End of Topic 4 - Claims
Card Set Information
End of Topic 4 - Claims
Claims Topic4 McCloskey
Topic 4 Flash Cards
What must the adjuster prove when they believe arson was committed?
Motive on insured's part
Opportunity on insured's part
What is evidence of arson?
Building was for sale
Building was recently purchased
Family pet was coincidentally absent
Fire occurs after 11pm, on a weekend or holiday when business is closed
Sentimental value items missing from scene
Physical signs of flammable materials or other items that start fire
How do you determine the amount covered?
ACV vs. Replacement Cost
Agreed amount - in advance it is determined the value to be paid out in the event of a loss
What are the Insured's duties?
Provide prompt notice
Assist with the adjustment process
Provide Proof of Loss
Submit to exam under oath
How do adjuster's attempt to minimize losses?
Determine salvage value
- Insurer retains right if full value is paid to insured
Determine subrogation possibilities
- Go after negligent 3rd party
What are the two types of Business Income Claims?
What is a prospective settlement?
Before property is repaired
What is a retrospective settlement?
After property is repaired and operations have resumed
What are the requirements for a loss?
Direct damage to property
Result of a covered cause of loss (primary)
Occurred at described premises
Suspension of operations and/or incurring extra expense
What is Business Income?
Net Income - net profit that would have been earned (based on tax record)
Continued normal operating expenses (included payroll)
What is Extra Expense?
To avoid or minimize the shut down and continue operations
Repair or replace property to reduce the extent of business income loss
What is a period of restoration?
Begins 72 hours after the damage occurs
No waiting period for extra expense
Ends when property should reasonably be stored or repaired
Ends when business is resumed at a new permanent location
72 hour waiting period is considered deductible
Determining the restoration period is key to settling business income claims
With respect to liability claim adjusting, how do you determine coverage?
Is it something insured is protected against?
Cover even if false
- If there is reasonable assumption that it could be covered
Bodily injury or property damages
- What most liability policies will pay
Intentional act?? (Not covered)
With respect to liability claim adjusting, how do you determine legal liability?
In a lawsuit - insurer defends in court
As long as it seems reasonable that the coverage might apply to the claim and could conceivably be covered
Does not matter if claim ends up groundless, fraudulent, false, etc.
With respect to liability claim adjusting, how do you determine damages?
Loss of earnings
Pain and suffering
Permanency and disfigurement
Loss of consortium
What are survival actions?
Costs (medical bills, loss of wages) that claimant could recover prior to death
What is wrongful death?
Legal actions that survivor of deceased can pursue
With respect to liability claim adjusting, how do you negotiate and settle claims?
Duty to settle
Advanced payment and walk away settlement
What is meant by duty to settle?
Insurer has a right to fight - especially in cases of fraud or frivolous claims
Good judgment to sometimes settle
Legal obligation when it approaches the liability limits
Could result in a bad faith claim insurer
What is meant by structured settlement?
Lump Sum Payment plus a series of future payments
High cost claims, future damages, or children
What is meant by advanced payment and walk away settlement?
Discourage claimants fro hiring attorneys
Quick - small lump sum payout