Pending License, Pending Claim: The Unlicensed Adjuster File
You are a senior claims examiner for a Nevada-licensed insurer. A Las Vegas homeowner reports wind damage to a shingle roof after a documented gust event. The file was assigned to a trainee adjuster who took the first notice call from her home in Arizona. Her Nevada nonresident adjuster license application is pending but not issued. She reviewed drone photos, estimated $18,400 replacement cost and $11,200 actual cash value, and applied a $2,500 deductible. The insured called three times over 12 days; no written status update was sent. The trainee's supervisor tells you, 'Just issue the ACV check and close it; we can adjust later if he complains.' The file note says the roof 'looked old,' but contains no roof measurements, weather report, or contractor inspection. The insured has now emailed asking why his claim is taking so long and whether he can recover the depreciation.
1. Identify the licensing and unfair claims practice issues on this file and explain what must happen before any payment is issued.
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Licensing. Nevada requires a person who investigates or adjusts claims to hold a Nevada adjuster license; a nonresident license must be issued before the adjuster acts. The trainee's pending application is not authority, and her Arizona location does not create an exception. Any work she performed on the file should be reviewed by a properly licensed adjuster, and the file should be reassigned. The insurer cannot cure unauthorized adjusting retroactively by issuing a check.
Unfair claims practices. The 12-day silence after three calls supports a failure to acknowledge and respond promptly and a failure to communicate material status. The supervisor's instruction to 'issue the ACV check and close it' before completing the investigation is also a red flag for failure to conduct a reasonable investigation. Paying ACV without explaining depreciation or the replacement-cost process could mislead the insured.
Before payment: assign a licensed adjuster, verify the license, obtain a weather report and roof measurements/contractor inspection, evaluate roof age and cause, send a written status letter, explain ACV/RCV and depreciation recoverability, and document all contacts. Any payment should be based on a completed coverage analysis, not on the threat of a complaint.
2. How should you respond to the supervisor's instruction, and what should the file contain to protect the insurer from a bad-faith claim?
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Respond in writing, not just verbally. State that you cannot close the file on ACV alone because (1) the assigned adjuster is not licensed, (2) the investigation is incomplete, and (3) the insured has not received a written explanation. Escalate to the claims manager or compliance. The supervisor's instruction should be documented as a file note, including date, time, and who was present.
The file should contain: the licensing verification and reassignment memo; a chronology of the three calls and the 12-day gap; copies of all written communications; the weather report; roof measurements and photos; contractor or engineer findings on age and cause; the ACV/RCV worksheet showing the $2,500 deductible and $7,200 depreciation; the policy language on replacement cost; and a written explanation to the insured that depreciation may be recoverable after repair. Also document why closing without investigation would be inconsistent with Nevada's claim-practice standards. This record shows the insurer acted reasonably and rebuts an allegation of bad faith.