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Insurance Claims Terminology

The following definitions are useful in understanding Siebel Claims:

• Appraisal. A survey to determine a property's insurable value, or the amount of a loss.
• Arbitration. The procedure in which an insurance company and the insured or a vendor agree to settle a claims dispute by accepting a decision made by a third party.
• Bodily injury liability coverage. The portion of an auto insurance policy that covers the injuries that the policyholder causes to someone else.
• Catastrophe. A single incident or a series of closely related incidents causing severe, insured property losses, totaling more than a given amount, which is currently $25 million.
• Comprehensive coverage. The portion of an auto insurance policy that covers damage to the policyholder's car not involving a collision with another car (including damage from fire, explosions, earthquakes, floods, and riots), and theft.
• Deductible. The amount of loss paid by the policy holder. Either a specified dollar amount, a percentage of the claim amount, or a specified amount of time that must elapse before benefits are paid.
• First-party coverage. Coverage for the policyholder's own property or person. In no-fault auto insurance, first-party coverage pays for the cost of injuries. In no-fault states with the broadest coverage, the personal injury protection (PIP) part of the policy pays for medical care, lost income, funeral expenses and, where the injured person is not able to provide services such as child care, for substitute services.
• Fraud. Intentional lying or concealment by policyholders to obtain payment of an insurance claim that would otherwise not be paid, or lying or misrepresentation by the insurance company managers, employees, agents, and brokers for financial gain.
• Loss costs. The portion of an insurance rate used to cover claims and the costs of adjusting claims. Insurance companies typically determine their rates by estimating their future loss costs and adding a provision for expenses, profit, and contingencies.
• No fault insurance. An auto insurance system that both requires drivers to carry insurance for their own protection, and which places limitations on their ability to sue other drivers for damages.
• Subrogation. The legal process by which an insurance company, after paying a loss, seeks to recover the amount of the loss from another party who is legally liable for it.
• Salvage. The damaged property an insurer takes over to reduce its loss after paying a claim. Insurers receive salvage rights over property on which they have paid claims, such as badly damaged cars.