CAIA Claims Investigation Techniques 4 — Questions and Answers
Question 1: During a total-loss investigation, the adjuster discovers the vehicle's title is branded as 'salvage' but the insured claimed it was a clean title. What is the most appropriate action?
- Pay the claim at the clean-title market value
- Reduce the settlement to reflect the salvage title status and investigate potential fraud (Correct answer)
- Transfer the claim to subrogation
- Accept the insured's explanation without further inquiry
Correct answer: Reduce the settlement to reflect the salvage title status and investigate potential fraud
A misrepresented title brand affects vehicle valuation and may constitute material misrepresentation, requiring adjustment of the settlement and a potential fraud referral.
Question 2: An adjuster is investigating a rear-end collision where the at-fault vehicle's driver denies the accident. Which piece of evidence would most objectively corroborate the collision?
- The claimant's verbal description
- Event data recorder (EDR/black box) data from the at-fault vehicle (Correct answer)
- A witness who heard a noise
- The adjuster's visual estimate
Correct answer: Event data recorder (EDR/black box) data from the at-fault vehicle
EDR data captures vehicle speed, brake application, and throttle position in the seconds before impact, providing objective, vehicle-generated evidence of the collision.
Question 3: What is 'subrogation' in the context of an auto insurance claim investigation?
- The insured's right to choose their own repair shop
- The insurer's right to pursue a third party responsible for the insured loss after paying the claim (Correct answer)
- A method of splitting claim payments between carriers
- The process of denying a fraudulent claim
Correct answer: The insurer's right to pursue a third party responsible for the insured loss after paying the claim
Subrogation allows the insurer, after indemnifying the insured, to step into the insured's shoes and recover the paid amount from the negligent third party.
Question 4: An adjuster finds that the insured's vehicle had extensive pre-existing rust and frame damage visible in repair shop photos taken six months before the loss. How should this affect the current claim?
- Pre-existing damage must be excluded from the current claim settlement (Correct answer)
- The claim should be paid in full including pre-existing damage
- The policy should be immediately cancelled
- Pre-existing damage is covered under comprehensive coverage
Correct answer: Pre-existing damage must be excluded from the current claim settlement
Insurers are only obligated to indemnify damage caused by the covered loss; pre-existing damage documented in prior records must be subtracted from the settlement.
Question 5: When conducting a recorded statement, which practice best protects the integrity of the investigation?
- Reading questions from a prepared script without deviation
- Advising the claimant of the recording at the outset and asking open-ended questions (Correct answer)
- Asking leading questions to confirm the adjuster's theory
- Conducting the statement without the claimant's knowledge
Correct answer: Advising the claimant of the recording at the outset and asking open-ended questions
Disclosing the recording and using open-ended questions produces uncoached, admissible testimony and ensures the process complies with state wiretapping laws.
Question 6: A vehicle fire claim shows burn patterns originating from multiple separate ignition points inside the passenger compartment. This finding most strongly suggests:
- An electrical short in the wiring harness
- An arson fire set intentionally (Correct answer)
- Spontaneous combustion from an aerosol can
- A fuel leak from a collision
Correct answer: An arson fire set intentionally
Multiple, independent origin points within the passenger compartment are a hallmark of intentional fire-setting because a single accidental cause produces one primary origin.
Question 7: Why is it important for an adjuster to document the chain of custody when collecting physical evidence from a damaged vehicle?
- To comply with repair shop billing requirements
- To ensure evidence is admissible and untampered if the case proceeds to litigation (Correct answer)
- To qualify for carrier bonuses
- To speed up the appraisal process
Correct answer: To ensure evidence is admissible and untampered if the case proceeds to litigation
Chain of custody documentation proves that evidence was properly collected, stored, and handled, making it legally defensible and admissible in court or arbitration.
CAIA Claims Investigation Techniques 4
During a total-loss investigation, the adjuster discovers the vehicle's title is branded as 'salvage' but the insured claimed it was a clean title.
What is the most appropriate action?