Claims Handling and Adjusting Practices
This domain tests how a public adjuster investigates, documents, evaluates, and resolves a first-party claim while avoiding unfair claims practices. It combines technical adjusting with communication, coverage analysis, and negotiation.
Initial handling
- Acknowledge the claim promptly, open a file, verify the policy period, insured status, coverage, deductible, and mortgagee. Send required claim forms and inspect without delay.
- Investigate cause and extent separately. Take photographs, measurements, and diagrams; obtain statements as needed; preserve evidence; use experts for causation, engineering, or accounting. Separate covered damage from noncovered damage.
- Communicate in writing. If coverage is uncertain, send a reservation of rights. Do not waive policy defenses or make a coverage promise before completing the investigation.
Evaluation and resolution
- Prepare a scope and estimate that matches the policy valuation method. Apply limits, deductibles, sublimits, and depreciation correctly. Negotiate with documentation, not pressure.
- Obtain a sworn proof of loss when required. Use appraisal for amount disputes and preserve salvage and subrogation. Denials must be in writing and cite the policy language and facts.
Worked example: A burst pipe causes $18,000 of damage, with a $1,000 deductible. The policy excludes mold except for a $5,000 sublimit. A long-term leak caused $7,000 of mold. The sudden pipe break is covered, but mold recovery is capped at $5,000. The payable amount is $18,000 minus the $1,000 deductible, with the mold portion limited by the sublimit, and the file documents causation.
Traps: paying before coverage is confirmed; missing a proof-of-loss deadline; failing to document causation; not reserving rights; negotiating before the scope is complete.