract. All parties must be competent, with the necessary legal and mental capacity. 1-A Complaint - A complaint initiates a civil lawsuit by a claimant requesting financial relief from damages caused by a policyholder. 1-L Concealment - The act of withholding relevant material facts from an insurer. 1-F Conditions - The section of a policy that qualifies or limits an insurer's promise to pay or perform. 1-B Consideration - One of the four qualifications of a legally binding contract. All parties must bring something of value to the contract. 1-A Contract - An agreement entered into voluntarily by two parties or more with the intention of creating a legal obligation. 1-A Coverages - The amount and extent of protection provided by an insurance policy. 1-B Crime - An offense against the State or Federal Government, or a breach of law, for which the offender shall make satisfaction to the public. 4-G Criminal - Someone who has been convicted of a criminal act in a court of law. 1-L Crop Hail Insurance - A form of Crop Yield Insurance that is usually provided by private insurers without government subsidy. It offers named-peril protection on an acreage basis. 3-E Crop Insurance - Insurance coverage designed to protect a farmer's financial investment in his or her crops. Covers losses to a crop's profitability. 3-E Crop Revenue Insurance - Crop insurance that combines crop-yield insurance and price insurance to protect against losses to crop value. 3-E Crop Yield Insurance - Crop insurance that covers physical losses to actual crops. Damages - general - Intangible losses such as pain and suffering, or mental anguish. 1-L Damages - special - Tangible, financial losses that can be documented. 1-L Dangerous Instrumentality Doctrine - States that anyone involved in the use of inherently dangerous products or machines is held 100% liable for their own damages. 1-K Dec Page - Also called the Declarations Page. First page of a policy, which provides a summary of the contract; includes names of insured, addresses, coverage limits, policy period, etc. 1-B Declined Coverage - takes place when an insurance company rejects an application for coverage. 1-D Deductible - the amount the policyholder must pay out-of-pocket before the insurance company will paythe remaining costs. 1-J Deductible - fixed - A fixed deductible is one specific, predetermined amount that a policyholder must pay out-of-pocket before he can be indemnified. 1-J Deductible - percentage - A deductible that is calculated as a percentage of the value of the insured risk. 1-J Deductible - franchise - franchise deductible states that the policyholder only pays for damages that are less than his deductible. If the cost of damages equals or exceeds his deductible, the insurer pays the full amount and the policyholder pays nothing. 1-J Defamation - Damage to another's name or reputation, whether by libel, which is in print, or by slander, which is in speech. 6-D Default Judgement - Default Judgement is entered by the court against the party who failed to defend against a claim brought on by another party. In other words, if the person fails to show up and answer the claim the court will find in favor of the other party. 1-L Definitions - Page in policy that gives specific limited meaning to terms used in policy. 1-B Depreciation - A decline in value of property caused by wear or loss of usefulness usually measured by a specific formula. 1-J Direct Loss - Physical harm to tangible property caused by a peril. 1-H Discoverable - Capable of being demanded and handed over as evidence in a court of law; during litigation proceedings, the adjuster's claims file is discoverable. 2-E Eligiblity - Eligibility Requirements are found in some insurance policies. They identify the conditions that must be met by the policyholder in order to qualify for coverage under a policy. 3-A End of Insurance Date - The date that crop insurance coverage will end. It is the earliest of: total crop destruction, harvest of the crop, final adjustment of a loss, abandonment of a crop, or a date predesignated by crop type. 3-E Endorsement(s) - An optional provision that can be added to a policy to increase, reduce, or modify coverage for specific property types or perils. 1-B Errors and Omissions - Liability insurance that indemnifies professionals for errors or oversights on the part of the insured that caused harm to their clients. 4-C Estoppel - A legal principle that bars a party from asserting something contrary to what has been implied by his previous actions or statements. 1-F Ethical - Adhering to moral laws and to principles of fairness. 6-C Evaluation - Evaluation, determining the approximate value of damages relevant to a claim i.e. total of medical bills, costs of repair & replacement of damaged property and the consideration of the financial provisions of the insurance policy. 1-I Exclusions - A section of an insurance policy that reduces coverage by listing specific individuals, property, or perils that are NOT covered by the policy. 1 B Exposure - The extent to which an item is open to damage or loss. More exposure means a loss is more likely. 1-DF Fair Credit Reporting - Federal legislation that gives an applicant for insurance the right to investigate the reasons his insurance application was denied. 6-D False Advertising - Presenting something in a deceptive or untrue manner to the consumer; misrepresentations in advertisements. 6-D Farm - A property where a farmer or rancher both resides and conducts commercial business. 3-D Farm Liability Coverage Form - A form added to a farm insurance policy that provides coverage for injury and damage to a third party. 3-D Farm Property Coverage Form - A form added to a farm insurance policy that provides coverage for the dwelling, other structures, farm structures, and both household and farm personal property. 3-D Farmer - Someone in the business of growing, harvesting, and selling crops for profit. In Farm insurance, a farmer must reside and do business on the same premises. 3-D Federal Crop Insurance Act - Legislation passed by Congress that established the Federal crop insurance program. 3-E Federal Crop Insurance Corporation (FCIC) - A government-owned corporation that manages the Federal crop insurance program. 3-E FEMA - Federal Emergency Management Agency - a branch of homeland security that coordinates relief programs when disaster strikes an entire community. N/A Fiduciary - One of the terms that describes the adjuster's relationship with the principal (the insurer). As FiduciaryAgent, the adjuster acts for the benefit of the principal, rather than for his own benefit. 2-B Final planting date - The last day to plant crops in order to receive the full insurance yield and/or revenue guarantee selected. 3-E First Named Insured - The first person or entity named as insured on the declarations page of a policy. 1-F Floater - A term for Inland Marine policies that cover mobile property. 5-E Flood - An overflow of inland or tidal waters; an unusual or rapid accumulation of runoff or surface waters from any source; mud flows; collapse or subsidence of land along the shore of a lake or other body of water. 5-A Flood Insurance - provides relief following flood damage to communities who participate in the NFIP floodplain management system; covers damages to the building and its contents 5-A Floodplain Management - maps out areas with high risk of flood, so that communities will avoid building in these areas 5-A Fraternal Benefit Societies - Fraternal Benefit Societies, or Fraternal Associations, are non-profit, mutual aid organizations that engage primarily in charitable or benevolent activities. They offer their members insurance against death, disease, and disability.1-C Fraud - The act of deceiving an insurance company in order to collect more money than one is legally entitled to. 1-G Fraud, Hard - Deliberately faking or causing an incident in order to collect money. 1-G Fraud, Soft - Inflating the gravity or the extent of claims in order to receive a higher indemnification. 1-G Full and legal purpose - See also "Legal Purpose." One of the four qualifications of a legally binding contract. The purpose of the contract must be legal (e.g. no contracts for illicit drug deals). Good faith - Acting honestly and fairly, with good intentions and full disclosure. 1-B