MN Claims Adjuster flashcards

33 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 person insured such that a loss would cause actual economic harm. In property insurance it must exist at the time of loss; its absence voids coverage.

Indemnity Principle

The principle that insurance restores the insured to approximately the pre-loss financial position, no better and no worse, subject to policy limits, deductibles, and valuation method.

Contra Proferentem

The rule that ambiguous policy language is construed against the insurer that drafted the contract, since insurance is a contract of adhesion. Exclusions are read narrowly and coverage grants broadly.

Proximate Cause

The dominant, efficient cause of a loss, not necessarily the last event in the chain. It determines whether a loss falls within a covered peril under the policy.

Subrogation

The insurer's right, after paying a claim, to step into the insured's shoes and recover from the third party responsible for the loss. It prevents double recovery and shifts loss to the responsible party.

Coinsurance Formula

Recovery equals (amount carried divided by required amount) times the loss, capped at the policy limit. Required amount is the coinsurance percentage multiplied by the property's value at the time of loss.

Replacement Cost vs ACV

Replacement cost pays to repair or replace with new materials of like kind and quality without depreciation. Actual cash value subtracts depreciation; Minnesota uses the broad evidence rule for ACV.

Appraisal Condition

A policy condition for resolving disputes over the amount of loss, not coverage. Each party selects a competent appraiser, and an umpire resolves differences between them.

Mortgagee Clause

A provision giving the lender rights to loss payment to the extent of its interest, plus notice of cancellation or nonrenewal. The insured's acts do not always defeat the mortgagee's rights.

Proof of Loss

The insured's sworn statement of the amount claimed, supporting the claim. Failure to submit it within the policy period can bar the claim absent a reasonable excuse.

Reservation of Rights

A written notice preserving the insurer's right to deny coverage later while the investigation continues. It does not waive coverage or create coverage where none exists.

Broad Evidence Rule

Minnesota's approach to actual cash value, considering replacement cost, depreciation, age, condition, and market value. Adjusters should document the valuation methodology used in each claim.

Minnesota Liability Minimums

Minnesota requires minimum auto liability limits of $30,000 per person and $60,000 per accident for bodily injury, plus $10,000 for property damage.

Minnesota No-Fault PIP

Minnesota requires $40,000 minimum personal injury protection per person: $20,000 for medical and rehabilitation and $20,000 for income loss and loss of services, paid regardless of fault.

No-Fault Tort Threshold

In Minnesota, a tort claim for non-economic damages requires meeting a medical expense threshold of $4,000 or showing permanent injury, disability, or fracture.

Uninsured Motorist Coverage

Coverage for injury caused by a driver with no insurance or a hit-and-run driver. Minnesota requires it to be offered at liability limits unless the insured waives it in writing.

Underinsured Motorist Coverage

Coverage that responds when the at-fault driver's liability limits are insufficient to pay the insured's damages. It applies after the at-fault policy is exhausted.

HO-3 Coverage Structure

Open-peril coverage on the dwelling and other structures, named-peril coverage on personal property. Coverage A dwelling, B other structures, C contents, D loss of use, E liability, F medical payments.

Loss of Use Coverage

Pays additional living expenses above normal living costs and fair rental value for rented portions, limited by the Coverage D limit and a reasonable time to repair or replace.

Ordinance or Law Coverage

Pays increased costs to comply with building codes after a covered loss, such as demolition and reconstruction to current code. It is typically limited and can be increased by endorsement.

Special Form Causes of Loss

The commercial property causes-of-loss form that covers risks of direct physical loss unless specifically excluded, shifting the burden to the insurer to prove an exclusion applies.

Business Income Coverage

Pays lost net income plus continuing normal operating expenses during the period of restoration after a covered loss. Extra expense covers costs to avoid or minimize shutdown.

Period of Restoration

Begins at the time of loss and ends when the property should be repaired with reasonable speed or when business resumes at a new permanent location.

CGL Coverage Triggers

Coverage A covers bodily injury and property damage; Coverage B covers personal and advertising injury; Coverage C is medical payments, paid without regard to liability.

Claims-Made vs Occurrence

Occurrence policies respond to injury or damage during the policy period. Claims-made policies respond to claims reported during the policy period or an extended reporting period.

Additional Insured Status

Status narrower than named insured, usually limited to liability arising out of the named insured's operations or premises. It is granted by endorsement, not automatically.

Workers Compensation Exclusive Remedy

Minnesota workers' compensation is no-fault and pays medical, wage-loss, rehabilitation, and death benefits. In exchange, the employee generally cannot sue the employer in tort.

Temporary Total Disability

Minnesota wage-loss benefit generally paying 66 2/3% of the average weekly wage, subject to statutory maximum and minimum, while the employee is unable to work.

Unfair Claims Practices

Minnesota rules prohibiting misrepresenting policy provisions, failing to investigate promptly, and refusing to pay without a reasonable basis. Denials must cite specific policy language.

Adjuster Conflict of Interest

An adjuster must disclose any financial interest in the outcome and must not accept gifts or compensation that could influence claim decisions.

Prior Approval State

Minnesota requires most property and casualty policy forms and rates to be filed with and approved by the Department of Commerce before use.

Minnesota Cancellation Notice

Cancellation for nonpayment of premium requires at least 10 days' written notice; cancellation for other reasons generally requires at least 30 days' notice.

Minnesota Adjuster Licensing

Adjusters must be licensed by the Minnesota Department of Commerce unless a specific exemption applies, such as salaried staff adjusters of an authorized insurer or emergency catastrophe permits.