ME Public Adjuster flashcards

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

Indemnity principle

Insurance restores the insured to the same financial position held before the loss, without profit. This principle underlies actual cash value and replacement cost valuations and limits recovery to the insurable interest.

Insurable interest

A legal or financial stake in the property such that loss would cause financial harm. In property insurance, it must exist at the time of loss for the claim to be enforceable.

Utmost good faith

A heightened duty on both insurer and insured to disclose all material facts. Concealment, misrepresentation, or fraud by either party can void the policy or excuse performance.

Contract of adhesion

A policy drafted by the insurer and offered on a take-it-or-leave-it basis. Ambiguities are interpreted against the drafter (contra proferentem) in favor of the insured.

Subrogation

The insurer's right, after paying a covered loss, to step into the insured's shoes and pursue recovery from the negligent third party responsible for the loss.

Coinsurance clause

A property policy provision requiring the insured to carry a limit at least equal to a stated percentage of value. If underinsured, recovery is reduced by the ratio of carried limit to required limit.

Proximate cause

The initiating, uninterrupted event that sets the chain of events in motion and produces the loss. Coverage depends on whether the proximate cause is a covered peril.

Maine Bureau of Insurance

The state agency that licenses and regulates insurance producers, adjusters, and insurers in Maine. It enforces the Insurance Code, including public adjuster licensing and claim practice rules.

Public adjuster license

A Maine license issued under 24-A M.R.S. Chapter 16 authorizing a person to represent insureds in first-party property claims for compensation. Requires exam, fee, and bond or E&O coverage.

Public adjuster contract

A written agreement signed by the insured that states services, compensation method, fee cap, and cancellation rights. Required before a public adjuster may represent an insured in Maine.

Fee cap

The statutory maximum a public adjuster may charge, generally 10% of the claim proceeds in Maine, with a higher cap permitted during a declared disaster as set by rule.

Right to cancel

The insured may rescind a public adjuster contract within three business days after signing by written notice, without penalty or fee. The contract must disclose this right.

Unfair claims practices

Acts prohibited by Maine's Unfair Claims Settlement Practices Act, including unreasonable delay, failure to investigate, low offers without basis, and failure to explain claim denials.

License renewal

Maine public adjuster licenses renew every two years. Renewal requires continuing education, including ethics hours, and payment of the renewal fee to the Bureau of Insurance.

HO-3 policy

A homeowners form providing open-peril coverage on the dwelling and named-peril coverage on personal property. It is the most common homeowner policy form used in Maine.

Replacement cost

The cost to repair or replace damaged property with new materials of like kind and quality, without deduction for depreciation. Usually subject to policy limits and a replacement-cost endorsement.

Actual cash value

Replacement cost minus depreciation. It reflects the pre-loss value of the damaged property and is the default valuation method in many property policies.

Deductible

The amount the insured must bear before the insurer pays. Applied per occurrence; some policies use percentage deductibles for wind or hurricane losses based on the dwelling limit.

Business income coverage

Pays the insured's net income loss plus continuing normal expenses during the period of restoration after a covered property loss, subject to a waiting period and limit.

Flood exclusion

Standard property policies exclude flood and surface water. Coverage must be purchased separately through the NFIP or a private flood insurer.

Ordinance or law exclusion

Excludes the extra cost to rebuild to current building codes. Coverage can be added by endorsement, which is important for older Maine properties.

First notice of loss

The initial report of a claim to the insurer. The adjuster records date, time, cause, location, and contacts, then acknowledges promptly per state claim practice rules.

Proof of loss

A sworn statement from the insured detailing the amount claimed and supporting facts. Policies set a deadline, often 60 days after the insurer's request.

Reservation of rights

A written notice that the insurer is investigating or defending a claim without waiving its right to deny coverage later. It protects the insurer while coverage questions remain open.

Non-waiver agreement

A signed agreement between insurer and insured allowing the insurer to continue investigating without waiving coverage defenses. It must be signed by the insured.

Salvage

Damaged property that retains value after a loss. The insurer may take salvage or sell it, and the insured may retain salvage with the insurer's consent and a reduced payment.

Claim file documentation

A dated record of every contact, decision, and payment in the claim. The file is discoverable evidence and supports the insurer's good-faith handling of the claim.

Fiduciary duty

A public adjuster must act solely in the insured's interest, avoid conflicts, and account for all funds received. The duty runs to the insured, not the insurer.

Duty to account

A public adjuster must maintain records of all funds received on behalf of the insured and provide a full accounting upon request or at the close of the claim.

Conflict of interest

A public adjuster may not represent both insured and insurer on the same claim, nor have a financial interest in repair contractors without written disclosure and consent.

Confidentiality

A public adjuster must protect the insured's personal and financial information obtained during representation and use it only for the claim.

Contract disclosure

The public adjuster must give the insured a copy of the signed contract and all required notices. The contract must state services, fee, and cancellation rights.