ME Public Adjuster key terms

The replacement cost of damaged property minus depreciation, or the fair market value at the time of loss, depending on the method the policy specifies. It is the usual valuation basis for personal lines dwelling and contents coverage.

The amount needed to repair or replace damaged property with new materials of like kind and quality, without any deduction for age or wear. Policies usually cap it at a stated percentage of the dwelling limit.

The reduction in a property's value caused by age, use, wear and tear, or obsolescence. Adjusters subtract it from replacement cost to calculate actual cash value settlements.

The policy clause that states how a covered loss will be valued and paid, including whether replacement cost or actual cash value applies and what conditions the insured must meet before full payment.

A property provision requiring the insured to carry coverage equal to a stated percentage of the property's value. If the limit falls short, the insurer pays only a proportional share of the loss.

The relationship between the amount of insurance carried and the actual value of the insured property. Carrying too little can trigger penalties under coinsurance or reduce recovery under valued policies.

The amount of a covered loss the insured must absorb before the insurer pays anything. It may be a flat dollar figure or a percentage of the dwelling limit, and it applies separately to each loss.

A specific cause of loss, such as fire, windstorm, hail, or theft. Policies are written either to cover named perils only or to cover all risks except those expressly excluded.

A policy that covers only the causes of loss listed in the contract. The insured bears the burden of showing that the damage resulted from one of those listed perils.

A policy covering all direct physical loss except losses the contract specifically excludes. Also called all-risk, it shifts to the insurer the burden of proving an exclusion applies.

A policy provision that removes specified losses, property, or circumstances from coverage. Common examples include earth movement, flood, intentional acts, and ordinary wear and tear.

A situation where a covered peril and an excluded peril combine to produce a single loss, such as wind-driven rain entering through storm damage. Courts differ on how to apportion such losses.

A doctrine holding that when several causes contribute to a loss, coverage is determined by the dominant, initiating cause. If that cause is covered, the entire loss may be payable.

A financial stake in the property such that the person benefits from its continued existence and suffers loss if it is damaged. It must exist at the time of loss for a claim to be payable.

The core principle that insurance restores the insured to approximately the same financial position held before the loss, not better. It prevents profit from insurance and underpins actual cash value settlements.

The mutual duty of insurer and insured to deal honestly and disclose material facts. Breach by the insured, such as misrepresentation on an application or claim, can void coverage.

A false statement of fact that would have influenced an insurer's decision to issue a policy or its terms. It can support rescission of the policy or denial of a claim.

The intentional withholding of a fact material to the risk or the claim. Unlike a false statement, concealment involves silence where disclosure was required.

The insurer's right, after paying a claim, to stand in the insured's shoes and pursue the responsible third party for reimbursement. It supports the indemnity principle and controls the insured's recovery.

Property remaining after a loss that still has value, such as damaged building materials or merchandise. The insurer may take it, sell it, or deduct its value from the claim payment.

The statistical principle that as the number of similar exposure units increases, actual losses approach the expected losses predicted by the insurer. It allows insurers to set stable rates.

Combining many similar, independent exposures so that the premiums of the many fund the losses of the few. It is the fundamental mechanism that makes insurance economically feasible.

The consideration the insured pays in exchange for the insurer's promise to indemnify covered losses. It reflects expected losses, expenses, and the insurer's profit and contingency margin.

The insurer's obligation to provide a legal defense for claims potentially within coverage, even if the suit is groundless or the ultimate amount exceeds the policy limit. It is broader than the duty to pay.

Coverage that pays sums the insured becomes legally obligated to pay to a third party for bodily injury or property damage, plus defense costs. It does not pay the insured's own property damage.

Failure to exercise the degree of care a reasonable person would use under similar circumstances. It is the usual basis of legal liability claims that liability insurance is designed to cover.

An accident, including continuous or repeated exposure to substantially the same harmful conditions, that results in injury or damage. The term determines which policy year responds to a loss.

A liability policy responding to claims first made against the insured during the policy period, regardless of when the act occurred. It typically requires a retroactive date and may offer extended reporting.

Coverage that reimburses reasonable increases in living costs, such as temporary housing and meals, while the insured home is uninhabitable due to a covered loss. It is usually subject to a time or dollar limit.

The homeowners coverage that pays additional living expenses or fair rental value when a covered loss makes the residence premises unfit to live in. It is distinct from direct damage to the dwelling.

A sworn statement the insured submits, usually within a policy-specified period after the insurer's request, detailing the amount, date, and circumstances of the claimed loss. It is a condition precedent to payment.

Policy provisions that set out obligations of both parties, such as prompt notice, proof of loss, and cooperation. Failure to satisfy a condition can bar or reduce recovery.

The insured's post-loss obligations, including giving prompt notice, protecting property from further damage, cooperating with investigation, and submitting records. Breach can prejudice the claim.

The insured's obligation to notify the insurer of a loss without unreasonable delay. Late notice may defeat coverage where the insurer is prejudiced in investigating or defending the claim.

A policy dispute-resolution process for disagreements about the amount of loss, not coverage. Each side selects a competent appraiser, and an umpire resolves differences if the appraisers cannot agree.

A dispute-resolution method in which a neutral third party hears evidence and issues a binding decision. Unlike appraisal, it may address coverage disputes if the policy or statute provides for it.

The insurer's performance of its promise to pay a covered claim after the insured satisfies policy conditions. Payment may be reduced by deductibles, depreciation, salvage, or policy limits.

The obligation to prove a fact by the required standard. In property claims, the insured usually must show a covered loss occurred, while the insurer must prove an exclusion applies.

A person who, for compensation, acts on behalf of an insured to negotiate or settle a first-party property claim. The role is distinct from a company adjuster, who represents the insurer.

The written agreement between a public adjuster and an insured setting out services, fees, term, and cancellation rights. Maine law prescribes required content, disclosure, and rescission provisions for these contracts.

The fee a public adjuster charges for services, commonly a percentage of the settled claim. Maine limits what may be charged and requires the fee to be stated clearly in the written contract.

The insured's statutory right to cancel a public adjuster contract within a specified period after signing, without penalty. The adjuster must disclose this right in the contract.

The legal obligation to act in the insured's best interest, avoid self-dealing, and handle claim funds honestly. A public adjuster owes this duty to the client rather than to the insurer.

A situation where a public adjuster's personal or financial interest could improperly influence the representation of a client. Undisclosed conflicts can violate licensing and ethics rules.

Prohibited conduct such as misrepresenting policy provisions, failing to investigate promptly, or offering unreasonably low settlements. Maine insurance law defines and penalizes these acts.

Deceptive or anti-competitive business conduct in insurance, including misrepresentation and illegal rebating. Maine regulates these practices and authorizes penalties and cease-and-desist orders.

The requirement that persons selling, soliciting, or negotiating insurance hold a license from the state. Public adjusters are separately licensed and must meet education and examination requirements.

Ongoing coursework licensees must complete to maintain an active license. Maine sets credit-hour requirements and subject-area rules for adjusters and other licensees.

A regulatory review of an insurer's or adjuster's business practices, including claims handling, sales, and recordkeeping. Findings can lead to fines, corrective orders, or license action.

The statutory and regulatory requirements governing how claims must be acknowledged, investigated, and resolved, including timeframes for communication and payment. They apply to insurers and their adjusters.

Intentional deception for financial gain, such as inflating a claim, staging a loss, or concealing material facts. Insurance fraud is a crime and also grounds for denying coverage and license discipline.

A temporary written or oral agreement providing immediate coverage until the policy is issued. It is subject to the terms of the eventual policy and can be important when a loss occurs early.

A written amendment that changes the terms of an existing policy, such as adding coverage, increasing limits, or adding an insured. Endorsements prevail over conflicting original policy language.

A document evidencing that insurance is in force, commonly used to show a lender or business partner that coverage exists. It does not itself grant coverage or amend the policy.

A provision giving a lender rights in the policy, including notice of cancellation and payment of loss up to its interest. It protects the lender's collateral when the property is damaged.