Property and Casualty Adjusting Topics
What this domain tests
Coverage analysis, investigation, valuation, liability, and recovery. Expect first-party property (HO forms, commercial property, ACV/RCV, deductible, coinsurance) and third-party liability (CGL, auto, duty to defend, comparative fault).
Core rules
- First-party property: establish insurable interest, cause of loss, and policy limit. Pay ACV initially where RCV is optional; recoverable depreciation is released after repair or replacement within the policy period. Apply the deductible once per occurrence unless the policy says otherwise.
- Liability: the duty to defend is broader than the duty to indemnify. Send a reservation of rights when coverage is uncertain; do not assume defense without notifying the insured of the conflict.
- Montana comparative negligence: MCA 27-1-702 reduces a claimant's recovery by the claimant's percentage of fault; if the claimant's fault is greater than the defendants' combined fault, recovery is barred.
- Subrogation: preserve evidence, identify the tortfeasor and insurance, and send notice promptly. Salvage: document and dispose only after payment and with authority.
Worked example
An HO-3 dwelling claim: replacement cost is $30,000; ACV is $22,000; deductible is $1,000. The adjuster pays $21,000 ($22,000 ACV minus $1,000) and holds $8,000 recoverable depreciation. After the insured completes repairs and submits invoices, the adjuster releases the $8,000, subject to the policy limit. If the insured instead sells the damaged home without repairing, the depreciation is not owed.
Traps
- Paying RCV up front without a repair-or-replacement condition.
- Applying a deductible per item rather than per occurrence.
- Denying a claim before checking the duty to defend.
- Ignoring Montana's comparative-fault bar in liability evaluations.
- Missing subrogation deadlines while the file is closed.