Adjusters

Elements of a Contract

1. An agreement to terms, or manifestation of assent, of the contact by the parties to the contract. The parties must understand what is being given and what is being received by each party- indicated by signatures 2. Adequate consideration for promises made 3. Legal capacity of parties to contract 4. Legal purpose- cannot go against public policy

Insurance as Contract

1. Premium must be paid in exchange for companies promise (Consideration) 2. Parties must be of legal age and capacity 3. Subject matter of policy cannot be illegal or against public policy 4. Contract must reflect an agreement of manifestation of assent to terms Agreement is made when the application is signed by policy holder and the policy is agreed to and issues by the carrier that coverage is afforded for certain type of risk

Insurance policy participate with other insurance in three ways

1. Primary- pays first 2. Excess- pays only after all other collectible (primary) insurance pays 3. Pro Rata- percentage of loss at the time of its policy bears to the total of all available insurance

Mediation

A third party servers as intermediary between two parties with the objective of persuading them to adjust or settle their dispute.

Florida Claims Requirements

Act Promptly in the handling of claims Conduct reasonable investigation into every claim Give every insured or claimant who files a claim an answer to their claim Explains denials in writing

Concealment

Active failure of an insured to reveal relevant facts known only have to the insured when applying for insurance.

Florida code of Ethics

Adjuster May not discuss settlement with any one who is represented by an attorney. Anytime interview is conducted, whether with insured, claimant, or witness, never suggest they suppress the truth. Copies of transcripts should always be available. Never give legal advice Never engage in drafting special release Never take advantage of an incapacitated claimant. (Including those who are under stress) Never fail to advise claimant of their rights under insurance law or policy Always approach investigation with unbiased open state of mind. Never accept payment from anyone involved in claims handling process. Claims should be handled with the goal of achieving final disposition as quickly and fairly as possible.

Contract of Adhesion

Agreement between two parties where the contract is created by one party without consideration for the other party in its terms. In the case the wording is vague or ambiguous, interpretation shall fall in the favor of the party who did not control its terms.

Three types of adjusters licenses in Texas:

All lines, Property and casualty and Surety, Workers Comp and Employers Liability and Longshore

Different types of licences

All lines, also know as multiline or general line; allows for handeling of any kind of claim. Partial or limitted; handle only one type of claim (workers comp) Must be supervised by someone with an all lines adjusters licence.

Appraisal

Allows insured and insurer to each employ their own appraisers who try to agree on the value of the damaged property. If they cannot agree, an umpire is consulted and the final amount if agreed to by two of the three will be paid. Value- NOT coverage

ADR

Alternative Dispute Resolution

Adjuster

An Individual who for compensation, feel or commission investigates and settles the claim arising under property, casualty, or surety. Contracts on behalf of either insured or insurer.

Contract

An act in exchange in exchange for promise Insured purchases policy- promises to pay premiums, Insurer promises to pay and all claims that legally responsible for.

Property Insurance

Any insurance where the insurance carrier makes payment directly to insured

Proximate Cause

Any loss connected to, or which flows or results directly from, damage caused by an insured peril, is considered to be loss by peril. Doctrine of Proximate Cause If there is an unbroken chain of events, or series of consequences, flowing from the initial loss caused by the insured peril, the insured peril will bone considered the proximate cause of damage.

Notice of Claim

Any written notification provided by claimant to an insurer that reasonably apprised the insurer of facts related to claim.

Arbitration

Approved by both parties to consider the facts and makes a recommendation. If the two cannot agree, each may appoint one. Then the two appoint a third that is acceptable to both. The panel Considers the facts and makes recommendation. Mainly deals with coverage disputes.

Pro Rata Cancellation

Cancelation of insurance policy or bond with the return of unearned premium credit being the full proportion of the premium for the unexpired term of the policy or bond, without penalty for interim cancellation.

Legal Purpose

Cannot be illegal or against public policy

CAT

Catastrophic Adjusters- independent adjusters who deal with just property only

Peril

Cause of loss ( wind, lightning, etc.)

Alleged

Claim may not be valid or legitimate, may not be any legal right to relief

Third Paty

Claimant

Auto Physical Damage Adjuster

Claims collision, comprehensive, mechanical breakdown Verify Coverage Investigate facts Determine the amount of loss Apps appropriate deductible and makes payment Determine potential surrogation

Relief

Compensation or payment

Casualty Claims

Comprised of both liability and workers comp Typically involves loss or inquiry to both person and property

Open Ended or Scheduled Payment

Concludes everything, except a few specific items that you promise to pay in the future

Moral Hazard

Conscious state of mind, or conscious disregard of risk or harmful convictions that could lead to loss by a particular peril. For example- a person who is habitual speeder and has lots of moving violations, they exhibit a conscious, gross disregard for traffic laws increasing the likelihood of an auto loss

3 Major Areas of Claims Investigation

Coverage- Must be accident or occurrence from perils covered by policy Liability- establish existence or lack of legal responsibility of insured, merits of claim against insured. Damages- determine and verify the extent of injury or damage

Fundamental parts of insurance contract

DICE Declaration- who and what are covered and where they are located Insuring agreement- what coverages are provided Exclusions- what is not covered Conditions- What each party must do to ensure coverage

Delay in Payment

Delayed for more than 60 days, the insurer shall pay damages and other items including 18% legal interest and reasonable atty fees Does not apply if case is in litigation

Three ways Claims can be resolved

Deny claim - dispose of claim with third party Pay 100 claim Pay partial amount/ Partial responsibility

Property Claims Adjuster

Evaluation of damage to real or personal property resulting from various perils Assess available policy limits for each peril determine how much should be paid determine if a third party is responsible Determine policy limits Determine appropriate value Resolve claims by making payment or make explanation if no payment is made

Florida Claim Practices Prohibits

Failing to act promptly Denying claims without conducting reasonable investigation Failing to give insured or claimant a response (agree or deny to pay) to claim Failing to explain denial in writing Failing to maintain complaint handling procedures

Bad Faith

Failure to pay according to policy conditions. Due to the might of insurance company compared to the insured, it is seen as bad faith

Unethical Adjuster Conduct

Failure to respond to policy holder inquires or request for info Fail to investigate and pay legit claims Delay in or inaccurate payment of benefit Misrepresenting facts or coverage To policy holder

Responsibility of Adjuster

Fiduciary- responsible to employer or client. Represent financial and or property interests Agency- actions of adjuster are considered actions of company - acts with authority on behalf of the company Perceived Vs. Actual Authority- General public believes adjuster holds authority Communication and Reporting- keep insured and company informed

Payment of Claims

Five Business days to pay once decision has been made

Structured Settlements

Generally reserved for very large financial commitments, paid over given time period

Working with-out License

Guilty of misdemeanor and 500 fine, jailed for 6 months, or both

Multi line Adjusters

Have experience in property, liability, workers comp, and CAT Gather Facts and Negotiate resolution

Primary Objective of adjuster

Help those who have been injured or have suffered a loss for which the insured is responsible, or which is covered by the insurance contract Minimize loss for the insured party and the carrier by fairly evaluating the legitimacy and legality of a claim and its value, resolving it satisfactorily for both the insured and the claiming party

Exclusions

Homeowners policy excludes any loss resulting out of use of auto because the risk are better insured under auto policy. Auto policy will exclude any loss raising out of employment relationship- that loss is better covered under workers comp Perils or exposures are uninsurable- I.e. War, nuclear loss, The risk or peril is so specialized that insurer is not qualified to underwrite it

Implied Waiver

Inferred from some other type of action or inaction that is inconsistent with the carriers rights under the policy and implies waiver of such right.

Components of Investigation

Inquiry- obtain facts Verification- check facts and details for accuracy Comparison\- constantly comparing facts and evidence as it is obtained

Property Adjusters

Inside, outside, or combo Auto collision, comprehensive, damage to building, homes, personal property, from causes like wind, storm, hail, fire Verify Coverage Investigate facts of loss to determine proximate cost Verify if policy covers involved perils Assists insured Determine extend of damage Verify insureds insurable interest as well as that of mortgagee or loss payee

Second Party

Insurance Company

Conditional Contracts

Insurance policy Policy holder has certain duties and responsibilities he must meet if a covered loss occurs.

First Party

Insured - claim by policy holder against his own policy

Exceptions to Unfair claims Settlement Practice

Insured or claimant intentionally prevents adjuster forum completing pertinent aspects of claims investigation- must be documented- denial of payment of acceptable Any delay in payment as a resulting from delay by insured or claimant in providing such info does not create a violation Delays resulting from factors outside the control of adjuster or company, especially if adjuster keeps the parties informed Denial of claims- as long as insured or claimant is given a reasonable explanation Refusal to give in to insured or claimant's demand for settlement when refusal is based in sound and reasonable evaluation of coverage Offering a lesser sum as a compromise of disputed claim when based in sound and reasonable evaluation of coverage Unintentional failure to meet all requirements inferred by Unfair claims act- as long as the unintentional nature of behavior is not part of a trend or total disregard for one's responsibilities

Subrogation

Insurer goes after another insurance company to recoup what was paid out. The Transfer of rights to recovery from insured to insurer

Fraud

Intentional act designed to deceive and induce another party to part with something of value. May occurred before or after a loss, If found during handling of claim, grounds for complete denial.

Waiver

Intentional or voluntary relinquishment of a known right

Unfair Claim Settlement practices

Knowingly misrepresenting to a claimant pertinent facts or policy provisions relating to a coverage issue failing to acknowledge with reasonable promptness and pertinent communications relating to a claim arising under the insured's policy Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under the insured's policies Not attempting in good faith to effect prompt, fair and equitable settlement of a claim submitted in which liability has become reasonably clear Compelling a policy holder to institute an suit to recover an amount due under a policy by offering substantially less than the amount ultimately recovered in a suit brought by policy holder Failing to maintain the information required Committing another act that the commissioner, by rule, determines to be an unfair claim settlement practice

HO-C Coverage

Loss of Use- also called ALE Additional living expenses Increased loss expense caused by the inability to live in your home and the messily of living at a temp location or for commercial risks, Business interruptions or Time Element - loss of business profits due to the inability to proceed with business due to loss

Indemnity

Make someone whole again, Bring back to prior status Insured should not profit from a loss

Liability or Compensation Investigation

Must answer: if insured if guilty of negligent act or is legally responsible If claimant was also guilty if claimant assumed or voluntarily accepted risk If claim is actionable because of relationship between parties

Texas Regulations Supporting Fair Claims ACT

No Later then the 15th day after the date an insurer receives notice of a claim, an insurer shall: Acknowledge receipt of claim Commence Investigation Request from the claimant all items, statements., and forms that the insurer reasonable you believes

Estoppel

One May not deny a fact where one's previous actions have indicated such a fact is true.

No Release or Walk away

Pay what you owe, say of you have any questions or additional expenses, call me. No Party makes commitment or relinquish any rights.

Liability Insurance

Payment is made to third parties on behalf of insured based in insured liability to third party

Payment of PD with BI Pending

Payment of undisputed property damage while overall claim for bodily injury develops

Claimant

Person making a claim

HO-B Coverage

Personal or Business Personal Property - Furniture, fixture, clothing, electrics, personal items, household goods, machinery, equipment, supplies, etc

Physical Hazard

Physical condition that increases the likelihood of loss by a particular peril, for example, a run down house would be particularly susceptible to damage by wind, rain, or fire.

Hazard

Physical or mental condition that increases the likelihood of loss by such perils

Adjusting

Process of investigating, evaluating, reporting on, negotiating, and resolving a claim.

Texas Law Re: cancelation

Prohibits cancelation of any policy that has been renewed, continued, or has been in force for more than 60 days except: Fraud on the part of the insured in obtaining coverage Names insured or member of insureds household has had his drivers license suspended or revoked Failure to pay premium where due Requires 10 days notice, except for non renewal which requires 60 days

Advanced Payment

Prompt payment of any out of pocket expenses to relieve a claimants burden and show good faith

Fair Claims Practices

Promptly investigate the circumstances surrounding a loss or claim Keep an insured or client informed if the status of the claim Make timely payment (or offer payment) in resolution if such claim

Insured Duties following a loss

Protect or preserve the insurer's rights, do nothing to prejudice the insurer's right Giving prompt notice of the loss, giving prompt referral of an legal notices to the insurer Cooperating with insurer in every practical way Submitting proof of loss when requested Any violation could lead to a declination of coverage, but courts are less likely to uphold this declination unless violation is serious and adversely affects the carrier's ability to defend its own position

Florida Civil Remedies Provision

Provides remedy (many sue carrier) to any person who damaged due to: Not among good faith attempt to settle claims when opportunity exists Making payments to insureds without identifying the coverage under which payment is made Failing to settle a 1st party claim when the obligation to do so is clear in order to influence a settlement under another form of 1st party coverage

Pro Rata Distribution

Provision that essentially converts a single blanket limit, applying over several locations, to specific limits

HO- A Coverage

Real Property- insured swelling, I.e. Primary home, commercial building, and/or other structures I.e. Storage buildings, fence, attached or detached garage

Types of Property Covered

Real, Personal, Possession

Offers to settle

Received by insurer, the insurer shall notify insured in writing no later than 10 days after receipt If claim is settled, insurer must advise insured within 30 days f Failure to do so in either case= penalties

Public Adjusters

Represent Insured Services are paid by the insured or policy holder Most often seen in property lines If claims is settled within 72 hours of loss reported, the public adjuster is entitled to only reasonable compensation for time and expenses. Otherwise, fee cannot exceed 10% of claim. Must have $10,000 Public Insurance Adjusters Bond

Assertion

Request or demand or letter requesting action A bill submitted for payment

CE Requirements

Resident All Lines 24 Hours every two years, at least 2 hours must be on ethics, consumer protection. Cannot carry over excess. Nonresident: when in compliance with their own states CE requirements are excerpt as long as they hold a resident license and is good standing with their state. Exemptions: Military service, illness or disability, circumstances beyond licensee control - must be told in advance

Independent Adjusters

Self employed or are employed by and take work from a number of different companies that insure many clients.

Material Misrepresentations

Significant, material to the decision to accept or reject the application for insurance. Policy will be treated as if it never issued and claims would be denied.

Standard vs. Statuary Policy

Standard- coverage and coverage forms and wording is common among most carriers. Most policies referred to as ISO (Insurance services offices) Statuary- most often not actual policy, but statuary language required by states to be included on standard policy. Manuscript policy - written form scratch, highly customized per agreement between the customers and insurance company. Almost always commercial policies for very large companies.

Texas dept of insurance has responsibility to

Supervision of claims so that policy holders are assured fair treatment, and prompt settlement, to investigate charges of unethical conduct, and take judicious action.

Non-renewal vs Increased premium

Texas law allows for additional premium charges to standard fire and homeowners if the insured has filed more than two claims in a given policy year, EXCEPT losses caused by natural disaster

Morale Hazards

Unconscious state of mind increases the risk of loss by a particular peril. Example- someone who though not intentionally, maintains a cluttered messy store or home thereby increasing the risk of injury. If someone frequently forgets to lock doors to house- increases likelihood of theft

Misrepresentation

Untrue statement to series of statements made by one party, usually at the time an application is filed.

Full Realease

Used to conclude claims against your insured Most preferred as they represent the only kind of settlement that guarantees a case is closed for good.

Adjusters Casualty

Verify coverage Investigate Facts Determine liability determine the amount of loss in terms of property and medical, and intangibles such as inconvenience and suffering Determine if litigation is eminent and estimate defense cost as well as probability of success Determine of other parties to the loss might also be responsible Pay claims or benefits as owed under various theories of liability

Extension of Deadlines

Weather related catastrophe- extended addition 15 days

Consideration

What transfers between parties to a contract in exchange for the other party's agreement or promise Consideration given to policyholder is promise to pay, albeit under certain circumstances. Consideration given top insurance company- premiums paid by policy holder.

Binder

When the customer completes application and sends in with initial premium, customer given temp insurance, or binder. If premium is not received or application denied, the policy will never be written. Coverage can be bound by calling agent and giving him the info over the phone, if agent has binding authority and confirms coverage, you have an oral binder. If a binder is given, no advanced notice of cancelation is required in less the binder period is more than 60 days.

Company or Staff Adjusters

Work for Insurance Company

Liability Adjusters

Work with vagueness and ambiguity Evaluate facts for legal liability, cause of loss, damages and bodily injury Involved negations, litigation, and settlement

Workers Comp Adjusters

Works in medical environment Provides both medical and wage replacement benefits

Insurance Policy

Written contract or agreement where one party (the Insurance Company) agrees to indemnify or pay to another (the policy holder) a determinable amount of money or benefit upon determinable conditions ( i.e. an accident)

Express Waiver

Written or oral statement or action that voluntarily gives up known right