IL Public Adjuster flashcards

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

Public adjuster license

An authorization issued by the Illinois Department of Insurance that lets a person negotiate or settle first-party property claims on behalf of insureds for compensation.

Public adjuster representation

A public adjuster acts only for the insured. The adjuster cannot represent the insurer, or both parties, on the same claim because that creates an impermissible conflict of interest.

Public adjuster contract

Illinois requires a written agreement signed by the insured that identifies the adjuster, describes the claim services, and states compensation as a fee or a percentage of the recovery.

IDOI disciplinary authority

The Illinois Department of Insurance may deny, suspend, revoke, or fine a public adjuster license for violations such as misrepresentation, fraudulent claim activity, or unlicensed adjusting.

Improper claims practices statute

Illinois Insurance Code Section 154.6 lists claim-handling acts, such as misrepresenting policy provisions or unreasonable delay and denial, that constitute improper claims practices.

Insurance fraud, Illinois

Knowingly presenting false claim information or inflating a loss to obtain payment is insurance fraud under Illinois law and may be prosecuted as a criminal offense.

Unfair trade practices article

Article XXVI of the Illinois Insurance Code prohibits misrepresentations, false advertising, and other unfair or deceptive acts committed in the business of insurance.

Adjuster fiduciary duty

A public adjuster owes the insured loyalty and confidentiality and may not accept compensation from any other party, such as a contractor or the insurer, for the same claim.

Principle of indemnity

Insurance restores the insured to approximately the same financial position held before the loss, no better and no worse, so recovery is limited to the actual amount of loss.

Insurable interest

A financial stake in the property or person insured such that a loss causes genuine economic harm; in property insurance it must exist at the time of loss.

Actual cash value

The indemnity measure calculated as replacement cost minus depreciation, reflecting the used value of the damaged property at the time of the loss.

Replacement cost

The cost to repair or replace damaged property with new property of comparable kind and quality without deducting depreciation, often limited to a stated percentage of Coverage A.

Utmost good faith

Insurance contracts rest on both parties making full and honest disclosure; concealment, material misrepresentation, or breach of warranty can affect or void coverage.

Subrogation

After paying a loss, the insurer acquires the insured's right to recover the amount paid from the party legally responsible for causing the damage.

Aleatory contract

An insurance contract in which the amounts exchanged are unequal and depend on chance, so a small premium may buy a large benefit after a covered loss.

Adverse selection

The tendency of higher-risk applicants to buy or keep insurance more readily than lower-risk ones, which threatens risk pooling and drives premiums upward.

HO-3 dwelling coverage

The HO-3 covers the dwelling and other structures on an open-peril basis while personal property is covered for named perils only, subject to policy limits and deductibles.

Coverage C personal property

Homeowners policies insure personal property on a worldwide basis, usually at actual cash value, with special sub-limits for jewelry, money, silverware, and similar categories.

Property coinsurance formula

Required insurance equals a stated percentage of replacement cost. Payment equals the limit carried divided by the required amount, times the loss, capped at the limit.

Special causes of loss form

A commercial property form insuring risks of direct physical loss unless excluded, which places the burden on the insurer to show that an exclusion applies.

Commercial general liability

Coverage for bodily injury and property damage liability arising from premises, operations, and products, written with per-occurrence and aggregate limits on an occurrence basis.

Business income coverage

Pays the insured's lost net income and continuing normal expenses during the period of restoration after a covered loss, plus extra expense to resume operations.

Flood insurance

Flood is generally excluded on property policies and is written separately through the National Flood Insurance Program or private carriers, typically with a 30-day waiting period.

Uninsured motorist coverage

Auto coverage that pays the insured's bodily injury damages caused by a hit-and-run or at-fault driver who carries no liability insurance, up to the policy limit.

Proof of loss

A sworn statement from the claimant documenting the amount and circumstances of the loss, which the insured must submit, usually within a time set by the policy.

Reservation of rights letter

A written notice telling the insured that the insurer will continue investigating and defending the claim while leaving open whether coverage ultimately applies.

Section 155 bad faith

Illinois Insurance Code Section 155 lets an insured recover attorney fees, costs, and other damages when an insurer's delay or denial is vexatious and unreasonable.

Modified comparative fault

Illinois rule under which a claimant 51 percent or more at fault recovers nothing, and a claimant less at fault has damages reduced by their own percentage of fault.

Claim file documentation

The adjuster must record each material act, including contacts, inspections, photographs, coverage analysis, reserve changes, and the reasons for payment or denial.

Conflict of interest rule

An adjuster must avoid relationships or financial interests that could bias claim decisions, such as referral fees from contractors or ownership of an interest in the damaged property.

Improper claim denial

Denying a claim without a reasonable investigation, or misrepresenting policy provisions to the insured, is an improper claims practice that may result in regulatory discipline.

Claim confidentiality

Claim information gathered by the adjuster is confidential and may be shared only with persons having a legitimate need, such as the insured and the insurer's authorized representatives.