CAIA Negotiation and Settlement 2

Question 1

A claimant rejects your initial offer and presents a demand that exceeds the policy limits. What is the most appropriate next step for the adjuster?

Accepted Answer

Document the demand, advise the insured of the excess exposure, and continue negotiating within authority

Answer

Immediately close the file as the claim exceeds coverage

Answer

Accept the demand to avoid bad faith litigation

Answer

Transfer the file to underwriting for policy rescission

Question 2

Which negotiation technique involves deliberately pausing after making an offer to allow the claimant time to respond without pressure?

Accepted Answer

Strategic silence

Answer

Anchoring

Answer

The flinch technique

Answer

Bracketing

Question 3

A claimant has a soft tissue injury claim with no objective medical evidence. What approach best supports a fair settlement evaluation?

Accepted Answer

Evaluate based on the claimant's reported symptoms, treatment history, and comparable verdicts in the jurisdiction

Answer

Deny the claim outright due to lack of objective findings

Answer

Offer only the policy deductible and close the file

Answer

Require the claimant to undergo surgery before settling

Question 4

What is 'bracketing' in the context of insurance claim negotiations?

Accepted Answer

Making an offer so that the midpoint between your offer and the claimant's demand equals your target settlement

Answer

Listing all damages in a bracket format on the settlement worksheet

Answer

Offering to settle only certain covered damages while excluding others

Answer

Using legal brackets to define policy exclusions during negotiation

Question 5

Under what circumstance is it appropriate for an adjuster to bypass the claimant and negotiate directly with the claimant's attorney?

Accepted Answer

Only when the claimant has formally designated the attorney as their authorized representative

Answer

Whenever the adjuster prefers dealing with attorneys

Answer

Whenever the claim value exceeds $10,000

Answer

Only after the claimant has filed a lawsuit

Question 6

A total loss vehicle has an ACV of $18,000 and the insured owes $22,000 on their auto loan. What should the adjuster advise?

Accepted Answer

Pay ACV of $18,000 to the lienholder and advise the insured about GAP coverage

Answer

Pay the lienholder $22,000 to satisfy the loan

Answer

Deny payment because the loan exceeds the vehicle's value

Answer

Negotiate the loan balance down before issuing payment

Question 7

What is the primary purpose of a 'reservation of rights' letter during settlement negotiations?

Accepted Answer

To notify the insured that the insurer is investigating coverage issues while still defending the claim

Answer

To delay settlement while additional coverage defenses are investigated

Answer

To formally deny the claim pending further investigation

Answer

To reserve the insurer's right to collect subrogation after settlement