Los Angeles Claims Adjuster Property and Causality Practice Exam

What is an insured's duty when a covered loss occurs?

1. Report the incident to the police

2. Submit the claim without delay

3. Mitigate further loss to the property

4. Inspect the property for pre-existing damage

The correct answer is: Mitigate further loss to the property

When a covered loss occurs, one of the primary responsibilities of the insured is to mitigate further loss to the property. This duty is essential because it involves taking reasonable steps to prevent additional damage after an initial loss has occurred. For example, if a pipe bursts in a home, the insured should act promptly to stop the water flow and begin the drying process. Failing to take action could result in worsened damage, which could ultimately affect any claims made. Mitigating further loss ensures that the insurer is not liable for damages that could have been prevented. This concept is rooted in the insurance principle of avoiding unnecessary losses and is often stipulated in insurance policies. Insurers expect policyholders to take reasonable actions during a loss to limit the extent of damage, as this not only protects the insured's property but also helps to keep insurance premiums manageable. In contrast, reporting the incident to the police, submitting the claim without delay, or inspecting for pre-existing damage, while potentially relevant actions to take, do not encompass the core duty of the insured in the aftermath of a loss. The focus should be on prevention and minimizing further damages, which is why mitigating further loss is the most critical duty at this juncture.