Claims Handling and Adjustment Practices
Claims Handling and Adjustment Practices tests the claim lifecycle: notice, acknowledgment, investigation, documentation, valuation, payment, and denial. The exam expects a public adjuster to know how a claim is built and how to avoid both factual gaps and procedural missteps.
Claim lifecycle
- Promptly acknowledge the loss, confirm the policy and date of loss, and identify all potentially covered items.
- Investigate before evaluating: inspect the risk, photograph damage, obtain estimates, preserve evidence, and interview witnesses. Separate covered damage from pre-existing or excluded conditions.
- Document the scope of loss, quantities, pricing, depreciation, and salvage. The proof-of-loss form is a formal statement of the claim, not a substitute for investigation.
- Determine coverage, apply the deductible and limits, and calculate ACV or RCV under the policy. Explain any holdback of recoverable depreciation.
- Communicate the payment or denial in writing and cite the policy provisions relied on. A reservation-of-rights letter preserves the insurer's coverage defenses while investigation continues.
Worked example
A kitchen fire causes $40,000 in covered damage. The adjuster inspects, photographs the origin area, obtains two repair estimates, and confirms the policy is RCV with a $2,000 deductible. The insurer pays $30,000 initially, representing ACV after $12,000 depreciation and the deductible. After repairs are completed and invoiced, the insured claims the $10,000 recoverable depreciation. The adjuster verifies completion and pays the holdback less any remaining deductible.
Traps
Do not settle before coverage is determined. Do not ignore additional living expenses, debris removal, or ordinance-or-law sublimits. Do not treat a low estimate as the full scope. Do not miss deadlines for acknowledgment, investigation, or written denial; Maine's unfair claims practices rules make unreasonable delay a compliance issue.