Arizona Adjuster Practice Exam

What is usually required of the insured after a loss according to commercial insurance policies?

1. Repair or restore the damaged property as soon as possible

2. Record the loss on social media

3. Obtain a new insurance policy

4. Negotiate with third parties

The correct answer is: Repair or restore the damaged property as soon as possible

The requirement for the insured to repair or restore the damaged property as soon as possible is a common expectation outlined in commercial insurance policies. This obligation supports the principle of mitigating losses, which emphasizes that the insured should take reasonable steps to minimize the amount of damage following a covered event. By acting quickly to repair or restore the property, the insured can help preserve the value of their assets and potentially reduce the overall cost associated with the claim. This requirement also aligns with the insurer’s interest in limiting their liability; if the insured does not take appropriate action to mitigate further damages, it could lead to increased costs that the insurer may need to cover. Therefore, prompt repairs help ensure that the claim process is smooth and that the property can return to its operational state as soon as possible. Other options, such as recording the loss on social media, obtaining a new insurance policy, or negotiating with third parties, are not standard requirements following a loss and do not effectively align with the goals of the insurance contract, which focuses on loss mitigation and proper reporting of the claim.