TX Public Adjuster flashcards

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

Texas public adjuster license

A public adjuster must hold a TDI license under Insurance Code Chapter 4102 before soliciting, negotiating, or settling an insured's claim for compensation in Texas.

Public adjuster surety bond

Texas public adjusters must maintain a $50,000 surety bond filed with TDI to protect insureds from dishonest or improper acts.

Written public adjuster contract

The contract must be in writing, signed by the insured, disclose the fee, and state that the public adjuster represents the insured only.

Three-day rescission right

Texas insureds may rescind a public adjuster contract within three business days after signing by giving written notice to the public adjuster.

TDI license revocation grounds

TDI may deny or revoke a public adjuster license for fraud, misrepresentation, felony conviction, failure to maintain the bond, or violating insurance law.

Public adjuster continuing education

Texas public adjusters must complete TDI-approved continuing education each renewal term, including ethics, and renew before the license expires.

Disaster solicitation restriction

A public adjuster may not solicit business at a disaster scene or in a manner prohibited by TDI rules after a declared disaster.

Principle of indemnity

Indemnity restores the insured to the pre-loss financial position, no better and no worse, subject to policy limits, deductibles, and valuation method.

Insurable interest

The insured must have a financial interest in the property at the time of loss, or the policy is not enforceable for that loss.

Actual cash value

ACV is replacement cost minus depreciation. It reflects the pre-loss value of damaged property and is the default valuation in many property policies.

Replacement cost value

RCV is the cost to repair or replace damaged property with new materials of like kind and quality without deducting depreciation.

Duties after loss

Typical duties include giving prompt notice, protecting property from further damage, cooperating, submitting a proof of loss, and allowing inspection.

Appraisal provision

Appraisal resolves disputes about the amount of loss when the policy provides it; each side selects an appraiser, and an umpire resolves differences.

Prompt payment acknowledgement

Texas insurers must acknowledge receipt of a claim, begin investigation, and request necessary information within 15 days after receiving notice.

Accept or deny deadline

After receiving all necessary claim information, a Texas insurer must accept or deny the claim within 15 business days.

Payment after acceptance

Once a Texas insurer accepts a claim, it must pay the amount owed within five business days, subject to policy terms.

Sixty-day demand rule

If a Texas insurer delays payment beyond 60 days after a proper demand, it may owe 18 percent annual interest and reasonable attorney fees.

Cause and origin investigation

The adjuster identifies what caused the loss and where damage began, separating covered peril damage from maintenance, wear, or excluded causes.

Mitigation duty

The insured must take reasonable steps to protect property from further damage after a loss; reasonable mitigation costs are often covered.

Unfair denial practice

Refusing to pay a claim without a reasonable investigation, or failing to explain the basis for denial, is an unfair claim settlement practice in Texas.

ACV formula

Actual cash value equals replacement cost minus depreciation. Depreciation is based on age, condition, and useful life of the damaged item.

Depreciation formula

Depreciation equals replacement cost times age divided by useful life, capped so ACV does not fall below zero.

Recoverable depreciation

Depreciation withheld on an RCV claim is released after the insured completes repairs and submits evidence of replacement cost.

Overhead and profit

O&P compensates for general contractor supervision and profit when a loss requires multiple trades or a general contractor.

Proof of loss

A sworn statement by the insured stating the amount claimed, the cause of loss, and supporting details required by the policy.

Ordinance or law coverage

This coverage pays extra cost to rebuild to current building codes; without it, code upgrades are generally not owed.

Fiduciary duty

A public adjuster must act in the insured's best interest, disclose conflicts, and avoid self-dealing when handling a claim.

Conflict of interest

A public adjuster may not represent both the insurer and the insured, or handle a claim where the adjuster has a personal financial interest.

Claim interest prohibition

Texas public adjusters may not acquire an ownership interest in the insured's claim, salvage, or proceeds beyond the agreed fee.

Fee-sharing prohibition

A public adjuster may not share compensation with an unlicensed person for referring or handling a claim.

Misrepresentation

Misrepresenting policy coverage, claim value, or the adjuster's authority is an unfair practice and grounds for license discipline.

Confidentiality

A public adjuster must protect the insured's nonpublic personal and claim information and use it only for the claim.