MI Claims Adjuster cheat sheet

Insurable interest requires a pecuniary relationship with the subject matter at the time of loss; without it, the contract is void.

Indemnity restores the insured to pre-loss financial position; valued policies and replacement cost coverage are exceptions that may exceed indemnity.

Utmost good faith imposes disclosure duties on both parties; material misrepresentation by the insured permits rescission.

Proximate cause is the dominant, efficient cause of loss; remote causes do not trigger coverage when excluded.

Actual cash value = replacement cost minus depreciation (or market value where that is more accurate).

Coinsurance formula for property: (limit carried / limit required) x loss = recovery, subject to the policy limit.

Subrogation transfers the insured's recovery rights against a negligent third party to the insurer after payment.

Four elements of a valid contract: offer and acceptance, consideration, legal purpose, competent parties.

Risk retention, transfer, avoidance, and reduction are the four standard risk management techniques.

McCarran-Ferguson Act leaves insurance regulation to the states; federal antitrust law applies only where states do not regulate.

A person who transacts insurance without a license commits an unauthorized practice; penalties include fines and denial of compensation.

Appointment authorizes a licensee to act as agent for a specific insurer; termination of appointment must be reported.

Continuing education requirements are set by the state; failure to complete them blocks license renewal.

Fiduciary duty means premium funds held for an insurer must be kept in a segregated account and remitted per contract terms.

Unfair claim settlement practices include misrepresenting policy provisions, unreasonable delay, and failing to investigate promptly.

A producer must report address changes, name changes, and administrative actions against the license within state-specified timeframes.

Twisting is misrepresentation that induces a policyholder to lapse one policy and buy another; churning is replacement by the same insurer.

Named-peril coverage pays only for perils listed in the policy; open-peril (special) coverage pays for all risks except those excluded.

Coverage A is the dwelling; Coverage B is other structures; Coverage C is personal property; Coverage D is loss of use.

Replacement cost pays to repair or replace with new property of like kind and quality, subject to policy limit and any cap.

Functional replacement cost substitutes modern materials or methods that restore equivalent function rather than identical construction.

The 80% coinsurance clause requires insurance to at least 80% of replacement cost to avoid a penalty on partial losses.

Debris removal, preservation of property, and fire department service charges are typical additional coverages with separate limits.

A deductible applies per occurrence; percentage deductibles (e.g., 2% of Coverage A) are common for wind or hurricane perils.

Ordinance or law coverage pays for code-required upgrades; it is excluded unless added by endorsement.

Vacancy and unoccupancy conditions reduce or eliminate coverage after a stated number of days.

General liability Coverage A covers bodily injury and property damage; Coverage B covers personal and advertising injury.

Occurrence policies cover injury or damage during the policy period; claims-made policies respond to claims reported during the policy period.

The CGL aggregate limit is the most payable in a policy period; the per-occurrence limit caps any single loss.

Premises and operations, products and completed operations, and independent contractors are distinct exposure categories.

Comparative negligence reduces recovery in proportion to the claimant's fault; contributory negligence bars recovery in strict jurisdictions.

Employers liability coverage responds to employee injury claims outside the workers compensation exclusive remedy.

A certificate of insurance evidences coverage but does not amend, extend, or create coverage under the policy.

Additional insured endorsements extend coverage to another party, often limited to liability arising from the named insured's work.

The claim file must document investigation, coverage analysis, damage evaluation, and payment decision with supporting evidence.

Reservation of rights letters preserve the insurer's coverage defenses while investigation continues; they do not deny coverage.

Prompt contact and acknowledgment of the claim is required; unreasonable delay can constitute an unfair claim practice.

Statements should be taken with consent, recorded only where lawful, and preserved in the claim file.

Damage valuation methods include replacement cost, actual cash value, agreed value, and repair estimates from qualified contractors.

Salvage and subrogation recoveries offset the insurer's net loss and must be tracked in the file.

A proof of loss is a sworn statement from the insured detailing the loss; the insurer may require it under the policy.

Bad faith exposure arises when the insurer denies without reasonable basis or fails to settle within policy limits.

Claim payment must account for deductibles, policy limits, and any applicable coinsurance penalty.

Personal auto Coverage A is liability; B is medical payments; C is uninsured/underinsured motorist; D is physical damage.

Collision covers impact with another object; other than collision (comprehensive) covers theft, fire, and weather.

Split limits state per-person and per-accident liability maximums; a combined single limit caps all damages in one number.

No-fault (PIP) systems pay medical and lost wages regardless of fault, with tort thresholds limiting lawsuits.

UM/UIM coverage responds when an at-fault driver has no insurance or insufficient limits.

A named driver exclusion removes coverage when the excluded person operates the vehicle.

Business use, delivery, and rideshare may be excluded under a personal auto policy and require endorsement or commercial coverage.

Diminished value claims seek the difference between pre-loss and post-repair market value after a covered collision.

HO-3 is open-peril on the dwelling and named-peril on personal property; HO-5 is open-peril on both.

HO-4 covers tenants' personal property and liability; HO-6 covers condominium unit owner improvements and contents.

HO-8 modifies coverage for older homes using functional replacement cost and limited perils.

Section II covers personal liability and medical payments to others, separate from Section I property limits.

Loss of use pays additional living expenses for the shortest time needed to repair or relocate, up to the stated limit.

Special limits cap categories such as cash, jewelry, silverware, and business property; scheduled endorsements raise limits.

Theft off premises, water backup, and service line damage require endorsements or separate coverage.

Mortgagee clause requires the lender be named on the policy and paid on a covered loss to its interest.

Replacement cost on the dwelling does not automatically extend to personal property; contents may be ACV unless endorsed.

The commercial package policy combines property and general liability coverages under one policy with shared limits.

Building and personal property coverage form designates covered causes of loss as basic, broad, or special.

Business income coverage pays lost net income plus continuing expenses during the period of restoration.

Extra expense coverage pays costs to continue operations; it can be written with or without business income.

Equipment breakdown, flood, and earthquake are typically excluded and require separate policies or endorsements.

The businessowners policy (BOP) packages property and liability for small businesses with eligibility based on size and class.

Commercial general liability uses occurrence triggers and defense costs either inside or outside the limits.

A protective safeguard condition requires maintenance of specified protections such as sprinklers for coverage to apply.

Spoilage, crime, and inland marine coverages address exposures not handled by the standard property form.