MS Public Adjuster flashcards

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

Public adjuster definition

A licensed person who, for compensation, represents the insured in negotiating a first-party property or casualty claim against the insurer, rather than representing the insurer.

Company adjuster

An employee of an insurer who investigates and settles claims on the insurer's behalf, with authority limited by the insurer's guidelines and delegated settlement authority.

Independent adjuster

A contractor retained by an insurer to handle claims, often during catastrophes; the independent adjuster owes duties to the insurer, not to the insured.

License renewal requirement

Public adjuster licenses renew on a biennial cycle and require completion of continuing education, including ethics hours, plus payment of the renewal fee before expiration.

Solicitation restriction

Statutes limit a public adjuster's ability to solicit business at the scene of a loss or during a declared emergency, and impose cooling-off periods after a loss.

Adjuster contract disclosure

The written contract must state the compensation percentage, describe services, disclose the insured's right to rescind within a set period, and be signed by the insured.

Indemnity principle

Insurance restores the insured to the pre-loss financial position without profit; policy limits, deductibles, and valuation methods define how that restoration is measured.

Insurable interest

A financial stake in the property such that loss causes the insured economic harm; it must exist at the time of loss for property claims to be payable.

Declarations page

The policy section listing the named insured, policy period, covered locations, limits, deductibles, and applicable forms, which controls the scope of coverage.

Coinsurance formula

Recovery equals (insurance carried divided by insurance required) times the loss, then capped by the policy limit and reduced by the deductible.

Actual cash value

Replacement cost of damaged property minus depreciation for age and condition; it is the default valuation in many property forms unless replacement cost is endorsed.

Subrogation right

After paying a claim, the insurer may pursue the responsible third party; the insured must cooperate and must not impair that right through release or settlement.

Duties after loss

Policy conditions requiring prompt notice, protection of property from further damage, proof of loss, cooperation, and submission to examination under oath when requested.

HO-3 coverage structure

The homeowners HO-3 form insures the dwelling and other structures on an open-peril basis while personal property is covered for named perils only.

Flood exclusion

Standard property policies exclude flood and surface water; coverage requires a separate flood policy or specific endorsement, and the exclusion is interpreted by its defined terms.

Ordinance or law exclusion

Excludes the added cost of rebuilding to current building codes unless endorsed; many policies include limited coverage for undamaged portions of the structure.

Proof of loss

A sworn statement from the insured detailing the amount claimed, the date and cause of loss, and supporting documentation, required within the policy's stated period.

Replacement cost coverage

Pays the cost to repair or replace with new materials of like kind and quality without depreciation, typically after the property is actually repaired or replaced.

Additional living expense

Pays the increase in living costs necessary to maintain the insured's normal standard of living while the dwelling is uninhabitable due to a covered loss.

Business income coverage

Covers lost net income plus continuing normal operating expenses during the period of restoration after a covered loss, subject to the stated limit.

Mortgagee clause

Gives the lender the right to receive loss payments and prior notice of cancellation, and protects the lender's interest even if the insured's acts impair coverage.

Occurrence vs claims-made

Occurrence policies cover injury or damage that happens during the policy period; claims-made policies cover claims first made and reported during the period, subject to a retroactive date.

Negligence elements

A liability claim requires a duty owed, breach of that duty, proximate cause linking the breach to harm, and actual damages; each element must be proven.

Comparative negligence

A rule reducing the claimant's recovery in proportion to the claimant's own fault; some jurisdictions bar recovery entirely above a specified fault percentage.

CGL limits structure

General liability limits include each-occurrence, general aggregate, products-completed operations aggregate, and personal and advertising injury limits, each applying separately.

Additional insured endorsement

Extends liability coverage to another party, such as a landlord or general contractor, usually limited to liability arising out of the named insured's operations or premises.

Medical payments coverage

Pays reasonable medical expenses for injured persons regardless of fault, up to a per-person limit, without requiring a determination of legal liability.

Workers compensation benefits

Statutory no-fault benefits including medical care, wage replacement, and death benefits for work-related injury; the exclusive remedy rule generally bars employee tort claims.

Unfair settlement practice

Misrepresenting policy provisions, failing to investigate promptly, or offering substantially less than the amount owed without a reasonable basis constitutes a prohibited claims practice.

Reservation of rights

A written notice preserving the insurer's right to deny coverage later while the investigation continues; it identifies the specific coverage issues under review.

Claim file documentation

Contemporaneous records of contacts, inspections, estimates, coverage analysis, and payments that demonstrate a reasonable and timely investigation of the claim.

Conflict of interest

A situation where the adjuster's personal or financial interest could bias claim handling, such as contractor referral fees or dual representation, which must be disclosed and avoided.