Property And Casualty Insurance License Claims and Loss Settlement 1

Question 1

What is the insured's 'duty to cooperate' after a loss?

Accepted Answer

The insured must assist the insurer in investigating, settling, and defending a claim

Answer

The insured must accept any settlement the insurer offers

Answer

The insured must hire an attorney before reporting a loss

Answer

The insured must mitigate losses even if it costs more than the damage

Question 2

What is a 'proof of loss' in the claims process?

Accepted Answer

A formal sworn statement submitted by the insured detailing the circumstances and amount of a loss

Answer

A police report filed after a theft

Answer

Photographs taken at the scene of the damage

Answer

The insurer's internal claim file notes

Question 3

What does it mean when an insurer 'reserves the right to deny coverage' in a reservation of rights letter?

Accepted Answer

The insurer will investigate and potentially defend the claim while preserving its right to contest coverage later

Answer

The insurer refuses to pay the claim immediately

Answer

The insurer is canceling the policy

Answer

The insurer has determined the claim is fraudulent

Question 4

What is the role of a 'public adjuster'?

Accepted Answer

A licensed professional hired by the insured to negotiate the claim settlement on their behalf

Answer

A state employee who regulates insurance companies

Answer

An independent adjuster hired by the insurer

Answer

An arbitrator who resolves coverage disputes

Question 5

What does 'subrogation waiver' mean?

Accepted Answer

The insurer agrees not to pursue recovery from a negligent third party

Answer

The insured waives the right to receive any claim proceeds

Answer

The insurer cancels the policy after paying a claim

Answer

The insured gives up the right to sue the insurer

Question 6

What is 'bad faith' in insurance claims handling?

Accepted Answer

The insurer's unreasonable refusal to pay a valid claim or failure to properly investigate a claim

Answer

Filing a fraudulent claim

Answer

The insured's failure to report a loss promptly

Answer

An insurer denying a claim based on a valid policy exclusion