Georgia Adjuster Practice Test

In what circumstance might an insured party expect to receive advance payment?

1. Only after claim settlement

2. When awaiting repair estimates

3. To alleviate immediate financial stress

4. When the claim has been fully approved

The correct answer is: To alleviate immediate financial stress

An insured party might expect to receive advance payment to alleviate immediate financial stress because insurers often recognize that certain situations can create urgent financial needs for policyholders. For instance, if a disaster or loss has occurred, the insured may face unexpected expenses, such as temporary living arrangements or immediate repairs, before the full claim is settled. In these cases, insurers may provide an advance payment to help cover these immediate costs without waiting for the entire claims process to be completed. This approach also helps maintain a good relationship between the insurer and the insured, demonstrating the insurer's commitment to easing the financial burden of the insured party during difficult times. Such advance payments are typically contingent on the initial review of the claim, indicating that there is a likelihood that the claim will be approved, but they do not require full approval before being issued.