Insurance and Legal Procedures Flashcards
7 cards from real CAADE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Insurance and Legal Procedures flashcards as text
An appraiser discovers a vehicle was previously declared a total loss and rebuilt. This history must be disclosed because it affects:
Answer: Actual cash value and insurability
A salvage or rebuilt title history significantly reduces ACV and may limit available coverage options, making disclosure legally and ethically required.
Which insurance coverage specifically protects the insured when the at-fault driver has no auto liability insurance?
Answer: Uninsured motorist coverage (UM)
Uninsured motorist coverage compensates the insured for bodily injury and sometimes property damage caused by a driver who carries no liability insurance.
A repair facility submits a supplemental estimate after disassembly reveals additional hidden damage. The insurer's obligation is to:
Answer: Evaluate the supplement and pay for covered legitimate damage
Insurers are obligated to cover all legitimate repair costs for covered damages, including supplements for hidden damage discovered after disassembly.
In states with no-fault insurance laws, a driver injured in an accident must first seek compensation from:
Answer: Their own insurer's Personal Injury Protection (PIP) coverage
No-fault states require each driver's own PIP coverage to pay for their medical expenses and lost wages regardless of who caused the accident.
A public adjuster working on behalf of a policyholder is legally prohibited from:
Answer: Contracting with repair facilities to receive referral fees
Accepting referral or steering fees from repair facilities creates a conflict of interest and violates public adjuster licensing laws in most states.
When an insurer denies a claim in bad faith, the insured may be entitled to:
Answer: Extracontractual damages beyond the policy limits
Bad faith claim denials can expose the insurer to extracontractual damages, including punitive damages and attorney fees, beyond the policy limits.
The primary purpose of an anti-fraud provision in an auto insurance policy is to:
Answer: Void coverage when the insured materially misrepresents facts related to a claim
Material misrepresentation or fraud in connection with a claim voids coverage under the anti-fraud provision and may expose the insured to criminal liability.