Adjusting Practices and Claims Handling
Domain 2: Adjusting Practices and Claims Handling
This domain tests the claim lifecycle: first notice, investigation, coverage determination, documentation, reserving, negotiation, and settlement. The exam favors defensible file handling and plain coverage reasoning.
Core rules
- Acknowledge the claim promptly, identify the policy and named insured, and open a reservation of rights when coverage is uncertain. A reservation of rights preserves the insurer's coverage defenses while investigation continues.
- Investigate liability, damages, and coverage separately. Obtain recorded statements, photographs, estimates, medical records, and proof of loss as needed.
- Evaluate damages under the policy: ACV or replacement cost, deductibles, policy limits, and excluded costs.
- Never pay without authority; document every contact, decision, and payment. A settlement release should match the claim being resolved.
- Preserve subrogation: identify third parties, notify them, and avoid prejudicing recovery.
Worked example
A New Hampshire auto claim: the claimant's damages are $50,000, and the claimant is 20% at fault. Under RSA 507:7-d, fault of 50% or less reduces recovery proportionally, while more than 50% bars recovery. The claimant recovers $50,000 x 80% = $40,000, subject to available liability limits. The adjuster documents the comparative-fault evidence and explains the reduction in the settlement letter.
Traps
Confusing a reservation of rights with a denial; settling before verifying coverage; missing a proof-of-loss deadline; treating a repair estimate as proof of all damages; failing to document a claimant's comparative fault; and using a release that is broader than the claim being resolved.