TX Claims Adjuster cheat sheet

Indemnity: insurance restores the insured to the pre-loss financial position - no profit, no betterment.

Insurable interest in property must exist at the time of loss; in life insurance it must exist at policy inception.

Utmost good faith makes material misrepresentation, concealment, or breach of warranty grounds for voiding or reducing coverage.

Subrogation transfers the insured's recovery right against a third party to the insurer after payment; the insured must not impair it.

Contribution: when two or more policies cover the same loss at the same level, each pays its pro rata share; primary policies pay before excess.

Coinsurance payment = (insurance carried ÷ insurance required) × loss, capped at the policy limit; deductible is then subtracted.

Actual cash value = replacement cost − depreciation; replacement cost pays new-for-old without depreciation, usually after repair or replacement.

Only pure risk (loss or no loss) is insurable; speculative risk (chance of gain) is not. Insurable risks are accidental, definite, calculable, and spread over many similar exposures.

Deductibles, limits, and exclusions define the transfer of risk; the insured retains the portion below the deductible and above the limit.

The Texas Department of Insurance, headed by a Commissioner appointed by the Governor, licenses insurers and adjusters and enforces the Texas Insurance Code.

A Texas adjuster license requires age 18+, a completed prelicensing course, exam passage, fingerprints, and a background check; the license is valid for two years and expires on the licensee's birthdate.

Prompt Payment of Claims Act (Insurance Code Chapter 542): acknowledge the claim within 15 days of notice, accept or deny within 15 days after receiving all required items, and pay within 5 business days after acceptance.

The insurer may extend the acceptance/denial deadline by written request, up to 45 additional days, when more time is needed to investigate.

A Chapter 542 violation obligates the insurer to pay the claim amount plus interest at 18 percent per year and reasonable attorney fees.

Texas valued policy law: on a total loss of an insured building by fire or windstorm, the insurer owes the full policy limit covering the structure, not depreciated value.

The Texas Windstorm Insurance Association is the coastal residual market insurer for windstorm and hail in designated catastrophe areas; separate TWIA adjuster certification is required.

Public insurance adjusters are licensed separately and represent the insured for compensation; an adjuster may not act as both a company adjuster and a public adjuster on the same claim.

Emergency (catastrophe) adjuster licenses may be issued to out-of-state adjusters during declared disasters for a limited period.

HO-3 covers the dwelling and other structures on an open-peril (special) basis and personal property on a named-peril basis; HO-2 is named peril throughout.

Common homeowners percentages of Coverage A: other structures 10%, personal property 50–70%, loss of use 20–30%.

Commercial property coinsurance typically requires 80% of replacement value; carrying less reduces the loss payment by the same ratio.

Replacement cost pays new-for-old; depreciation is withheld as recoverable depreciation and released after repair or replacement is verified.

Standard exclusions include flood and surface water, earth movement, neglect, intentional loss, war, nuclear hazard, and ordinance or law (endorsable).

Texas-specific forms: HO-A is a limited named-peril policy, HO-B is a broad named-peril policy, and HO-3 is the special-form policy; ISO forms are not automatically used in Texas.

Percentage wind/hail deductibles are calculated on the Coverage A dwelling limit (commonly 1–5%) rather than a flat dollar amount.

Proof of loss, appraisal, salvage, pair-and-set, and vacancy provisions govern how a property claim is documented, valued, and settled.

Vandalism and glass losses are commonly excluded after the dwelling has been vacant for 60 consecutive days.

CGL structure: Coverage A bodily injury and property damage, Coverage B personal and advertising injury, Coverage C medical payments; defense is provided under the supplementary payments provision.

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

The duty to defend is broader than the duty to indemnify and is triggered when allegations in the suit potentially fall within coverage.

Texas minimum auto liability limits are 30/60/25: $30,000 per person, $60,000 per accident bodily injury, and $25,000 property damage.

Texas insurers must offer uninsured/underinsured motorist coverage and personal injury protection; the insured may reject either only in writing.

Negligence elements: duty, breach of that duty, proximate cause, and damages.

Texas uses modified comparative responsibility: a claimant 50% or less at fault recovers reduced damages; a claimant more than 50% at fault recovers nothing.

Premises liability duty varies by status: invitees receive the highest duty (inspect and warn), licensees a lower duty, trespassers only a duty against willful injury.

Workers compensation in Texas is elective for employers; when subscribed, it is generally the exclusive remedy against the employer.

Duty of good faith and fair dealing requires a thorough investigation, prompt communication, and a fair, prompt settlement when liability and damages are clear.

A reservation of rights letter preserves the insurer's coverage defenses while investigation or defense continues; denial must ultimately cite specific policy language in writing.

Proof of loss is a sworn itemized statement of the claim; the policy sets the deadline, commonly 60 days after request.

Examination under oath is a policy condition used to verify facts, ownership, and damages when the claim is suspicious or complex.

The claim file must contemporaneously document contacts, inspection findings, photographs, estimates, recorded statements, coverage analysis, and the rationale for every payment or denial.

Fraud indicators include late reporting, no proof of ownership, recent policy inception, prior similar losses, altered documents, and pressure for fast cash settlement; refer suspected fraud to the insurer's SIU and the TDI fraud unit.

Identify subrogation potential early, preserve evidence, and avoid prejudicing recovery through settlement or release language.

Unfair claim settlement practices include misrepresenting policy provisions, failing to acknowledge or act reasonably promptly, and refusing to pay without a reasonable investigation.

Conflicts of interest are prohibited: no personal financial stake in the claim outcome, and claimant personal information must be kept confidential.