KY Claims Adjuster cheat sheet

Insurance transfers a fortuitous risk of loss from the insured to the insurer in exchange for a premium; insurable interest must exist at policy inception for property coverage and at the time of loss for life coverage.

The indemnity principle restores the insured to the pre-loss financial position, not a better position; actual cash value equals replacement cost minus depreciation.

A policy contains declarations, an insuring agreement, conditions, exclusions, and definitions; endorsements amend the policy and control over conflicting form language.

Utmost good faith imposes duties on both parties; a material misrepresentation, concealment, or breach of warranty can void coverage, while representations are not warranties unless the policy makes them so.

A deductible is subtracted from a covered loss per occurrence; coinsurance is a property limit requirement and is not a deductible.

Proximate cause analysis asks whether an unbroken chain of events began with a covered peril; a covered peril that sets an excluded peril in motion can bring the loss within coverage.

Subrogation transfers the insured's recovery rights against a third party to the insurer after payment; the insured must not impair those rights.

Common valuation methods include actual cash value, replacement cost, agreed value, and functional replacement cost.

The HO-3 insures the dwelling and other structures on an open-peril basis and personal property on a named-peril basis; the HO-5 uses open perils for both.

Dwelling policies DP-1, DP-2, and DP-3 provide named-peril, broad named-peril, and open-peril dwelling coverage respectively, and do not include liability coverage.

Replacement cost coverage pays new-for-old only if the insured repairs or replaces the damaged property and carries an adequate limit; otherwise the loss is settled at actual cash value.

The coinsurance formula is (insurance carried divided by insurance required) multiplied by the loss, not exceeding the policy limit; insurance required equals the coinsurance percentage times replacement cost.

Standard water exclusions include flood, surface water, waves, and water below ground; sewer backup coverage requires an endorsement.

Ordinance or law, earth movement, mold, and neglect are commonly excluded or sublimited in property policies.

Business income coverage pays lost net income and continuing normal operating expenses; extra expense coverage pays costs incurred to resume operations.

A mortgage or loss-payable clause protects the lender's interest and allows the lender to receive loss payments up to its interest.

Appraisal resolves valuation disputes, while a proof of loss is a sworn statement of the amount and cause of loss.

Commercial general liability Coverage A pays bodily injury and property damage; Coverage B pays personal and advertising injury; Coverage C pays medical payments.

An occurrence policy responds to injury or damage that occurs during the policy period regardless of when the claim is reported; a claims-made policy responds to the claim date and may have a retroactive date.

CGL trigger theories include exposure, manifestation, injury-in-fact, and continuous trigger.

A personal auto policy includes liability, medical payments or PIP, uninsured and underinsured motorist, collision, and comprehensive coverages.

Kentucky minimum auto liability limits are 25/50/25 with $10,000 PIP; uninsured and underinsured motorist coverage must be offered.

Workers compensation provides medical and indemnity benefits and generally gives the employer an exclusive remedy against employee claims.

Professional liability, errors and omissions, and cyber liability are commonly written on a claims-made basis; additional insured status requires an endorsement rather than a certificate.

Kentucky follows pure comparative negligence, so a claimant's recovery is reduced by the claimant's percentage of fault and is not barred unless the claimant is 100 percent at fault.

The Kentucky Department of Insurance regulates insurers, agents, and adjusters, and the Commissioner of Insurance enforces the Kentucky insurance code.

A Kentucky adjuster license is required to investigate or settle claims for compensation in the state; attorneys and certain other persons are exempt.

License categories include staff adjuster, independent adjuster, and public adjuster; a public adjuster represents the insured rather than the insurer.

Adjuster licenses renew biennially; Kentucky requires 24 continuing education hours every two years, including 3 hours of ethics.

The Kentucky Unfair Claims Settlement Practices Act, KRS 304.12-230, lists unfair claim practices and supports regulatory penalties and bad-faith claims.

Emergency or temporary adjuster licenses may be issued for declared catastrophes and carry limited scope and duration.

Public adjuster contracts must be written and disclose compensation; an adjuster cannot commingle client funds with personal or business funds.

Adjusters must report administrative actions and criminal convictions as required, and licenses are subject to suspension or revocation.

Kentucky pure comparative negligence and bad-faith law affect claim evaluation and settlement exposure.

First notice of loss captures date and time, policy number, insured, loss location, cause, injuries, witnesses, and police or fire report information.

Coverage analysis checks policy period, insured status, covered location, peril, exclusions, limits, deductible, and endorsements.

Investigation may include recorded statements, scene inspection, photographs, diagrams, estimates, medical records, and subrogation evidence.

A reservation of rights letter preserves coverage defenses while investigation continues; a nonwaiver agreement is signed by the insured.

A proof of loss is a sworn statement of loss amount and cause; policy conditions set the deadline and required content.

Claim file documentation includes the contact log, diary, investigation notes, coverage analysis, payments, and denial rationale.

Fraud indicators include prior claims, inconsistent statements, inflated estimates, arson evidence, and missing records; suspected fraud is referred to special investigation units.

Total loss valuation for a vehicle uses market value or actual cash value plus applicable taxes and fees, less deductible and salvage value.

Kentucky pure comparative negligence and lien resolution affect casualty claim evaluation and payment.

The Kentucky UCSPA requires prompt acknowledgment, reasonable investigation, and affirmation or denial within a reasonable time after proof of loss.

Unfair practices include misrepresenting policy terms, refusing to pay without reasonable investigation, and failing to provide a reasonable explanation for denial.

Kentucky first-party bad faith requires an insurer obligation to pay, a breach, causation, and damages; UCSPA violations can be evidence of bad faith.

Negotiation uses authority limits, a documented settlement range, bracketing, and written rationale; authority must not be exceeded without approval.

A settlement release should identify the parties, claim, amount, and scope; minors and liens require special handling.

Undisputed amounts must be paid promptly; delaying payment or making low offers can violate the UCSPA and create bad-faith exposure.

A policy-limits demand or time-limit demand creates excess exposure if the insurer unreasonably fails to respond promptly and document its position.

Medicare, Medicaid, ERISA, and workers compensation liens must be identified and resolved before final settlement distribution.

Settlement documentation includes the release, payment ledger, closing letter, and file notes.