The Role of a Loss Adjuster
A: This term, used to describe a person who investigates insurance claims, may be influenced by use in the corporate environment, local use, legislation or specific licensing requirements.
Q: What is the term "adjuster"?
(Adjuster, claims adjuster, claims representative, insurance adjuster = same thing. Terms are used interchangeably). (See page 1-3 of the textbook).
A: These form the basis for deciding court cases in the common law provinces and territories.
Q: What are legal precedents?
(These are well-documented and reasoned judicial judgements that guide judges to help determine new unresolved disputes). (See page 1-6 of the textbook).
A: The owner, a bailee, a mortgagee, a lessee.
Q: Who are other parties who may have an insurable interest?
(See page 1-13 of the textbook).
A. Material change.
Q: What is a fact or change that would influence an insurer to decide whether to stay on risk or change the terms on which the risk is retained.
(See page 1-16 of the textbook).
A: A person presenting a claim must take reasonable steps to prevent further damage.
Q: What is loss mitigation?
(Insureds and third parties have a duty to mitigate damages; the duty to mitigate is also a stat condition of most insurance policies). (See page 1-22 of the textbook).
A: This agreement specifies the standards and expectations for customer service.
Q: What is a service-level agreement ("SLA")?
(See page 1-6 of the textbook).
A: This is the term used to describe the special relationship that exists between two parties because they have entered into a contract.
Q: What is privity of contract?
For a party to enforce a contract, they must show privity of contract, which limits the scope of the insurance policy to a private relationship between the person insured and the insurer. (See page 1-7 of the textbook).
A: These types of damages are intended to punish those who act in bad faith; to deter similar future behaviour and publicly condemn the behaviour.
Q: What are punitive damages?
(See page 1-15 of the textbook).
A: This type of warranty states that a fact is true when the insurance policy is purchased.
Q: What is an affirmative warranty?
E.g., the building insured is sound and meets all current building code requirements. (See page 1-19 of the textbook).
A: This common law doctrine prevents a party from taking a certain course of action and then later revoking it after someone has relied on it.
Q: What is an estoppel?
A legal principle that serves as a safeguard for policyholders, preventing insurance companies from going back on their promises. (See page 1-21 of the textbook).
Q: Who is a claims handler?
(The claims handler may be involved in any aspect of the claim; they may work for brokers, agents or insurers. See page 1-5 of the textbook).
A: The courts rely on this in Quebec, rather than on legal precedent.
(See page 1-6 of the textbook).
A: Under this principle, the insured is limited to collect only what was lost.
Q: What is the principle of indemnity?
The insured should not benefit or profit from a loss. Claim payments should restore policyholders to the same financial position they were immediately prior to a loss. (See page 1-12 of the textbook).
A: Describe non-disclosure.
Non-disclosure is when an applicant for insurance fails to notify the insurer of all material facts necessary to underwrite a policy.
(If an applicant does not disclose all material facts, they may risk having coverage voided from inception). (See page 1-17 of the textbook).
Q: What is:
1. Sue for damages
2. Compel performance or ask to be released
3. Ask for an injunction
(See page 1-19 of the textbook).
A: When an insurer pays a loss, they are assigned this legal right to recover the amount paid from the person(s) legally liable for it.
Q: What is subrogation?
(See page 1-5 of the textbook).
A: Under the Civil Code of Quebec, these four (4) elements are essential for a contract be legally binding.
Q: What are:
1. Consent (Articles 1386-1408)
2. Capacity to contract (Article 1409)
3. Cause of contract (Articles 1410-1411)
4. Object of contracts (Articles 1412-1413)
(See page 1-11 of the textbook).
A: This tradition in insurance demands a higher standard of honesty and trust from both parties.
Q: What is Utmost Good Faith?
(See page 1-14 of the textbook).
A: This happens at the time of application, and can be innocent, fraudulent or careless.
Q. What is a misrepresentation?
(Misrep it is incorrect or missing information about a material fact that is offered (or not) by an application (or an insured) with or without the intent to mislead). (See page 1-16 of the textbook).
A: This type of liability is often associated with dangerous actions; negligence does not need to be proven.
Q: What is absolute liability?
Under absolute liability in Alberta, , the insurer is responsible for paying third party claims even if the insured has breached a policy condition. So, even though an insured may be convicted of a crime and penalized for it, this will have no effect on a TP’s right to claim against the insured’s policy if the insured is legally liable for the loss. (See page 1-20 of the textbook).
A: These are the three (3) general steps an adjuster takes in the claims process.
Q: What are:
1. Investigate claims by gathering information.
-- Interview witnesses, take statements, review IA reports.
- Verify coverage under the policy contract.
2. Assess and evaluate damage
-- Work with appraisers, accountants, lawyers, doctors, and engineers to measure and determine the extent and nature of the loss.
-- Apply policy terms and set reserves.
3. Negotiate various issues with claimants.
-- Finalize settlements.
-- Deal with salvage and subrogation, if possible.
(See page 1-5 of the textbook).
A: Under common law, contracts must have these five (5) essential elements to be legally binding.
Q: What are:
1. Agreement
2. Capacity to contract
3. Consideration
4. Genuine intention
5. Legality of object
(See page 1-8 of the textbook).
A: These are the three (3) conditions required to qualify as insurable interest in a fire policy.
Q: What are:
1. There must be a physical object capable of being destroyed by an insured peril.
2. The physical object must be the subject matter of insurance.
3. The insured must have a relationship to the property in law (the person benefits when the property is safe and suffers a detriment if there is a loss).
(See page 1-13 of the textbook).
A: This type of warranty promises not only that a fact is presently true, but that it will continue to be true during the policy period.
Q? What is a promissory warranty?
(See page 1-18 of the textbook).
Describe "relief from forfeiture" for imperfect compliance".
Relief from forfeiture is the loss of a right as a result of the non-performance of some obligation or condition. The concept of relief from forfeiture for imperfect compliance helps prevent unfair outcomes when insureds fail to meet contract terms perfectly or on time.
E.g., an insured is injured in a car accident and is in hospital for several months before reporting the loss to the insurer. (See page 1-20 of the textbook).