NC Public Adjuster cheat sheet

NCGS Chapter 58, Article 33 governs insurance adjusters; public adjusters are licensed under §58-33-10 et seq. and must be appointed by the Commissioner of Insurance.

A public adjuster license requires a written exam, a surety bond of at least $20,000, and a $50,000 errors and omissions policy, per 11 NCAC 09 .0601.

Public adjuster contracts must be in writing, contain a right to rescind within 3 business days, and disclose the fee as a percentage of the claim payment; fees are capped at 10% for claims arising from a declared disaster.

License renewal is annual by June 30; continuing education requires 24 hours every 2 years, including 3 hours of ethics, per 11 NCAC 09 .0701.

Adjusters must report administrative actions or criminal convictions to the NC Department of Insurance within 30 days under 11 NCAC 09 .0504.

Unfair claim settlement practices are defined in NCGS §58-63-15(11); violations include misrepresenting policy provisions, failing to acknowledge claims promptly, and offering substantially less than the amount ultimately recovered.

The Commissioner may fine, suspend, or revoke a license for fraudulent or dishonest practices under NCGS §58-33-55; penalties can reach $5,000 per violation.

Adjusters must maintain claim records for at least 3 years after the claim is closed, per 11 NCAC 09 .0502.

Indemnity principle: insurance restores the insured to the pre-loss financial position, no better and no worse; actual cash value (ACV) = replacement cost minus depreciation.

Insurable interest must exist at the time of loss for property insurance and at inception for life insurance; without it, the contract is void.

Utmost good faith requires both parties to disclose material facts; concealment or misrepresentation can void the policy.

Aleatory contract: performance depends on an uncertain event; unequal exchange of premiums for potential benefits.

Contract of adhesion: the insurer drafts the policy, so ambiguities are construed against the insurer (contra proferentem).

Principle of proximate cause: the efficient and dominant cause of loss determines coverage when multiple perils combine.

Subrogation allows the insurer, after paying a loss, to pursue the third party responsible; the insured must not impair this right.

Coinsurance formula for property: (insurance carried ÷ insurance required) × loss = claim payment, subject to deductible.

Property policies cover direct physical damage to covered property; perils are either named (specified) or open (all risk).

Liability policies pay sums the insured is legally obligated to pay because of bodily injury or property damage to others, plus defense costs.

Occurrence policy: coverage triggered by injury or damage during the policy period, regardless of when claim is made; claims-made policy: triggered when claim is reported.

Deductibles apply per occurrence; franchise deductibles require the insured to pay the full amount until the franchise threshold is reached.

Replacement cost (RC) pays to repair or replace with new property of like kind and quality, without depreciation, up to policy limits.

Actual cash value (ACV) = replacement cost − depreciation; depreciation may be physical, functional, or economic.

Other insurance clauses: pro rata (proportional), excess (secondary), and primary/non-contributory; NC uses pro rata for concurrent property policies unless stated otherwise.

Duties after loss typically include prompt notice, proof of loss, protection of property, and cooperation with the investigation.

HO-3 (special form) covers the dwelling and other structures on an open-peril basis and personal property on a named-peril basis; HO-5 covers both on open peril.

Coverage A (Dwelling), B (Other Structures), C (Personal Property), D (Loss of Use), E (Personal Liability), F (Medical Payments to Others).

Standard HO-3 limits: Coverage C = 50% of A; Coverage D = 30% of A; Coverage E = $100,000 minimum; Coverage F = $1,000 per person.

Dwelling policy (DP-1, DP-2, DP-3) is for non-owner-occupied residences; DP-1 is named peril, DP-2 broad named peril, DP-3 open peril on dwelling.

Special limits under HO-3: $200 for money, $1,500 for securities, $1,500 for jewelry theft, $2,500 for firearms theft, $1,500 for silverware theft.

Loss of use pays additional living expenses (ALE) for the shortest time to repair or relocate, plus fair rental value if rented.

Replacement cost coverage on dwelling requires at least 80% of full replacement cost at time of loss; otherwise loss settlement is ACV or a reduced amount.

Exclusions common to HO policies: earth movement, water damage (flood), neglect, intentional loss, ordinance or law (limited), and nuclear hazard.

Commercial property policy (CPP) covers buildings, business personal property, and personal property of others; causes of loss forms: basic, broad, special.

Business income coverage pays lost net income plus continuing expenses during restoration period, including extended period of indemnity.

Equipment breakdown coverage (boiler and machinery) covers loss from accidental breakdown of covered equipment, including business income and spoilage.

Builder's risk covers property under construction, including materials and supplies, until completed and accepted.

Inland marine covers property in transit, mobile property, and property of others; common forms include motor truck cargo, bailee, and fine arts.

Difference in conditions (DIC) fills gaps in standard property coverage, often including flood and earthquake.

Blanket insurance applies a single limit across multiple locations or items; specific insurance applies a separate limit to each.

Commercial property coinsurance: if insurance carried is less than the coinsurance percentage × value, the claim is reduced proportionally.

NC minimum auto liability limits: $30,000 bodily injury per person, $60,000 per accident, $25,000 property damage (30/60/25).

Personal auto policy (PAP) parts: A Liability, B Medical Payments, C Uninsured/Underinsured Motorist, D Damage to Your Auto, E Duties After an Accident.

NC requires uninsured motorist coverage at the same limits as liability; it can be rejected in writing.

Collision covers damage to the insured auto from collision or upset; other than collision (comprehensive) covers theft, fire, hail, flood, and vandalism.

CGL occurrence form: Coverage A Bodily Injury and Property Damage; Coverage B Personal and Advertising Injury; Coverage C Medical Payments.

CGL limits: general aggregate, products-completed operations aggregate, personal and advertising injury limit, each occurrence limit, damage to premises rented limit.

Additional insured endorsements extend liability coverage to landlords, lessors, or others as required by contract.

Professional liability (errors and omissions) covers negligent acts, errors, or omissions in rendering professional services; different from CGL.

Acknowledge claim within 10 business days of receipt; provide a written response to any inquiry within 10 business days, per NCGS §58-63-15(11).

Conduct a prompt, thorough investigation; do not require a proof of loss until after the investigation is complete.

Proof of loss: sworn statement from insured detailing the loss; must be furnished within 60 days after insurer's request unless extended in writing.

Payment of undisputed claim is due within 30 days after receipt of proof of loss, per NCGS §58-44-15.

Investigation includes scene inspection, photographs, witness statements, police/fire reports, and review of financial records for business income claims.

Reservation of rights letter informs the insured that coverage is uncertain while investigation continues; does not deny coverage.

Subrogation potential must be evaluated early; preserve evidence and identify third parties.

Claim file documentation must include all communications, estimates, photos, and rationale for payment or denial.

Public adjuster contract must be in writing, signed by the insured, and include a statement of the adjuster's fee, which cannot exceed 10% of the claim payment.

Insured has the right to rescind the contract within 3 business days after signing by written notice to the public adjuster.

Public adjuster may not advance funds to the insured, except for emergency repairs, and may not accept compensation from both insured and insurer.

Solicitation is prohibited between 6 p.m. and 8 a.m. and during a state of emergency declared by the Governor, per 11 NCAC 09 .0602.

Public adjuster must provide a written estimate of the claim and a copy of the contract to the insured; must not misrepresent policy coverage.

Fee must be reasonable and disclosed; charging a fee on policy deductible or on undisputed amounts not recovered is prohibited.

Unfair trade practices under NCGS §75-1.1 allow treble damages for deceptive public adjuster conduct.

Public adjuster must maintain a separate trust account for client funds and provide a written accounting upon request.