C111 Chapter 1 Advanced Loss Adjusting





  1. Occurrence- An accident (element of suddenness) and/or continuous or repeated exposure to the same general conditions.
  2. Qualities affect coverage of an occurrence
    1. Suddenness – definite as to time and place; one of the elements (accident) of an occurrence.
    2. Intent – insurance does not apply to losses expected or intended regardless of what the amount of damage is.
    3. Foresee ability – As long as the result was unintended (accidental), it is still insurable, even if the result is foreseeable.
    4. Chance – An occurrence must be fortuitous to be insurable. If an insured has been warned about a process or activity, and continues that practice with a resulting occurrence, the resulting damage did not occur by chance (not fortuitous) and is not insurable.
    5. Criminality – Any criminal act falls under the intentional act exclusion.
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C111 Chapter 2 Advanced Loss Adjusting



  1. 3 aspects of a claim settlement the adjuster could explain to a claimant in order to manage expectations. – 1) Explain any obligations to the insured. 2) Explain the legal process, possible outcomes and timing. 3) Explain their right to retain a lawyer. Pg. 03
  2. List the steps to follow in reading a liability policy in light of a claim made against the policy.
    • Review the declarations-who is an insured.
    • Review that part that defines who qualifies as an insured in addition to the named insured.
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C111 Chapter 3 Advanced Loss Adjusting



  1. What warranty is implied when a seller sells a good? – The seller must warrant to a buyer that the item sold is suitable for the purpose for which it is purchased. Pg. 03
  2. What actions demonstrate that a seller has warranted the product reasonably fit for its purpose? – If the seller describes the item, advertises or fits within the sellers scope of business. Pg.04
  3. What provisions might a warranty of fitness contain to limit liability? – The item must be free of any latent defects which renders it unfit for the use it was intended. Pg 05
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C111 Chapter 4 Advanced Loss Adjusting



 
  1. Who mandates automobile insurance policy wording? – Provincial law. Pg. 03
  2. Why are accident benefits referred to as no fault? – They are payable to policy holders regardless of who is at fault. Pg. 03
    3.
  3. What medical knowledge should an adjuster have in order to assess automobile injury claims? – Understand associated medical terminology, optimum course of treatment, limitations injuries could impose, length of time injury could affect individual. Pg. 04
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C111 Chapter 8 Advanced Loss Adjusting


  1. Most business interruption losses are difficult to quantify due to uncertainty and financial flux and therefore subject to some kind of negotiated settlement. Pg.03
  2. A) Loss from reduction in sales (turnover) and B) Loss resulting from an increase in costs, to avoid a reduction in sales. Pg. 04
  3. Determining the financial condition that would have existed requires recreating the conditions that would have existed during the period of loss and projecting the operating results that could be expected under those conditions. Pg.03
  4. Two standard forms for business interruption insurance:
    • Profits Form
    • Gross earnings form. Pg. 04
  5. Gross Profit: Net profit before taxes and all insured standing charges. Pg.04
  6. Standing charges: expenses that would continue in the event of an interruption.
Variable expenses: Expenses that vary in direct proportion to sales (i.e. if a sale is lost, the variable expense is not incurred). Pg.04-05.
  1. Examples of standing charges: fixed and semi-variable charges such as - mortgage interest, rent, important salaries, depreciation of property, office expenses, property taxes etc. Pg.05
  2. (i) Depreciation of stock;

(ii) Bad debts;
(iii) Wages and salaries other than salaries to permanent staff or important people. ``Ordinary payroll``. Pg.05
  1. Increase in cost of working: The additional expenditure necessary to avoid or diminish the reduction in ``turnover`` during the indemnity period – subject to an economic test. Pg.05
  2. Measure of recovery: ….Something to do with coinsurance???
  3. Total net sales + Other earnings of the business – less the cost of:
    • Merchandise sold
    • Materials and supplies consumed in supplying the sevices
    • Services purchased from outsiders. Pg. 06
  4. Such expenses necessary for reducing loss; to the limit that that such expenses exceed the amount saved. Pg. 07
  5. Such length of time as is required to rebuild, repair or replace such part of the property that was destroyed or damaged. Pg. 07
  6. The definition of gross earnings is based on the sales value of production (Manufacturing form) rather than that of sales (non-manufacturing sales). i.e. Finished stock is excluded from the indemnity agreement since it represents past production. Pg. 07
  7. Ten steps to settlement:

    1. Understand the Coverage
    2. Understand the Business
    3. Identify the Cause of Damage and Expected Impact on Business
    4. Help Insured to Recover Quickly from Damage
    5. Estimate Required Reserve
    6. Gather Financial Information and Records
    7. Examine Business Outlook
    8. Calculate the Loss
    9. Examine Related Coverage
    10. Settle the Claim. Pg. 08

  1. General Manager, people from production, finance, marketing and HR. Pg. 09  
  2. The business interruption coverage will still respond subject to policy limitations. However, the deduction for savings in standing charges or non-continuing costs will be substantial. Pg. 10


  1. 3 names for Recent historical operating statements:
    • Profit and loss
    • Statement of Operations
    • Income statements Pg. 12
  2. Recent historical operating statements, review internal statements, forecasts, sales records, productions records, equipment maintenance, payroll records, invoices for additional expenses. Pg. 12-13
  3. Investigate the activities of competitors, regulatory bodies, suppliers, and customers. Pg. 14
  4. To ensure that items are not claimed twice. Pg. 16
  5. Expenses incurred that do not meet the economic test associated with the additional expense coverage in the policy. This may be purchased in order to protect reputation or keep regular customers. Pg. 17

C111 Chapter 6 Advanced Loss Adjusting


  1. The insured may feel vulnerable or traumatized. The insured may display strange and unpredictable behaviour. Pg. 02
  2. A conflict of interest may arise if the adjuster has a stake in the business or the same adjuster (company) represents two opposing claimants. Pg. 03
  3. A loss adjuster may need to hire an expert to deal with separate issues and be prepared to explain how each claim will be handled and what kind of information is required for each. Pg. 03
  4. Questions to be answered for good faith test:
    • Did the loss adjuster or insurer act promptly?
    • Did the loss adjuster or insurer act competently?
    • Was the loss investigated thoroughly? Pg. 05
  5. All claims file information is available to the insured. If uncorrected criticism is included in the file, the insured will have greater evidence for liable against the adjuster/insurer (bad faith). Pg.07
  6. Statutory conditions. Pg. 09
  7. Insured statement, witness statements, Fire/police reports/statements, expert reports, financial information/history. Pg. 10

    • replacement to occur with due diligence and dispatch;
    • replacement to take place on the same site or an adjacent site;
    • settlement on a replacement cost basis to occur once the replacement has been effected by the insured;
    • if the insured fails to comply with the terms and conditions of the replacement cost endorsement then the basis of settlement reverts to the original policy terms. Pg. 10-11
  9. The value of a property is based on the income produced by the property. Pg. 12
  10. An appraisal can expedite a claims process when the value of the claim is in dispute. Pg. 12
  11. The appraisal clause can be invoked by either party to contract. Pg. 12

    • umpire controls the appraisal process; asks for all documentation (narrative)
    • umpire will hear arguments from both sides, and will usually allow controlled debate on the issues;
    • it is up to the umpire to limit the discussions to the area the appraisal concerns. Pg. 13-14
  13. Building code and repair violations as well as permits and original plans/documents. Pg. 14
  14. Privacy’s officer role is to protect personal information collected by the organization. Pg. 15
  15. Incendiary, accidental and unknown. Pg. 23
  16. Statements should be taken as soon after incident as possible so that recollection does not fade. Pg. 18
  17. Policy or statute conditions. Pg. 22
  18. An insurer can recoup some losses from a fraudulent insured by becoming the mortgagee and selling the property when the insured defaults. Pg. 20
  19. Ask for an order of restitution or launch civil action against insured. Pg.20
  20. The insurer must show the insured what is deficient in the proof of loss and ask the insured to rectify the situation. Pg. 21
  21. There are several stages:
    • pre-test interview;
    • collection of data;
    • analysis of the data
  22. Public adjusters represent the insured’s interest with their insurer when a loss has occurred. Pg. 25

C111 Chapter 5 Advanced Loss Adjusting


 
  1. To resolve the claim in a fair and equitable way. Pg. 03
  2. Negotiating styles can roughly be broken into two main divisions:
    • rights-based negotiation where one party will lose and the other one will win;
    • interest-based negotiation where cooperation is stressed and each party is expected to make concessions to the other in order to eventually answer to both parties' needs.
  3. Negotiators use repetition to help people remain focused. Pg. 04
  4. The adjuster can express his empathy for the injuries sustained “...I’m sorry this has happened...” but avoid indicating you know how it feels. Pg. 09
  5. Reactive devaluation occurs when the other party interprets your first settlement offer as being the lower end of the settlement range and will react by looking for a larger number. Pg. 10
  6. When negotiations break down or the claim was denied, mediation is possible instead of litigation. Pg. 11
  7. The mediator must be neutral and skilled in negotiation, communication, interviewing, and counselling. Pg. 14
  8. Loss adjuster can act as the insurer’s representative during mediation proceedings. Pg. 15
  9. The adjuster should have the authority to agree to a settlement in mediation, otherwise another representative will have to be brought in (with the authority) and much time and effort would have been wasted. Pg. 15
  10. Litigation council is most comfortable with the adversarial system and may not adapt well to the co-operative nature of mediation. Pg. 16
  11. Council participates in negotiation, interprets information, and provides feedback as necessary. Pg. 16
  12. The mediation agreement sets out all the terms and conditions of the mediation, including confidentiality. Such items as:
    • Who will pay the costs
    • What will happen if mediation is cancelled
    • Issues of confidentiality
    • Other terms that may be a source of contention later. Pg. 17
  13. Expert witness testimony tends to carry more weight if opposing council may question them. Refusing to allow opposing questions will cast suspicion on the testimony given. Pg. 20
  14. Mediators use separate, private, side meetings in mediation known as caucusing. Pg. 20
  15. “Jackpot syndrome” occurs when a claimant feels they have a very good case and can secure a larger settlement at trial. This is a problem because it is a disincentive to the claimant to continue with mediation. Pg. 22
  16. 3 options available should negotiations break down:
    • Neutral evaluation.
    • Arbitration.
    • Litigation. Pg. 22
  17. Surveillance evidence should be disclosed in the mediation summary and sent to counsel ahead of time. Pg. 20
  18. Two approaches in caucusing are commonly used:
    • everything discussed can be revealed to the group as a whole;
    • everything revealed is confidential unless agreed that it can be shared with the group;
      • promise of confidentiality encourages participants to disclose information fully;
      • Each party may lose if goes to litigation; legal fees are not usually recovered;
      • each party assesses the current situation and what their chances of success would be in court;
      • claims rep have an opportunity to reflect on what was said.  

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