Alabama Insurance Adjuster Practice Exam

What may have caused the denial of Robert's claim for low crop yield?

1. Failure to use proper irrigation

2. Failure to document actual production history

3. Insufficient coverage limits

4. Late-filed claim

The correct answer is: Failure to document actual production history

The denial of Robert's claim for low crop yield may have been primarily due to his failure to document actual production history. In agricultural insurance, having a well-documented production history is crucial as it provides evidence of the expected yield for a given crop type. Insurance policies often require this documentation to establish a baseline for what constitutes a normal yield. Without this information, it becomes challenging for the insurance adjuster to assess the validity of the claim and determine whether it meets the policy's conditions for coverage. Hence, the lack of supporting data can lead to a denial of the claim, as the insurer cannot evaluate the extent of the loss accurately. Other factors, while they may contribute to issues in a claim, do not have as direct an impact on the basis for coverage as proper documentation does. For example, failure to use proper irrigation or insufficient coverage limits may affect yield or payout, but the core issue lies in the ability to prove that a low yield occurred relative to historical benchmarks as defined in the policy. Similarly, a late-filed claim could result in procedural challenges or limitations but would not inherently justify the denial of the claim itself if the production history was established.