AZ Public Adjuster flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Insurable Interest

A financial relationship in which the insured would suffer a monetary loss from damage to the property. It must exist at the time of loss for property coverage to apply.

Principle of Indemnity

The insured is restored to approximately the pre-loss financial condition, no better and no worse. Actual cash value valuation enforces this principle by deducting depreciation.

Actual Cash Value

The replacement cost of damaged property minus depreciation, or market value where appropriate. It reflects the property's value immediately before the loss occurred.

Replacement Cost

The cost to repair or replace property with new materials of like kind and quality without a deduction for depreciation. Policies usually require adequate limits to qualify.

Named Peril Policy

A policy that covers only the causes of loss specifically listed in the form. The burden falls on the insured to show the loss resulted from a listed peril.

Open Peril Coverage

Coverage for all risks of direct physical loss except those specifically excluded. The insurer bears the burden of proving an exclusion applies to the loss.

Coinsurance Clause

A property provision requiring the insured to carry a limit equal to a stated percentage of value. A penalty reduces payment when the carried limit falls short.

Subrogation

The insurer's right to pursue recovery from a negligent third party after paying the insured's claim. It prevents the insured from collecting twice for one loss.

Arizona Adjuster License

A public adjuster must hold a current Arizona license issued by the Department of Insurance to negotiate or settle claims for compensation on behalf of insureds.

Right to Rescind

Arizona requires a written public adjuster contract to give the insured a stated period to cancel without owing a fee. Work may not begin before it expires.

Solicitation Hours Limit

Arizona restricts public adjusters from soliciting a claimant between 6 p.m. and 8 a.m. Solicitations outside permitted hours may constitute an unfair trade practice.

Unfair Claim Settlement Practices

Acts such as misrepresenting policy terms, failing to respond to communications, or offering substantially less than the amount ultimately recovered. They are prohibited and subject to penalties.

Dwelling Policy DP-3

A dwelling form covering the structure on an open-peril basis and personal property on a named-peril basis. It excludes liability unless added by endorsement.

Fair Rental Value

Dwelling coverage that reimburses lost rental income when a rented dwelling is made uninhabitable by a covered loss. Payment continues for the reasonable repair period.

Dwelling 80 Percent Rule

Replacement cost settlement on the dwelling requires insurance equal to at least 80 percent of full replacement cost. Falling below that triggers a reduced settlement.

Homeowners Coverage C

Personal property coverage insuring household contents and personal effects wherever located, subject to special dollar limits for categories such as jewelry and money.

Homeowners Coverage D

Loss of use coverage paying additional living expense and fair rental value when the residence is uninhabitable due to a covered loss. It applies for a reasonable time.

Homeowners Coverage F

Medical payments to others, paying reasonable medical expenses for bodily injury to a non-resident guest without regard to the insured's legal fault.

HO-4 Tenants Policy

A homeowners form for renters covering personal property and loss of use, plus personal liability. It does not insure the building owned by the landlord.

HO-6 Condominium Policy

A form for condominium unit owners covering personal property, loss of use, liability, and limited building items such as fixtures and improvements within the unit.

Equipment Breakdown Coverage

Coverage for loss caused by mechanical or electrical breakdown of covered equipment, a cause of loss excluded by standard property forms. It is added by endorsement or separate policy.

Business Income Coverage

Commercial coverage replacing net income and continuing normal operating expenses during the period of restoration following a covered loss to insured property.

Extra Expense Coverage

Commercial coverage paying reasonable costs to continue or resume operations after a covered loss, reducing the business interruption loss. It applies even without lost income.

Agreed Value Endorsement

A commercial property option suspending the coinsurance penalty when the insured submits an accepted statement of values. The limit becomes the agreed covered value.

Value Reporting Form

A commercial form adjusting premium to actual reported values during the policy period. It avoids coinsurance penalties for businesses with fluctuating inventory.

Mortgage Clause

A provision giving the lender loss payment to the extent of its interest and requiring notice of cancellation or nonrenewal. It protects the mortgagee's collateral.

Appraisal Provision

A policy condition resolving disputes over the amount of loss. Each party selects a competent appraiser, and an umpire decides if the appraisers disagree.

Liberalization Clause

A condition extending broader coverage later added to the policy form to existing policies during the current policy period, without additional premium.

Proof of Loss

A sworn statement from the insured detailing the amount and circumstances of the loss. Insurers may require it within a stated period after the loss.

Public Adjuster Duty of Loyalty

A public adjuster represents the insured rather than the insurer. All claim activity must serve the policyholder who signed the adjuster agreement.

Damage Documentation

The process of recording cause, extent, and repair cost through photographs, inventories, and itemized contractor estimates. It forms the evidentiary basis of the claim.

Fee Disclosure Requirement

The adjuster must disclose in writing the fee percentage, the method of calculation, and the timing of payment before the insured signs the agreement.