MS Claims Adjuster flashcards

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

Indemnity principle

The insured should be restored to roughly the pre-loss financial position, no better and no worse. It is the foundation of property claim valuation and explains why depreciation is applied under actual cash value.

Actual cash value

Replacement cost minus depreciation. It reflects the value of the damaged property at the time of loss and is the default valuation method unless the policy provides replacement cost coverage.

Replacement cost

The cost to repair or replace damaged property with new material of like kind and quality, without deducting depreciation. It usually requires the insured to actually repair or replace within a stated period.

Insurable interest

A financial stake in the property such that the insured suffers a loss if it is damaged. Required at the time of loss for property insurance and at inception for life insurance.

Utmost good faith

The mutual duty of honesty and full disclosure between insurer and insured. Material misrepresentation on an application can give the insurer grounds to rescind the policy.

Coinsurance clause

A provision requiring the insured to carry coverage equal to a stated percentage of property value. Underinsurance reduces the claim payment proportionally to the shortfall.

Subrogation

The insurer's right to step into the insured's shoes and recover paid claim amounts from the at-fault third party. Recovery is limited to the amount the insurer actually paid.

Proximate cause

The dominant, efficient cause that sets the loss in motion without which the loss would not have occurred. Adjusters use it to determine whether a covered peril triggered the damage.

Policy aggregate limit

The maximum total the insurer will pay for all covered losses during the policy period. It caps cumulative payments even when individual occurrences remain within per-occurrence limits.

Deductible

The amount of each covered loss the insured must bear before the insurer pays. It is subtracted from the covered loss and can be stated as a flat amount or percentage.

Coverage A dwelling

The policy section covering the insured residence structure itself. Its limit is usually the basis for other limits, such as Coverage C personal property expressed as a percentage.

Coverage C personal property

Covers household contents and personal belongings, typically at a limit set as a percentage of the dwelling limit. Special sublimits apply to categories such as jewelry, cash, and silverware.

Named peril policy

A policy that covers only the perils specifically listed, such as fire, windstorm, hail, and theft. Damage from an unlisted cause is not covered.

Open peril policy

A policy covering all risks of direct physical loss except those expressly excluded. The burden shifts to the insurer to show an exclusion applies.

Flood exclusion

Standard property policies exclude flood and surface water damage. Separate flood coverage, often through the National Flood Insurance Program, is needed to insure that peril.

Proof of loss

A formal sworn statement detailing the amount and cause of damages, submitted by the insured. Failure to file within the required period can bar the claim.

Appraisal provision

A contractual remedy for disputes over the amount of loss. Each party selects an appraiser, and the appraisers may choose an umpire to resolve differences.

Ordinance or law exclusion

Excludes the extra cost of rebuilding to current building codes after a loss. Coverage can be added by endorsement because code upgrades often exceed the stated limit.

Salvage value

The residual worth of damaged property that can be sold or reused. It is deducted from the loss payment when the insurer takes the damaged property.

Duty to defend

The insurer's obligation to provide legal defense for the insured against covered claims. It is broader than the duty to indemnify and applies when any allegation is potentially covered.

Duty to indemnify

The insurer's obligation to pay judgments or settlements on behalf of the insured for covered losses, up to policy limits. It arises only when liability is established.

Negligence elements

Duty owed, breach of that duty, proximate cause, and damages. All four must be shown for a claimant to recover in a liability claim.

Pure comparative fault

A rule reducing a claimant's recovery by their own percentage of fault without barring recovery. Mississippi follows pure comparative fault, so a claimant over 50% at fault may still recover a reduced amount.

Medical payments coverage

Pays reasonable medical expenses for injured occupants regardless of fault, up to a stated limit. It is a no-fault coverage separate from liability coverage.

Uninsured motorist coverage

Applies when the at-fault driver has no liability insurance or insufficient limits. It fills the gap between the at-fault driver's coverage and the insured's damages.

Split liability limits

Limits stated as per person and per occurrence amounts, such as 25/50. The per-person cap applies to each injured claimant, and the per-occurrence cap applies to the whole accident.

Claim reserve

An estimate of the amount ultimately payable on a claim, set aside by the insurer. It is not a payment and is adjusted as investigation develops.

Adjuster license requirement

Mississippi requires a license from the Commissioner of Insurance before a person investigates or settles claims for another party for compensation.

Catastrophe adjuster license

A temporary license issued for a declared emergency or catastrophe event. It expires on the date set in the Commissioner's order rather than on a standard renewal cycle.

Continuing education requirement

Licensed adjusters must complete a set number of credit hours per license term, including ethics hours. Failure to complete them blocks license renewal.

Unfair claim settlement practices

Prohibited conduct including misrepresenting policy provisions, failing to investigate promptly, and refusing to pay without a reasonable basis. These violations can lead to fines and license action.

Mississippi Department of Insurance

The state agency led by the Commissioner of Insurance that licenses adjusters and insurers, examines records, and enforces the insurance code through penalties and license actions.