Claims Handling, Investigation, and Adjustment Practices
This domain tests the claim process from notice through investigation, documentation, negotiation, and resolution. The exam emphasizes good faith, promptness, and a defensible file.
Claim handling sequence
Upon notice, the adjuster should acknowledge the claim, investigate promptly, inspect the loss, document damage, identify coverage and exclusions, set reserves where appropriate, and communicate. A reservation of rights preserves the insurer's position while investigation continues. Proof of loss, examination under oath, and appraisal are policy tools with specific conditions.
Good faith and unfair practices
Indiana law prohibits misrepresentation, unreasonable delay, failure to investigate, and failure to explain a denial. The adjuster should distinguish coverage issues from damage issues, avoid unauthorized settlement commitments, and document every material communication. A denial should cite the policy language and facts relied on.
Worked example
An insurer receives a water-damage claim, waits 60 days, and denies it with a one-line letter citing no policy provision. The file lacks an inspection report and contains no explanation of the exclusion. Even if coverage is ultimately questionable, the handling creates unfair-claim-practice and bad-faith exposure. A proper file would show prompt contact, an inspection, a coverage analysis, a written explanation, and a reservation of rights if needed.
Traps
Do not miss proof-of-loss or suit-limitation deadlines. Do not treat a reservation of rights as a denial. Do not negotiate beyond authority. Do not let a contractor's report replace an independent coverage analysis.