Free NY Public Adjuster Exam Flashcards

A release is the insured's written discharge of the insurer for the claim being paid. Under 11 NYCRR 216.6(g), an insurer cannot require a release broader than the scope of the settlement, and a first-party claim check cannot state that cashing it is a final settlement.

11 NYCRR § 25.7 caps a public adjuster's fee at 12.5% of the recovery. On a supplemental claim, the fee can go up to 20% of that supplemental recovery, but only if the total fee stays at or below 12.5% of the full claim payment.

11 NYCRR § 25.8(a) lets the insured cancel a public adjuster compensation agreement until midnight of the third business day after signing. Under § 25.9, a Notice of Cancellation form in at least 12-point type must be attached, and the 3-day clock starts only once the adjuster complies.

The NY Standard Fire Policy says there can be no abandonment of property to the insurer: the insured cannot hand over damaged property and demand its full value. The insurer may, however, choose to take all or part of the property at the agreed or appraised value.

The insurer alone drafts the policy and the insured simply accepts or rejects it. Because the insured has no power to negotiate terms, courts construe any genuine ambiguity in the policy language against the insurer that wrote it.

A contract where the dollar values exchanged are intentionally unequal and depend on an uncertain event. A policyholder may pay a small premium and receive a much larger claim payment if a covered loss occurs — or nothing if it never does.

Insurance contracts require unusually high honesty from both parties. An applicant's statements are representations, not guarantees; they must be substantially true, and a material misrepresentation can let the insurer void the policy.

Naming someone on a policy isn't enough — an owner, a lienholder, or even a tenant who paid for improvements can qualify if they would lose money from the property's damage. Without that real stake, courts treat the contract as an unenforceable wager rather than indemnity.

A peril is the actual cause of loss, such as fire or windstorm. A hazard is a condition that increases the chance a peril will occur or makes its result worse, such as frayed wiring (physical hazard) or a history of arson (moral hazard).

Both are "other insurance" methods for splitting a loss among multiple insurers on the same property. Pro rata divides the loss in proportion to each policy's limit; contribution by equal shares has each insurer pay equally until one policy's limit is exhausted.

Penalizes underinsurance on property policies. Recovery is generally: (Amount of Insurance Carried ÷ Amount of Insurance Required) × Loss. Carrying less than the required percentage of value reduces the claim payment proportionally.

Ins. Law § 2108(s)(1) creates an affirmative duty for a public adjuster to act on behalf of, and in the best interests of, the insured when negotiating or effecting a claim settlement — unlike a staff or independent adjuster, who represents the insurer.

The NY Standard Fire Policy requires immediate written notice and a signed, sworn proof of loss within 60 days after the loss unless the insurer extends it in writing. Under Ins. Law § 3407(a), missing that deadline doesn't defeat the claim unless the insurer sends a written demand with blank forms; the insured then has 60 days.

The insured, not the insurer, carries the burden of proving both the actual cash value of the damaged property and the dollar amount of the loss claimed, generally through estimates, receipts, and other supporting documentation.

When an insurer pays a total loss, it may take ownership of the damaged property's remaining value (salvage) and sell or reuse it. The salvage value effectively offsets what the insurer ultimately pays out on the claim.

An insurer may make a partial payment toward the eventual settlement while adjusting continues, and accepting it does not waive the unresolved balance. Under 11 NYCRR 216.6(e), undisputed claim elements must be paid despite disputes over other elements, when payment can be made without prejudice to either party.

After paying a loss, the insurer can pursue the third party who caused it to recover what it paid. The NY Standard Fire Policy lets the insurer require the insured to assign that right of recovery, but only to the extent of the insurer's payment.

If the insured and insurer disagree on actual cash value or loss amount, either may demand appraisal in writing; each side names a disinterested appraiser within 20 days. If the two appraisers can't agree on an umpire within 15 days, a court judge appoints one, and the written award of any two of the three is binding.

Both let an insurer keep investigating without waiving its coverage defenses. A reservation of rights letter is a unilateral notice the insurer sends to the insured; a non-waiver agreement is a bilateral agreement that the insured also signs. Neither one admits or denies coverage.

11 NYCRR § 216.6(c) gives an insurer 15 business days after receiving a complete proof of loss and all requested items to notify the claimant in writing of acceptance or rejection. If arson is suspected, that period extends to 30 business days under Ins. Law § 2601.

The NY Standard Fire Policy requires the insured to protect the property from further damage and separate damaged from undamaged personal property. It also excludes loss caused by the insured's neglect to use all reasonable means to save and preserve property at and after a loss.

Ins. Law § 3404 bars any suit on the Standard Fire Policy unless it is filed within 24 months after the inception of the loss, and only after the insured has complied with all other policy requirements, such as timely proof of loss.

The three Dwelling Policy forms widen the perils covered as you move up: Basic covers a short list of named perils, Broad adds more named perils, and Special covers the dwelling and other structures on an open-perils basis.

Coverage A: Dwelling. Coverage B: Other Structures. Coverage C: Personal Property. Coverage D: Fair Rental Value (lost rental income). Coverage E: Additional Living Expense (extra cost of living elsewhere after a covered loss).

A New York-specific endorsement attached to Dwelling Policies that adjusts the standard ISO form language to match New York statutory requirements, such as cancellation and other provisions unique to this state.

Automatically increases the Coverage A (dwelling) and Coverage B (other structures) limits by the annual percentage shown in the schedule, commonly 4%, 6%, or 8%, prorated through the policy period, so limits keep pace with rising construction costs without a mid-term change.

Converts a Dwelling Policy into builders' risk coverage on the dwelling while it is being built. The Coverage A limit is provisional: the insurance in force on any date is that limit multiplied by the property's actual value on that date divided by its value at completion.

HO-2 (Broad Form) covers a longer list of named perils. HO-3 (Special Form) covers the dwelling and other structures on an open-perils basis but personal property on named perils. HO-5 extends open-perils coverage to personal property too.

Coverage A: Dwelling. Coverage B: Other Structures. Coverage C: Personal Property. Coverage D: Loss of Use (covers Fair Rental Value and Additional Living Expense together under one homeowners coverage).

Removes the depreciation deduction that otherwise applies to personal property claims under the base HO form's actual cash value settlement, so damaged contents are paid at replacement cost instead.

Covers direct physical loss from water or waterborne material that backs up through sewers or drains, or overflows or is discharged from a sump, sump pump, or related equipment, even when the pump breaks down. The base HO water exclusion removes this cause of loss.

Schedules specific valuables, such as jewelry or fine art, with their own amounts of insurance so the base form's special limits don't cap them, and covers them on an open-perils basis. It is not agreed value: for jewelry and most other classes, the insurer pays the least of actual cash value, repair or replacement cost, or the scheduled amount.

Adds limited business property, business income and extra expense, and liability coverage for a home-based business that the base homeowners policy would otherwise largely exclude, letting the insured avoid a separate commercial policy for a small operation.

A CPP combines a single set of common policy declarations and common conditions with two or more coverage parts (such as commercial property and general liability), each still governed by its own coverage-specific conditions form.

Commercial property causes-of-loss forms come in Basic, Broad, and Special versions. Basic and Broad each list a specific, growing set of named perils; the Special form instead covers direct physical loss from any cause not specifically excluded, subject to its own standalone list of exclusions.

Business income pays the net income the business would have earned plus continuing normal operating expenses, including payroll, during the "period of restoration" after covered direct physical loss. Extra expense pays necessary added costs, such as a temporary location, to avoid or minimize the suspension and keep operating.

Used when covered stock or inventory values fluctuate through the year. The insured must periodically report actual values to the insurer; underreporting can trigger a coinsurance-style penalty at the time of loss.

An NAIC definition (adopted 1953, revised 1976) of property that may be insured on ocean and inland marine forms: imports, exports, domestic shipments, instrumentalities of transportation and communication such as bridges and pipelines, and personal and commercial property floaters. Qualifying property is generally movable, in transit, or tied to transportation or communication.

Packages property and liability coverage for eligible small and midsize businesses into one policy with combined underwriting, so the insured doesn't need to separately purchase and rate each coverage part the way a CPP requires.

The PSI outline lists a standard (named-perils) and a special (open-perils) BOP property form. Since 2002, ISO's single Businessowners Coverage Form (BP 00 03) is written on an open-perils basis, and a Named Perils endorsement (BP 10 09) narrows it when needed.

Makes maintaining the scheduled safeguards, such as an automatic sprinkler system, central-station fire alarm, or security service, a condition of coverage. The insurer won't pay for fire loss if, before the fire, the insured knew a safeguard was impaired and didn't notify it, or failed to keep a safeguard it controlled in complete working order.

Covers direct physical damage to covered property caused by an interruption of utility service, such as power or water, at a source away from the insured's premises.

Covers business income and extra expense losses caused by an off-premises utility service interruption, complementing BP 04 56's coverage for direct physical damage from the same interruption.

Loss conditions govern a claim: Abandonment, Appraisal, Duties in the Event of Loss or Damage, Legal Action Against Us, Loss Payment, Recovered Property, Resumption of Operations, and Vacancy. Property general conditions are Control of Property, Mortgageholders, No Benefit to Bailee, and Policy Period/Coverage Territory. Changes, books examination, and subrogation are common policy conditions.

Optional coverages, such as outdoor signs above the base limit or employee dishonesty, are extra protections the insured can add to a Businessowners Policy for additional premium, beyond what the base form automatically includes.

Under the National Flood Insurance Program's Write Your Own arrangement, private insurers issue and service flood policies under their own name, but the federal government underwrites the flood risk and pays covered claims from the National Flood Insurance Fund.

The NFIP defines flood as a general and temporary inundation of two or more acres of normally dry land, or of two or more properties (one being the policyholder's), from overflow of inland or tidal waters, unusual and rapid surface-water runoff, or mudflow. It also includes shoreline collapse from abnormal waves or currents.

Hull insurance covers the vessel itself. Cargo insurance covers goods being shipped. Freight insurance covers the shipowner's revenue if a voyage doesn't complete. Protection and Indemnity (P&I) covers the vessel owner's liability to third parties.

When a voluntary sacrifice or expense is deliberately incurred to save a marine venture from a common peril, all parties who benefit — ship, cargo, and freight interests — share that loss proportionally, not just the party who bore it directly.

A separate policy written to fill gaps between an underlying property policy's covered causes of loss and its exclusions — most commonly flood and earthquake — rather than duplicating perils the underlying policy already covers.