Claims and Loss Settlement Flashcards
6 cards from real Property And Casualty Insurance License practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Claims and Loss Settlement flashcards as text
What is the insured's 'duty to cooperate' after a loss?
Answer: The insured must assist the insurer in investigating, settling, and defending a claim
The cooperation clause requires the insured to assist the insurer by providing information, submitting to examinations, and helping with claim investigation and defense.
What is a 'proof of loss' in the claims process?
Answer: A formal sworn statement submitted by the insured detailing the circumstances and amount of a loss
A proof of loss is a sworn, written statement that details the nature and extent of the loss, submitted by the insured within the time frame required by the policy.
What does it mean when an insurer 'reserves the right to deny coverage' in a reservation of rights letter?
Answer: The insurer will investigate and potentially defend the claim while preserving its right to contest coverage later
A reservation of rights letter notifies the insured that the insurer will handle the claim but has not waived any policy defenses and may deny coverage if a coverage issue is confirmed.
What is the role of a 'public adjuster'?
Answer: A licensed professional hired by the insured to negotiate the claim settlement on their behalf
A public adjuster represents the policyholder — not the insurer — in preparing, filing, and negotiating property insurance claims, typically charging a percentage of the settlement.
What does 'subrogation waiver' mean?
Answer: The insurer agrees not to pursue recovery from a negligent third party
A subrogation waiver is an agreement by the insurer to give up its right to recover from a third party after paying a claim, often requested when the insured has a contractual obligation not to sue a certain party.
What is 'bad faith' in insurance claims handling?
Answer: The insurer's unreasonable refusal to pay a valid claim or failure to properly investigate a claim
Bad faith occurs when an insurer unreasonably delays, denies, or underpays a valid claim; policyholders can sue for bad faith and may recover damages beyond the policy limits.