A claimant presents a demand for $500,000 but the at-fault insured has only $100,000 in liability coverage. The adjuster believes the case has a fair value of $85,000. What is the adjuster's primary obligation?

EXCESS JUDGMENT AND INSURER DUTY: When a claim could exceed policy limits, the insurer has a duty to protect the insured from personal excess judgment exposure. DUTY TO SETTLE: When a settlement demand is within policy limits and the case has a reasonable value near or above the limit, the insurer has a good faith obligation to attempt settlement at or within the policy limit; Failing to do so exposes the insurer to a BAD FAITH claim — if the insurer refuses a reasonable within-limits demand and the jury returns a verdict above the limit, the insurer may be liable for the ENTIRE judgment, not just the policy limit; PRACTICAL GUIDANCE: Evaluate the realistic verdict range; if $85,000 is a fair value but there's variance that could put a verdict near or above $100,000, strong consideration should be given to settling within limits; document all settlement authority requests and decisions; involve coverage counsel on excess exposure cases.