DE Claims Adjuster flashcards

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

Insurable interest

The insured must stand to suffer actual monetary loss from the event; it must exist at policy inception and, for property claims, at the time of loss.

Actual cash value

Replacement cost of damaged property minus depreciation. ACV reflects the pre-loss value of the property rather than the cost to buy new property of like kind.

Replacement cost value

The amount needed to repair or replace damaged property with new property of like kind and quality, without deducting depreciation, subject to policy limits.

Coinsurance formula

Payment equals the limit carried divided by the limit required, multiplied by the loss, capped by the policy limit; the deductible is subtracted first.

Proximate cause

The unbroken chain of events linking a covered peril to the loss. Coverage depends on whether the efficient proximate cause is a covered peril.

Subrogation

The transfer of the insured's right to recover from a negligent third party to the insurer after the insurer pays the claim; the insured must not impair that right.

Moral hazard

A tendency to behave carelessly or dishonestly because insurance exists, increasing the likelihood or size of a loss beyond ordinary risk.

Adverse selection

The tendency of higher-risk insureds to buy or retain coverage disproportionately, which underwriting, exclusions, and pricing are designed to counter.

Declarations page

The policy section identifying the named insured, policy period, limits, deductible, and covered property; it frames the insuring agreement that follows.

Insuring agreement

The core policy promise describing the perils and property covered and the insurer's obligation to pay covered losses within the stated limits.

Policy condition

A duty the insured must perform, such as prompt notice, proof of loss, cooperation, or mitigation; breach may excuse the insurer's performance when prejudicial.

Contra proferentem

The rule construing ambiguous policy language against the party that drafted it, typically the insurer, while plain unambiguous terms are enforced as written.

Reasonable expectations

A doctrine under which coverage may be found where an insured's objectively reasonable expectations of coverage are defeated by unclear or hidden policy language.

Proof of loss

A sworn statement of the amount claimed by the insured, submitted within the deadline the policy specifies, usually after the insurer requests it.

Examination under oath

A contractual condition allowing the insurer to question the insured under oath about the claim, its circumstances, and the damages asserted.

Suit limitation clause

A policy provision requiring legal action to be filed within a specified period after the loss or denial, enforceable only within statutory limits.

Mortgagee clause

A provision protecting a lender's interest in insured property, allowing the lender to receive payment or repair proceeds independent of the borrower's conduct.

Endorsement

A document amending the policy that controls over conflicting base-form language and may add, restrict, or clarify coverage terms.

Reservation of rights

A letter preserving the insurer's coverage defenses while investigation continues; it does not waive coverage or estop a later denial.

Unfair claim practice

Conduct such as misrepresenting policy provisions, failing to act promptly, or refusing to pay without reasonable basis, prohibited by state insurance law.

Bad faith

Unreasonable conduct by an insurer, such as delay, inadequate investigation, or failure to pay undisputed benefits, that breaches the duty of good faith.

First notice of loss

The initial report of a claim recording date, time, location, cause, and reporter; it starts the investigation and claim file documentation.

Claim diary

A chronological record of every claim contact, information exchanged, and next action, used to document handling and support decisions.

Fraud indicator

A fact suggesting possible claim fraud, such as late reporting, prior losses, altered documents, or damage inconsistent with the stated cause.

Replacement cost holdback

The depreciation portion withheld at initial settlement and released after the insured documents that repair or replacement occurred within the policy time limit.

Other insurance clause

A provision determining how multiple policies covering the same loss contribute, using pro rata, excess, or similar allocation methods.

Company adjuster

A licensed adjuster employed by an insurer who handles claims solely for that employer and represents the insurer's interest.

Independent adjuster

A licensed adjuster who contracts with insurers, often serving multiple carriers, and represents the insurer rather than the insured.

Public adjuster

A licensed adjuster who contracts with and is paid by the insured to negotiate a first-party claim and may not represent the insurer on that claim.

Nonresident reciprocity

A licensing pathway allowing an adjuster with an active home-state license to obtain a Delaware license without retaking the Delaware examination.

Continuing education requirement

Insurance-related instruction, sometimes including ethics hours, that a licensee must complete each renewal cycle to keep the license active.

License class

The category of adjuster license issued, such as company, independent, public, or catastrophe, which limits the claims an adjuster may handle.