Florida Claims Adjuster Exam, 6-20 All Lines Adjuster- Florida- Review

Peril

Something that causes a loss.

Hazard

Something that increases the probability that a loss will occur.

Warranty

A policy condition, either based on information in the insureds application or inserted by the insurer. It is a guarantee of a fact.

Misrepresentation

An untrue statement by the insured, made in an application for insurance but which does not become a part of the policy.

Concealment

The failure of the insured to reveal relevant facts known to the insured in applying for insurance.

Abandonment

Property insurance policies usually contain an abandonment clause, stating the insured cannot dump damaged property on the insurer and demand its full value.

Severability

The insurance applies separately to each insured as if other insureds did not exist.

Proximate Cause

The cause having the most significant impact in bringing about the loss under a first-party property insurance policy, when two or more independent perils operate at the same time (i.e., concurrently) to produce a loss. Courts employ a set of rules to resolve causation disputes when a property policy states that it covers or excludes losses "caused by" a peril and there is more than one peril at work in a fact pattern. Under common law, whether the policy provides coverage depends on which peril is chosen as the proximate cause.

Direct Loss

Physical harm to tangible property.

Indirect Loss

Economic loss which flows as a result of direct loss.

Actual Cash Value(ACV)

Replacement Cost minus Depreciation

Coinsurance

The amount, generally expressed as a fixed percentage, an insured must pay against a claim after the deductible is satisfied. It's ultimately a way for the insured and insurer to share responsibility for the risk. It can also help reduce the cost of the insurance policy premium. Coinsurance can be written on an 80/20, 90/100, or 100% rule.

Personal Contract

Policies cover people who own and operate things, such as automobiles.

Conditional Contract

Also called a hypothetical contract, is a contract agreement that only requires performance once the delineated conditions are met. This legal agreement requires prior performance of another agreement or clause in order to be enforceable. If the other agreement or condition is performed, then the conditional contract is enforceable and the parties are bound to carry out the terms of the contract.

Contract of Indemnity

Principle of insurance that provides that when a loss occurs, the insured should be restored to the approximate financial condition he/she occupied before the loss occurred, no better or no worse.

Insurable Interest

the reasonable concern of a person to obtain insurance for any individual or property against unforeseen events such as death, losses, etc.

Waiver

1.) Implied voluntary relinquishment, abandoning a legal advantage, need, claim or right.

2.) Agreement or added clause of a policy that excludes some losses or limits the sum of a claim, or extends coverage to add items not in a normal policy.

Express Waiver

Occurs when the insurer or its representative knowingly gives up a known right under the insurance contract.

Implied Waiver

A waiver that is assumed to be in effect from a person's behavior and shows he is waiving a right.

Damages

Monetary compensation that is awarded by a court in a civil action to an individual who has been injured through the wrongful conduct of another party.

Subrogation

When an insured has a right to collect damages from another party, but instead elects to claim the damages under his insurance policy, his rights against the other party are transferred to the insurer.

Changes

All policies provide that any changes to the policy be made by the insurer, in writing.

Policy Period

The condition states that coverage applies only to losses or occurrences that take place during the policy period. (Prior to the stated date and time of termination).

Policy Territory

Condition limiting coverage to occurrences or losses that take place only within a stated geographical region.

Other Insurance

The principle of indemnity dictates against duplicate recovery for the same loss.

Cancellation

The insured may cancel at any time, for any reason, without advance notice. If the conpany wishes to cancel, it must provide some degree of advance notice so the insured will have time to replace the coverage.

Appraisal

A written contract of or written agreement for or effecting insurance, or the certificate thereof, by whatever name called, and includes all clauses, riders, endorsements and papers which are a part thereof.

Insurance

Is a contract whereby one undertakes to indemnify another or pay or allow a specified amount or a determinable benefit upon determinable contingencies.

Binder

Acts as a temporary contract until the policy is issued.

How many days should an insurer give for prior notice of cancellation of a binder?

5 days.

Property Insurance

Any insurance wherein payment by the insurer will be paid directly to the insured or other specifically named interests.

Liability Insurance

Payment will be on behalf of the insured to another, based upon the insureds liability to the recipient. Simply stated, Liability is "Negligence of the Insured".

Loss Payee Clause

A Clause in a contract of insurance that provides, in the event of payment being made under the policy in relation to the insured risk, that payment will be made to a 3rd party rather than to the insured beneficiary of the policy.

Mortgage Clause

A property insurance provision granting special protection for the interest of a mortgagee named in the policy, in effect setting up a separate content between the insurer and the mortgagee.

Other Structures

Covers items that are not permanently attached to the main dwelling, such as a shed, fence, etc.

Commercial Inland Marine

Helps identify the kinds of risk which are eligible for either ocean or inland Marine insurance.

Building Ordinance Coverage

This endorsement covers the insured for enforcement of laws which require demolition of undamaged portions of buildings.

Umbrella Policy

Covers a much higher limit and goes above and beyond claims directly relating to your home and auto, it provides your assets from an unforeseen event, such as a tragic accident in which you are held responsible for damages or bodily injuries.

Known Loss

Prevents an insured from coverage if the insured knew the loss was probable at the time of the insurance contract.

Value Reporting

The limit of coverage is set at an amount somewhat higher than expected peak values.

Commercial Property Insurance

Covers direct and indirect losses related to properties other than one to four family dwellings and farm properties.

Employee Theft

Provides coverage for loss of or damage to money, securities, and other property resulting from theft committed by an employee. Theft is defined as the unlawful taking of money, securities or other property to the deprivation of the insured.

Bid

Aggreement to fulfill a contractual obligation used frequently in construction and supplying goods.

Health Maintenance Organization (HMO)

Provides comprehensive health services to its members for a prepaid fixed fee, equivalent to an insurance premium.

Preferred Provider Organization

(PPO)

A selected group of hospital's and medical practitioners in a given area who have joined together in an effort to reduce medical costs.

Estoppel

Is an equitable principle to the effect that if one intentionally or unintentionally creates the impression that a certain fact exists, and an innocent party relies on that impression and is damaged as a result, the guilty party may be legally prohibited(estopped) from asserting that the fact does not exist.

Salvage

Motor vehicle or mobile home is a total loss.

Junk

Any material which is or may have been a motor vehicle or mobile home, with or without all component parts, which is inoperable and which material is in such condition that its highest or primary value is either in its sale or transfer as scrap metal.

Fiduciary Agent

Agent for a principal/Client. The legal or special relationship of trust, confidence, or responsibility between 2 or more parties.

Domestic Insurer

Insurer is one formed under the laws of its this state.

Foreign Insurer

Insurer is one formed under the laws of any state, district territory, or commonwealth of the United States other than this State.

Alien Insurer

Insurer is an insurer other than a domestic or foreign insurer.

Appointment

The authority given by an insurer or employer to a licensee to transact insurance or adjust claims on behalf an insurer or employer.

Derelict

Material which is or may have been a motor vehicle or mobile home, with or without all component parts, which is inoperable and which material is in such condition that its highest or primary value is either in its sale or transfer as scrap metal or component parts or both.

Mechanical Breakdown Coverage

Covers repairs to mechanical parts of your vehicle that break. Even covers break in events not related to an accident.

Sliding

Selling an item and stating that it is required by law.

What is the Death Benefit amount for PIP ?

$5,000

What is the amount for medical and disability benefits afforded by PIP ?

$10,000

Who is the Financial Responsibility Law administered by ?

The Department of Highway Safety and Motor Vehicles.

What are the Basic PIP Benefits ?

-Medical-80% of responsible expenses are paid for necessary medical, surgical, X-Ray and dental.

-Work Loss-60% of any loss of gross income and loss of earning capacity reimbursed.

-Replacement Services-100% for the cost of having household services performed by others.

-Death-Effective 01/01/2013 the death benefit will be $5,000 in addition to the $10,000 in medical and disability benefits afforded by PIP.

Company or Staff Adjuster

Are salaried employees under the supervision of the home, branch or regional claims department of insurers.

Fee Adjusters

Offer their services on a fee-for-service basis. They represent many insurers.

Bureau Adjuster

Employee or agent of an adjustment bureau which serves multiple company clients such as the GAB Business Services, Inc and Underwriters Adjusting Company both national firms.

Independent Adjuster

Are Self-Employed and are not affiliated with either insurers or bureaus. They serve as adjuster representatives of insurers, and their services are compensated on a fee-plus-expenses basis for each loss handled.

Public Adjuster

Is a claims adjuster who is an advocate for the policyholder in appraising and negotiating an insurance claim.

What are the Characteristics of a Personal Auto Policy Declaration Page ?

-Liability(Bodily Injury)

-Property Damage

-Uninsured Motorist

-Medical Payments

-Personal Injury Protection

-Collision Deductible

-Comprehensive Deductible

-Towing Coverage

-Rental Coverage

What are examples of Transacting Insurance?

-Solictitation of Insurance

-Negotiation of Insurance

-Effecting Coverage (Binding insurance coverage)

-Transacting Insurance Matters(during and after insurance is bound).

What are thresholds of the No-Fault Law ?

-Significant and permanent loss of a bodily function or

-Permanent injury other than scarring and disfigurement or

-Significant and permanent scarring or disfigurement or

-Death

What is the adjusters investigation limited too ?

A simple verification of bills and estimates or it may be expanded to include photographs, witness canvasses, or recorded statements as the circumstances require.

What are the componets of a investigation process ?

-Inquiry

-Verification

-Comparison

What are some reasons for suspension, revocation or termination of a license ?

-Transacting Insurance outside of scope of one's license

-Misrepresentation or fraud

-Sliding

-Demonstration of unworthiness or lack of fitness

-Misappropriation of funds

-Failure to inform Department of financial services, within 30 days, after pleading guilty or no contest to a felony.

Florida Unfair Insurance Trade Practices Act

Describes certain practices, penalties are provided for misrepresentation to insureds and claimants and business practices such as

-Failing to act promptly

-Failure to affirm or deny a claim when an insured is entitled there to

-Failure to explain claim denials in writing

-Failure to maintain complaint-handling procedures such as keeping accurate records of complaints.

Comprehensive Coverage

Covers all loss except collision or overturn. Standard deductible is $100 per car, $500 per occurrence applies to losses from theft, mischief, and vandalism.

What is the minimum requirements for the Financial Responsibility Law ?

-The legally valid claims of others must be satisfied(up to the 10/20/10 requirements)

-The owner and operator must provide certification of financial responsibility for future accidents. If not satisfied operator's driver's license and the registrations of all owned vehicle's are suspended.

What are the basic activities in claims handling ?

-Investigation to establish coverage, determine legal liability, and verify if the alleged damages qualify the loss for payment.

-Evaluation to determine the fair payment in accordance with the contract and applicable law.

-Negotiation of a quality settlement based on facts discovered during the evaluation process.

Claim

Is the assertion of an alleged legal right against an insurer, which carries with it a demand for appropriate relief.

Claims Adjuster

One who is involved in the investigation, adjustment, negotiation and/or trial preparations of claims arising under insurance policies.

Adjusting

Process of disposing of an insurance claim.

Loan Receipt

A written statement given by the insured to the insurer acknowledging that money received in the settlement of damages is received, not as a final payment, but as an advanced pending the outcome of a claim against the person responsible for the damage.

Apportionment

Is a provision for computing and assigning to each of two or more contracts covering a claim its proportion of the amount of the loss.

How to settle a claim for an Injured Minor ?

Under Fl Law, the adjuster should settle a third-party liability claim of an injured minor child with both parents of the injured child, presuming the settlement is for an amount not in excess of $15,000. If it is more than that it must be consummated through the Circuit or County Courts.

What are the violations of the Unfair Trade Practices Act ?

-Failing to act promptly.

-Failure to affirm or deny a claim when an insured is entitled thereto.

-Failure to explain claim denials in writing.

-Failure to maintain complaint-handling procedures, such as keeping accurate records of complaints.

Section 624.155 of the Florida Statues provides ?

That any person who is damaged by certain insurer practices is granted a right to sue the insurer for damages.

The Principle Of Utmost Good Faith

An insurance contract is based, places serious responsibilities on the claim adjuster with regard to conduct, work habits, and specific claims handling activities.

What does 10/20/10 mean ?

10=10,000 Livability per person injured-amount that will be paid out for injuries to one person.

20=20,000 Combined Total Liability for all injuries-this is the most paid out for injuries for an accident.

10=10,000 Property Damage-the most paid out for damage caused to property of others.

What is SR-22 ?

A form of coverage known as a NAMED NOOWNER policy is required, this form offers insurance coverage only while the insured is operating automobiles owned by others.

What are the two things that need to happen for financial responsibility that did not exist at the time of the accident ?

-The legally valid claims of others must be satisfied(up to the 10/20/10 requirements).

-The owner and operator must provide certification of financial responsibility for future accidents.

What are the main elements of the FL Law ?

-Those who comply with the law have limited immunity from tort suits.

-As one may not be able to seek legal liability damages against another for bodily injuries, the law substitutes, under one's own insurance, the coverage defined as Personal Injury Protection(PIP)

How many days does a Non-Resident's vehicle physically present in FL have subject to the No-fault law ?

90 days.

What are the three penalties for non-compliance with the compulsory insurance requirements ?

-The owner is denied the immunities from legal liabilities that are granted to those who comply.

-The owner is personalltly liable for payment of PIP benefits to those entitled to such benefits.

-The owner's driver's license and vehicle registration are subject to suspension, as under the Financial Responsibility Law.

What does Extended PIP do ?

-Increases medical benefits from 80% to 100%.

-Increases income loss from 60% to 80%.

-Applies only to named insured and family members.

What does additional PIP do ?

-Increases the $10,000 limit by amounts such as $10,000, $25,000, $40,000, and $90,000(again, for a premium increase).

-Increases do not impact $5,000 death benefit.

-Applies only to insured and family members.

Personal Auto Policy

Used to insure the automobile exposures of individuals and families.

Business Auto Policy

Insurers the automobile exposures of Business.

What are the kinds of autos owned by businesses and covered under a Business Auto Policy ?

-Private Passenge Type Auto-Station Wagons, jeeps, pickups, panel trucks, vans, and utility trailers.

-Public Auto- Buses and Taxicabs

-Commercial Auto- truck tractors, semi-trailers, commercial trailers, and Service trailers.

-Special types of vehicles like cherry pickers, air compressors.

Garage Coverage Form

Used to insure businesses engaged in selling, servicing, repairing, parking or storing autos.

Truckers Coverage Form

Used to insure businesses that are hired to transport goods for someone else.

Business Auto Coverage Form

Used to insure the automobile exposures of all businesses other than garage or trucking businesses.

What does Commercial General Liability contract includes ?

-Declarations

-Common policy conditions

-One of the two coverage forms, Occurrence, or Claims-Made

-A Nuclear Energy Liability Exclusion endorsement

-Various other endorsements may be attached to broaden or restrict the coverage provided by these basic forms.

Declarations

Identifies the named insured and address, states the policy period and premium and miscellaneous information about the insured, and specifies the limits of coverage that apply.