Los Angeles Claims Adjuster Property and Causality Practice Exam

An adjuster acts as a fiduciary agent representing which party's interests?

1. The insurance company

2. The public

3. The principal

4. The state

The correct answer is: The principal

An adjuster serves as a fiduciary agent representing the interests of the principal, which in this context typically refers to the insurance company or the insurer that has hired the adjuster. In the fiduciary relationship, the adjuster has the duty to act with the utmost good faith, loyalty, and integrity, ensuring that the principal's interests are prioritized in the handling of claims. This includes making fair assessments regarding claims, accurately representing the terms of the insurance policy, and ensuring that all parties involved in the claim process are treated fairly. While the adjuster does interact with various stakeholders, including claimants and sometimes the public, their primary obligation is to the principal—the insurance company that employs them. Therefore, it is essential for the adjuster to maintain a clear focus on the needs and rights of the principal in all decisions and communications related to claims processing.