Property and Casualty Coverage and Adjusting
Coverage analysis
Property and casualty policies are read as a whole: declarations, insuring agreement, conditions and exclusions. The claimant generally bears the burden to show a covered loss; the insurer bears the burden to prove an exclusion. In New Mexico liability claims, pure comparative fault reduces a claimant’s recovery by the claimant’s share of fault, so adjusters must evaluate negligence evidence rather than assume a complete bar. New Mexico’s minimum auto liability limits are 25/50/10, and uninsured/underinsured motorist coverage must be offered; a valid written rejection is required for the insured to decline it.
Property valuation
Actual cash value is replacement cost less depreciation; replacement-cost coverage usually pays ACV first and recoverable depreciation after repairs. Coinsurance, deductibles and policy limits apply before payment. Duties after loss commonly include prompt notice, protection of property, inventory, cooperation and proof of loss. Missing a duty can prejudice the claim, but the adjuster should evaluate actual prejudice and policy language rather than automatically denying.
Worked example
A homeowner claims a 20-year-old composition roof damaged by hail. The policy is replacement cost with a $2,000 deductible and 80% coinsurance. The adjuster finds covered hail damage but also pre-existing wear. The correct approach is to separate covered hail damage from wear-and-tear, calculate ACV, apply the deductible, check the coinsurance requirement, and hold recoverable depreciation until repairs are completed. The adjuster should not pay full replacement cost upfront or deny the entire roof because of age.
Traps
Do not confuse ACV with market value. Do not apply coinsurance without checking the limit-to-value calculation. Do not ignore comparative fault or UM/UIM rejection documentation. Do not treat a policy condition as an absolute bar without analyzing prejudice and the specific wording.