CO Public Adjuster flashcards

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

Public adjuster definition

A person who, for compensation, acts on behalf of an insured to negotiate, adjust, or settle a first-party property claim. In Colorado this is a licensed producer line regulated by the Division of Insurance.

Colorado licensing authority

The Colorado Division of Insurance within the Department of Regulatory Agencies issues, renews, suspends, and revokes public adjuster licenses and enforces the insurance statutes and commissioner bulletins.

Written contract requirement

Before representing an insured, a public adjuster must obtain a signed written contract stating the fee or fee method and the insured's statutory right to rescind within the cooling-off period.

Fee reasonableness rule

Compensation must be reasonable and fully disclosed. Contingent fees tied to using a particular contractor, and fee-sharing with unlicensed solicitors, are prohibited and support disciplinary action.

Solicitation waiting period

Colorado restricts soliciting a loss immediately after a casualty event; public adjusters may not canvass or solicit affected insureds until the statutory waiting period has elapsed.

Dual-role prohibition

A public adjuster may not represent the insurer and the insured on the same claim, and may not serve as a staff or independent adjuster for that loss.

Commissioner bulletins

Interpretive guidance issued by the Colorado Insurance Commissioner on claim handling, disaster response, and fee transparency. Bulletins are binding expectations published on the Division's website.

Unfair trade practice statute

C.R.S. title 10, article 3 defines unfair or deceptive insurance acts, including unfair claim settlement practices, and authorizes Division enforcement through fines and license action.

Resident license requirements

Be at least 18, complete the exam and prelicensing requirement, submit fingerprints for a CBI/FBI background check, pay fees, and apply electronically through the Division's licensing system.

Nonresident reciprocity

Colorado issues nonresident public adjuster licenses to home-state licensees in good standing, typically through the NAIC uniform application, with the home state designated for reciprocal treatment.

Entity registration

A business entity adjusting claims for compensation must hold the required entity registration and designate a licensed responsible producer; unlicensed entity operation violates Colorado law.

Appointment filing

Affiliation between a public adjuster and a business entity is filed electronically with the Division and terminated when the relationship ends; unfiled appointments are a compliance defect.

Continuing education

Licensees must complete Colorado's CE requirement for the license term, including ethics and Colorado law components, certify completion at renewal, and retain records for audit.

Record retention

Contracts, fee disclosures, claim files, and settlement documents must be retained for the regulatory period, commonly at least five years, and produced to the Division on request.

Change reporting duty

Licensees must promptly report name and address changes and any administrative action or conviction in another jurisdiction; failure to report is an independent violation supporting discipline.

License lapse consequences

Operating on an expired license voids contracts, exposes the adjuster to civil penalties, and may require late fees and CE make-up before reinstatement is granted.

Replacement cost value

RCV is the cost to repair or replace damaged property with new materials of like kind and quality, without deduction for depreciation. Policies often pay RCV only after repair or replacement.

Actual cash value

ACV equals replacement cost value minus depreciation. Most homeowners forms pay ACV first and hold back recoverable depreciation until the insured completes repairs or replacement within policy time limits.

Coinsurance formula

Recovery = loss times (limit carried divided by limit required), where limit required equals the coinsurance percentage times replacement cost at the time of loss.

Percentage wind-hail deductible

A deductible stated as a percentage of the Coverage A dwelling limit, not of the loss. Compute Coverage A limit times the deductible percentage, then subtract from the covered damage.

Coverage A through D structure

A is the dwelling, B other structures, C personal property, and D loss of use. B and C are commonly expressed as percentages of A, and special categories carry internal sublimits.

Overhead and profit

O&P is added to a repair estimate when the scope requires a general contractor or three or more trades. It is not automatic and must be justified by the documented scope.

Loss of use and ALE

Additional living expenses pay the reasonable increase in living costs during the time to repair, subject to a stated time or dollar limit, and require documentation of the extra expense incurred.

Period of restoration

The time reasonably required to repair or replace damaged property with due diligence, which sets the duration of business income and loss of use payments under the policy.

Flood exclusion

Standard property forms exclude loss caused by rising water or flood. Coverage requires a separate flood policy, and the public adjuster must identify the correct policy before estimating the claim.

Ordinance or law coverage

An endorsement that pays the extra cost to rebuild to current code, such as upgraded electrical or ADA compliance, which the base policy excludes. Limits are usually a percentage of Coverage A.

Insured's burden of proof

The insured must prove a covered peril caused the loss and establish the amount of damage with documentation such as photographs, measurements, contractor bids, and pricing data.

Unfair claim settlement practices

Statutory violations including misrepresenting policy provisions, failing to act promptly on communications, refusing to pay without reasonable investigation, and failing to explain a denial.

Good faith and fair dealing

A public adjuster owes the insured honesty and diligence and may not inflate damages, alter documents, or advise false statements. Fraudulent claim conduct is grounds for license revocation.

Conflict of interest disclosure

A public adjuster may not steer the insured to contractors, appraisers, or attorneys in which the adjuster holds an undisclosed financial interest, nor accept kickbacks from vendors.

Policy appraisal clause

When the parties dispute only the amount of loss, each selects a competent appraiser and the appraisers choose an umpire. The public adjuster may not serve as appraiser or umpire on the same claim.

Confidentiality duty

Claim information and personal data obtained from the insured may be used only to adjust the claim and must be protected; disclosure to third parties requires authorization or legal compulsion.