AIC-M cheat sheet

Coverage analysis follows a fixed sequence: insuring agreement, exclusions, conditions, then limits and deductibles; a failure at any step ends the analysis.

The duty to defend is broader than the duty to indemnify and is triggered when the allegations potentially fall within coverage, even if the suit is groundless or false.

Occurrence policies are triggered by injury or damage during the policy period; claims-made policies require the claim to be first made and reported during the period, subject to retroactive dates and extended reporting periods.

Under the four corners rule, coverage is determined by comparing the complaint's allegations with policy language; extrinsic evidence is generally not considered in duty-to-defend disputes.

A reservation of rights letter preserves coverage defenses while the insurer continues to defend; it must identify the specific policy provisions in question.

In concurrent causation, an anti-concurrent-causation clause may exclude the entire loss when an excluded peril is a contributing cause, depending on jurisdiction and wording.

When defense costs are inside the limit, they erode the amount available for indemnity; outside-the-limit defense preserves policy limits for damages.

Late notice bars coverage only where the insurer was prejudiced, in jurisdictions applying the notice-prejudice rule; others enforce notice conditions strictly.

Negligence requires four elements: duty, breach, causation, and damages; the claimant bears the burden of proving each element.

Contributory negligence bars recovery entirely in a few jurisdictions; comparative negligence reduces damages by the claimant's percentage of fault.

Modified comparative negligence bars recovery when the claimant's fault equals or exceeds a statutory threshold, commonly 50 or 51 percent.

Res ipsa loquitur permits an inference of negligence when the injury-causing instrumentality was under the defendant's exclusive control and the event ordinarily does not occur without negligence.

Proximate cause requires the act to be a substantial factor in producing harm and the result to be foreseeable; unforeseeable intervening causes may break the chain.

Strict liability applies to abnormally dangerous activities and defective products without proof of negligence, but causation and damages still must be shown.

The statute of limitations sets the filing deadline; the discovery rule delays accrual until the claimant knew or reasonably should have known of the injury.

Workers compensation exclusive remedy doctrine generally bars employee tort suits against the employer for work-related injury, except for intentional torts in many states.

The collateral source rule prevents reducing a tortfeasor's damages by the amount the claimant received from other sources such as health insurance.

Loss ratio = (incurred losses + loss adjustment expenses) ÷ earned premium; it measures claims cost against premium.

Claim frequency = number of claims ÷ exposure units (policies, payroll, or vehicle-years); severity = total incurred losses ÷ claim count.

Total reserves equal case reserves plus IBNR; adequacy is tested with loss development triangles comparing estimated and ultimate paid amounts.

Cycle time is elapsed time from report to closure or milestone; reducing it typically lowers LAE and improves customer satisfaction.

Triage routes new claims by severity, complexity, and coverage risk to the appropriate adjuster and handling path.

Straight-through processing automates low-complexity claims using rules and data, reserving human adjusters for higher-risk files.

Subrogation and salvage recoveries reduce net incurred loss and are tracked separately from gross claim payments.

Reopen rate and closure ratio measure operational quality; a rising reopen rate signals incomplete initial claim resolution.

Workload standards express caseload per adjuster and vary by line, complexity, and pending inventory age.

The implied covenant of good faith and fair dealing requires prompt investigation, fair evaluation, and a reasonable basis for any denial or settlement offer.

The NAIC Unfair Claims Settlement Practices Act model prohibits misrepresenting policy provisions, failing to investigate promptly, and offering unreasonably low settlements without a reasonable basis; states adopt variations.

A conflict of interest exists when personal or financial interest could bias a claim decision; it is disclosed and the handler is removed from the file.

SMART goals are specific, measurable, achievable, relevant, and time-bound, and align individual adjuster behavior with claims outcomes.

The observation-impact-request feedback model describes the observed behavior, its effect on results, and the desired change.

Claim files contain personal and medical information that is shared only on a need-to-know basis consistent with privacy laws and policy terms.

Performance audits are structured file reviews measuring compliance, accuracy, and outcomes against standards and identifying training needs.

Ethical decision test: whether the action is legal, balanced among stakeholders, and defensible if publicly disclosed; the reasoning is documented in the file.