LA Claims Adjuster cheat sheet

Indemnity principle: the insured is restored to approximately the pre-loss financial position and never profits from a loss; this principle drives ACV, salvage, and subrogation rules.

Insurable interest timing: for property insurance the interest must exist at the time of loss; for life insurance it must exist at policy inception.

Utmost good faith (uberrimae fidei): a material misrepresentation, concealment, or breach of warranty in the application can support rescission or denial.

Law of large numbers: as the number of similar, independent exposure units grows, actual losses converge on expected losses, making rates more reliable.

Adverse selection: higher-risk applicants disproportionately seek or retain coverage; underwriting, exclusions, and rating classes are the controls.

Subrogation: after paying a loss the insurer acquires the insured's right of recovery against the responsible third party, preventing double recovery.

Contract of adhesion: the insurer drafts the policy and the insured accepts or rejects it, so ambiguities are construed against the insurer (contra proferentem).

Aleatory contract: the values exchanged are unequal and contingent on an uncertain event, so a small premium may purchase a large conditional benefit.

Reinsurance: a cession of risk between insurers that affects the ceding insurer's capacity and solvency, not the original insured's rights under the policy.

Standard claim sequence: acknowledge and verify coverage, investigate (statements, photographs, cause and origin), document damages, evaluate, negotiate, settle with a release, then pursue subrogation.

Burden of proof: the insured must establish that a covered loss occurred; once that is shown, the insurer bears the burden of proving that an exclusion applies.

Actual cash value = replacement cost minus depreciation; under replacement cost coverage, recoverable depreciation is typically withheld until repairs or replacement are completed.

Settlement authority: an adjuster may not exceed assigned authority; amounts above the limit must be referred to a supervisor or committee and documented in the file.

A reservation of rights letter preserves coverage defenses while the investigation continues and must identify the specific policy provisions at issue.

Every contact, statement, payment, and decision belongs in the claim file with date and time; the file is discoverable in bad faith litigation.

Salvage and subrogation recoveries reduce net loss cost; subrogation can be defeated if the insured has released the tortfeasor or waived the insurer's rights.

Common fraud indicators include a loss soon after inception or a coverage increase, a prior claims history, altered or missing documents, and refusal to provide records.

Deductibles are applied per occurrence before payment, and the adjuster must confirm which deductible (flat dollar or percentage hurricane) governs the cause of loss.

A policy has five structural parts: declarations, insuring agreement, conditions, exclusions, and definitions; definitions control how every other part is read.

HO-3 structure: the dwelling and other structures are covered on an open-peril basis while personal property is covered for named perils only.

Replacement cost settlement on a dwelling usually requires the limit carried to equal at least 80% of the full replacement cost of the structure.

Coinsurance formula: (limit carried / limit required) x loss = recovery, from which the deductible is then subtracted.

Anti-concurrent causation lead-in language excludes a loss whenever an excluded cause contributes to it, regardless of the sequence in which the causes acted.

Duties after loss commonly include prompt notice, protecting property from further damage, cooperating, submitting an inventory, filing a proof of loss, and submitting to examination under oath.

Appraisal resolves disputes about the amount of loss only; it cannot decide whether coverage exists or interpret policy language.

An occurrence is typically defined as an accident, including continuous or repeated exposure to substantially the same general harmful conditions.

Hurricane or named-storm deductibles are expressed as a percentage of the Coverage A limit and apply only when the storm meets the policy's naming definition.

La. R.S. 22:1892: a first-party claim must be paid within 30 days after receipt of satisfactory written proof of loss; arbitrary or capricious failure adds a 50% penalty on the amount due plus reasonable attorney fees.

La. R.S. 22:1892(A)(1) requires insurers to initiate loss adjustment of a property damage claim, or a claim for reasonable medical expenses, within 14 days after notification of loss by the claimant.

La. R.S. 22:1893 governs third-party claims: payment is due within 60 days after satisfactory proof of loss, and arbitrary failure adds a 25% penalty (minimum $1,000) plus attorney fees.

Direct action statute (La. R.S. 22:1269): an injured party may sue the liability insurer directly without first obtaining a judgment against the insured, subject to policy limits and defenses.

Uninsured/underinsured motorist coverage must equal the liability limits unless the named insured rejects UM or selects lower limits in writing on the form prescribed by the commissioner (La. R.S. 22:1295).

Louisiana is a pure comparative fault state under La. C.C. art. 2323: the claimant's recovery is reduced by his percentage of fault, and no percentage bars recovery.

No Pay, No Play (La. R.S. 32:866) bars an uninsured driver from recovering the first $15,000 of bodily injury damages and the first $25,000 of property damage.

Minimum auto liability limits in Louisiana are $15,000 per person and $30,000 per accident for bodily injury plus $25,000 for property damage.

The Louisiana Insurance Guaranty Association (La. R.S. 22:2051 et seq.) pays covered claims of insolvent property and casualty insurers and is funded by assessments on member insurers.