Chapter 5 - Insurance Claims Adjusting
Insurance Adjuster - answerAny individual who, for compensation, fee or commission,
investigates and settles claims arising under property, casualty or surety contracts on
behalf of the insurer or insured.
Types of insurance Adjusters - answer1. Company Adjuster 2. Public Adjuster
Company Adjuster - answerAdjuster representing the interests of the insurer, including
independent contractors and salaried employees of the insurer.
Public Adjuster - answerAn independent contractor representing solely the financial
interests of the insured named in the policy. The insured, and not the insurance
company pays the adjuster.
Multiple licensing - answerAn individual may be licensed concurrently under separate
licenses as a company and public adjuster but may not act as both types of adjuster
with respect to the same claim.
Relationship to the Legal Profession - answerOnce the claimant has hired the services
of an attorney, the adjuster may no longer contact the claimant w/o the
consent/presence of said attorney. Often the adjuster must negotiate with an attorney
towards the final disposition of the claim. Attorneys representing the insurance company
prepare releases for processing by adjusters.
Fiduciary Agent - answerThe adjuster is a Fiduciary Agent. This relationship must
maintain a high degree of fidelity and loyalty to the interest of the principal (Insurer)
whether or not the adjuster is a direct employee. As a fiduciary agent of the principal,
the adjuster should not deal in any way with the principals property with motives of self-
interest. The adjuster should not represent interests that are averse to those of the
principal and should not profit or seek to profit from any outside source.
Power to Bind - answerOnce and adjuster is appointed, the claimant/Insured has the
right to assume the adjuster has the power to ascertain the amount of the loss and
settle it. If there are any limitations on the authority of the adjuster the insured is not
bound unless there is knowledge of said limit of authority. While an adjusters power to
bind an insurer to an agreement made w/ a claimant varies by type of adjuster, the
adjuster is considered the agent of the insurer and is empowered to make agreements
regarding value and loss on its behalf.
Duties of the insured - answerInsured is required to report a claim to the company as
soon as practical. The insured usually reports to their agent who provides the claim
, forms. The insured use also preserved the undamaged property to the best of their
ability to avoid additional loss.
Proof of Loss - answerA formal statement made by the insured to the insurance
company regarding a loss. The purpose is to provide sufficient info concerning the loss
to enable it to determine liability under the policy/bond.
Special requirements/ Production of Books & records/ Abandonments - answerThe
insured must fully cooperate w/ the insurance company by offering testimony or other
evidence including the production of book/records. The insured must separate the
damaged from the undamaged property. The insured cannot simply abandon the
property to the insurance company.
Duties of the insurer - Investigation - answerIt is the responsibility of the insurer to
provide a thorough investigation of the claim and to keep adequate documentation of
the investigation
Claims investigation - answerA duty performed by the insurance company to perform on
behalf of the insured and to also protect the interest of the insurance company. Each
insurance policy contains a clause that outlines the duties of the insurance company.
This is found in the insuring agreement in most liability policies. State laws requires that
the claim be handled "Promptly"
Claim file Documentation of events - answerEach company has its own claim
procedures and methods of documentation. Records must be kept in such a form to
present to an insurance examiner shoulder the occasion arise. Such files must contain
all notes and paperwork pertaining to the claim in such detail that pertinent events and
dates of such events can be reconstructed.
Standards for the Acknowledgement of Pertinent Communications - answerA.
Acknowledgment of Notices of Claim. B. Answer of Inquiries from Insurance
Department C. Replies to Other Pertinent communications D. Provision of Assistance to
first party claimants
A. Acknowledgment of Notices of claim - answerEvery insurer, upon receiving
notification of a claim must, within a specific number of working days, acknowledge the
receipt of such notice unless payment is made within such period of time. If an
acknowledgement is made by means other than writing and appropriate notation of
such acknowledgment must be made in the claim file of the insurer and dated.
Notification given to an agent of an insurer will be considered notification to the insurer.
B. Answer of Inquiries from Insurance Department - answerEvery insurer, upon
receiving notification of a claim must, within a specific number of working days, furnish
the department with a response to the inquiry
Insurance Adjuster - answerAny individual who, for compensation, fee or commission,
investigates and settles claims arising under property, casualty or surety contracts on
behalf of the insurer or insured.
Types of insurance Adjusters - answer1. Company Adjuster 2. Public Adjuster
Company Adjuster - answerAdjuster representing the interests of the insurer, including
independent contractors and salaried employees of the insurer.
Public Adjuster - answerAn independent contractor representing solely the financial
interests of the insured named in the policy. The insured, and not the insurance
company pays the adjuster.
Multiple licensing - answerAn individual may be licensed concurrently under separate
licenses as a company and public adjuster but may not act as both types of adjuster
with respect to the same claim.
Relationship to the Legal Profession - answerOnce the claimant has hired the services
of an attorney, the adjuster may no longer contact the claimant w/o the
consent/presence of said attorney. Often the adjuster must negotiate with an attorney
towards the final disposition of the claim. Attorneys representing the insurance company
prepare releases for processing by adjusters.
Fiduciary Agent - answerThe adjuster is a Fiduciary Agent. This relationship must
maintain a high degree of fidelity and loyalty to the interest of the principal (Insurer)
whether or not the adjuster is a direct employee. As a fiduciary agent of the principal,
the adjuster should not deal in any way with the principals property with motives of self-
interest. The adjuster should not represent interests that are averse to those of the
principal and should not profit or seek to profit from any outside source.
Power to Bind - answerOnce and adjuster is appointed, the claimant/Insured has the
right to assume the adjuster has the power to ascertain the amount of the loss and
settle it. If there are any limitations on the authority of the adjuster the insured is not
bound unless there is knowledge of said limit of authority. While an adjusters power to
bind an insurer to an agreement made w/ a claimant varies by type of adjuster, the
adjuster is considered the agent of the insurer and is empowered to make agreements
regarding value and loss on its behalf.
Duties of the insured - answerInsured is required to report a claim to the company as
soon as practical. The insured usually reports to their agent who provides the claim
, forms. The insured use also preserved the undamaged property to the best of their
ability to avoid additional loss.
Proof of Loss - answerA formal statement made by the insured to the insurance
company regarding a loss. The purpose is to provide sufficient info concerning the loss
to enable it to determine liability under the policy/bond.
Special requirements/ Production of Books & records/ Abandonments - answerThe
insured must fully cooperate w/ the insurance company by offering testimony or other
evidence including the production of book/records. The insured must separate the
damaged from the undamaged property. The insured cannot simply abandon the
property to the insurance company.
Duties of the insurer - Investigation - answerIt is the responsibility of the insurer to
provide a thorough investigation of the claim and to keep adequate documentation of
the investigation
Claims investigation - answerA duty performed by the insurance company to perform on
behalf of the insured and to also protect the interest of the insurance company. Each
insurance policy contains a clause that outlines the duties of the insurance company.
This is found in the insuring agreement in most liability policies. State laws requires that
the claim be handled "Promptly"
Claim file Documentation of events - answerEach company has its own claim
procedures and methods of documentation. Records must be kept in such a form to
present to an insurance examiner shoulder the occasion arise. Such files must contain
all notes and paperwork pertaining to the claim in such detail that pertinent events and
dates of such events can be reconstructed.
Standards for the Acknowledgement of Pertinent Communications - answerA.
Acknowledgment of Notices of Claim. B. Answer of Inquiries from Insurance
Department C. Replies to Other Pertinent communications D. Provision of Assistance to
first party claimants
A. Acknowledgment of Notices of claim - answerEvery insurer, upon receiving
notification of a claim must, within a specific number of working days, acknowledge the
receipt of such notice unless payment is made within such period of time. If an
acknowledgement is made by means other than writing and appropriate notation of
such acknowledgment must be made in the claim file of the insurer and dated.
Notification given to an agent of an insurer will be considered notification to the insurer.
B. Answer of Inquiries from Insurance Department - answerEvery insurer, upon
receiving notification of a claim must, within a specific number of working days, furnish
the department with a response to the inquiry
