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C11 - Insurance Flashcards - Chapter 11- Adjusters & the Claims Process
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C11 - Insurance Flashcards - Chapter 11- Adjusters & the Claims Process
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C11 - Insurance Flashcards - Chapter 11-Adjusters & the Claims Process
Name & Define the 2 types of Losses an Insured can face? - CORRECT
ANSWER-First Party - A loss experienced by the insured. Involves the insured,
the insurer & a lien holder/mortgagee.
Third Party- (aka liability coverage) A loss by a person who is not a listed
member on the policy.
Who is responsible for proving a loss?
Who can report a loss, and to who? - CORRECT ANSWER-The insured is
responsible for proving a loss.
Either an insured or a third party can report a loss to the broker or insurance
company directly
What is the first thing than an insurer does before taking any action concerning a
reported loss? What is the second an insurer takes concerning a reported loss? -
CORRECT ANSWER-First - Confirm that coverage exists on the policy
Second - Open claim & assign claim number, determine how a claim needs to be
handled.
What is a proof of loss, and what does it contain? - CORRECT ANSWER-A proof
of loss is a document completed & signed by insureds making a claim against
their own insurer. It releases the insurer of further obligations relating to that loss
and transfers title to any useful salvage to the insurer.
It contains the following: policy details, loss details, how much is being claimed,
who will the claim be paid to.
How do insurers determine who investigates a loss? - CORRECT
ANSWER-They appoint an adjuster to investigate the loss. Whether they assign
a staff appraiser or a independent appraiser depends on the amount being
claimed, and the possibility of fraud in the claim.
What are some subtle ways insureds may perpetrate insurance fraud? -
CORRECT ANSWER--Overstating settlement values
, -Claiming for items that never existed
-Claiming for damage that was never intended to be covered by insurance
What is estoppel and how can it arise? - CORRECT ANSWER-Estoppel is a
doctrine of law which precludes a person from denying the truth of a statement
formerly made by him or the existence of a series of facts which has caused
someone to draw a certain logical conclusion. It can be created by conduct as
well. (example - not advising insured upfront of coverage issues)
What is prescription and how is it determined? - CORRECT
ANSWER-Prescription, in law, is a time after which a cause of action ceases. In
insurance, it is the time after which a claim may not be brought.
What is a statement of claim? - CORRECT ANSWER-A statement of claim is a
written statement by a plaintiff detailing the facts which support the claim against
the defendant and the relief sought.
What is a waiver? - CORRECT ANSWER-The voluntary relinquishment of a
known right.
What is the difference between a non-waiver agreement & a reservation of rights
letter? - CORRECT ANSWER-A non-waiver is an agreement between insured &
insurer recognizing that there is a possible right to deny liability but in the interest
of both parties, a note will be made of it and the matter will be allowed to proceed
without prejudice to either party.
A reservation of rights letter states that the insured is investigating the loss
without prejudicing it's position.
If the insurer cannot get an insured to sign a non waiver, it will send out a
reservation of rights letter.
Why is an adjusters first report so important? - CORRECT ANSWER-It is
important because it contains the estimate of the damages and the potential cost
of the claim. From this information an adjuster can adjust it's reserves.
What are loss reserves and what is their purpose? - CORRECT ANSWER-Loss
reserves are funds set aside to cover an insurer's outstanding claims. They are
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