Practice Test Geeks(CAADE) Certified Automotive Appraisal and Damage Estimator Practice Test
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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

  1. GAP insurance covers the difference between a vehicle's ACV and:

    Answer: The outstanding loan or lease balance

    GAP (Guaranteed Asset Protection) insurance pays the shortfall between what the insurer pays (ACV) and what the owner still owes on the loan or lease.

  2. A vehicle title branded as 'salvage' indicates:

    Answer: The vehicle was declared a total loss by an insurer at some point

    A salvage title is issued when an insurance company declares a vehicle a total loss due to damage, theft recovery, or other qualifying event.

  3. An insured has a $1,000 collision deductible. If total repairs cost $4,200, the insurer pays:

    Answer: $3,200

    The insurer pays total repair costs minus the deductible, so $4,200 − $1,000 = $3,200.

  4. Which legal concept prevents an insurer from denying coverage based on a policy exclusion if it failed to clearly communicate that exclusion to the policyholder?

    Answer: Waiver and estoppel

    Under waiver and estoppel, an insurer that fails to timely assert an exclusion or misrepresents coverage may be legally prevented from later denying the claim on that basis.

  5. A vehicle appraisal report used in a legal proceeding must meet the evidentiary standard of being:

    Answer: Prepared by a qualified expert using accepted industry methodologies

    For an appraisal to be admissible in court, it must be authored by a qualified expert who applied recognized and reliable valuation methods.

  6. Comparative negligence laws in auto accident claims affect damage recovery by:

    Answer: Reducing each party's recovery proportionally to their percentage of fault

    Under comparative negligence, a claimant's compensation is reduced by their own percentage of fault, allowing partial recovery even when they share blame.

  7. An insurer's duty to defend is triggered when:

    Answer: A claim is filed that potentially falls within policy coverage, regardless of ultimate merit

    The duty to defend is broader than the duty to indemnify; it is triggered by any claim alleging facts that could potentially be covered under the policy.