NC Public Adjuster flashcards

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

Public adjuster license bond

North Carolina requires a surety bond of at least $20,000 and a $50,000 errors and omissions policy for a public adjuster license.

Public adjuster fee cap

Fees are limited to 10% of the claim payment; for claims arising from a declared disaster, the cap is 10% as well, but must be disclosed in writing.

Right to rescind

The insured may cancel a public adjuster contract within three business days after signing by delivering written notice to the adjuster.

Unfair claim settlement practices

Defined in NCGS §58-63-15(11); includes misrepresenting policy provisions, failing to acknowledge claims, and offering substantially less than the amount ultimately recovered.

Continuing education requirement

North Carolina adjusters must complete 24 hours of continuing education every two years, including at least three hours of ethics.

Indemnity principle

Insurance restores the insured to the pre-loss financial condition, no better and no worse; actual cash value and replacement cost are methods to achieve indemnity.

Insurable interest

A financial stake in the property or person insured such that loss would cause monetary harm; must exist at the time of loss for property insurance.

Utmost good faith

Both insurer and insured must disclose all material facts; concealment or misrepresentation can void the policy or allow rescission.

Contract of adhesion

A contract drafted by one party (the insurer) and accepted or rejected by the other; ambiguities are construed against the drafter.

Subrogation

The insurer's right to pursue a third party responsible for a loss after paying the insured; the insured must not impair this right.

Coinsurance formula

Claim payment = (insurance carried ÷ insurance required) × loss, minus deductible; insurance required = coinsurance percentage × property value.

Actual cash value

Replacement cost minus depreciation; depreciation may be physical, functional, or economic, reflecting the property's pre-loss condition.

Replacement cost

Pays to repair or replace damaged property with new property of like kind and quality, without deduction for depreciation, up to policy limits.

Occurrence vs claims-made

Occurrence policies respond to injury or damage during the policy period; claims-made policies respond when a claim is reported during the policy period.

HO-3 special form

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

HO-5 comprehensive form

Homeowners policy covering both dwelling and personal property on an open-peril basis, broader than HO-3, typically for higher-value homes.

Coverage D loss of use

Pays additional living expenses and fair rental value when the home is uninhabitable due to a covered loss, for the shortest time to repair or relocate.

80% replacement cost requirement

To receive full replacement cost on the dwelling, the insured must carry at least 80% of the full replacement cost at the time of loss.

Dwelling policy DP-3

Covers the dwelling on an open-peril basis and personal property on a named-peril basis; used for non-owner-occupied residences and rental properties.

Business income coverage

Pays lost net income and continuing expenses during the restoration period after a covered property loss, often including an extended period of indemnity.

Equipment breakdown coverage

Covers loss from accidental breakdown of covered equipment, including business income and spoilage; replaces traditional boiler and machinery insurance.

Builder's risk policy

Covers property under construction, including materials and supplies, until the project is completed and accepted by the owner.

Inland marine insurance

Covers property in transit, mobile property, and property of others; common forms include motor truck cargo, bailee, and fine arts coverage.

Difference in conditions (DIC)

A policy that fills gaps in standard property coverage, often adding flood and earthquake coverage not included in the primary policy.

NC minimum auto liability

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

Uninsured motorist coverage

North Carolina requires UM coverage at the same limits as liability; it can be rejected in writing by the named insured.

Personal auto policy parts

Part A Liability, Part B Medical Payments, Part C Uninsured/Underinsured Motorist, Part D Damage to Your Auto, Part E Duties After an Accident.

Commercial general liability (CGL)

Covers bodily injury, property damage, personal and advertising injury, and medical payments; limits include general aggregate and each occurrence.

Proof of loss

A sworn statement from the insured detailing the loss, furnished within 60 days after the insurer's request unless extended in writing.

Prompt claim acknowledgment

North Carolina requires acknowledgment of a claim within 10 business days and a written response to inquiries within 10 business days.

Reservation of rights letter

Informs the insured that coverage is uncertain while the investigation continues; it preserves the insurer's right to deny coverage later.

Public adjuster solicitation restrictions

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