NC Claims Adjuster cheat sheet

Principle of indemnity restores the insured to the pre-loss financial position and does not permit profit from a loss.

Insurable interest must exist at the time of loss for property insurance and at policy inception for life insurance.

Utmost good faith imposes a duty on both parties to disclose material facts and avoid concealment or misrepresentation.

A contract of adhesion is drafted by the insurer; ambiguous policy language is generally construed against the drafter.

Subrogation transfers the insured's right to recover from a liable third party to the insurer after the insurer pays the loss.

Actual cash value equals replacement cost minus depreciation; replacement cost value pays replacement without depreciation.

Coinsurance recovery formula: (insurance carried / insurance required) x loss, subject to the deductible.

Proximate cause is the dominant, uninterrupted cause connecting a covered peril to a loss.

Risk transfer and pooling spread the losses of the few among premiums paid by many insureds.

The North Carolina Department of Insurance, headed by the Commissioner of Insurance, regulates insurers, producers, and adjusters.

North Carolina requires an adjuster license before a person investigates or settles claims for an insurer, subject to statutory exemptions.

Adjuster licensees must meet continuing education and renewal requirements established by the North Carolina Department of Insurance.

The North Carolina Unfair Trade Practices Act and unfair claim settlement practices rules apply to insurance claim handling.

The Commissioner may examine records, investigate complaints, issue orders, suspend or revoke licenses, and impose penalties.

Licensees must report required changes such as address changes, criminal convictions, and administrative actions within prescribed timeframes.

A public adjuster represents the insured for compensation; a company or staff adjuster represents the insurer.

An adjuster license is not transferable and limits the licensee to activities authorized under that license.

Unlicensed adjusting can result in cease-and-desist orders and civil or administrative penalties.

HO-3 insures the dwelling on an open-peril basis and personal property on a named-peril basis.

HO-5 insures both the dwelling and personal property on an open-peril basis, subject to exclusions and conditions.

A homeowners deductible generally applies per occurrence, and a separate wind or hail deductible may apply.

North Carolina minimum auto liability limits are $30,000 per person, $60,000 per accident for bodily injury, and $25,000 for property damage.

Collision coverage pays for damage to the insured vehicle from collision with an object or upset, subject to the deductible.

Comprehensive coverage pays for vehicle damage from causes other than collision, such as theft, fire, hail, flood, or vandalism.

An occurrence liability policy responds to bodily injury or property damage that occurs during the policy period.

A claims-made liability policy responds when a claim is first made during the policy period, subject to any retroactive date.

Business income coverage replaces lost net income and continuing operating expenses during the restoration period.

Claim files document acknowledgment, contacts, investigation steps, and the basis for payment or denial.

A reservation of rights letter preserves the insurer's coverage defenses without denying coverage.

A proof of loss is a sworn statement supporting the claim, and the policy may require it before payment.

Unfair claim practice includes refusing to pay a claim without a reasonable investigation.

Unfair claim practice includes failing to affirm or deny coverage within a reasonable time after complete proof of loss.

Settlement amount is limited to covered damages supported by policy terms and documented evidence.

Releasing a liable third party before subrogation is preserved can impair the insurer's recovery right.

Claimant personal, health, and financial information is confidential and used for legitimate claim handling.