NJ Public Adjustment review

Public Adjuster Bond

$10,000 bond is required for solicitors/adjusters

BOP property in transit limit

$10,000.00

Under a dwelling broad or special policy, what is the maximum that would be paid for "loss of use" if coverage A was $60,000?

$12,000 (20%)

Under the "emergency program" the National Flood Insurance Program will insure a single family residence for up to:

$35,000

Loss to a Pair or Set

(1) repair or replace any part to restore the pair or set to its value before the loss or (2) pay the difference between actual cash value before and after the loss

CE (Continuing Education) credits

15 hours are required to renew the Public Adjuster license.

Changes to Public Adjuster sublicensees must notify the Commissioner of Insurance in _______ days.

20 days

Number of days a Commercial claim must be paid after submission of proof of loss?

30 days

You must notify the Dept. of Insurance within _______ if you lose your license in another state.

30 days

In the event of a catastrophic loss the the Insurance Commissioner may issue licenses for ______ days?

90 days

Information provided by the insured in a proof of loss is considered:

A representation

Public Adjuster License

A solicitors/adjusters license is valid for two years and must be renewed every two years

Gable roof

A type of roof containing sloping planes of the same pitch on each side of the ridge.

When is abandonment of insured property to an insurer permitted in a policy?

Abandonment of insured property to an insurer is NEVER permitted.

When is a residential property considered vacant?

Absence of furniture.

An example of moral hazard

An arsonist applies for property insurance.

What Coverage of an insurance policy would cover a swimming pool?

Coverage C - personal property

"fascia" boards are used for:

Covering the ends of rafters/truss ends

Sprinkler Leakage insurance exception

Damage to growing crops from malfunctioning sprinklers.

What is balloon construction framing?

Frame walls that run the entire vertical length from the floor to the roof.

Commercial policy premiums must be paid within 15 days.

How many days before an insurer can cancel a Commercial Policy for non-payment?

What is not covered in an HO-6 policy fire loss with full replacement value?

Improvements and betterments are not covered.

Business activities under Coverage E (Personal Liability)

Insured is NOT covered.

In a dwelling policy what is covered by Coverage D?

Loss of Use (additional expenses such as food and lodging)

In a case of a broken water line is the cost of the water covered?

No, the cost of the water lost from a water line break is not covered.

In a policy with multiple named insureds must all insureds receive a cancellation notice?

No, the insurer need only inform the person whose name appears first on the policy.

Does a business policy cover structures and walls?

No. Structures and walls are not covered.

In a dwelling policy what is covered by Coverage B?

Other structures

License refusal

Penalty for withholding of material information on the public adjuster application - imposed by the Insurance Commissioner

Fire, lightning and internal explosion

Perils automatically covered by the basic dwelling form (DP-1).

In a dwelling policy what is covered by Coverage C?

Personal Property

Concurrent policies

Separate policies that insure the same interest and identical property in the same loss.

These are not covered in a Business property policy.

Structural members

Who must a Public Adjuster notify (in NJ) if he is indicted for a crime?

The Commissioner of Insurance

Who to notify and what to do if you lose your bond (surety)?

The Dept of Insurance and turn in your license immediately.

How is responsibility for specific property determined in cases of condominium ownership?

The adjuster must check the master deed and by-laws of the condominium association to determine responsibility for specific property in condos.

What is true about the co-insurance clause when a loss is valued using functional replacement cost?

The co-insurance clause is not applicable.

Conditions

The part of an insurance policy that sets forth the rules of conduct, and the duties and obligations of the insured and insurer under the terms of the contract.

Who are the three parties to the "appraisal clause"?

The two appraisers and the umpire.

Under the Homeowners Policy, "theft" does not include:

Theft of building materials from a dwelling under construction.

Extra Expense Insurance

This is coverage that pays for the necessary extra expenses, over and above normal expenses, to keep a business operating during the time it takes to rebuild, repair, or replace the damaged or destroyed property after a loss.

What cause of water damage is covered in a homeowner's policy?

Water from pipes and appliances NOT wind driven rain, floods or subterranean water.

Protect people from fraudulent and unethical business.

What is the purpose, goal or aim of surety bonds according to the N.J. Department of Banking and Insurance?

Hazard

a condition that may create or increase the chance of loss arising from a given peril

Reservation of Rights Letter

a letter from an insurer to the insured advising that the insurer will not give up its rights under the policy. The insurer reserves the right to raise coverage issues at a later date when and if they become known

Deductible

a means (device, method) used to minimize small property claims which also helps to keep insurance premiums down.

Non-waiver Agreement

a preprinted form presented by the insurance companies adjuster to the insured for signature. It allows for the insurer to carry out an in depth investigation without waiving any of its rights under the policy

Agreed Value

a stipulated agreement between the insurance company and the insured that the amount of insurance coverage under the policy is sufficient to be in compliance with the coinsurance requirement.

Unoccupancy

absence of people for at least 60 consecutive days from a given property

Non-Recoverable Depreciation

actual cash value policies state that an offer of settlement is based on the actual cash value of the property at the time of the loss, therefore, any depreciation applied because of age, deterioration, etc. is not recoverable.

Depreciation

actual or accounting recognition of the decrease in the value of a hard asset (property) over a period of time

Recoverable Depreciation(Holdback)

although replacement cost policies provide for replacement of damaged property at current prices, certain conditions must be met before you can collect the full amount for the loss. The insurance company will make an offer of settlement, then withhold a portion of the money until the repairs are actually made. You must provide receipts showing that you incurred a cost of equal or greater than the offer of settlement in order for you to receive all of the holdback moneys.

Mortgage Clause

attachment to a property insurance policy to protect the interest of the mortgage in the mortgaged property. If the property is damaged or destroyed the mortgage is indemnified up to his or her stated interest in the property.

Chance of Loss

chance that an event will occur

Physical Hazard

circumstance that increases the likelihood a probable severity of a loss. For example, the storing of explosives in a home basement

Vacancy

circumstance where no people or contents occupy or are kept in a building for at least 60 consecutive days

Moral Hazard

circumstance which increases the probability of loss because of an applicant's personal habits - circumstance that increases the probability of loss because of the insured's indifferent attitude. For example, if an insured leaves the doors unlocked and the windows open when leaving home

Apportionment Clause

clause in a property insurance policy that requires that insurance coverage in that policy to be allocated in the proportion that it bears to the total insurance coverage in force from all policies covering that particular property

Insurer

company offering protection through the sale of an insurance policy to an insured

Actual Cash Value

cost of replacing damaged or destroyed property with comparable new property, minus depreciation

Spoilage Coverage

coverage for power outages

Ordinance or Law Coverage

coverage providing for the cost or restoration to the undamaged portion of the damaged building, by building codes that is in force. This coverage would also apply to the costs of demolition and debris removal of the undamaged portions of the property in order to bring that portion up to code. Also covers increased cost of reconstruction due to building code

Demolition Insurance

coverage that will indemnify the insured for the expense if a building is damaged by a peril and zoning requirement codes mandate the building be demolished

Proof of Loss

documentation of loss required of a policy owner by an insurance company; must usually be filed within 60 days after the request of the insured or according to policy provision, 60 days after the date of loss

Insurable Interest

expectation of a monetary loss that can be covered by insurance. Owner of the property.

Improvements and Betterments

fixtures added to a structure after it was originally constructed made by a tenant to suit the tenant's purposes

Principle of Indemnity

in a property casualty contract, the objective is to restore an insured to the same financial position after the loss that he or she was in prior to the loss. But the insured should not be able to profit by damage or destruction of property, nor should the insured be in a worse financial position after a loss

Coinsurance

is a clause in policies stating that the insured must insure to at least 80% of the replacement cost of their property. Its primary purpose is to encourage the property owner to insure to value

Friendly Fire

kindling intentionally set in a fireplace, stove, furnace or other containment that has not spread beyond it

Salvage

legal status giving an insurance company all rights to an insured's property. Once the insurance company has decided to pay you for your damaged property, the insurance company has the right to recover part of the loss by the sale of the damaged goods

Indirect Loss

loss that is not a direct result of a peril. For example, damage to property of a business firm would be a direct loss, but the loss of business earnings because of a fire on its premises would be indirect loss

Limit of Liability

maximum amount of coverage available under a liability insurance policy

Insured

party covered by an insurance policy

Blanket Coverage

policy covering an insured's property at several different locations

Direct Loss

property loss in which the insured peril is the proximate cause (an unbroken chain of events) of the damage or destruction

Bailee Insurance

protection against loss of damage to property while in temporary custody of that property. For example, dry cleaner, storage facilities and laundry mat

Automatic Restoration of Limits

provision in a property or liability policy stating that after a loss has been paid, the total original limits of the policy are once again in effect

Other Insurance Clause

provision in a property or liability policy stipulating the extent of coverage in the event that other insurance covers the same property

Pro Rata Liability

provision in a property or liability policy stipulating the extent of coverage in the event that other insurance covers the same property

Exclusions

provision in an insurance policy that indicates what is denied coverage

Demolition Clause

provision that excludes the insurance company's liability for indemnification of the insured for the insured's expenses incurred in the demolition of undamaged property

Waiver

relinquishment of a legal right to act

Additional Living Expenses

same as loss of use. When a homeowner is temporarily forced from their home due to a loss, the insurance company will pay for the same type of living means as to what they are accustomed to

Subrogation

section of property insurance and liability insurance policies giving an insurer the right to take legal action against a third party responsible for a loss to an insured for which a claim has been paid

If insured fails to report a claim in a timely manner the adjuster may

send the insured a reservation of rights letter.

Estoppel

stop or bar, such that one party makes a statement upon which a second party has every reason to rely, thereby preventing the first party from denying the validity of that statement. The misleading actions of an agent of the insurance company

Replacement Cost Value

sum it takes to replace an insured's damaged or destroyed property with one of like kind and quality

Loss

the experienced reduction of value, partial or complete, for which an insured places a claim with the insurance company

Policy Period

the inception date and expiration date of the policy

Peril

the loss or situation that could lead to a loss in the future

Builders Risk Insurance

types of contracts that insure building contractors for damage to property under construction

Risk

uncertainty of a financial loss-term used to designate an insured or a peril insured against

Hostile Fire

unfriendly fire not confined to its normal habitat. For example, fire in the fireplace leaps onto the sofa

Appraisal

valuation of property insurance and liability insurance policies giving an insurer the right to take legal action against a third party responsible for a loss to an insured for which a claim has been paid

Consequential Losses

value of loss resulting from loss of use of property. For example fire damaging refrigeration equipment resulting in food spoilage

Market Value

value of property as established by the price a willing buyer would pay for property purchased from a willing seller

After how many days of vacancy will the Insurance Company not pay a vandalism claim?

vandalism claims and vacancy-30 day limit

Sewer Back Up

when there is a problem in the street sewer system, which builds up pressure making water back up into the home

Contributing Insurance

when two or more policies apply to the loss, each policy pays its part of the loss

Endorsement

written agreement attached to a policy to add or subtract insurance coverage's. Once attached the endorsement takes precedence over the original provisions of the policy