CAA Total Loss and Diminished Value 4

Question 1

In most states, which costs should be included in a total loss settlement in addition to the vehicle's ACV?

Accepted Answer

Applicable sales tax and title/registration fees

Answer

Many state regulations require reimbursement of sales tax and title fees on a replacement vehicle.

Question 2

An owner owes $24,000 on a loan, but the totaled vehicle's ACV is $19,000. Which coverage pays the $5,000 difference?

Accepted Answer

Gap insurance

Answer

Gap coverage pays the difference between ACV and the loan or lease balance.

Question 3

When an insured disputes a total loss valuation, which policy provision allows each side to hire an independent appraiser with an umpire resolving differences?

Accepted Answer

Appraisal clause

Answer

The appraisal clause provides a binding dispute resolution process for value disagreements.

Question 4

A totaled vehicle that is repaired and passes a state inspection is usually issued which type of title?

Accepted Answer

Rebuilt or reconstructed title

Answer

Repaired salvage vehicles receive a rebuilt brand after inspection.

Question 5

Which situation most likely results in a 'constructive total loss'?

Accepted Answer

Repair costs plus storage and salvage considerations make repair economically unreasonable

Answer

A constructive total loss occurs when repair is possible but not economically sensible.

CAA - Certified Automotive Appraiser Practice Test

CAA - Certified Automotive Appraiser Practice Test

CAA Total Loss and Diminished Value 4