LA Claims Adjuster flashcards

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

Insurable interest

A financial stake in property or a life such that the insured suffers economic loss if the loss occurs. In property insurance it must exist at the time of loss; in life insurance at inception.

Principle of indemnity

The insured is restored to approximately the pre-loss financial condition and never better off. It limits recovery to the value of the actual loss and underlies ACV, salvage, and subrogation.

Contract of adhesion

A policy drafted entirely by the insurer and merely accepted or rejected by the insured. Because the insured has no bargaining power, ambiguities are construed against the insurer.

Subrogation

The insurer's right, after paying a loss, to stand in the insured's shoes and pursue the responsible third party. It prevents double recovery and helps hold down premium levels.

Adverse selection

The tendency of persons with the greatest loss exposure to buy or retain insurance. Underwriting standards, exclusions, and rating classifications are used to control this tendency.

Utmost good faith

A duty on both parties to deal honestly and disclose material facts. A material misrepresentation or concealment in the application may allow the insurer to rescind the policy.

Reinsurance

An arrangement in which one insurer assumes part of another insurer's risk. It affects the ceding insurer's capacity and solvency, not the original insured's rights under the policy.

Aleatory contract

A contract in which the values exchanged are unequal and depend on an uncertain event. A small premium may purchase a very large, conditional benefit.

Proof of loss

A formal, usually sworn statement by the insured detailing the date, cause, and amount of the loss. It starts contractual and statutory payment clocks, including Louisiana's 30-day rule.

Reservation of rights

A written notice that the insurer will continue to investigate or defend while preserving its right to deny coverage. It must identify the specific policy provisions in question.

Examination under oath

A contractual condition permitting the insurer to question the insured under oath about the loss. An unjustified refusal to submit can bar recovery under the policy.

Salvage

Damaged property the insurer acquires after paying a total or partial loss. Selling the salvage offsets the gross loss and the proceeds belong to the insurer.

Notice of loss

The insured's prompt report of a claim to the insurer or its agent. Late notice is judged by the prejudice it causes, and payment deadlines run from notification and proof of loss.

Public adjuster

A licensed representative retained by the policyholder, usually paid a percentage of the recovery, who prepares and negotiates the claim. The public adjuster represents the insured, not the insurer.

Cause and origin

The investigation establishing how and where a loss began, such as fire scene examination or engineering reports. It determines whether a covered peril or an exclusion caused the damage.

Betterment

Improvement of damaged property beyond its pre-loss condition during repair. Insurers generally do not pay for it, because indemnity restores but does not upgrade the property.

Coinsurance clause

A property condition requiring insurance of at least a stated percentage of value. Recovery equals (limit carried divided by limit required) times the loss, then minus the deductible.

Replacement cost coverage

Settlement at the cost to repair or replace with like kind and quality, without deducting depreciation. Recoverable depreciation is usually paid only after repairs are actually completed.

Anti-concurrent causation clause

Policy wording that excludes a loss whenever an excluded cause contributes to it, even if a covered cause also contributes. It defeats arguments that a covered peril was the efficient cause.

Deductible

The amount the insured absorbs before the insurer pays. It generally applies per occurrence, and hurricane deductibles are calculated as a percentage of the dwelling limit.

Occurrence

The trigger for most liability coverage, typically defined as an accident, including continuous or repeated exposure to substantially the same general harmful conditions.

Insuring agreement

The policy section containing the insurer's core promise to pay on behalf of or to the insured, and identifying which perils or exposures are covered.

Pair and set clause

A provision limiting recovery when one item of a pair or set is lost or damaged, allowing the insurer to repair or replace the item or pay the difference in value.

Appraisal provision

A property policy condition in which each side selects a competent appraiser and the appraisers choose an umpire. It resolves the amount of loss, not coverage questions.

Direct action statute

La. R.S. 22:1269 allows an injured person to sue a liability insurer directly, without first obtaining judgment against the insured, with policy limits and defenses still applying.

UM/UIM coverage

Louisiana requires uninsured/underinsured motorist coverage at liability limits unless the named insured rejects it or selects lower limits in writing on the commissioner's form.

Pure comparative fault

Louisiana's La. C.C. art. 2323 reduces a claimant's recovery by his own percentage of fault but never bars recovery, even when his fault exceeds the defendant's.

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 from an at-fault driver.

Louisiana Insurance Guaranty Association

A statutory entity that pays covered claims of insolvent property and casualty insurers, funded by assessments on member insurers. It does not duplicate coverage available from another source.

Minimum auto liability limits

Louisiana requires $15,000 per person and $30,000 per accident for bodily injury, plus $25,000 for property damage, to satisfy financial responsibility requirements.

La. R.S. 22:1892

The first-party bad faith statute: pay within 30 days of satisfactory written proof of loss or face a 50% penalty on the amount due plus reasonable attorney fees.

La. R.S. 22:1893

The third-party claims statute: pay within 60 days of satisfactory proof of loss; arbitrary or capricious failure adds a 25% penalty, minimum $1,000, plus attorney fees.