Insurance Claims and Coverage Flashcards

What is a third-party claim in auto insurance?

Answer: A claim filed by an injured party against the at-fault driver's insurance company

A third-party claim is made by the accident victim against the liable party's insurance company, not the victim's own insurer.

What is a general release in an accident settlement?

Answer: A legal document signed by the plaintiff releasing all claims against the defendant in exchange for settlement payment

A general release is a binding agreement where the plaintiff gives up all current and future claims related to the accident in exchange for the settlement amount.

What is the significance of a recorded statement requested by an insurance adjuster after an accident?

Answer: It can be used against the claimant to limit or deny their claim, so claimants should consult an attorney first

Recorded statements can be used to challenge the claimant's credibility or contradict later testimony, so legal advice before providing one is strongly recommended.

What does collision coverage pay for in an auto insurance policy?

Answer: Damage to the insured's own vehicle resulting from a collision, regardless of fault

Collision coverage pays to repair or replace the policyholder's vehicle after a crash, subject to the deductible, regardless of who caused the accident.

What is an excess liability or umbrella insurance policy?

Answer: A policy that provides additional liability coverage above the limits of underlying auto or home policies

An umbrella policy kicks in after the underlying liability policy is exhausted, providing an extra layer of protection for large accident verdicts.

What is loss of consortium and who can claim it?

Answer: A claim by a spouse for the loss of companionship, affection, and support caused by the other spouse's accident injuries

Loss of consortium compensates a spouse or close family member for the loss of the injured party's companionship, love, and support due to the accident.