CAADE Estimating Principles and Software 4 — Questions and Answers
Question 1: When a damaged vehicle has a salvage title, how does this typically affect its actual cash value (ACV) calculation?
- The ACV is reduced, often by 20–50%, to reflect the diminished market value of a vehicle with a salvage history (Correct answer)
- The ACV increases because the vehicle has already been repaired once
- The ACV is unchanged because title status is irrelevant to value
- The vehicle is automatically declared a total loss regardless of damage extent
Correct answer: The ACV is reduced, often by 20–50%, to reflect the diminished market value of a vehicle with a salvage history
A salvage title significantly reduces a vehicle's market value because buyers pay less for vehicles with a documented prior total-loss history.
Question 2: In collision estimating, 'sublet' refers to:
- Repair work sent to a specialized vendor outside the primary repair shop, such as a glass or frame shop (Correct answer)
- A deductible paid by the insured directly to a vendor
- Labor performed by a temporary employee hired for a single job
- Parts sourced from a salvage yard
Correct answer: Repair work sent to a specialized vendor outside the primary repair shop, such as a glass or frame shop
Sublet operations are tasks outsourced to specialists — such as wheel alignment, glass replacement, or mechanical repair — and billed to the estimate at the vendor's invoice price.
Question 3: Which of the following is a key advantage of using computerized estimating software over manual estimating?
- Automatic lookup of current OEM parts pricing, labor times, and real-time database updates (Correct answer)
- Elimination of the need for a physical vehicle inspection
- Guaranteed insurer approval for all line items
- Removal of the estimator's need for technical knowledge
Correct answer: Automatic lookup of current OEM parts pricing, labor times, and real-time database updates
Computerized platforms connect to live databases that update parts prices and labor times, ensuring estimates reflect current market conditions without manual lookups.
Question 4: A damage appraiser notes that a replacement door must be painted to match. The correct way to reflect this in the estimate is to:
- Add a refinish labor line for the replacement door at the full panel refinish time (Correct answer)
- Include refinish in the door R&R time automatically
- Charge only for materials, not labor, since the door is already primed from the factory
- List the refinish as a sublet operation regardless of shop capability
Correct answer: Add a refinish labor line for the replacement door at the full panel refinish time
Replacement panels require a separate refinish labor line at the full published time because refinish is listed as a not-included operation in R&R labor.
Question 5: What is 'diminished value' in the context of auto damage claims?
- The reduction in a vehicle's market value after a collision repair, even when repaired to pre-loss condition (Correct answer)
- The depreciation of a vehicle's value over time due to normal wear
- The discount applied to parts that are no longer in production
- The loss in value when aftermarket parts are used instead of OEM
Correct answer: The reduction in a vehicle's market value after a collision repair, even when repaired to pre-loss condition
Diminished value represents the difference between a vehicle's pre-accident market value and its post-repair market value, as consumers pay less for vehicles with accident history.
Question 6: When using Audatex (Solera), what does the 'Qapter' platform primarily provide?
- AI-assisted photo-based damage assessment and automated estimate generation from vehicle images (Correct answer)
- A database of used OEM parts from recycled vehicles
- A direct communication channel between body shops and parts warehouses
- A compliance tracking system for state insurance regulations
Correct answer: AI-assisted photo-based damage assessment and automated estimate generation from vehicle images
Qapter by Solera uses artificial intelligence to analyze damage photos and generate estimate data, accelerating the appraisal process for insurers and shops.
Question 7: On a damage estimate, 'R&I' (Remove and Install) differs from 'R&R' (Remove and Replace) in that:
- R&I removes and reinstalls the original undamaged part, while R&R removes the damaged part and installs a new one (Correct answer)
- R&I is more expensive than R&R in all cases
- R&R applies only to structural components, while R&I applies to trim
- R&I requires dealer authorization but R&R does not
Correct answer: R&I removes and reinstalls the original undamaged part, while R&R removes the damaged part and installs a new one
R&I labor covers removing an undamaged part to access a damaged area and reinstalling the original part, whereas R&R covers removing a damaged part and installing a replacement.
CAADE Estimating Principles and Software 4
When a damaged vehicle has a salvage title, how does this typically affect its actual cash value (ACV) calculation?