AZ Claims Adjuster cheat sheet

The Arizona Department of Insurance and Financial Institutions (DIFI) licenses adjusters and insurers and enforces Arizona Revised Statutes Title 20.

Arizona adjuster licenses include company, independent, and public adjuster categories; the license type must match the adjuster's role in the claim.

A public adjuster represents the insured for compensation; company and independent adjusters represent the insurer.

A.R.S. § 20-461 lists unfair claim settlement practices, including misrepresentation, unreasonable delay, and failure to investigate claims promptly.

Arizona uses pure comparative negligence (A.R.S. § 12-2505): the claimant's recovery is reduced by the claimant's percentage of fault, and fault never bars recovery.

Arizona minimum auto liability limits are $25,000 per person and $50,000 per accident for bodily injury and $15,000 for property damage (A.R.S. § 28-4009).

Arizona's notice-prejudice rule: an insurer generally must show actual prejudice before denying a liability claim solely because the insured gave late notice.

Arizona requires insurers to offer uninsured and underinsured motorist coverage; the insured may reject it in writing, and UM/UIM limits may not exceed the liability limits.

Indemnity: insurance restores the insured to the pre-loss financial position; policy limits, deductibles, and actual cash value prevent recovery of profit from a loss.

Insurable interest must exist at policy inception for life insurance and at the time of loss for property insurance.

A policy is an adhesion contract; ambiguities are construed against the insurer, and exclusions are interpreted narrowly.

Occurrence policies respond to injury or damage that happens during the policy period; claims-made policies respond to claims first made during the period, subject to any retroactive date.

ACV = replacement cost − depreciation; replacement cost = cost to repair or replace with like kind and quality, without depreciation.

Coinsurance payment = (insurance carried ÷ insurance required) × covered loss − deductible, capped by the policy limit; required insurance = coinsurance percentage × replacement cost.

Common duties after loss: prompt notice, proof of loss, cooperation, protection of property from further damage, and submission to an examination under oath.

Subrogation transfers the insured's recovery rights to the insurer after payment, preventing double recovery and shifting the loss to the responsible party.

Waiver is the voluntary relinquishment of a known right; estoppel bars an insurer from asserting a right when its conduct induced the insured's reliance.

First contact should establish the date, time, location, cause, injuries, police or fire report numbers, and any other insurance.

A recorded statement should cover who, what, when, where, how, witnesses, prior damage, and all applicable policies; consent and the recording are preserved.

Investigation plan elements: scene examination, photographs and diagrams, witness canvass, public records, weather or fire reports, and expert retention when cause is disputed.

ISO ClaimSearch is an industry claims database; prior claims and policy history can reveal patterns but must be independently verified.

Chain of custody records each transfer of physical evidence; it preserves admissibility and rebuts spoliation claims.

A reservation of rights letter preserves coverage defenses while the investigation continues; it is not a denial of the claim.

An examination under oath is a policy condition; an unjustified refusal can bar coverage when the insurer is prejudiced.

Fraud indicators include late reporting, staged accidents, exaggerated damages, prior similar claims, and refusal to provide records or an EUO.

Each claim file entry should record the date, time, method, and content of the contact; claim file notes are discoverable.

Coverage analysis sequence: identify the insured, policy period, insured property or vehicle, grant of coverage, exclusions, exceptions, conditions, limits, and deductible.

Four-corners analysis compares the alleged loss to the policy's grant of coverage first, then to exclusions, then to exceptions to those exclusions.

Concurrent causation: when a covered and an excluded peril combine, determine whether the covered peril was the efficient proximate cause of the loss.

ACV settlement = replacement cost − depreciation − deductible; replacement cost settlements may be held until repair or replacement is completed.

Coinsurance payment = (limit carried ÷ required limit) × covered loss − deductible; required limit = coinsurance percentage × replacement cost.

Business income loss = net income + continuing normal operating expenses during the period of restoration, subject to the policy's waiting period and limit.

Loss of use or additional living expense pays necessary increased living costs or fair rental value while the residence is uninhabitable, subject to time and dollar limits.

Ordinance or law coverage pays additional costs to comply with building codes after a covered loss; standard policies exclude most code upgrades.

Total loss valuation uses comparable sales, condition, mileage, and options; adjustments and the valuation report are retained in the claim file.

Settlement authority is the maximum amount an adjuster may pay without supervisor approval; payments above that amount require escalation.

A release should identify the claim, the parties, and the consideration; settlements involving minors may require court approval.

Undisputed amounts are paid promptly; disputed portions may be paid with a reservation of rights or partial release.

Liens to identify include Medicare, Medicaid, hospital, and workers' compensation liens; settlement documents should address their resolution.

A subrogation receipt acknowledges the insurer's payment and transfers the insured's recovery rights to the insurer.

Structured settlements pay damages over time through an annuity and require a qualified assignment; they are used for large or long-term damages.

Payment review checks the payee, mortgage clause, loss payee, and joint payee requirements before the check is issued.

A supported first offer should be based on documented damages; each concession should be exchanged for a release or additional documentation.

Negotiation reserves should reflect probable exposure from liability, damages, coverage, and expense, not the claimant's demand.

Arizona A.R.S. § 20-461 prohibits misrepresenting policy provisions, unreasonable delay, and failing to attempt a prompt, fair settlement once liability is reasonably clear.

Public adjusters owe a fiduciary duty to the insured; compensation and any conflicts must be disclosed in the written contract.

A conflict of interest exists when an adjuster has a financial or personal interest in a repair facility, contractor, or vendor used in the claim.

Confidential claimant information, including medical and financial records, is shared only with authorized parties and as required by law.

Fraud requires an intentional misrepresentation of a material fact; negligence, mistake, or exaggeration without intent is not fraud.

Suspected fraud is documented and referred to the special investigation unit; the adjuster does not accuse the insured and continues handling under a reservation of rights.

Arizona insurance fraud may be prosecuted criminally; DIFI and law enforcement may receive documented evidence from the claim file.

Claim file integrity requires accurate, contemporaneous entries; altering or destroying records can constitute evidence tampering.

Unreasonable delay or a low offer used to pressure a claimant can violate Arizona's unfair claims practices law.