Claims Handling and Investigation Practices
What this domain tests
The path from notice of loss to resolution, and the investigative standard the exam expects at each step.
The sequence
- Notice of loss and prompt acknowledgment; confirm the policy was in force on the date of loss and identify the insured, the location, and the coverage parts involved.
- Coverage analysis before numbers: insuring agreement, exclusions, endorsements, limits, deductibles, and sublimits.
- Investigation proportionate to the claim: recorded statement, proof of loss, photographs, scene inspection, cause and origin, receipts, bank records, contents inventory, and expert retention (engineer, fire investigator, accountant) where cause, scope, or amount is disputed.
- Communication and timing: Pennsylvania's unfair claims settlement practices regulations require reasonable investigation, timely response to communications, and a written explanation of a denial. Document every contact.
- Payments, salvage, subrogation, and recovery; appraisal for disputes about amount; bad faith exposure under 42 Pa.C.S. section 8371.
Worked example
A ceiling stain is reported in March; the policy period ended in January. The adjuster photographs, takes a statement, and has a plumber test the system. The leak began in December but stayed hidden. The date of loss is the date of the precipitating event, not the report date. Continuous seepage over weeks may trigger the constant-or-repeated-seepage exclusion and a mold sublimit, so both cause and timing must be proven with evidence, not assumed.
Traps that cost marks
- Using the report date as the loss date.
- Denying without a written explanation supported by the file.
- Ordering destructive testing before photographing existing conditions.
- Ignoring the insured's duty to mitigate and the effect of temporary repairs.