MT Public Adjuster flashcards

32 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 such that the insured suffers economic loss if it is damaged. For property coverage it must exist at the time of loss, not merely at policy inception.

Principle of Indemnity

Restoring the insured to approximately the same financial position held before the loss, without profit. Betterment and depreciation adjustments enforce this principle in property settlements.

Contra Proferentem

Rule that ambiguous language in an insurer-drafted policy is interpreted against the drafter and in favor of coverage for the insured. Courts apply it only after finding genuine ambiguity.

Utmost Good Faith

Mutual duty requiring full and honest disclosure between insured and insurer. Material misrepresentation on an application can allow the insurer to rescind or deny coverage.

Subrogation

The insurer's right, after paying a loss, to pursue the responsible third party in the insured's name. The insured must not impair that right by releasing the tortfeasor.

Montana Unfair Claim Practices

Statutory prohibitions on misrepresenting policy provisions, failing to acknowledge communications, and delaying or denying claims without reasonable basis. Violations can trigger regulatory action and bad-faith exposure.

Cancellation Notice Requirement

Montana generally requires advance written notice of cancellation, with longer periods for nonpayment and shorter periods for certain other reasons. The notice must state the effective date and reason.

Modified Comparative Negligence

Montana rule barring recovery when the claimant's negligence is 50 percent or more, and reducing recovery proportionally when it is less. Relevant to third-party claims underlying subrogation.

Actual Cash Value

Replacement cost minus depreciation, reflecting the pre-loss value of the damaged property. Some policies instead define ACV as fair market value, so the policy wording controls.

Replacement Cost

Cost to repair or replace damaged property with new materials of like kind and quality, without deduction for depreciation, subject to policy limits and settlement conditions.

Coinsurance Clause

Commercial property provision requiring the insured to carry a minimum percentage of value. Recovery equals insurance carried divided by insurance required, times the loss.

HO-3 Policy Form

Homeowners form covering the dwelling and other structures on an open-peril basis and personal property on a named-peril basis. The most common form for owner-occupied homes.

Business Income Coverage

Pays lost net income plus continuing normal operating expenses during the period of restoration after a covered loss, typically after a 72-hour waiting period.

Claims-Made Policy

Liability policy responding to claims first made during the policy period, subject to a retroactive date. Differs from occurrence policies, which respond to injury or damage dates.

CGL Coverage A

Commercial general liability coverage paying sums the insured is legally obligated to pay as damages because of bodily injury or property damage caused by an occurrence.

Duties After Loss

Policy conditions the insured must satisfy, including prompt notice, protection of property from further damage, proof of loss, cooperation, and examination under oath when requested.

Percentage Deductible

Deductible stated as a percentage of a coverage limit, commonly the dwelling limit for wind or hail. It is calculated on the limit, not on the amount of the loss.

Claim Lifecycle

Sequence from loss report through assignment, inspection, documentation, coverage analysis, reserving, negotiation, settlement, payment, and file closure. Each stage should be documented.

Loss Reserve

An estimate of the ultimate cost of a claim, including indemnity and expense. Adjusters revise reserves as facts develop, and adequacy is reviewed at diary intervals.

Proof of Loss

A sworn statement of the amount claimed, submitted on the insurer's form within the policy deadline. Failure to submit can bar the claim absent waiver or estoppel.

Efficient Proximate Cause

Doctrine holding that when covered and excluded perils combine, coverage follows the peril that set the chain of events in motion. Anti-concurrent causation language may override it.

Recoverable Depreciation

The withheld portion of replacement cost held back until the insured completes repairs or replacement and submits invoices. Nonrecoverable depreciation is permanently deducted.

Salvage

Remaining property value after a loss. Salvage proceeds offset the insurer's payment, and the insurer may take title to damaged property under policy salvage provisions.

Examination Under Oath

A recorded, sworn questioning of the insured during claim investigation, authorized by policy conditions. Refusal to submit can bar recovery when the request is reasonable and material.

Diary System

Scheduling tool that prompts follow-up on open claims at set intervals. It supports timely contact, reserve review, and compliance with prompt-handling requirements.

Public Adjuster License

Montana credential required to represent an insured for compensation in negotiating or settling a first-party claim. Unlicensed adjusting activity is prohibited.

Written Adjuster Contract

Required agreement between public adjuster and insured stating services and compensation. It must disclose the fee and give the insured a statutory right to rescind.

Right of Rescission

The insured's statutory right to cancel a public adjuster contract within a short period after signing, commonly three business days, without penalty or fee.

Fiduciary Duty

The adjuster's obligation to act in the insured's interest and hold claim funds in trust. Funds received for the insured must be accounted for and disbursed promptly.

Conflict of Interest

A situation where the adjuster's personal or financial interest could bias claim handling, such as ownership in a repair firm. It must be disclosed and avoided.

Continuing Education

Ongoing coursework required to renew a Montana adjuster license. Licensees must also report address changes and may not transact business while suspended or expired.

Solicitation Restrictions

Limits on public adjusters approaching claimants, especially during declared disasters or emergencies. Prohibited conduct includes deceptive or high-pressure solicitation tactics.