CAIA Legal & Ethical Considerations in Insurance Adjusting 5

Question 1

An adjuster is asked by a supervisor to alter claim notes to reduce the reserve amount before a quarterly audit. The adjuster should:

Accepted Answer

Refuse and report the request to the compliance or ethics hotline

Answer

Altering claim records fraudulently is illegal and unethical; the adjuster must refuse and report the misconduct through proper channels.

Question 2

In a subrogation action, the insurer steps into the shoes of the insured to pursue which party?

Accepted Answer

The negligent third party responsible for the loss

Answer

Subrogation allows the insurer, after paying the insured's claim, to recover from the at-fault third party who caused the loss.

Question 3

An adjuster learns that a claimant's attorney is also the brother-in-law of the adjuster's supervisor. This relationship should be:

Accepted Answer

Disclosed as a potential conflict of interest and another adjuster assigned

Answer

Any relationship that could create the appearance of bias must be disclosed and the claim reassigned to eliminate conflicts of interest.

Question 4

Under the doctrine of 'stacking' in UM/UIM coverage, a policyholder with multiple vehicles on one policy may:

Accepted Answer

Combine the UM limits of each vehicle to increase the available coverage

Answer

Stacking allows the insured to combine UM/UIM limits across multiple vehicles on the policy, though many states permit anti-stacking policy language.

Question 5

A claimant submits repair estimates inflated by 30% with the collusion of the body shop. Both the claimant and shop owner could face charges of:

Accepted Answer

Insurance fraud, a criminal offense

Answer

Intentionally submitting false or inflated repair estimates constitutes insurance fraud, which is prosecuted criminally in every US state.

(CAIA) Certified Automotive Insurance Adjuster Practice Test