MD Public 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 the property or life insured, such that the insured benefits from its preservation or suffers loss from its destruction; required at the time of loss for property claims.

Principle of indemnity

A property recovery may not exceed the insured's actual financial loss, which is why actual cash value, policy limits, and deductibles constrain payment even when the loss is a total loss.

Subrogation

The insurer's right, after paying a loss, to step into the insured's legal position and pursue the responsible third party; the insured must not impair that right.

Combined ratio

Loss ratio plus expense ratio. A combined ratio above 100 percent means the insurer paid out more in losses and expenses than it collected in premiums for that period.

Moral hazard versus morale hazard

Moral hazard is a dishonest exposure such as intentional loss or overinsurance; morale hazard is carelessness about loss because insurance exists; physical hazard is a condition of the property itself.

HO-3 special form

The most common homeowners form: open-peril coverage on the dwelling and other structures, named-peril coverage on personal property, plus personal liability and medical payments to others.

Coverage B other structures

Protects structures on the residence premises not attached to the dwelling, such as fences, detached garages, and sheds; the limit is commonly 10 percent of the Coverage A amount.

Replacement cost versus actual cash value

Replacement cost is the cost to repair or replace with like kind and quality today; actual cash value is replacement cost minus depreciation, and replacement cost payment usually requires repair or replacement.

Coinsurance penalty formula

Recovery equals the limit carried divided by the limit required, multiplied by the loss, capped at the policy limit. The required limit equals the coinsurance percentage times replacement cost.

Flood exclusion

Homeowners and commercial property forms exclude flood and surface water, so flood coverage must come from a separate NFIP policy or a private flood policy written for that exposure.

Appraisal provision

A policy condition allowing each party to select a competent appraiser to resolve a dispute over the amount of loss; it does not decide whether the policy covers the loss.

Claims-made policy trigger

Coverage responds to claims first made during the policy period, subject to a retroactive date; an extended reporting endorsement can extend the window for reporting after the policy expires.

Certificate of insurance

Evidence of coverage issued to a third party; it summarizes limits and additional insured status but does not amend, extend, or alter the terms of the underlying policy.

Maryland minimum auto liability

Thirty thousand dollars per person and sixty thousand dollars per accident for bodily injury, plus fifteen thousand dollars for property damage; uninsured motorist coverage must equal those liability limits.

Contributory negligence in Maryland

Maryland applies pure contributory negligence: if the claimant's own negligence contributed in any degree to the injury, the claim is barred entirely, unlike comparative negligence states.

Workers compensation exclusive remedy

Statutory benefits are the employee's sole remedy against the employer for a work-related injury, so a tort suit is barred, though the employee may still sue a negligent third party.

Proof of loss

A sworn statement of the amount and cause of loss, submitted within the period the policy requires, usually sixty days after the insurer's written request for the document.

Examination under oath

A policy condition permitting the insurer to question the insured under oath about the loss, which the insured must attend and answer truthfully to satisfy post-loss duties.

Depreciation in contents valuation

The loss in value from age, wear, and obsolescence; straight-line depreciation divides replacement cost by expected useful life and multiplies by the number of years used.

Business income period of restoration

The reasonable time needed to repair or replace damaged property with due diligence, sometimes including a stated extension for continuing expenses after the property is restored.

Burden of proof in a claim

The insured must prove that a loss occurred, that a covered peril caused it, and the amount of damage; the insurer must prove that a specific exclusion applies.

Red flags of claim fraud

Pre-existing damage, inflated or unsupported inventories, altered receipts, loss shortly after policy inception, multiple policies, and refusal to provide records or submit to examination under oath.

Maryland Insurance Administration

The state agency headed by the Insurance Commissioner that licenses insurers, producers, and public adjusters, reviews rates and forms, and investigates consumer complaints against licensees.

45-day cancellation notice

Maryland generally requires 45 days' written notice of cancellation or nonrenewal, and 10 days' notice when the cancellation is for nonpayment of premium, with the reason stated.

Maryland Joint Insurance Association

Maryland's FAIR plan, which offers basic property coverage to owners who cannot obtain insurance in the voluntary market, subject to plan limits and eligibility rules.

Maryland statute of limitations contract

Maryland generally requires a civil action on a contract, including an insurance policy, to be filed within three years under Courts and Judicial Proceedings § 5-101.

Insurance Article § 27-1001

Maryland's administrative good-faith complaint process for first-party claims; the Commissioner investigates and may order remedies, and Maryland recognizes no common-law bad faith tort.

Public adjuster representation

A public adjuster is licensed to represent the insured in first-party property or casualty claims for compensation; the adjuster never represents the insurer on the same claim.

Public adjuster written contract

Must be signed by the insured before services begin and must state the fee or percentage, the services provided, and the insured's right to rescind the agreement.

Fiduciary duty of public adjuster

Settlement funds received on the insured's behalf must be accounted for promptly and held in trust; commingling those funds with the adjuster's own money is prohibited.

Prohibited public adjuster conduct

Soliciting at the scene of a loss, advancing money to the insured, acquiring an interest in salvage, misrepresenting coverage, and using a title implying insurer or state affiliation.

Public adjuster as appraiser

A public adjuster may not act as an appraiser or umpire on a loss the adjuster handled, because the advocate and neutral roles create an impermissible conflict of interest.