Claims Processing & Investigation Flashcards

In a homeowners claim, the 'mortgagee clause' requires the insurer to:

Answer: Include the mortgagee as a payee on property damage claim payments

The mortgagee clause protects the lender's financial interest by requiring their name on claim checks so loan collateral is properly repaired or the loan is repaid.

When a third-party claimant files a claim under someone else's auto liability policy, the insurer's duty runs primarily to:

Answer: The named insured/policyholder

In liability claims, the insurer's contractual duty is to the insured, though it must handle third-party claims fairly under unfair claims practices laws.

A 'global settlement' in a multi-claimant auto accident claim means:

Answer: Resolving all claims arising from one accident simultaneously in one agreement

A global settlement resolves all claimants from a single accident together, often used when policy limits require equitable distribution among multiple parties.

Under ACORD standards, the 'Loss Type' field on a claim notice is used to:

Answer: Categorize the nature of the loss (e.g., fire, theft, collision) for routing and statistical purposes

The Loss Type field standardizes categorization of claim types, enabling proper routing, reserving, and statistical aggregation across insurers and systems.

In a commercial general liability claim, 'occurrence' trigger versus 'claims-made' trigger determines:

Answer: Which policy period's coverage applies to the claim

Occurrence policies cover losses that happen during the policy period regardless of when claimed; claims-made policies cover claims reported during the policy period.

A 'tolling agreement' in claims management extends the:

Answer: Statute of limitations deadline by mutual agreement between the parties

A tolling agreement pauses the statute of limitations clock, giving both parties additional time to negotiate without the claimant needing to file suit defensively.

Which red flag MOST strongly suggests potential fraud in a newly issued homeowners policy with an immediate large fire loss claim?

Answer: The loss occurs within weeks of policy inception with maximum coverage recently increased

A large loss shortly after policy inception — especially with a recent coverage increase — is a classic fraud indicator suggesting the loss may have been planned.