MA Public Adjuster flashcards

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

Indemnity principle

Property insurance restores the insured to the same financial position as before the loss, not better; valued policies and replacement cost coverage are exceptions.

Insurable interest

A financial stake in the property that would be harmed by its loss; required at the time of loss for property coverage.

Actual cash value

Replacement cost minus depreciation; Massachusetts does not mandate one formula, so the policy definition controls the calculation.

Replacement cost coverage

Pays to repair or replace damaged property with new materials of like kind and quality, usually conditioned on actual repair or replacement and capped by the policy limit.

Coinsurance clause

Requires the insured to carry a minimum percentage of value; a lower limit reduces the claim payment by the ratio of limit carried to limit required.

Deductible

The amount the insured bears before the insurer pays; applies per occurrence unless the policy provides otherwise, and may be a percentage of the dwelling limit.

Uninsured motorist coverage

Massachusetts requires insurers to offer at least $250,000 per person of uninsured/underinsured motorist coverage on private passenger auto policies unless the insured rejects it in writing.

Public adjuster license

Massachusetts requires a Division of Insurance license under M.G.L. c. 175, § 172 before soliciting, negotiating, or effecting a claim adjustment for compensation.

Public adjuster fee cap

Massachusetts caps public adjuster compensation at 10% of the amount recovered on claims arising from a declared disaster or emergency.

Written representation contract

A public adjuster contract must be in writing, signed by the insured, and disclose the fee or commission before the adjuster represents the insured.

Dual representation prohibition

A public adjuster may not represent both the insured and the insurer on the same claim, nor act as a contractor on a loss being adjusted.

211 CMR 120.00

Massachusetts unfair claims settlement practices regulation requiring prompt investigation, fair offers, and written explanations for denials.

M.G.L. c. 93A

Massachusetts consumer protection statute providing multiple damages and attorney's fees for unfair or deceptive acts in trade or commerce, including claims handling.

Solicitation restrictions

Massachusetts restricts public adjuster solicitation at a loss scene and before the insured has had a reasonable opportunity to consult with the insurer.

First notice of loss

The initial report recording date, time, cause, and reporter; the adjuster should advise the insured to mitigate further damage and preserve the scene.

Cause of loss

The peril that produced the damage; the adjuster must confirm it is covered and not excluded, including analysis of concurrent causation.

Water loss origin

Sudden accidental discharge is typically covered; long-term seepage and repeated leakage are commonly excluded, so the source must be traced.

Proof of loss

A sworn statement of the amount claimed, supported by inventories, receipts, and estimates, usually due within 60 days of the insurer's request.

Pre-existing damage

Damage present before the loss; compare listing photos, prior inspections, and maintenance logs to separate it from new damage.

Cause and origin report

A technical report identifying where and how a fire or loss began, used to confirm coverage and support subrogation against responsible parties.

Salvage and subrogation

Salvage is recoverable property value after a loss; subrogation is the insurer's right to recover from a third party responsible for the loss.

Line-item estimating

Building a repair estimate from quantities multiplied by unit prices, plus overhead and profit, using standardized price lists by ZIP code.

Depreciation formula

Depreciation equals replacement cost multiplied by the ratio of age to expected useful life; recoverable depreciation is released when repair or replacement is documented.

Overhead and profit

General contractor markups typically added to a loss estimate when three or more trades are involved or the loss is complex.

Matching requirement

Massachusetts practice often requires matching undamaged materials where a reasonable match is unavailable, but the policy language controls the outcome.

Business interruption valuation

Lost net income plus continuing expenses measured over the period of restoration, subject to the policy's waiting period and limit.

Appraisal clause

If the insurer and insured disagree on the amount of loss, either may demand appraisal; each selects a competent appraiser and the two choose an umpire.

Claim documentation package

Contract, proof of loss, photographs, estimates, receipts, inventory, and correspondence, each dated and tied to a specific line item.

Fiduciary duty

A public adjuster owes loyalty to the insured, must avoid conflicts of interest, and may not accept compensation from contractors or vendors on the same claim.

Prohibited adjuster conduct

Misrepresenting coverage, altering documents, charging undisclosed fees, and concealing errors are licensing violations and may violate M.G.L. c. 93A.

Claim diary

A written record of all contacts, offers, and payments; the insured should receive copies of all documents submitted to the insurer.

Represented insured

An insured represented by counsel; a public adjuster may not negotiate with that insured without counsel's consent.