Property Damage Loss Adjuster (재물손해사정사) common mistakes
Property Damage Loss Adjuster (재물손해사정사) · Understand the traps and how to avoid them.
When calculating indemnity for a total loss, the candidate subtracts depreciation from the insurable value (보험가액) instead of from the replacement cost, or applies depreciation to the insured amount (보험금액) rather than to the value of the damaged object; the resulting claim figure is internally inconsistent with the underinsurance ratio.
Candidates memorize the formula 'loss amount × insured amount ÷ insurable value' but never fix which quantity depreciation attaches to. Under Commercial Code Art. 676 and the standard fire policy, the loss is first valued at the time and place of the loss (actual cash value = replacement cost minus depreciation for the damaged part only), then the proportional (비례) or valued (기평가) basis is applied. Mixing the two steps produces errors that look arithmetically clean and are therefore not re-checked.
What to do instead
Before touching numbers, write a three-line ladder on the answer sheet: (1) replacement cost of the damaged portion, (2) minus depreciation of that portion = actual loss, (3) apply the policy basis (proportional if insured amount < insurable value; valued policy pays up to the agreed value). Then state explicitly that depreciation is never applied twice and never to undamaged property. Practise with one fire total loss, one partial loss, and one valued policy so the ladder becomes automatic.
The candidate treats the deductible (자기부담금) and the franchise (면책공제) as interchangeable, or subtracts the deductible before applying the proportional payment ratio instead of after, producing a payout that differs from the policy wording.
Both reduce the payout and both appear as '공제' in Korean materials, so the distinction is skimmed. The correct order under most Korean property wordings is: determine the loss amount, apply the proportional/limit calculation, then deduct the self-borne amount; a franchise means no payment at all below the threshold. Candidates also forget that some deductibles are stated as a percentage of the loss with a minimum amount.
What to do instead
Build a one-page decision table: franchise = below threshold, zero payment; deductible = always subtracted after the coverage calculation. For each practice claim, annotate the order of operations in the margin (loss → limit/proportion → deductible → payout) and check whether the deductible is fixed-sum or percentage-with-floor. Recompute one claim both ways to see how large the gap becomes.
In fire and specialty lines, the candidate pays the full loss without checking subrogation (대위) and salvage (잔존물) treatment, or ignores the salvage value of damaged stock and machinery when settling, so the insured recovers more than the actual loss.
Subrogation and salvage feel like back-office steps rather than adjustment arithmetic, and exam scenarios often mention damaged inventory without flagging that it still has scrap value. Under Commercial Code Art. 681 the insurer is subrogated to the insured's rights to the extent of payment, and salvage proceeds must be credited so indemnity does not exceed the loss.
What to do instead
Add two mandatory lines to every property adjustment: 'salvage value credited: ___' and 'subrogation right: against ___ for ___'. If the scenario is silent on salvage, state the assumption explicitly rather than omitting it. Remember that subrogation cannot prejudice the insured's remaining claim (the insured is paid in full first), and that the insurer cannot subrogate against its own insured or a co-insured family member.
The candidate confuses the insurable value (보험가액) with the insured amount (보험금액) and therefore mislabels an underinsured or overinsured policy, applying proportional payment where the policy is actually a valued policy or applying no proportion where the insured amount is clearly below value.
The two terms differ by one syllable in Korean and both are 'the number on the policy'. Candidates also assume the sum insured always equals value, so they never test the ratio. Overinsurance triggers the Art. 669 cap (indemnity limited to actual loss) and Art. 669(2) refund of excess premium, while undervaluation triggers proportional payment under Art. 674 - completely different outcomes.
What to do instead
At the top of every answer, write two labelled figures side by side: 보험가액 = ___ (market/actual value at risk) and 보험금액 = ___ (policy limit). Compute the ratio and state the consequence in one sentence ('underinsured → proportional payment applies'). For overinsurance, cite the actual-loss cap and the duty to refund premium for the excess.
In machinery and electrical breakdown adjustment, the candidate settles the cost of repairing or replacing the damaged machine but ignores the policy's exclusion of wear and tear, gradual deterioration, and pre-existing defects, or fails to distinguish electrical breakdown from fire damage.
Machinery and electrical policies cover sudden and accidental breakdown, not the normal ageing that usually caused the failure. Korean machinery wordings and the fire policy's 'electrical damage' clause draw a sharp line: damage caused by the machine's own short-circuiting is excluded from fire cover but may fall under a machinery/electrical policy. Candidates who have only drilled fire claims carry fire logic into machinery claims.
What to do instead
For each machinery claim, write the causal chain and mark where it breaks: 'cause: insulation degradation (gradual, excluded) → short circuit (sudden) → damage'. Then decide which policy responds and whether the proximate cause is an insured peril. Practise three scenarios: gradual wear, sudden electrical breakdown, and fire following a short circuit, and state which policy pays and why.
In construction and erection (건설공사보험) claims, the candidate adjusts the damage as if it were a completed building, ignoring the contractual matrix of employer, contractor, subcontractors, and the CAR/EAR policy's insured parties, and forgetting that the contract price includes materials, labour, and profit that must be valued separately.
Construction claims are multi-party and the policy covers the works until handover, plus third-party liability. Candidates default to a simple property-loss template and miss that defective workmanship and its consequences are excluded, that the deductible often applies per occurrence, and that temporary works and construction machinery may be separately insured or excluded.
What to do instead
Draw the party map and the works timeline before valuing anything: who is insured, what is at risk at the date of loss, and which section (material damage vs third-party liability) responds. Value the damaged works at contract-price basis (materials + labour + attributable profit) and explicitly exclude the cost of rectifying the original defect. Note the deductible per occurrence and any sub-limit for testing and commissioning.
In liability claims, the candidate treats the third party's claimed amount as the loss and pays it, without establishing the legal liability elements (duty, breach, causation, damage) or checking policy limits, defence costs, and exclusions before applying the deductible.
Liability adjustment looks like paying a demand, but the insurer only owes what the insured is legally liable to pay. Candidates also confuse the limit of indemnity with the claim amount and forget that defence costs may be inside or outside the limit depending on the wording, and that the deductible usually applies to each claim including defence-cost-inclusive wordings.
What to do instead
Use a four-step liability template: (1) is there a legal duty and breach under Korean civil law (Art. 750 tort or contract)? (2) causation and quantified damage; (3) policy response - covered peril, exclusion, limit, defence costs inside/outside; (4) deductible and payout. Write 'legally liable amount = ___' before 'policy pays = ___' so the two never merge. Also test one excluded claim (e.g. intentional act) to confirm the reasoning.
The candidate treats the insurance contract's formation, duty of disclosure (고지의무), and breach consequences as automatic, answering 'the insurer may cancel and pay nothing' for any non-disclosure, without distinguishing intentional/gross negligence (Art. 651: cancellation plus no payment for the loss occurring before cancellation) from ordinary negligence (cancellation but pro-rata payment for the loss).
The disclosure rules in Commercial Code Arts. 651–655 have graded consequences, and candidates collapse them into one outcome. They also ignore the insurer's right to cancel within one month of knowing the breach, and the rule that the duty does not extend to matters the insurer knew or should have known or that were solicited by the insurer's own questions.
What to do instead
Memorize a three-row table for disclosure breach: intentional or gross negligence → cancel + no payment for pre-cancellation loss; ordinary negligence → cancel + pro-rata payment for the pre-cancellation loss; no breach → full cover. Add the one-month cancellation window and the causation requirement (the non-disclosed fact must have influenced the loss). Apply the table to two hypotheticals with different mental states.
The candidate answers ethics and legal-regulation questions with general statements ('the adjuster must be fair and objective') instead of citing the specific statutory duty - the prohibition on unregistered loss adjusting, the duty to explain policy terms, the ban on obtaining undue benefit, and conflict-of-interest rules - and cannot identify the correct sanction.
Ethics is treated as a soft topic to be answered with platitudes, and the statutory basis (Insurance Business Act provisions on loss adjusters, the loss adjuster registration and supervision rules) is memorized as names without content. Candidates also confuse the adjuster's role as an independent professional with the role of an agent of the insurer.
What to do instead
For each ethics scenario, name the concrete rule and the consequence: unregistered adjusting → criminal penalty and business suspension; conflict of interest → must decline the assignment; improper benefit → disciplinary measure and registration revocation. Write the adjuster's statutory duties as a numbered list and attach one realistic scenario to each so the rule is recalled with its application.
The candidate presents a final claim figure without documenting the calculation trail - no statement of the loss date and place, no basis for depreciation rates, no source for replacement cost, and no reconciliation of the sum insured, limit, and deductible - so partial credit is lost even where the final number happens to be right.
Exam answers are graded on the adjustment process, and candidates under time pressure jump to the number. Real loss adjustment practice requires a reasoned report (손해사정서) that a court or the insured could audit, and markers reward the visible chain of reasoning. Candidates also skip the check that the payout cannot exceed the sum insured or the actual loss.
What to do instead
Adopt a fixed report skeleton and practise it until it is automatic: facts (date, place, peril) → coverage analysis (peril, exclusion, basis) → valuation (replacement cost, depreciation, actual loss) → limit and proportional calculation → deductible → salvage/subrogation → final payout with a sanity check against sum insured and actual loss. Write the skeleton headings even when the calculation is short.