Kentucky Insurance Adjuster Exam|190
Answered Questions A+ Graded
Four requirements of a legal contract - -1. Agreement
2. Consideration
3. Competent Parties
4. Legal purpose
- Six Characteristics of Insurance Contracts - -Personal, Adhesion, Utmost
Good Faith, Aleatory, Unilateral, Conditional
- Adhesion - -One party dictates, the other agrees (or not)
- aleatory - -Depends on a future, unknown event
- unilateral - -Only one party agrees to perform an act
- Four sections of an insurance policy - -Dec page, insuring agreement,
conditions, exclusions (also definitions and endorsements)
- Speculative Risk - -Consciously taken, gain is possible (not insurable)
- Pure Risk - -Only loss or no loss is possible, can be insured
- hazard - -A condition increasing the likelihood or severity of a loss
- Adverse Selection - -When someone buys insurance because they will
probably file a claims because of info about a risk that the insurer is unaware
of
- binder - -Temporary coverage for an insurance applicant until a policy is
issued
- warranty - -A promise that certain conditions will be met
- Estoppel - -Prevents an insurer from denying coverage if the insured has
reasonable come to believe that he has such coverage based on insurers
practices
- Moral Hazard - -Deliberate, involved reckless behavior, an attempt to
defraud
- Morale Hazard - -Indifference/carelessness, no intent to defraud, just feel
more secure because of insurance
, - proximate cause - -Unbroken chain of events between an occurrence and
a loss, the occurrence is the proximate cause of the loss
- Claims process (5)) - -1. filed 2. Acknowledgment 3. Investigation 4.
Evaluation 5. Adjustment
- Actual Cash Value - -Market/depreciated value prior to destruction
(replacement cost minus depreciation)
- Replacement Cost - -Don't subtract depreciation,
Common in home but not in auto
- Valued Policy - -Assigns a set value to an item, avoids confusion of
depreciation
- stated value - -Value state by insured when applying for insurance.
(Usually for when insured can't afford to insure for full value)
- Deductibles (fixed, percent, franchise) - -Fixed- set amount; percent- % of
risks value; franchise- policy kicks in after loss exceeds certain amount,
insurer pays 100%
- Coinsurance Penalty Formula - -(Amount of Insurance )/(Amount of
Insurance Required) x Loss - Deductible
- Vicarious Liability - -Transfer of negligence (employer or parent)
- Four elements of negligence - -1-Duty of care
2-Derelict: breah of duty if care
3-Direct cause: legally recognizable injury occurs as a result of breach of
duty of care
4-Damage: wrongful activity must have been caused the injury or harm that
occurred
- Defenses to a Claim of Negligence - -assumption of risk, contributory
negligence, comparative negligence
- Liability policy limits (3) - -Single limit, split limits, aggregate limits
- tort - -Any wrongful act, intentional or unintentional
- Diminution of Value - -Total amount of all damages resulting from an
occurrence; legal term used in calculating compensatory damages
, - General Damages - -Intangible, not quantifiable (future losses, mental
anguish, loss of reputation)
- Special Damages - -Awarded for tangible losses, quantifiable value
- Punitive Damages - -For intentional acts, as punishment
- Discovery Rule - -Statute of limitations is based on when injury is/should
have been discovered
- Adjuster reports (3) - -(1) initial - in 15 days, timelines, deadlines,
apparent losses, coverages, initial reserve (2) interim- every 30 days,
progress made and any new info (3) final -all facts and statements,
coverages applied, adjusted losses, final claim disposition
- Steps of a claim process (9) - -1. Acknowledge the claim
2. Establish lines of communication
3. Prepare necessary paperwork
4. Determine insurer's liability in the claim
5. Investigate the losses
6. Determine the time and cost of repairs
7. Apply all policy coverages and provisions
8. Negotiate a settlement
9. Prepare final reports
- How to determine insurer's liability (6) - -1. Was the policy active
2. Does claimant have insurance interest
3. Does policy cover this type of damage
4. Is there a history of similar claims
5. Do any other policies cover the loss
6. Has the insured met all the requirements
- Types of Dispute Resolution (5) - -1. Arbitration- neutral 3rd party, legally
binding, less costly and more expertise than court
2. Mediation- neutral 3rd party, advised only, legally binding if both parties
agree
3. Appraisal- only decides settlement, not if coverage exists, each side
chooses and appraiser, they choose an umpire
4. Declatory judgment action-court declares rights if both parties
5. Litigation- last resort. Expensive, unpredictable, time costly
- Settlement options (6) - -1. Full release- insurer cuts check, insured signs
release
2. Scheduled release- insurer pays damages up until settlement and certain
future incidentals
Answered Questions A+ Graded
Four requirements of a legal contract - -1. Agreement
2. Consideration
3. Competent Parties
4. Legal purpose
- Six Characteristics of Insurance Contracts - -Personal, Adhesion, Utmost
Good Faith, Aleatory, Unilateral, Conditional
- Adhesion - -One party dictates, the other agrees (or not)
- aleatory - -Depends on a future, unknown event
- unilateral - -Only one party agrees to perform an act
- Four sections of an insurance policy - -Dec page, insuring agreement,
conditions, exclusions (also definitions and endorsements)
- Speculative Risk - -Consciously taken, gain is possible (not insurable)
- Pure Risk - -Only loss or no loss is possible, can be insured
- hazard - -A condition increasing the likelihood or severity of a loss
- Adverse Selection - -When someone buys insurance because they will
probably file a claims because of info about a risk that the insurer is unaware
of
- binder - -Temporary coverage for an insurance applicant until a policy is
issued
- warranty - -A promise that certain conditions will be met
- Estoppel - -Prevents an insurer from denying coverage if the insured has
reasonable come to believe that he has such coverage based on insurers
practices
- Moral Hazard - -Deliberate, involved reckless behavior, an attempt to
defraud
- Morale Hazard - -Indifference/carelessness, no intent to defraud, just feel
more secure because of insurance
, - proximate cause - -Unbroken chain of events between an occurrence and
a loss, the occurrence is the proximate cause of the loss
- Claims process (5)) - -1. filed 2. Acknowledgment 3. Investigation 4.
Evaluation 5. Adjustment
- Actual Cash Value - -Market/depreciated value prior to destruction
(replacement cost minus depreciation)
- Replacement Cost - -Don't subtract depreciation,
Common in home but not in auto
- Valued Policy - -Assigns a set value to an item, avoids confusion of
depreciation
- stated value - -Value state by insured when applying for insurance.
(Usually for when insured can't afford to insure for full value)
- Deductibles (fixed, percent, franchise) - -Fixed- set amount; percent- % of
risks value; franchise- policy kicks in after loss exceeds certain amount,
insurer pays 100%
- Coinsurance Penalty Formula - -(Amount of Insurance )/(Amount of
Insurance Required) x Loss - Deductible
- Vicarious Liability - -Transfer of negligence (employer or parent)
- Four elements of negligence - -1-Duty of care
2-Derelict: breah of duty if care
3-Direct cause: legally recognizable injury occurs as a result of breach of
duty of care
4-Damage: wrongful activity must have been caused the injury or harm that
occurred
- Defenses to a Claim of Negligence - -assumption of risk, contributory
negligence, comparative negligence
- Liability policy limits (3) - -Single limit, split limits, aggregate limits
- tort - -Any wrongful act, intentional or unintentional
- Diminution of Value - -Total amount of all damages resulting from an
occurrence; legal term used in calculating compensatory damages
, - General Damages - -Intangible, not quantifiable (future losses, mental
anguish, loss of reputation)
- Special Damages - -Awarded for tangible losses, quantifiable value
- Punitive Damages - -For intentional acts, as punishment
- Discovery Rule - -Statute of limitations is based on when injury is/should
have been discovered
- Adjuster reports (3) - -(1) initial - in 15 days, timelines, deadlines,
apparent losses, coverages, initial reserve (2) interim- every 30 days,
progress made and any new info (3) final -all facts and statements,
coverages applied, adjusted losses, final claim disposition
- Steps of a claim process (9) - -1. Acknowledge the claim
2. Establish lines of communication
3. Prepare necessary paperwork
4. Determine insurer's liability in the claim
5. Investigate the losses
6. Determine the time and cost of repairs
7. Apply all policy coverages and provisions
8. Negotiate a settlement
9. Prepare final reports
- How to determine insurer's liability (6) - -1. Was the policy active
2. Does claimant have insurance interest
3. Does policy cover this type of damage
4. Is there a history of similar claims
5. Do any other policies cover the loss
6. Has the insured met all the requirements
- Types of Dispute Resolution (5) - -1. Arbitration- neutral 3rd party, legally
binding, less costly and more expertise than court
2. Mediation- neutral 3rd party, advised only, legally binding if both parties
agree
3. Appraisal- only decides settlement, not if coverage exists, each side
chooses and appraiser, they choose an umpire
4. Declatory judgment action-court declares rights if both parties
5. Litigation- last resort. Expensive, unpredictable, time costly
- Settlement options (6) - -1. Full release- insurer cuts check, insured signs
release
2. Scheduled release- insurer pays damages up until settlement and certain
future incidentals
