Hawaii Insurance Adjuster License Practice Exam

What is the maximum additional charge for attorney's fees associated with a judgment against an unauthorized insurer?

1. 10% of the original judgment.

2. 15% of the original judgment.

3. 12.5% of the judgment.

4. 20% of the judgment.

The correct answer is: 12.5% of the judgment.

The correct answer indicates that the maximum additional charge for attorney's fees associated with a judgment against an unauthorized insurer is 12.5% of the original judgment. This percentage is significant as it represents a cap established by regulatory statutes to provide a legal framework for compensating the expenses incurred due to the necessity of hiring an attorney in such situations. This stipulation ensures that there is a controlled and reasonable limit to the fees that can be charged, reflecting a balance between the rights of individuals seeking redress and the necessity of protecting unauthorized insurers from excessive penalties that could impact their operations. In the context of insurance regulations, particularly in Hawaii, knowing the limits of attorney's fees is crucial for both policyholders and insurers. It reflects an effort to maintain fairness within the system while providing a legal recourse for policyholders who have been wronged by unauthorized practices. Knowing the specifics, such as this 12.5% limit, is essential for insurance adjusters. It enables them to provide accurate information, guide clients effectively, and ensure compliance with state laws regarding insurance claims and legal actions.