HI Public Adjuster flashcards

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

Indemnity principle

Insurance restores the insured to the pre-loss financial position, no better and no worse. It explains why betterment and most depreciation are deducted from claim payments.

Actual cash value

Replacement cost of damaged property minus depreciation for age, condition, and useful life. It is the default valuation on many homeowner personal property coverages.

Coinsurance formula

Recovery equals limit carried divided by limit required, multiplied by the loss, capped at the limit carried. The required limit is the coinsurance percentage times replacement cost.

Efficient proximate cause

When a covered and an excluded peril combine to cause loss, the dominant or initiating cause determines coverage. Hawaii applies this doctrine to concurrent causation disputes.

Replacement cost holdback

The insurer pays actual cash value first and releases recoverable depreciation after the insured completes repairs within the policy time window, often 180 days and extendable.

Loss of use coverage

Pays additional living expense and fair rental value above normal living costs while the dwelling is uninhabitable. It does not pay mortgage principal or purchase of permanent housing.

Mortgagee clause

Gives the lender rights to loss payment and repair proceeds, and its interest survives even when the insured's own claim is denied for acts of the insured.

Proof of loss

A sworn statement of the amount claimed, usually due within 60 days of the insurer's request. Failure can bar the claim absent waiver or lack of prejudice.

Hawaii claim acknowledgement

Insurers must acknowledge a claim communication within 15 calendar days and accept or deny within 30 days of receiving proof of loss, extendable with written notice.

Cause and origin

Investigation that identifies the peril that triggered the loss and separates it from pre-existing deterioration, long-term leakage, or faulty workmanship that policies commonly exclude.

Appraisal clause

Contractual remedy for disputes over the amount of loss only. Each party selects a competent appraiser and the two appraisers choose an umpire to resolve differences.

Overhead and profit

Added to a repair estimate when three or more trades are required, reflecting general contractor supervision and indirect job costs. It is not automatic for every loss.

Business interruption measure

Gross earnings minus continuing expenses plus extra expense, for the period of indemnity ending at restoration or the policy's stated limit, often twelve months.

Subrogation

The insurer's right to recover claim payments from a negligent third party. The insured must not impair that right by releasing the third party.

Public adjuster role

A licensed representative of the insured, paid by the insured, who prepares and negotiates the claim. Company and independent adjusters represent the insurer instead.

Disaster fee cap

Hawaii limits public adjuster compensation to ten percent of the claim amount paid on claims arising from a declared disaster or emergency.

Three-day rescission right

Hawaii gives the insured the right to rescind a public adjuster contract within three business days after signing, and the right must be conspicuously disclosed.

Contingency fee contract

Written agreement paying the adjuster a percentage of the net settlement. It must state the percentage, services, and rescission right, and a copy goes to the insured.

Fee base exclusions

No fee may be charged on proceeds the insured would have received without the adjuster's work, such as undisputed emergency advance payments for additional living expense.

Solicitation restrictions

Adjusters may not solicit at a loss scene before a reasonable time and may not imply they represent the insurer or a government agency.

Commingling prohibition

Client claim funds and trust money must be kept separate from the adjuster's operating funds. Misappropriation supports license revocation and criminal referral.

Hawaii Insurance Division

The DCCA branch headed by the Insurance Commissioner that licenses adjusters and insurers, adopts rules, investigates complaints, and imposes fines or revocation.

Unfair claim settlement practices

HRS 431:13-103 prohibits misrepresenting policy provisions, failing to act promptly on communications, and refusing to pay without a reasonable investigation.

Commissioner enforcement authority

After notice and hearing, the Commissioner may impose fines, suspend or revoke licenses, issue cease-and-desist orders, and order restitution to consumers.

Continuing education requirement

Adjusters must complete approved CE hours each renewal cycle, including ethics, and pay the renewal fee before expiration to avoid license inactivation.

Recordkeeping duty

Claim files and transaction records must be kept for the period set by Hawaii rule, commonly five years, and produced to the Division on request.

Hurricane deductible disclosure

Hawaii requires insurers to disclose hurricane deductible amounts and the triggering circumstances at issuance. The percentage applies to the Coverage A limit.

Dual representation bar

A public adjuster may not also act as the insurer's representative on the same claim. Conflicts must be disclosed in writing to the client.

Confidentiality obligation

Claim information may be disclosed only as needed to handle the claim or as required by law. Unauthorized disclosure may violate privacy statutes and ethics rules.

Fraud reporting duty

Suspected claim fraud must be reported to the insurer and may be referred to the Insurance Division fraud unit. Knowingly false reporting is itself a violation.

Deceptive advertising prohibition

Advertising must identify the adjuster by name and license status. Implying government or insurer affiliation is a deceptive trade practice under Hawaii law.

Settlement conduct rule

An adjuster may not advise an insured to accept less than the policy provides or draft a release that misstates the settlement amount actually paid.