Arizona Adjuster Practice Exam

When insured property is damaged, what must the insured do with it?

1. Sell it immediately

2. Arrange for its repair or disposal

3. Leave it as is for inspection

4. Submit a claim before taking action

The correct answer is: Arrange for its repair or disposal

When insured property is damaged, the insured has a duty to mitigate further damage by arranging for its repair or disposal. This requirement is a fundamental principle in insurance claims to ensure that the loss does not increase. For instance, if a roof is damaged and left unrepaired, any water intrusion that occurs can lead to more significant issues, such as mold or structural damage, which could have been avoided with prompt action. Mitigation is essential not only to preserve the condition of the property but also to facilitate the claims process. By taking appropriate steps to repair or dispose of the damaged property, the insured helps in maintaining the integrity of the claim and demonstrates responsibility in managing the situation. The other options do not align with the insured's responsibilities as they could either exacerbate the damage (by leaving it as is) or compromise the claims procedure (by selling it immediately or submitting a claim without addressing the damage). Proper management of the damaged property is crucial to ensure a smoother claims experience and to uphold the contractual obligations outlined in most insurance policies.