DE Claims Adjuster cheat sheet

Delaware licenses adjusters through the Department of Insurance; a resident adjuster license requires an application, fingerprints, and passing the Delaware adjuster exam unless a qualifying exemption applies.

Delaware recognizes four adjuster license classes: company/staff adjuster, independent adjuster, public adjuster, and catastrophe adjuster; each class carries its own scope of authority.

A public adjuster contracts with and is paid by the insured to negotiate a first-party claim; a company or independent adjuster is compensated by the insurer and represents the insurer's interest.

Fingerprinting and a criminal background check are required for resident applicants before a license is issued; out-of-state applicants use the designated electronic fingerprint vendor where applicable.

Delaware resident adjusters must meet continuing education obligations (insurance-related instruction) on a biennial cycle; CE credits must be reported and records retained for audit.

Nonresident adjusters may qualify for a Delaware license through reciprocity based on an active home-state adjuster license, avoiding a duplicate Delaware exam.

Acting as an adjuster without a license, or transacting claims outside the licensed class, is a regulatory violation subject to fines, suspension, or revocation.

Licensees must report name changes, address changes, and administrative actions taken by other states to the Department within the statutory timeframe.

Insurable interest requires that the insured suffer actual monetary loss from the event; it must exist at policy inception and, for property claims, at the time of loss.

Indemnity principle: a property claim payment restores the insured to pre-loss financial position, not better; the measure is actual cash value or replacement cost per the policy.

Actual cash value (ACV) = replacement cost minus depreciation; replacement cost value (RCV) pays the cost to repair or replace with new property of like kind and quality.

Coinsurance clause: payment = (limit carried / limit required) x loss, capped by the policy limit; applies only when the carried limit is below the required percentage.

Deductible is subtracted from the covered loss before applying the coinsurance formula; policy limits cap the total payable regardless of formula results.

Subrogation transfers the insured's right of recovery against a negligent third party to the insurer after payment; the insured must not impair that right.

Proximate cause is the unbroken chain of events linking a covered peril to the loss; losses are paid only when the proximate cause is a covered peril.

Utmost good faith underlies the insurance contract; material misrepresentation on the application may allow rescission or denial of a claim.

The declarations page identifies named insured, policy period, limits, deductible, and covered property; the insuring agreement grants the core promise to pay.

Conditions are the insured's duties (notice, proof of loss, cooperation, mitigation); noncompliance can prejudice a claim but materiality and prejudice are typically evaluated.

Exclusions remove coverage; the burden of proving an exclusion applies rests on the insurer, while the insured bears the burden of proving the loss falls within coverage.

Delaware applies the doctrine of reasonable expectations and construes ambiguous policy language against the drafter (contra proferentem).

The policy is a contract of adhesion; court decisions in Delaware enforce plain, unambiguous policy terms as written.

Loss payment and appraisal provisions set timeframes and a dispute mechanism for valuation; appraisal determines amount of loss, not coverage.

A mortgagee clause protects the lender's interest and allows the lender to receive payment or repair proceeds independent of the borrower's conduct.

Cancellation and nonrenewal provisions require statutory notice periods; midterm cancellation for nonpayment typically requires shorter notice than cancellation for other reasons.

Delaware's standard fire policy statute (19 Del. C. ch. 27) prescribes required fire coverage provisions that property policies must meet.

Delaware's Unfair Trade Practices Act (18 Del. C. ch. 23) defines unfair claim settlement practices, including misrepresenting policy provisions and failing to act promptly on communications.

A claim must be acknowledged and investigated promptly; the adjuster must communicate settlement decisions and the basis for denial in writing.

Adjusters may not offer payment conditioned on a release broader than the claim or misrepresent coverage to induce a lower settlement.

First notice of loss should record date, time, location, cause, and reporter; preserve evidence and document all contacts in the claim file.

Reservation-of-rights letters preserve the insurer's coverage defenses while investigation continues; they do not waive coverage or estop denial.

Ethical duties include avoiding conflicts of interest, not accepting undisclosed gratuities, and not handling claims where the adjuster has a personal financial interest.

Fraud indicators (late reporting, prior claims, altered documents, cause inconsistent with damage) must be documented and referred under Delaware fraud reporting rules.

Total loss settlements must account for applicable liens, salvage, and any state-mandated fees; itemize the payment so the insured can verify the calculation.

Delaware resident adjuster licenses renew on a biennial basis tied to the licensee's birth month; late renewal may require reinstatement and fees.

CE compliance is a condition of renewal; failure to complete required hours can result in license lapse or a nonrenewable status.

Appointments: company and independent adjusters are appointed by an insurer; adjusters may not act for an unauthorized insurer.

License status must be verified; a lapsed license bars claim handling, and claim decisions made while unlicensed may be challenged.

Public adjuster contracts must be in writing and disclose compensation terms; Delaware caps or regulates public adjuster fees and requires written contract terms.

Change of address or legal name must be reported to the Department; misrepresentation on a license application is grounds for denial or revocation.

Reciprocal licensing with other states depends on the home state's substantially similar requirements and the absence of disciplinary action.

Replacement cost valuation requires repair or replacement actually occur or be planned within the policy's time limit; otherwise payment may settle on an ACV basis.

Depreciation is computed on the damaged component's age and condition; adjusters must use consistent, documented schedules.

Policy limits are the maximum payable; when limits are exhausted by multiple claims, the insurer's obligation ends.

Other insurance clauses determine contribution when multiple policies cover the same loss; pro rata and excess clauses govern which policy responds.

Valued policy laws apply to total losses of real property in some states; the policy limit is paid without regard to actual cash value.

Deductibles apply per occurrence unless the policy states otherwise; wind/hurricane deductibles are often percentage-based on the dwelling limit.

Recoverable depreciation is released after documented repair; nonrecoverable depreciation is deducted permanently from the settlement.

Salvage and subrogation recoveries reduce the insurer's net loss and may affect the insured's deductible recovery.

Prompt notice of loss is a condition precedent; unreasonable delay may bar the claim if the insurer is prejudiced.

Proof of loss is a sworn statement of the amount claimed; the policy states the deadline, often 60 days after request.

Suit limitation clauses require legal action within a specified period after loss or denial; enforceability depends on statutory compliance.

Examination under oath (EUO) is a contractual condition allowing the insurer to question the insured under oath about the claim.

Concealment or fraud provisions void coverage when the insured intentionally misrepresents material facts about the loss.

Waiver and estoppel: an insurer's conduct inconsistent with a policy condition may waive that condition, but waiver of one condition does not waive all.

Assignment of policy rights generally requires insurer consent in property policies; claim proceeds may be assigned without consent in some circumstances.

Document a complete claim diary: date of contact, person contacted, information exchanged, and next action.

Investigate before denying; coverage decisions must be based on facts in the file and the policy language.

Written denial letters must state the specific policy provision relied on and the factual basis for denial.

Avoid steering insureds to preferred contractors without disclosure; the insured has the right to choose a repair vendor.

Settlement offers must be evaluated against documented damages; lowball offers unsupported by the file risk bad-faith exposure.

Maintain confidentiality of personal and medical information; share only with parties needing it for claim handling.

Promptly pay undisputed amounts even when the total claim is disputed; withholding undisputed sums can constitute an unfair practice.

Refer suspected fraud to the insurer's special investigation unit and comply with Delaware fraud reporting requirements.

Delaware adjuster exam content typically covers licensing law, insurance principles, policy provisions, and claims practices.

Applicants must be at least 18, be trustworthy and competent, and not have committed an act that would bar licensure.

Prelicensing education may be required for resident applicants depending on license class; verify current Department requirements.

Exemptions from the exam may apply to certain company officers or holders of specified professional designations.

A license is issued for a specific class; handling claims outside the class is unlicensed activity.

Continuing education hours must include ethics instruction where required by Department rule.

Nonresident licenses remain valid while the home-state license is active; lapse in the home state terminates reciprocity.

Moral hazard is a tendency to behave carelessly or dishonestly because insurance exists; morale hazard is indifference to loss.

Physical hazards are tangible conditions (wiring, occupancy) that increase the chance of loss.

Risk transfer shifts financial consequences to the insurer; risk retention keeps them with the insured through deductibles and self-insurance.

Law of large numbers allows insurers to predict losses across a pool; individual losses remain unpredictable.

Adverse selection occurs when higher-risk insureds disproportionately buy coverage; underwriting and exclusions counter it.

Proximate cause analysis determines whether the loss is covered when multiple perils combine; concurrent causation clauses address mixed causes.

Contribution and subrogation prevent double recovery and allocate loss among responsible parties.

Definitions control the meaning of policy terms; adjusters must apply defined terms exactly as written.

The insuring agreement describes covered perils and property; open perils forms cover all risks except exclusions.

Named perils policies cover only listed causes of loss; the insured bears the burden of proving a listed peril caused the loss.

Coverage extensions (debris removal, temporary repairs, loss of use) apply only within stated sublimits.

Endorsements amend the policy and control over conflicting base-form language.

The policy period and territory define when and where coverage applies; losses outside either are not covered.

Notice, cooperation, and mitigation conditions must be satisfied for coverage to respond.

Insurers must attempt good-faith settlement when liability and damages are reasonably clear.

Failing to explain the basis for a settlement offer or denial can constitute an unfair claim practice.

Bad faith may arise from unreasonable delay, inadequate investigation, or failure to pay undisputed benefits.

Adjusters must not misrepresent the policy or the insured's rights; document all communications.

Settlement releases should be limited to the claim at issue and explained to the insured.

Payments must be timely under the policy and state prompt-payment requirements.

Maintain an audit trail of estimates, photos, and correspondence to support the settlement amount.

Grounds for discipline include fraud, misrepresentation, unlicensed activity, and failure to comply with CE requirements.

Administrative actions in other states must be reported to the Delaware Department; failure to report is itself a violation.

Fines and license suspension are common sanctions; repeat violations may lead to revocation.

Adjusters must cooperate with Department investigations and produce records on request.

Records of claim handling should be retained per statutory and insurer requirements.

Public adjusters must maintain separate records of client funds and compensation.

Unlicensed claim handling by staff must be corrected promptly; the insurer and adjuster may both face exposure.

Betterment occurs when repair improves property beyond its pre-loss condition; the insured may be charged the difference.

Matching of undamaged materials may be required by policy or regulation; document the basis for any matching decision.

Ordinance or law coverage pays for upgrades required by code during repair, up to the stated limit.

Debris removal and mitigation costs are typically additional coverages subject to sublimits.

Business interruption measures lost income and continuing expenses during restoration.

Loss of use pays additional living expenses when the dwelling is uninhabitable.

Replacement cost holdback is released upon completion of repairs within the policy time limit.

Offer, acceptance, and consideration form the insurance contract; the application is the offer and the policy is acceptance.

Material misrepresentation on the application may allow rescission if the insurer relied on it.

Ambiguity is construed against the drafter, but plain language is enforced as written.

The entire contract clause limits the contract to the policy and endorsements.

The insured's duties are conditions; breach may excuse the insurer's performance if prejudicial.

Statutory requirements override conflicting policy language.

Endorsements and state-specific amendatory endorsements control over the base form.

Photograph and measure damage; retain originals and note chain of custody.

Record witness statements and preserve them in the claim file.

Limit collection of personal data to what is needed for the claim.

Do not disclose claim information to third parties without authorization or legal requirement.

Document the basis for any coverage denial and cite the specific exclusion.

Use consistent estimating standards and retain the estimate in the file.

Communicate settlement calculations clearly and itemize deductions.

Company adjusters handle claims solely for their employer insurer.

Independent adjusters contract with insurers and may serve multiple carriers.

Public adjusters represent the insured and may not represent the insurer on the same claim.

Catastrophe adjusters are licensed to respond to declared events and may operate under emergency appointment rules.

Scope of authority is limited by license class; acting outside it is unlicensed activity.

Nonresident adjusters must maintain an active home-state license to keep reciprocity.

License renewal requires CE completion and fee payment within the renewal window.

Named perils include fire, lightning, windstorm, hail, explosion, riot, and vandalism.

Open perils coverage excludes specified causes such as flood, earth movement, and neglect.

Concurrent causation: when a covered and excluded peril combine, policy language and state law determine coverage.

Ensuing loss clauses restore coverage for resulting damage from an excluded cause in some forms.

Neglect and intentional loss exclusions bar coverage where the insured failed to protect property.

Wear and tear, deterioration, and latent defect exclusions address maintenance-related loss.

Adjusters must identify the efficient proximate cause to determine coverage.

Delaware fire policy statute prescribes standard provisions for fire coverage.

Cancellation notice periods are set by statute and vary by reason for cancellation.

Unfair trade practices statutes govern claim settlement conduct.

Valued policy and total loss rules may override policy valuation language.

Suit limitation periods may be shortened only within statutory limits.

Proof of loss deadlines must comply with statutory requirements.

Endorsements required by statute must be attached to the policy.

Red flags include inflated estimates, prior losses, and inconsistent statements.

Investigate before denying; document the factual basis for fraud findings.

Refer suspected fraud to the SIU and comply with reporting rules.

Do not accuse the insured of fraud without documented evidence.

Preserve evidence and maintain chain of custody.

Coordinate with law enforcement when required.

Document all fraud indicators and the investigation steps taken.

Submit a complete application with fees and fingerprints.

Pass the required exam unless exempt.

Provide proof of home-state licensure for nonresident applicants.

Disclose any criminal history and administrative actions.

Verify license status before handling claims.

Report changes to the Department promptly.

Maintain CE records for audit.

Deductibles reduce the payable loss and apply per occurrence.

Percentage deductibles are calculated on the dwelling limit.

Policy limits cap payment regardless of loss amount.

Sublimits restrict specific coverages such as debris removal.

Aggregate limits cap total payments over the policy period.

Other insurance clauses allocate loss among policies.

Recoverable depreciation is released after repair.

Notify the insurer promptly.

Protect property from further damage.

Provide proof of loss when required.

Cooperate with investigation and EUO.

Submit to examination under oath if required.

Preserve records and evidence.

Allow inspection of damaged property.

Acknowledge claims promptly.

Explain coverage decisions in writing.

Provide the basis for denial with policy citations.

Respond to insured inquiries timely.

Document all communications.

Avoid misleading statements about coverage.

Pay undisputed amounts promptly.

Complete required CE hours each renewal cycle.

Include ethics hours where required.

Report CE completion to the Department.

Retain certificates for audit.

Late CE may require reinstatement.

CE must be insurance-related and approved.

Failure to comply can result in license lapse.

Subrogation transfers recovery rights to the insurer after payment.

The insured must not impair subrogation rights.

Recoveries reduce the insurer's net loss.

Deductible recovery may be pursued by the insured.

Salvage reduces the loss payable.

Contribution allocates loss among insurers.

Document recovery efforts in the claim file.

The insured bears the burden of proving coverage.

The insurer bears the burden of proving an exclusion applies.

Exclusions must be read narrowly where ambiguous.

Ensuing loss clauses may restore coverage.

Concurrent causation clauses address mixed causes.

Intentional loss exclusions bar coverage for deliberate acts.

Neglect exclusions address failure to protect property.

Settle claims in good faith when liability is clear.

Do not lowball unsupported by the file.

Explain settlement calculations.

Itemize deductions and payments.

Limit releases to the claim at issue.

Pay promptly under policy terms.

Document the settlement rationale.

Nonresident licenses depend on an active home-state license.

Reciprocity avoids duplicate exams.

Home-state discipline must be reported.

Lapse in the home state terminates reciprocity.

Nonresident CE may be satisfied by home-state compliance.

Verify license status before handling claims.

Report address changes promptly.

Replacement cost pays to repair or replace with new property.

ACV deducts depreciation from replacement cost.

Recoverable depreciation is released after repair.

Nonrecoverable depreciation is permanently deducted.

Time limits apply to completion of repairs.

Matching requirements may affect settlement.

Document depreciation schedules.

Appraisal determines the amount of loss, not coverage.

Each party selects an appraiser; umpire resolves disagreement.

Appraisal is not arbitration and does not decide coverage.

Suit limitation periods apply to legal action.

Document appraisal requests and outcomes.

Coverage disputes are resolved separately from valuation.

Appraisal clauses are enforceable per policy terms.

Maintain a complete claim diary.

Retain photos, estimates, and correspondence.

Document chain of custody for evidence.

Record witness statements.

Preserve records per statutory requirements.

Limit access to personal data.

Document the basis for all decisions.

Acting without a license is prohibited.

Misrepresentation on applications is grounds for denial.

Handling claims outside the license class is prohibited.

Failure to report administrative actions is a violation.

Fraud and dishonesty are grounds for discipline.

Failure to complete CE can result in lapse.

Uncooperative conduct with investigations is a violation.

Coinsurance requires carrying a minimum percentage of value.

Payment = (carried / required) x loss, capped by the limit.

The deductible is subtracted before applying the formula.

Coinsurance applies only when underinsured.

Agreed value endorsements waive coinsurance.

Document the valuation basis.

Policy limits cap total payment.

Mortgagee clauses protect the lender's interest.

Lenders may receive payment or repair proceeds.

Mortgagee rights are independent of the borrower's conduct.

Loss payable clauses apply to personal property liens.

Lienholder information must be verified before payment.

Payments may require joint checks.

Document lien releases.