CAADE Supplement and Reinspection Procedures 2 — Questions and Answers
Question 1: What is a 'concurrence' in supplement procedures?
- A disagreement between the shop and insurer over repair methods
- An agreement between the repair facility and the insurance appraiser on the supplemental items and amounts (Correct answer)
- A court order to proceed with repairs
- The vehicle owner's written authorization to begin work
Correct answer: An agreement between the repair facility and the insurance appraiser on the supplemental items and amounts
Concurrence is the mutual agreement reached between the repair facility and the insurance appraiser on the scope and cost of supplemental repairs, allowing work to proceed without dispute.
Question 2: When a supplement is submitted electronically via an estimating platform, which of the following is typically required to finalize the process?
- A notarized statement from the vehicle owner
- Appraiser review and digital authorization within the system (Correct answer)
- A physical signature on paper from the insurer's field adjuster
- Approval from the state insurance commissioner
Correct answer: Appraiser review and digital authorization within the system
Modern estimating platforms (e.g., CCC, Mitchell, Audatex) allow appraisers to review, adjust, and digitally authorize supplements without requiring paper signatures or regulatory approval.
Question 3: A repair shop discovers that a vehicle's frame rail is more severely buckled than originally noted. This finding should result in:
- Closing the claim immediately as a total loss without a supplement
- A supplement that includes additional straightening, sectioning, or replacement labor and materials (Correct answer)
- No change to the original estimate since frame damage was already noted
- Contacting the vehicle owner only, bypassing the insurer
Correct answer: A supplement that includes additional straightening, sectioning, or replacement labor and materials
Greater-than-anticipated structural damage warrants a supplement to account for the additional labor operations, equipment use, and materials required to restore the vehicle to pre-loss condition.
Question 4: Which of the following best describes 'parts price adjustments' in a supplement?
- Correcting part prices that changed between the original estimate and the time of ordering (Correct answer)
- Reducing the cost of parts below the insurer's maximum allowable amount
- Replacing OEM parts with aftermarket parts to reduce costs
- Adding a markup above MSRP for rare parts
Correct answer: Correcting part prices that changed between the original estimate and the time of ordering
Parts prices can fluctuate between the initial estimate and actual ordering; a supplement may adjust prices to reflect current market pricing at the time the repair is performed.
Question 5: In a supplement, what does 'related damage' mean?
- Damage that is older than the current loss event
- Damage that is causally connected to and resulted from the covered loss (Correct answer)
- Damage that the insurer agrees to cover regardless of cause
- Damage noted in a prior claim on the same vehicle
Correct answer: Damage that is causally connected to and resulted from the covered loss
Related damage is damage that is causally linked to the current covered loss event; only related damage is eligible for coverage and inclusion in the supplement.
Question 6: An insurer's appraiser disagrees with a repair shop's supplement on a specific repair operation. What is the appropriate process to resolve this?
- The shop proceeds with repairs and bills the customer for the disputed amount
- Both parties review technical references, OEM procedures, and estimating guidelines to reach agreement (Correct answer)
- The insurer automatically denies the entire supplement
- The vehicle owner must sue the insurer to resolve the dispute
Correct answer: Both parties review technical references, OEM procedures, and estimating guidelines to reach agreement
Disputes over supplement items are typically resolved by referencing OEM repair procedures, I-CAR training, estimating database guidelines, and mutual discussion between the appraiser and shop.
Question 7: What is a 'desk review' in the context of supplement processing?
- A physical reinspection performed at the repair facility
- A remote review of the supplement by an appraiser using photos and documentation without visiting the vehicle (Correct answer)
- A legal review conducted by the insurer's attorney
- An audit of the repair shop's financial records
Correct answer: A remote review of the supplement by an appraiser using photos and documentation without visiting the vehicle
A desk review allows appraisers to evaluate supplement requests remotely using digital photos, estimates, and documentation rather than a physical reinspection, which reduces cycle time.
CAADE Supplement and Reinspection Procedures 2
What is a 'concurrence' in supplement procedures?