Public Adjusting Exam Flashcards
Dwelling
DP-Forms
1-Basic (ACV)
2-Broad (RCV)
3-Special (RCV)
Homeowners
HO-Forms
1-Basic 2-Broad 3-Special 4-Contents (Personal Property) (Renters) 5-Comprehensive 6-Condo 8-Modified
Types of Coverages in a policy:
A-Dwelling
B-Other Structures (10% of Cov A)
C-Contents (Personal Property) (50% of Cov A)
D-Loss of Use (Fair Rental Value for Dwelling DP) (30% of Cov A)
E-Liability (ALE Additional Living Expenses for Renters for Dwelling DP)
F-Medical Payments
Reinsurance
When an insurance company buys insurance for some of the risks for which it has issued coverage.
RCV and ACV
Replacement Cost Value (RCV) has no depreciation
Actual Cash Value (ACV) is replacement cost value minus depreciation
Tort
A civil wrong that violates the rights of others.
The Gramm Leach Billey Act
The federal law enacted to control the ways financial institutions & insurance companies deal with the information of individuals.
Mutual Company
Insurance company owned by it’s policy holders
Adverse Selection
When an insurance company experiences negative financial results due to unforseen catastrophes.
What are the four basic parts of an insurance policy?
Declarations, Insuring Agreement, Conditions and Exclusions (DICE)
What are Declarations
The sections of an insurance contract which shows
1) who is insured
2) what property or risk is covered
3) when and where coverage is in affect
4) the amount of the deductible(s)
5) how much coverage applies
What is an Insuring Agreement
The section of an insurance policy which states which losses will be indemnified and which perils are insured against.
What are Conditions
Set provisions, rules of conduct, duties & obligations of both parties. Such as the policy period and the insured’s obligation to provide proof of loss.
Exclusions
Section of an insurance policy which lists property, perils, persons, or situations which are not covered under the policy.
In Florida any policy that contains a separate hurricane deductible must include:
The actual dollar value in bold print and notice of high-out-of pocket expense.
What are the allowed hours for a public adjuster to solicit services?
8am - 8pm M-Sat
What is a Binder?
An oral or written statement providing immediate insurance protection, valid for a specified period.
Designed to provide temp. coverage until a policy can be issued or denied.
What is Concealment?
The withholding of a material fact from the insurance company that could void a policy.
These violations have a fine of up to $5000 per act:
1) Violating department rules or orders
2) Receiving payment or value as result of unfair or deceptive practice
3) Accepting a fee, kickback, or other value
4) Entering into a split fee arrangement with a person who is not a public adjuster
5) Soliciting or taking advantage of a vulnerable, emotional, or traumatized person
6) Making false or fraudulent insurance claims
A public adjuster contract relating to a property and casualty claim must contain:
1) the full name, permanent business address and
license number of the public adjuster
2) the full name of the public adjusting firm
3) the insured’s full name and street address
4) a brief description of the loss.
A PA contract must state:
1) percentage of compensation for the public adjuster’s services
2) the type of claim:
a) emergency claim
b) non-emergency claim
c) supplemental claim
3) the signatures of the public adjuster and all named insureds; and the signature date.
All contracts for public adjuster services must be in writing and prominently display the following statement on the contract and also on the Proof of Loss:
“Pursuant to s. 817.234, Florida Statutes, any person who,
with the intent to injure, defraud, or deceive an insurer or
insured, prepares, presents, or causes to be presented a proof
of loss or estimate of cost or repair of damaged property in
support of a claim under an insurance policy knowing that
the proof of loss or estimate of claim or repairs contains
false, incomplete, or misleading information concerning any
fact or thing material to the claim commits a felony of the
third degree, punishable as provided in s. 775.082, s. 775.083,
or s. 775.084, Florida Statutes.”
Defamation
Knowingly making any oral or written statement which is false or derogatory towards any person and which is calculated to injure such person.
Any advertisement by a public adjuster shall state:
1) The full name as specified in department records of the public adjuster.
2) For purposes of this paragraph, the term “written advertisement” includes only newspapers, magazines, flyers, and bulk mailers.
3) The following disclaimer, which is not required to be printed on standard size business cards, must be added in bold print and capital letters in typeface no smaller than the typeface of the body of the text to all written advertisements by a public adjuster:
“THIS IS A SOLICITATION FOR BUSINESS. IF YOU HAVE HAD A CLAIM FOR AN INSURED PROPERTY LOSS OR DAMAGE AND YOU ARE SATISFIED WITH THE PAYMENT BY YOUR INSURER, YOU MAY DISREGARD THIS ADVERTISEMENT.”
Written Estimates Must
Public Adjuster must provide to the claimant or insured a written estimate of the loss to assist in the submission of a proof of loss or any other claim for payment of insurance proceeds. The public adjuster shall retain such written estimates for at least 5 years and shall make the estimate available to the insured, the insurer, and the department upon request.
6 Responsibilities of the Public Adjuster
- Evaluate
- Substantiate
- Determine values
- Negotiate
- Recommend(upgraded insurance)
- Re-Open Claims
Fiduciary
A person or institution which has responsibility for the money, property, or financial affairs of another.
One of the terms that describes the adjuster’s relationship with the insurer.
As Fiduciary Agent the adjuster acts for the benefit of the principal, rather than for his own benefit.
6 Rights of the Insured
- Acknowledgement in 14 Days
- Approval or denial in 30 Days
- Full payment as applicable in 90 Days
- Free Mediation
- A neutral evaluation of a sinkhole claim
- Availability of assistance from the department of consumer services
What is the common element that links inland marine with ocean marine risks?
Transportation
Hull Insurance
In ocean marine and aviation insurance against physical damage to a plane or ship
Instrumentalities of Transportation and Communication
A category of inland marine insurance covering such property as bridges, tunnels, pipelines, etc.
Jettison
Voluntary action to rid the ship of cargo in order to prevent further damage.
Imputed or vicarious negligence
Attributed to a third person responsible for the negligent acts of another.
Example: An employer may be responsible for the negligent acts of an employee acting within the scope of his or her employment.
An insured who wishes to purchase flood insurance and is located in a moderate or low risk flood zone may do so by purchasing a:
Preferred Risk Flood Policy
“Doctrine of Proximate Cause”
States that when there is an unbroken connection between an occurrence and
damage that grows out of the occurrence, then the resultant damage is all a part of the occurrence.
Which of the following forms is “all-risk” on the dwelling policy?
DP-3, or the Special Form
Which Dwelling forms provide broad form coverage for personal property?
DP-2 and DP-3
What are the continuing education requirements for public adjusters?
24 hours of continuing education (5 hours law and ethics/ 19 hours online approved course by the DFS for
public adjusters)
A ship owner wanting coverage in case crew members bring liability suits for injuries sustained while working would purchase:
Protection and Indemnity
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
To be Authorized and transact business in FL what must you have?
Certificate of Authority
A contract that is written by one party and merely accepted by another is known as a:
Contract of Adhesion
Contracts of adhesion usually have any misunderstandings resolved in favor of the insured.
Primary Adjuster
The department requires each adjusting firm to designate a Primary Adjuster who supervises all individuals within an adjusting firms location.
Surety Bond
The State of Florida requires a $50000 Surety Bond for all licensed public adjusters.
Qualities that make an Insurance Contract or Policy legally binding
Agreement - Mutual consent
Consideration - All parties bring something of value
Competent parties - The parties have the necessary legal and mental capacity
Legal purpose - The purpose of the contract has to be legal
Imputed/Vicarious Negligence
Third person responsible for the negligent act of others
Telemarketers
Telemarketers who transmit prerecorded messages to consumers who have not agreed to accept such messages will be fined up to $16,000 per call.
Barratry
Illegal Acts committed willfully by a ship’s master or crew for the purpose of damaging the ship or cargo.
Demurrage
A fee levied by the shipping company upon the port or supplier for not loading or unloading the vessel by a specified date agreed upon by contract. Usually, assessed upon a daily basis after the deadline.
“Catastrophic Ground Collapse”
By law all FL insurers have to cover “Catastrophic Ground Collapse”
Civil Remedy
A civil remedy must be filed by an insured or their lawyer. Public adjusters can not file a civil remedy.
Proof of Loss Timeline
Needs to be sent within 60 days of request.
Boiler and Machinery
Allows for replacement cost coverage on covered property unless repairs have not been made within 18 months of damage, in that case ACV applies.
Two Types of Waivers
- Explicit
2. Implied
Burglary
A theft that occurs with visible signs of forced entry.
When can a PA adust claims?
A PA can adjust claims in FL after they are Appointed.
What happens if an insured impairs the subrogation rights of the insurance company?
If an insured impairs the subrogration rights of the insurance company the insurance company could deny payment of the claim.
Cost of Mediation:
Property mediation is free for the policyholder. The insurance company pays the entire cost of the conference.
However if the conference has to be rescheduled, there are associated fees. If the policyholder fails to appear for the conference, it can be rescheduled after the policyholder pays the mediator’s fee. Generally, the cost of mediation is $350. If the insurance company fails to appear, without good cause, they must pay actual cash expenses of the policyholder in attending the rescheduled conference and they must pay the mediator’s fee for the rescheduled conference.
When can an insured cancel a PA’s contract to adjust a claim (non emergency)?
An insured or claimant may cancel a public adjuster’s contract to adjust a claim without penalty or obligation within 3 business days after the date on which the contract is executed.
When can an insured cancel a PA’s contract to adjust a claim (emergency)?
During any state of emergency as declared by the Governor and for 1 year after the date of loss, the insured has 5 business days after the date on which the contract is executed to cancel a public adjuster’s contract.
Cancellations terms in a PAs contract
The public adjuster’s contract must disclose to the insured their right to cancel the contract and advise the insured or claimant that notice of cancellation must be submitted in writing and sent by certified mail.
Coinsurance Clause
Method of requiring the insured to insure at least 80% of the value of the property in exchange for a premium discount. This is used on an acv or replacement cost basis. If policy contains this clause & the insured carries less than the amount a penalty will occur in the case of partial losses.
Coinsurance Penalty
Here is the formula the insurance company uses to determine if you insured your home correctly.
Insured Amt ÷ Replacement Cost of Home = % x amount of the loss – the deductible = the amount due
You take the amount for which the home is insured and divide it by the replacement cost value of the home.
This will result in a % amount. If that % amount number is 80% or more, you can stop.
Your home is insured to value, and a coinsurance penalty will not be applied to your loss.
If that % amount number is less than 80% you will then multiply that % number by the amount of the loss.
You will then subtract your deductible and that will result in the amount due*. See below.
Practical Example:
You insured your home for: $100,000.00
You should have insured it for: $200,000.00
You have a loss which totals: $50,000.00
Your deductible was:: $1,000.00
$100,000.00 / 200,000.00 = 50% X $50.000= $25,000.00 - $1000.00 = $24,000.00
Department of Financial Services
They License agents and adjusters in Florida and make sure those agents and adjusters are in compliance with the
rules and regulations.
What is the OIR’s role? (Office of Insurance Regulation)
To examine the qualification of insurance companies seeking to do business in this state.
How long must a Public Adjuster wait after an event that leads to a claim to contact the claimant?
48 hours
What is the limit to the Public Adjuster’s share of a re-opened claim?
20% or 10% if declared a state of emergency by the govenor
A PA CANNOT DO THE FOLLOWING
A PA can not give a loan or advance to an insured
A PA may not give legal advice or aid any person in negotiating or settling a claim relating to bodily injury
A PA can not aquire interest in salvaged property unless they have written consent and a signed affidavit from the insured
A person employed by a PA who is not licensed
May not solicit, investigate, or offer legal information regarding the adjusting of claims on behalf of a public adjuster.
Statute of limitations to claim windstorm or hurricane damage
3 years
Violations of the provisions of the “Unfair Insurance Trade Practices Act”
Includes:
Failing to act promptly
Denying claims without resonable investigation
Failing to affirm or deny a claim when an insured is entitled to
Failing to explain claim denials in writing
Failing to maintain claim handling procedures
Idemnity
A principal part of insurance that states when a loss occurs the insured should be restored to the same financial condition they occupied before the loss (no better, no worse)
Insureds duties following a loss:
Give prompt notice of the loss Cooperate with the insurer Preserve the rights of the insurer Protect the property from further damage Provide a proof of loss statement
Liberalization
A condition which states that if the insurer addopts a revision which would broaden coverage within some period of time prior to the policy period the insured automatically recieves the benefit of such broadened coverage.
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.
Appraisal Clause
When there is a dispute over a claim both parties select an appraiser & the appraisers choose an umpire to settle the dispute.
Vacancy vs Unoccupancy
Vacancy is void of contents & people. Unoccupancy means premises is void of people.
Third Party Insurance Coverage
Those coverages under which the insured obtains protection against a legal obligation to pay damages to others because of injuries to persons or damage to property.
Third Party Claim
In a third party insurance policy the first party is the insured and the second party is the insurance company.
The third party here is any third person. Under third party insurance, a third party can file a claim for compensation for injury, death or property damage.
Acts of Terrorism
Must exceed more than 5 million in loss.
- Must be a violent act that is dangerous to human life, property or infrastructure.
- Must be perpetrated in the USA.
- Must have been committed by an individual or individuals as an effort to coerce the civilian population of the USA to influence the policy or affect the conduct of the US government by coercion.
- Losses are capped at 100 billion.
