NC CLAIMS ADJUSTER UPDATED EXAM STUDY GUIDE
QUESTIONS AND SOLUTIONS RATED A+
✔✔Before negotiations Begin: 3 Things - ✔✔1. Is there coverage?
○ peril is covered
○ policy is active, etc.
2. What is the insured's liability?
(liability claims only)
3. What are the damages?
○ special damages
○ general damages
Remember: no negotiating punitive damages!
✔✔Preparing to negotiate... Do this: - ✔✔• Complete Investigation
• Complete Estimate
• Know the circumstances
• Be clear about objectives
• Understand possible obstacles
• Have an idea of the maximum the insurer will pay
• Have an idea of the minimum amount the claimant will accept
✔✔Preponderance of evidence (Civil Suits) - ✔✔more than 50 percent of the evidence
proves justification or excuse
✔✔Most insurance language is written by - ✔✔Insurance services office (ISO)
Association of insurance services (AAIS)
✔✔Cancelation and Nonrenewal - ✔✔• sets rights and duties of both insured and
insured if either cancels
• policyholder can cancel any time with no notice
• insurer's right to cancel is subject to state insurance laws
• generally, insurance must provide written notice for cancellation or non-renewal
(typically requires 20-60 days notice in advance)
• insures can cancel with fewer days notice for nonpayment of premiums (usually 10
days)
✔✔Unearned Premium - ✔✔When a premium is paid... but policy is canceled ... leaving
a portion of that premium unused
it must be returned
✔✔Liberalization Clause - ✔✔Allows insurers to make FRIENDLY
changes to a policy
• if a policy form is broadened
• at no additional premium
, THEN
the broadened coverage automatically applies to all existing policies of the same type
✔✔Representation Condition - ✔✔States that any information provided by the insured
on the declaration page must be complete and accurate.
• if false information is given, the insurer can void the policy
✔✔Rescission - ✔✔termination of contract
• declaring that it was never a valid agreement
• done under certain circumstances such as:
1. Person lied or concealed info
2. Made a mistake in the application that significantly affects the insurer
3. Made a fraudulent claim to get benefits
✔✔Assignment Provision - ✔✔Prevents policy from being transferred unless insurer
agrees or insured dies
• if insured dies, coverage transfers to the decedents legal representative
✔✔Other Apportionment - ✔✔establishes how the policy will respond if the insured risk
is covered by two or more policies
✔✔Primary vs. Excess - ✔✔2 policies covering the same property • Primary: policy
must pay up to the limit, regardless of another policy
• Excess: policy only pays once the primary policy limits have been exhausted
✔✔Pro Rata - ✔✔proportionate
each insurer agrees to pay its share of the loss according to its share of all policy limits
Say Annie's dwelling policy has a limit of $100,000 and her husband takes out another
$50,000 policy.
The total amount of insurance covering the property is $150,000.
Annie's policy makes up 2/3
✔✔Nonconcurrency - ✔✔The situation in which two or more policies covering the same
risk have different inception and expiration dates
✔✔Overinsurance - ✔✔The amount of insurance covering a risk which exceeds the
insurable value of that risk
● Insurer will only pay up to the insurable value
● Fraudulent intent voids the contract
✔✔Vacancy Condition - ✔✔Establishes when a building is considered "vacant."
Typically, it will:
• specify a time period, such as 60 days,
• and describe a condition to define "vacancy."
"a dwelling that is unoccupied or a company that is not open for business
QUESTIONS AND SOLUTIONS RATED A+
✔✔Before negotiations Begin: 3 Things - ✔✔1. Is there coverage?
○ peril is covered
○ policy is active, etc.
2. What is the insured's liability?
(liability claims only)
3. What are the damages?
○ special damages
○ general damages
Remember: no negotiating punitive damages!
✔✔Preparing to negotiate... Do this: - ✔✔• Complete Investigation
• Complete Estimate
• Know the circumstances
• Be clear about objectives
• Understand possible obstacles
• Have an idea of the maximum the insurer will pay
• Have an idea of the minimum amount the claimant will accept
✔✔Preponderance of evidence (Civil Suits) - ✔✔more than 50 percent of the evidence
proves justification or excuse
✔✔Most insurance language is written by - ✔✔Insurance services office (ISO)
Association of insurance services (AAIS)
✔✔Cancelation and Nonrenewal - ✔✔• sets rights and duties of both insured and
insured if either cancels
• policyholder can cancel any time with no notice
• insurer's right to cancel is subject to state insurance laws
• generally, insurance must provide written notice for cancellation or non-renewal
(typically requires 20-60 days notice in advance)
• insures can cancel with fewer days notice for nonpayment of premiums (usually 10
days)
✔✔Unearned Premium - ✔✔When a premium is paid... but policy is canceled ... leaving
a portion of that premium unused
it must be returned
✔✔Liberalization Clause - ✔✔Allows insurers to make FRIENDLY
changes to a policy
• if a policy form is broadened
• at no additional premium
, THEN
the broadened coverage automatically applies to all existing policies of the same type
✔✔Representation Condition - ✔✔States that any information provided by the insured
on the declaration page must be complete and accurate.
• if false information is given, the insurer can void the policy
✔✔Rescission - ✔✔termination of contract
• declaring that it was never a valid agreement
• done under certain circumstances such as:
1. Person lied or concealed info
2. Made a mistake in the application that significantly affects the insurer
3. Made a fraudulent claim to get benefits
✔✔Assignment Provision - ✔✔Prevents policy from being transferred unless insurer
agrees or insured dies
• if insured dies, coverage transfers to the decedents legal representative
✔✔Other Apportionment - ✔✔establishes how the policy will respond if the insured risk
is covered by two or more policies
✔✔Primary vs. Excess - ✔✔2 policies covering the same property • Primary: policy
must pay up to the limit, regardless of another policy
• Excess: policy only pays once the primary policy limits have been exhausted
✔✔Pro Rata - ✔✔proportionate
each insurer agrees to pay its share of the loss according to its share of all policy limits
Say Annie's dwelling policy has a limit of $100,000 and her husband takes out another
$50,000 policy.
The total amount of insurance covering the property is $150,000.
Annie's policy makes up 2/3
✔✔Nonconcurrency - ✔✔The situation in which two or more policies covering the same
risk have different inception and expiration dates
✔✔Overinsurance - ✔✔The amount of insurance covering a risk which exceeds the
insurable value of that risk
● Insurer will only pay up to the insurable value
● Fraudulent intent voids the contract
✔✔Vacancy Condition - ✔✔Establishes when a building is considered "vacant."
Typically, it will:
• specify a time period, such as 60 days,
• and describe a condition to define "vacancy."
"a dwelling that is unoccupied or a company that is not open for business
