HI Claims Adjuster common mistakes
HI Claims Adjuster · Understand the traps and how to avoid them.
Answering motor vehicle injury questions with a tort-first logic - 'the at-fault driver's liability coverage pays the medical bills first' - instead of applying Hawaii's no-fault PIP sequence in which the injured party's own policy responds regardless of fault.
Most study material and prior experience comes from tort-liability states, so the reflex is to look for fault and a third-party payer before looking at the injured person's own personal injury protection.
What to do instead
Build a one-page 'Hawaii motor vehicle sequence' card: injured party's own PIP first, stated PIP limit, statutory notice/time limits for claiming benefits, then the tort threshold that must be met before a liability claim can be pursued. Drill the sequence until it is automatic before touching any MV question.
Treating 'adjuster' as a single role and blurring company/independent adjusters with public adjusters - for example, having a public adjuster settle on the insurer's behalf or accept a settlement without the insured's written authority.
Generic claims courses rarely separate the licensing categories, and the exam tests who may act for whom, who may be compensated how, and what a public adjuster may and may not do.
What to do instead
Make a four-column table (company, independent, public, and unlicensed/exempt persons) listing: whose interest they represent, who pays them, what authority they need in writing, and what conduct is prohibited. Memorise the table, not the narrative.
Computing a property loss payment in the wrong order - subtracting the deductible before applying coinsurance, or depreciating items (labor, taxes, permanent fixtures, ordinance-upgrade costs) that are not subject to depreciation.
Candidates learn each formula separately and then combine them under time pressure, and the exam deliberately supplies numbers that produce a 'clean' but wrong answer if the order is reversed.
What to do instead
Write the chain out on scratch paper every time: determine replacement cost, apply the coinsurance/limit test, apply depreciation only to depreciable components, then apply the deductible last. Sanity-check that the payment can never exceed the applicable limit.
Jumping to a coverage conclusion before checking the policy's conditions - notice, proof of loss, cooperation, examination under oath, and the suit-limitation period - and then picking the answer that grants coverage for a claim whose conditions were never met.
Coverage triggers (fire, wind, collision) are vivid and easy to spot, while conditions are buried in a later section and feel procedural rather than substantive.
What to do instead
Adopt a fixed reading order for every policy question: declarations and limits, insuring agreement, exclusions, then conditions. Answer only after asking 'has every condition precedent been satisfied, waived, or excused?'
On ethics items, choosing the answer that is most helpful to the insured or most protective of the insurer's money - for example, quietly correcting a proof of loss, accepting an estimate from a contractor who is a relative, or disclosing claim information to a third party without authority - rather than the answer that discloses the conflict and stays within authority.
Ethics questions are usually framed so that the 'kind' or 'cost-saving' option looks attractive, and candidates answer from sympathy or loyalty instead of from the duty of good faith owed to all parties.
What to do instead
Use a three-question screen on every ethics item: (1) Who do I represent and what is my authority? (2) Is there a conflict I must disclose in writing? (3) Would I be comfortable if this file entry were read aloud at a regulatory examination? If any answer is doubtful, choose disclosure and referral upward.
Allowing claim-handling questions to be answered on outcomes alone, ignoring the documentation and communication record - accepting an answer that reaches the right number but reflects an unexplained delay, no written status updates, or no recorded basis for the decision.
Candidates focus on the final settlement figure because that is what the arithmetic questions test, and they underestimate how heavily the exam tests unfair-claim-settlement-practice conduct such as unreasonable delay and failure to communicate.
What to do instead
For every claims-handling scenario, write a three-line file note before answering: what was received and when, what was done and when, what was communicated to the claimant and when. Answers that cannot be supported by that timeline are wrong regardless of the dollar figure.
Applying a single flat deductible to every property loss, ignoring that a separate, percentage-based hurricane (named-storm) deductible may apply and that it is triggered by a specific event rather than by the amount of damage.
Most practice material is written in flat-dollar-deductible states, and the wind-versus-water sequence of a named storm is easy to analyse as an ordinary wind loss.
What to do instead
Before any wind-related property calculation, ask and record: was the cause a named or declared storm, is a separate hurricane deductible shown on the declarations, is it a percentage of a specific base (dwelling limit, not the loss), and what is the event window? Compute the loss twice - once under the all-other-perils deductible and once under the storm deductible - and select deliberately.
Analysing Hawaii property losses as though the peril list were generic, missing that volcanic activity/lava and tsunami-related damage need to be tested against specific exclusions, that flood is excluded under the homeowners form and requires a separate flood policy, and that 'wind-driven rain' is not the same as flood.
Candidates study one national homeowners form and never map Hawaii's dominant catastrophes onto the exclusions and endorsements, so they default to 'it's a natural disaster, it's covered'.
What to do instead
Maintain a Hawaii peril grid: peril, covered/excluded under the standard form, which endorsement or separate policy fills the gap, and the proximate-cause question to ask. Review earthquake, lava/volcanic activity, tsunami, hurricane wind, and flood side by side.
Evaluating a liability claim using pure contributory negligence or pure comparative fault, and pronouncing the claimant fully barred by any fault, instead of applying Hawaii's modified comparative negligence rule under which recovery is barred only when the claimant's own fault exceeds the defendant's.
Candidates confuse the 'any fault bars recovery' states with the 'greater-than-50%-bars' states, and the exam supplies fact patterns with claimant fault just above and just below the line.
What to do instead
Before any negligence computation, place the claimant's percentage and the defendant's percentage side by side and state the rule aloud: recovery is reduced by the claimant's share and is barred only if the claimant's share is greater than the defendant's. Practise pairs of facts at 49/51 and 51/49 until the boundary is instinctive.
Closing a casualty file with a release that is broader than the damages actually paid, or settling a liability claim without identifying and resolving outstanding reimbursement interests such as PIP reimbursement or a workers' compensation lien.
Candidates treat the release as a formality at the end of the claim and never trace which payments other parties have already made on the same injury.
What to do instead
Before any release or payment in a casualty claim, complete a lien and subrogation checklist: every payer that has paid related medical or wage-loss benefits, the amount claimed, the written confirmation of the balance, and the release language limited to the claim being settled. Document each item in the file before the cheque is issued.