N.C. Claims Adjuster Exam Latest 2023 Rated A+

N.C. Claims Adjuster Exam Latest 2023 Rated A+ Inception/Expiration Date an insurance policy covers the insured starting at 12:01am on the day on which coverage begins and expires at 12:01am on the expiration day of the policy. Occurrence Date Date of which the loss occurred Identification of parties involved The loss report should include the names and addresses of the parties involved in the loss, the names and addresses of any injured person(s) and the names and addresses of any witness(s). Policy Form/Number Identifies the type of coverage purchased (policy form) and the policy number for the particular policy purchased by the insured. Description of the Loss Information concerning how, when and where the accident or loss happened is an essential element in any loss report. Coverage Shows the type of coverage(s) purchased as well as the limits of coverage purchased. Damages - Special Compensatory damages Are amounts paid to compensate the plaintiff for direct expenses such as medical treatment, lost wages (both past and future), funeral expenses and rehabilitation expenses required because of bodily injury. Special damages are paid for losses that can be determined and documented. They are often referred to as "out-of-pocket" expenses. Damages - General Compensatory Damages Are paid for losses that cannot be specifically measured and itemized in order to compensate the plaintiff for things such as pain and suffering, loss of the use of an arm or leg, loss of vision, physical disfigurement and/or loss of consortium. Damages - Punitive Damages Are typically awarded to the plaintiff in addition to compensatory damages when the defendants conduct has been especially malicious. Punitive damages are awarded to punish the defendant and to deter others from engaging in similar actions. Unfair Claims Settlement Practices 1. Knowingly misrepresenting relevant facts or policy provisions relating to the coverage at issue. 2. Failing to acknowledge with reasonable promptness communications pertaining to claims. 3. Failing to adopt and implement reasonable standards for the prompt investigation of claims. 4. Arbitrary and unreasonable refusal to pay claims. 5. Failing to affirm or deny coverage of claims within a reasonable time after proof of loss has been completed. 6. Not attempting in good faith to make prompt, fair and equitable claims settlement when the insurer's liability has become reasonably clear. 7. Compelling insureds to institute suits to recover amounts due under a policy by offering substantially less to settle immediately. 8. Attempting to settle claims for less than the amount for which a reasonable person would believe one was entitled based on written or printed advertising material accompanying or made a part of an application. I. Attempting settlement of claims on the basis of applications that were altered without notice to knowledge of or consent of insureds. Total Losses on Motor Vehicles/Miscellaneous Provisions 1. If the insurer and the claimant are unable to reach an agreement as to the value of the vehicle, the insurer shall base any further settlement offer not only on the published regional average value of similar vehicles, but also on the value of the vehicle in the local market. 2. Local market value shall be determined by using either the local price of a comparable vehicle or if no comparable vehicle can be found, quotations from at least two qualified dealers within the local market area. Additionally, if the claimant represents that the vehicle was in better than average condition, the insurer shall give due consideration to the condition of the claimant's vehicle prior to the accident. 3. When a motor vehicle is damaged in an amount which equals or exceeds 75 percent of the preaccident actual cash value, an insurer shall "total loss" the vehicle by paying the claimant the preaccident value and in return, receiving possession of the legal title for salvage purposes. 4. The insurer will be responsible for all reasonable towing and storage charges until three days after the owner and the storage facility are notified in writing that the insurer will no longer reimburse the owner or storage facility for storage charges. 5. Loss and claims payments shall be mailed or otherwise delivered within 10 business days after the claim is settled. After Market Parts An after market part is any part made by a non original manufacturer. Speculative Risk When there is a chance of gain as well as a chance of loss. Insurance is not intended to protect against this type of risk. Pure Risk When there is a chance of loss only. Insurable Risk One that an insurance company is willing to accept. Characteristics of Insurable Risk 1. Low probability of loss occurring, 2. Less than catastrophic results, 3. The loss must be measurable, 4. The loss must be significant, 5. The loss must be accidental and unintended. Probability Measures the chance of an event occurring, it is the measure of uncertainty (risk). Law of Large Numbers (Law of Averages) Mathematical principle that makes it possible to predict future losses based upon prior experience. Spread of Risk (Geographic Dispersion) Also used to decrease loss probability. This process involves spreading the company's policies (exposures) over a broad geographical area in order to avoid large losses in the vent of a catastrophic event. An example is a hurricane. Adverse Selection Adverse selection occurs when insureds with a high risk of loss attempt to purchase insurance and are successful in obtaining insurance. Perils Are the actual cause of loss such as a fire, theft, wind, hail, etc. Hazards Increase the probability of a peril occurring. Bald tires on an automobile increase the chance of a wreck happening. The tires are the hazard, the wreck is the peril. Property Insurance Indemnified (repays) a person or business with an interest in the physical integrity of tangible property for its loss or the loss of income produced by that property. Casualty Insurance Provides protection to meet the unexpected costs imposed by law due to acts that have caused bodily injury or property damage to another individual. Included isn't he field of casualty (liability) insurance are automobile, crime and surety bonds. Private or Voluntary Insurance Portion of the insurance industry where individuals seek coverage to meet recognized needs. These coverages are neither required nor made available by government. An example would be collision insurance in a personal automobile insurance policy. Social Insurance Programs either required or made available by government. Reinsurance Filed of the industry where insurers sell portions of their individual contracts of insurance to other companies. This activity helps with the spread of risk and/or improves cash positions by lowering reserve requirements for these contracts. Insurance companies also purchase reinsurance to protect themselves in case of catastrophic losses. Capital Stock Companies Proprietary companies that are in business to make a profit for their stockholders. These companies are owned by stockholders who retain management responsibility through the selection of a Board of Directors. Profits are paid to the stockholders in the form of a commercial stock dividend that is fully taxable to the stockholder. Mutual Insurance Companies Are owned by their policyholders. Each policyholder "owns" a part of the company equal to their proportionate share of the company's total insurance in force. The policyholders select a board of directors who appoint officers to be in charge of the company's daily operations. Operating surpluses of these companies may be returned to their policyholders in the form of a non-taxable policy dividend. The dividend is non-taxable because it is a return of premium (the company charged too much). Reciprocal (Assessment) Companies Are non-incorporated associations of individuals or businesses (subscribers) who engage in cooperative insurance. Each policyholder is insured by all other policyholders and each policyholder insures the others as coverage is exchanged on a reciprocal basis. Two important facts to remember about reciprocals are: 1. Managed by Attorney-in-Fact (not necessarily a lawyer), 2. The Attorney-in-Fact can assess the policyholders for additional premiums if underwriting losses jeopardize financial solvency. Domestic Companies Companies organized in this state. Foreign Companies Organized in another state. Alien Companies Organized in another country. Certificate Of Authority When authorized by the state and become known as an Admitted or Authorized company. Non-Admitted or non-authorized companies For basic understanding, property, casualty and personal lines insurance agents are not permitted to represent or place insurance with non-admitted companies. Independent Agency System System in which an agent may represent more than one insurance company in the marketing of property and liability insurance products. Independent agents own the business and they retain all rights to the accounts they have placed with a company. Direct Writers Use captive or exclusive agents or employees in the sale of property and liability insurance products. Agents or employees can only represent that particular insurance company. Agents Representatives of the insurer. Agents must be licensed with the state to legally conduct insurance transactions. Agents receive their authority to operate on behalf of the company by the agency contract and by an appointment. Property Casualty and Personal Lines Agents May be given "binding" authority. A binding premium receipt (binder) is temporary evidence that insurance is in effect without condition. Binder