CA Public Adjuster flashcards

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

Public adjuster license

A California Department of Insurance credential required before a person may, for compensation, negotiate or settle a first-party property claim on behalf of an insured.

Unlicensed public adjusting

Acting for compensation on behalf of an insured to negotiate a property claim without a CDI public adjuster license; a violation subject to enforcement.

Fair Claims Settlement Practices Regulations

California regulations at 10 CCR §2695 that set minimum standards and deadlines for insurers investigating, evaluating, and paying first-party claims.

Claim acknowledgment deadline

Under 10 CCR §2695, an insurer must acknowledge receipt of a first-party claim within 15 calendar days after receiving notice of the claim.

Claim decision deadline

Under 10 CCR §2695, an insurer must accept or deny a first-party claim within 40 calendar days after receiving a complete proof of claim.

Unfair claims practices statute

California Insurance Code §790.03(h) lists prohibited claims conduct, including misrepresenting policy provisions and failing to settle promptly where liability is clear.

Public adjuster contract

A written agreement, signed by the insured, that states the public adjuster's compensation and discloses that the adjuster represents the insured, not the insurer.

Three-day rescission right

The insured may cancel a public adjuster contract within three business days after signing it, and the adjuster must honor that cancellation.

Fiduciary trust account

A separate account where a public adjuster holds funds belonging to clients; commingling those funds with the adjuster's business or personal money is prohibited.

Dual representation prohibition

A public adjuster may not represent both the insured and the insurer on the same claim because the interests are adverse and the conflict cannot be waived.

Contract copy requirement

The public adjuster must give the insured a complete signed copy of the contract at the time it is executed or promptly afterward.

Contingent fee disclosure

If compensation depends on the amount recovered, the contract must state the percentage or formula used to calculate the public adjuster's fee.

Claim record retention

Public adjusters must keep claim files, contracts, and financial records available for CDI examination; California insurance record retention is generally five years.

Actual cash value

The replacement cost of damaged property minus depreciation for age, wear, and obsolescence; it reflects the property's value at the time of loss.

Replacement cost coverage

Policy coverage that pays the cost to repair or replace damaged property with new property of like kind and quality, without deducting depreciation.

Coinsurance formula

Recovery = (insurance carried ÷ insurance required) × covered loss, where required insurance equals the coinsurance percentage times the property's value at loss.

Proof of loss

A sworn written statement, often required by the policy, showing the time, cause, and amount of loss and the insured's claimed damages.

Additional living expense

Coverage for the necessary increase in living costs, such as temporary rent and meals, when a covered loss makes the dwelling uninhabitable.

Ordinance or law coverage

Coverage that pays for building-code-required demolition, reconstruction, or upgrades that the base property policy would otherwise exclude.

Subrogation

The insurer's right to pursue a responsible third party after paying the insured; the insured must cooperate and must not impair that recovery right.

Depreciation

The decrease in property value from age, wear, use, or obsolescence, measured from acquisition or installation to the date of loss.

Recoverable depreciation

The portion of replacement cost withheld by the insurer until the insured documents that the damaged property has actually been repaired or replaced.

Overhead and profit

Markups added to a repair estimate for a contractor's indirect business costs and profit, typically when multiple trades must be coordinated.

Betterment

An improvement that makes property better than its pre-loss condition; insurers may deduct its value from a claim payment.

Line-item estimate

A repair estimate that separates quantities and prices for labor, materials, equipment, taxes, and overhead and profit by trade.

Claim documentation file

The organized record of a loss, including dated photographs, inventories, receipts, estimates, correspondence, and the proof of loss.

Insurance fraud

Knowingly presenting a false or inflated claim, or aiding such a claim, to obtain insurance money; California Penal Code §550 prohibits it.

Referral fee kickback

An undisclosed payment for sending a claim or client to a contractor, attorney, or other vendor; it creates an unlawful conflict of interest.

Policy misrepresentation

Falsely describing coverage, limits, deductibles, or claim procedures to persuade an insured to sign a public adjuster contract.

Conflict of interest

A situation where the public adjuster's financial interest, such as ownership of a repair contractor, could bias advice given to the insured.

Unfair practice

Conduct such as false advertising, coercion, undisclosed fees, or charging for work not performed that harms insureds and violates insurance law.

Fraud reporting

Suspected false claims should be documented and reported to the insurer and may be referred to the California Department of Insurance fraud division.