Install
Fraud and Disputes terms
When Homeowners Insurance goes wrong.
Assignment of benefitsA signed agreement that transfers your right to claim payments to a contractor or other vendor, who then deals with the insurer directly.Identity theft coverageAn optional add-on that reimburses the out-of-pocket costs of repairing your name and credit after someone uses your personal information to commit fraud.Intentional lossAn exclusion for damage arising from an act that an insured commits or conspires to commit with the intent to cause a loss, such as arson of one's own home.Moral hazardThe risk that holding insurance leads someone to cause or inflate a loss, or to take less care, because the insurer rather than the owner bears the cost.Anti-concurrent causation clauseExclusion wording that denies a loss whenever an excluded cause contributes, even if a covered cause also played a part or came first.Appraisal clauseA policy condition that lets either side demand a neutral panel to set the dollar amount of a loss when you and the insurer cannot agree on its value.Concurrent causationThe question of how to decide coverage when a covered cause and an excluded cause combine to produce one loss, such as wind and storm surge in a hurricane.Efficient proximate causeA legal test that decides coverage by asking which cause set the others in motion and dominated the loss when covered and excluded causes combine.Examination under oathA formal, recorded question-and-answer session under oath that an insurer can require of a claimant, usually led by the insurer's attorney.NAIC complaint indexA ratio comparing an insurer's share of confirmed consumer complaints with its share of premium, where 1.00 means complaints in line with its size.Public adjusterA licensed claims professional hired by the policyholder, not the insurer, who documents and negotiates the claim for a fee, usually a share of the payout.Reservation of rightsA written notice that an insurer is investigating or paying a claim but keeps the option to deny coverage or limit payment later if the facts warrant it.UmpireThe neutral third person who breaks the tie when the two appraisers in a claim appraisal cannot agree on the amount of a loss.AssessmentAn extra charge raised after a state-backed insurer or guaranty fund runs short of money, collected from insurers and sometimes passed on to policyholders.Demotech ratingA financial strength grade from an independent firm that rates mostly small and regional property insurers, often those AM Best and S&P do not cover.Guaranty fundA state safety net, financed by charges on licensed insurers, that pays covered claims up to a cap when an insurer is declared insolvent.InsolvencyThe condition of an insurer that cannot pay its claims and debts as they come due, or whose liabilities exceed its assets or required capital.Liquidation (insurer)The final stage of an insurer failure, when a court orders the company wound up, its policies ended and its assets sold to pay claims and creditors by priority.Policyholder surplusAn insurer's assets minus its liabilities under statutory accounting, the capital cushion that absorbs losses beyond its reserves and premiums.ReceivershipA court-supervised takeover of a troubled insurer, run by the state's insurance regulator or a designee, to either repair the company or wind it down.Rehabilitation (insurer)A court-ordered effort, run by a state-appointed rehabilitator, to restore a financially troubled insurer, which can end in recovery, a sale or a wind-down.