CAADE Insurance and Legal Procedures 2

Question 1

Under which legal doctrine can an insurer who pays a claim then pursue the at-fault third party for reimbursement?

Accepted Answer

Subrogation

Answer

Indemnification

Answer

Arbitration

Answer

Estoppel

Question 2

A vehicle owner disputes the insurer's total loss valuation. The most common contractual mechanism to resolve this without litigation is:

Accepted Answer

Appraisal clause invocation

Answer

Filing a bad faith lawsuit

Answer

Requesting a state audit

Answer

Demanding a jury trial

Question 3

Which federal law requires insurers to provide written explanations when denying or partially paying auto insurance claims?

Accepted Answer

Unfair Claims Settlement Practices Act

Answer

McCarran-Ferguson Act

Answer

Employee Retirement Income Security Act

Answer

Truth in Lending Act

Question 4

When a claimant signs a release of liability in exchange for a settlement check, this document is legally known as:

Accepted Answer

A full and final release

Answer

A proof of loss form

Answer

A reservation of rights letter

Answer

An assignment of benefits

Question 5

An insurer issues a 'reservation of rights' letter when:

Accepted Answer

It is investigating a claim where coverage may not apply

Answer

A claimant requests an independent medical exam

Answer

A vehicle is declared a total loss

Answer

The claimant hires a public adjuster

Question 6

Which valuation method for total loss settlement is most commonly required by state regulations in the United States?

Accepted Answer

Actual Cash Value (ACV)

Answer

Replacement Cost Value (RCV)

Answer

Original Purchase Price

Answer

Agreed Value

Question 7

A lienholder listed on an auto insurance policy has a legal right to:

Accepted Answer

Receive payment up to the outstanding loan balance in a total loss settlement

Answer

Deny any claim filed by the insured

Answer

Cancel the policy at will

Answer

Increase deductibles without insured consent