Unlock hundreds more features
Save your Quiz to the Dashboard
View and Export Results
Use AI to Create Quizzes and Analyse Results

OR
Sign inSign in with Facebook
Sign inSign in with Google
Quizzes > Quizzes for Business > Finance

Test Your Skills: Insurance Estimating Terminology Quiz

Sharpen Your Insurance Estimation Terminology Skills

Difficulty: Moderate
Questions: 20
Learning OutcomesStudy Material
Colorful paper art displaying insurance estimating terminology quiz

Ready to master insurance estimating terminology? This interactive quiz is perfect for adjusters, claims specialists, and students seeking to solidify their understanding of key estimating terms. With expert-crafted questions, participants will gain confidence in interpreting claim estimates and applying industry jargon accurately. Explore additional resources like the Insurance Fundamentals Quiz or dive into the Terminology Assessment Quiz for further practice. All our quizzes can be freely customized in the editor to suit any training need.

What is an estimate in insurance claims estimating?
A detailed calculation of repair or replacement costs for damaged property
A formal policy endorsement document
A scheduled payment plan for insurance premiums
A legally binding contract between the insurer and the insured
An insurance estimate details the anticipated costs to repair or replace damaged property, ensuring accurate claim settlements. It is not a contract, policy endorsement, or premium schedule.
Who typically prepares an insurance claim estimate?
The actuary
The insurance adjuster
The underwriter
The policyholder
An insurance adjuster inspects the damage and compiles cost data to prepare the claim estimate. Underwriters and actuaries perform different roles in insurance operations.
In insurance estimating, what does 'adjuster' refer to?
The professional who assesses damage and prepares the cost estimate
The broker negotiating premium rates
The person who underwrites a new policy
The lawyer defending the insurer in court
An adjuster is responsible for evaluating loss and calculating repair or replacement costs. They are not underwriters, attorneys, or brokers in the claims process.
What does depreciation represent in an insurance estimate?
A contractor's markup for overhead
The reduction in value due to wear and tear or age
A policy deductible applied at claim time
An increase in repair costs due to market demand
Depreciation accounts for loss of value from age or wear and tear. It is not a markup, deductible, or demand-driven cost increase.
In an insurance claim, what is a supplement?
A deduction for policy deductibles
An additional payment for extra work not in the original estimate
A standard adjustment for overhead and profit
A penalty charged by the insurer for late filing
A supplement is an added amount when unforeseen work arises after the initial estimate. It is not a deductible, penalty, or standard O&P adjustment.
What is the primary difference between Actual Cash Value (ACV) and Replacement Cost Value (RCV)?
ACV includes depreciation while RCV is the full cost to replace without depreciation
RCV includes depreciation while ACV is the full cost without depreciation
ACV covers materials only, RCV covers materials and labor
RCV accounts for market value fluctuations, ACV is fixed at policy inception
ACV reflects current value after accounting for depreciation, whereas RCV represents the full cost to replace an item without depreciation. This distinction guides settlement amounts.
In a claim estimate, line items are typically broken down into which three primary components?
Material, labor, and equipment
Policy limit, sublimit, and endorsement
Liability, property, and casualty
Deductible, premium, and surcharge
Estimate line items generally list material, labor, and equipment costs for each repair task. Other options relate to policy structure or coverage types, not estimating components.
What does 'profit and overhead' refer to in an insurance estimate?
A contractor's markup to cover business overhead and profit
The depreciation factor applied to the replacement cost
A penalty for late repair completion
An insurer's administrative fee
Profit and overhead is a standard contractor markup added to direct costs to cover business expenses and profit. It is not an insurer fee, penalty, or depreciation.
In most estimating software, what is the database of standardized unit prices called?
Vendor catalog
Cost ledger
Price list
Rate schedule
The standardized database of unit prices in estimating software is known as the price list. Other terms refer to different tools or external catalogs.
What is line item coding in an insurance estimate?
The unique identifier assigned to each repair task
The classification of claim reserving
The process of checking policy coverages
The method for calculating depreciation
Line item coding assigns a unique code to each repair task to standardize estimates. It is not used for policy review, depreciation calculations, or reserving classifications.
How is labor rate typically represented in an insurance estimate?
Cost per job
Cost per day
Cost per hour of labor
Cost per square foot
Labor rate in estimates is expressed as a cost per hour of labor. It is not usually stated per square foot, job, or day for standard estimating tasks.
In an estimating report, what does the unit 'sq ft' signify?
Square footage of labor hours
Square feet, a measurement of area
Supervisory quality factor
Standard quarterly fee tariff
'sq ft' stands for square feet, which measures area for materials or surface work. It does not refer to labor hours or fees.
What does 'scope of work' refer to in an insurance estimate?
The premium calculation formula
The deductible amount
The detailed description of tasks to be performed
The policy limit for coverage
Scope of work outlines the specific tasks required to complete repairs. It is not related to policy limits, deductibles, or premium formulas.
What is a depreciation schedule in insurance estimating?
A list of required repair tasks
A table showing percentage value reduction by age or condition
A breakdown of overhead and profit
A record of payment installments
A depreciation schedule provides percentages for reducing value based on age or wear. It is not a task list, payment record, or O&P breakdown.
How is 'contingency' used in an insurance estimate?
A mandatory policy deductible
A depreciation factor on materials
An allowance for unforeseen costs
A fee charged by the insurer for late submission
A contingency line item is budgeted to cover unexpected costs during repairs. It is not a government fee, deductible, or depreciation.
What is benchmark analysis in the context of insurance claim estimating?
Calculating depreciation based on market trends
Comparing an estimate line by line against industry-standard costs
Assessing policyholder satisfaction post-repair
Reviewing underwriting guidelines for new policies
Benchmark analysis involves comparing each estimate item to industry-standard costs to ensure accuracy. It is not related to customer feedback, depreciation calculation, or underwriting review.
In claim estimating, what does 'holdback' refer to?
A bonus paid to contractors for quick turnaround
The portion of depreciation withheld until repair completion
The deductible amount subtracted from payment
An additional policy surcharge for complex claims
Holdback is the depreciation amount retained by the insurer until the repairs are completed. It is not a deductible, surcharge, or contractor bonus.
A repair requires removal and replacement of 100 linear feet of baseboard. Demolition takes 0.5 labor hours per linear foot at $50 per hour. What is the demolition cost?
$5,000
$1,250
$2,500
$750
0.5 hours à - 100 LF = 50 labor hours; 50 hours à - $50/hour = $2,500. Other totals do not match this calculation.
What distinguishes estimating terminology from valuation terminology?
There is no difference; the terms are interchangeable
Estimating is used by underwriters; valuation is used by adjusters
Estimating focuses on repair/replacement costs; valuation determines asset worth for settlement
Valuation calculates depreciation only; estimating excludes depreciation
Estimating calculates the projected repair or replacement costs, while valuation determines the monetary worth of an asset. They serve different purposes in claims handling.
When preparing an estimation summary, which element ensures compliance with policy coverage limits?
Reference to the applicable coverage limit and sublimits
Invoice payment schedule
Contractor license numbers
Detailed list of subcontractor phone numbers
An estimation summary must cite the policy coverage limits and any sublimits to ensure estimates do not exceed allowable amounts. Contact details or licensing info are unrelated to coverage compliance.
0
{"name":"What is an estimate in insurance claims estimating?", "url":"https://www.quiz-maker.com/QPREVIEW","txt":"What is an estimate in insurance claims estimating?, Who typically prepares an insurance claim estimate?, In insurance estimating, what does 'adjuster' refer to?","img":"https://www.quiz-maker.com/3012/images/ogquiz.png"}

Learning Outcomes

  1. Identify common insurance estimating terms and their definitions
  2. Analyse claim estimate components in real scenarios
  3. Apply terminology to interpret estimating reports accurately
  4. Evaluate appropriate use of industry-specific estimating jargon
  5. Demonstrate proficiency in reading and creating estimation summaries
  6. Master distinctions between estimating and valuation terminology

Cheat Sheet

  1. Understand Key Insurance Estimating Terms - Put on your detective hat and explore terms like Actual Cash Value (ACV) and Replacement Cost Value (RCV). ACV shows you the item's worth after taking age and wear into account, while RCV tells you what it costs to replace without any depreciation. Mastering depreciation means you can accurately calculate how much of the item's value has "aged away." Travelers' Property Estimate Guide
  2. Analyze Claim Estimate Components - Break down each estimate into bite-sized pieces: materials, labor, equipment, and more. By examining line items closely, you'll see exactly how every dollar is allocated, which makes the total claim easier to verify. This skill turns you into a budgeting pro who never misses a hidden cost. Dick Law Firm: Reading Your Claim Estimate
  3. Apply Estimating Terminology to Reports - Become fluent in unit costs, quantities, and markup jargon so that inspection reports make sense at a glance. When you know what each term stands for, you can quickly interpret the scope and cost of repairs without breaking a sweat. It's like having a secret decoder ring for industry reports! Dick Law Firm: Decoding Estimate Reports
  4. Evaluate Use of Industry-Specific Jargon - Decide when to toss in fancy terms and when to keep it simple for clients who aren't insurance buffs. Balancing technical language with clear explanations means everyone stays on the same page. Clear communication is your superpower when explaining complex numbers. VTalk Insurance: Jargon Busters
  5. Demonstrate Proficiency in Estimation Summaries - Craft concise overviews that spotlight subtotals by repair category and wrap up with a neat grand total. A crisp summary makes your findings impossible to misinterpret and keeps clients and insurers smiling. Think of it as the executive summary that seals the deal. Dick Law Firm: Summarizing Estimates
  6. Master Distinctions Between Estimating and Valuation Terminology - Learn why an "estimate" is your best guess at repair costs, while a "valuation" measures an item's worth in the market. Mixing these up can lead to major confusion in reports and client conversations. Keep them straight and watch your professionalism shine. VicePro Estimates: Estimating vs. Valuation
  7. Calculate Depreciation Accurately - Get hands-on with formulas that factor in an item's age, expected lifespan, and current condition. This calculation is the key to finding the true Actual Cash Value in any claim. Nail depreciation math, and you'll always land on fair payouts. Travelers' Depreciation Deep Dive
  8. Understand the Role of Deductibles - Discover how deductibles work as the policyholder's "up-front" share of the cost before insurance kicks in. Choosing a higher deductible can shrink your premium, but it also ups your out-of-pocket if you file a claim. Balancing this trade-off is a budgeting skill every student should master. VTalk Insurance: Deductible Dynamics
  9. Recognize the Importance of Policy Limits - Insurance policies cap the maximum payout for any claim, so knowing your limits prevents surprises when final numbers arrive. When you're aware of coverage ceilings, you can advise clients on whether they need extra protection. It's all about making sure nobody gets left holding the bill. VTalk Insurance: Policy Limit Lessons
  10. Stay Updated on Market Rates - Keep one eye on industry reports and trade publications to track current prices for materials and labor. Regular updates mean your estimates are always fair, up-to-date, and defensible. In the fast-changing world of construction, staying informed gives you the competitive edge. VicePro Estimates: Market Rate Monitor
Make a Quiz (FREE) Copy & Edit This Quiz Create a Quiz with AI

Finance Quizzes

Powered by: Quiz Maker