NY Public Adjuster flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Indemnity principle

Insurance restores the insured to the pre-loss financial position, no better and no worse. Recovery is measured by actual loss, so the insured cannot profit from a claim.

Insurable interest

A financial stake in the property such that loss causes the insured economic harm. For property insurance, it must exist at the time of loss, not merely at policy inception.

Utmost good faith

The mutual duty of insurer and insured to disclose material facts. Concealment or material misrepresentation in the application or proof of loss can void coverage.

Actual cash value

Replacement cost minus depreciation. ACV reflects the depreciated value of the damaged property at the time of loss and is the default settlement method on many policies.

Replacement cost value

The cost to repair or replace damaged property with new materials of like kind and quality, without deducting depreciation, subject to policy limits and conditions.

Coinsurance formula

Payment equals (insurance carried divided by insurance required) multiplied by the loss, capped at the policy limit. Underinsurance reduces recovery proportionally.

Subrogation

After paying a claim, the insurer acquires the insured's right to recover from a negligent third party. The insured must not impair those rights.

Proximate cause

The peril that sets in motion an unbroken chain of events producing the loss. Coverage depends on whether that initiating peril is insured or excluded.

HO-3 policy form

A homeowners form insuring the dwelling on an open-peril basis and personal property on a named-peril basis. It is the most common form for owner-occupied dwellings.

HO-5 policy form

A homeowners form covering both the dwelling and personal property on an open-peril basis. It is broader than HO-3 and typically used for higher-value homes.

Coverage A through D

Dwelling, other structures, personal property, and loss of use. Limits for B, C, and D are usually stated as percentages of the Coverage A dwelling limit.

80% replacement cost condition

Homeowners replacement cost settlement generally requires carrying insurance of at least 80% of full replacement cost at loss time; otherwise settlement may fall to ACV.

Causes of loss forms

Commercial property designations: basic, broad, and special. The special form is open peril, and the insurer bears the burden of proving an exclusion applies.

Business income coverage

Pays lost net income plus continuing normal operating expenses during the period of restoration, beginning after a waiting period that is commonly 72 hours.

CGL Coverage A

Commercial general liability coverage that pays sums the insured becomes legally obligated to pay because of bodily injury or property damage caused by an occurrence.

Claims-made vs occurrence

Occurrence policies respond to injury or damage during the policy period. Claims-made policies respond to claims first made during the period, subject to a retroactive date.

Flood and earthquake exclusions

Standard property and homeowners forms exclude flood and earthquake. Coverage requires a separate policy or endorsement, such as a difference-in-conditions form.

Public adjuster

A licensed person who, for compensation, represents the insured in negotiating or settling a first-party claim. The adjuster owes duties to the policyholder, not the insurer.

Independent adjuster

An adjuster who represents the insurer on claims, often as an outside contractor. This role differs from a public adjuster, who represents the insured.

Compensation agreement

A written contract between the public adjuster and insured stating the fee and terms. New York requires the fee to be disclosed in writing before representation begins.

12.5% disaster fee cap

New York limits public adjuster compensation to 12.5% of the amount recovered on claims arising from a declared disaster or emergency. Other claims are negotiated in writing.

Proof of loss

A sworn statement, often on the insurer's form, setting out the amount claimed and supporting facts. Missing the policy deadline can bar the claim absent written waiver.

Burden of proof of loss

The insured must prove the amount of damage. Adjusters build room-by-room inventories, photographs, receipts, and a detailed scope of damage to meet that burden.

Replacement cost holdback

Depreciation withheld on a replacement cost claim. The insured recovers it by showing repair or replacement within the policy time limit, commonly 180 days.

Duties after loss

Policy conditions including prompt notice, protection of property from further damage, cooperation with investigation, and submission of a signed proof of loss.

Suit limitation period

The contractual deadline to sue on a claim. New York generally allows two years on fire policies and six years on other contract actions from the date of loss.

Unfair claim settlement practices

Insurance Law Article 26 and Regulation 64 prohibit delay without good cause, failure to investigate promptly, and failure to offer a reasonable settlement.

Insurance Law section 2101

The definitions section of Article 21. Subsection 2101(g)(2) defines a public adjuster as a person acting for the insured for compensation in settling a claim.

Insurance Law section 2108

The provision governing public adjuster licensing, examination, and conduct, and authorizing the Superintendent of Financial Services to adopt implementing regulations.

Regulation 10, Part 25

The New York regulation setting public adjuster standards, including written contracts, fee disclosure, solicitation limits, and recordkeeping requirements for licensees.

DFS licensing requirement

Public adjusters must be licensed by the New York Department of Financial Services. Acting without a license, or on a lapsed license, is unlawful.

Solicitation restrictions

A public adjuster may not solicit business at the scene of a loss before a reasonable time has elapsed, and may not represent both insurer and insured on one claim.