Rhode Island Insurance Adjuster Exam

What principle does a non-waiver agreement uphold?

1. Denial of all claims

2. Continuance of loss adjustments without liability admission

3. Termination of coverage

4. Open-ended coverage without exclusions

The correct answer is: Continuance of loss adjustments without liability admission

A non-waiver agreement is a key instrument in the claims adjusting process, particularly when there are questions about coverage or liability. The correct answer reflects the primary function of such an agreement, which is to allow the insurer to investigate and adjust a claim without conceding its liability. Essentially, this means that the insurer can continue to assess the loss, gather information, and make necessary adjustments, all while explicitly stating that this does not imply any acceptance of responsibility for the claim. This principle is crucial for both the insurer and the insured; it protects the insurer from unintentionally waiving their right to deny coverage later on and allows the insured to understand that their claim will be reviewed without preconceptions regarding liability. In situations where coverage is unclear, this agreement becomes especially vital to ensure that the claims process can proceed without premature admissions regarding responsibility. The other options do not accurately capture the purpose of a non-waiver agreement. For example, denying all claims would counteract the purpose of handling individual claims and could lead to unfair treatment of policyholders. Termination of coverage suggests a more radical action rather than allowing a claim to be assessed. Lastly, open-ended coverage without exclusions would contradict the intent of clearly defining terms and conditions of coverage. Therefore, the