Claim handling and investigation
Domain 3: Claim Handling and Investigation
This domain tests the claim lifecycle: notice, inspection, documentation, proof of loss, and payment. The exam expects you to know the SFIP deadlines and the adjuster's duty to investigate cause, coverage, and damage before recommending payment.
Core rules
- The insured must give prompt notice of loss and cooperate with the adjuster. The adjuster inspects promptly, photographs and measures damage, and separates flood damage from pre-existing or non-flood damage.
- The SFIP requires a signed and sworn proof of loss within 60 days after the loss, unless FEMA grants an extension. The adjuster should provide the form and explain it.
- Verify the policy was in force at the time of loss, the waiting period had expired, the building is in a participating community, and the loss is flood-related.
- Obtain an elevation certificate where needed, confirm the flood zone, and determine pre-FIRM or post-FIRM status because it affects rating, not the claim's compensability.
- Payment is due within 60 days after receipt of a satisfactory proof of loss. The suit limitation is generally one year after written denial of all or part of the claim.
Worked example
An insured calls 12 days after a flood. The adjuster inspects, documents 30 inches of water in the living area, and finds the policy effective 45 days before the loss. The proof of loss is due 60 days after the loss. The insured submits it on day 70 without an extension. The adjuster should not simply pay; the file needs a documented basis for accepting or denying the late proof, and the insured should be advised in writing.
Traps
Missing the proof-of-loss deadline is a common error. So is accepting a contractor's estimate without independent verification. Do not confuse the date of notice with the date of loss. Do not let a coverage question wait until after payment.