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
