Unit 5 - Basics of Claim Handling Flashcards Preview

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Flashcards in Unit 5 - Basics of Claim Handling Deck (14)
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1
Q

When is the insurer NOT obligated to pay

A
  • Insurer is only obligated to pay claims for which the insured is legally liable to pay damages and to which the policy applies (i.e. insured is negligent and has coverage).
2
Q

What is one way an adjuster can prevent a lawsuit?

A

PROMPT contact with the insured and with the claimant.

3
Q

Proof of Loss (Claim Form)

A
  • To be completed by INSURED (not adjuster)
  • Helps determine if insured…1) … has other insurance that may cover loss
    2) … whether insured has insurable interest in the property
    3) … time & origin of loss
    4) … Value of loss
4
Q

When must the sworn proof of loss statement be returned to insurer?

A

Within 91 days of RECEIPT BY THE INSURED (or from the date the adjuster mails out the form).

5
Q

Depreciation

A

A decrease in value of property as a result of use, age, obsolescence, wear and tear, deterioration, and so forth.

6
Q

Total Loss

A

Occurs when cost to repair is greater than the value of the property pre-loss value.

7
Q

Salvage

A

Occurs when the insurer takes title to the property of the insured under a covered loss and becomes the new owner of the property.

8
Q

4 Claim settlement options

A

Dictated by policy itself (under “conditions” section).

1) Replacement cost… provides a settlement to the insured to replace property with property of like kind and quality (without subtracting depreciation).
2) Actual cash value (ACV)… Replacement Cost - Depreciation
3) Valued Policy… pays the face amount of the policy in the event of a total loss (reserved for certain high-value items). Insured must pay for appraisal items covered under this policy.

9
Q

When can the adjuster issue settlement of loss?

A

After he/she…

1) Verify’s coverage
2) Determines liability
3) Completes thorough investigation

10
Q

Intangible damages

A
  • aka non-economic damages, general damages

- pain, suffering, emotional loss, and loss of future earnings

11
Q

Subrogation

A
  • The transfer by the insured to the insurance company of the insured’s right of recovery against others
  • Only applies when insured isn’t at fault.
  • 1st party will eventually recover cost of deductibles.
12
Q

Appraisal

A
  • Alternative dispute resolution
  • Method of solving disputes regarding the VALUE (or DOLLAR AMOUNT) of a claim
  • If insured and insurer can’t agree on the AMOUNT OF THE LOSS or the ACV, either may hire their own appraisers by making a written demand on the other.
  • Each party has 20 days to select a competent appraiser.
  • When neither appraiser comes to an agreement, both parties hire an “UMPIRE” (aka a retired judge). His word is final.
13
Q

Arbitration

A
  • Alternative dispute resolution
  • Occurs to determine whether or not there is a valid claim and/or dispute over specifics of coverage.
  • 3rd party, chosen by the participants or appointed by court, intervenes between the conflicting parties to hear their claims and render a decision.
  • Arbitration is NOT required in the state of Texas before filing a lawsuit in court.
14
Q

Negotiation

A

Critical factor in meeting company goals

  • Fulfill contractual and legal obligations
  • Manage expenses
  • Cultivate good customer relations