CALA CALA Auto & Vehicle Claims 1 — Questions and Answers
Question 1: When determining total loss on a vehicle claim, which valuation method is most commonly used by US insurers?
- Actual Cash Value (ACV) (Correct answer)
- Replacement Cost Value (RCV)
- Original Purchase Price
- Blue Book List Price
Correct answer: Actual Cash Value (ACV)
Actual Cash Value, which accounts for depreciation, is the standard valuation method used in most US auto total-loss determinations.
Question 2: Under a standard personal auto policy, which coverage pays for damage to the insured's own vehicle caused by a collision?
- Collision coverage (Correct answer)
- Comprehensive coverage
- Uninsured motorist property damage
- Medical payments coverage
Correct answer: Collision coverage
Collision coverage applies when the insured's vehicle sustains damage resulting from a collision with another object or vehicle.
Question 3: A vehicle's diminished value claim arises from which of the following circumstances?
- The vehicle's market value decreases after repair due to its accident history (Correct answer)
- The vehicle is declared a total loss
- The claimant cannot afford repairs
- The repair shop is out of network
Correct answer: The vehicle's market value decreases after repair due to its accident history
Diminished value refers to the reduction in a vehicle's market worth that persists even after quality repairs due to its accident history.
Question 4: Which document is the primary source an adjuster uses to verify a vehicle's ownership during an auto claim?
- Certificate of title (Correct answer)
- Insurance ID card
- Registration sticker
- Bill of sale
Correct answer: Certificate of title
The certificate of title is the legal document that establishes ownership of a vehicle in the United States.
Question 5: When adjusting an auto liability claim, what is the adjuster's first step after confirming coverage?
- Investigate the facts of loss to determine liability (Correct answer)
- Issue payment to the claimant immediately
- Obtain a recorded statement from unrelated witnesses only
- File a police report on behalf of the insured
Correct answer: Investigate the facts of loss to determine liability
After confirming coverage exists, the adjuster must investigate the facts to establish which party bears liability for the accident.
Question 6: Which type of auto coverage pays the insured's medical expenses regardless of fault?
- Medical Payments (MedPay) coverage (Correct answer)
- Bodily Injury Liability coverage
- Personal Injury Protection (PIP) only in no-fault states
- Uninsured Motorist Bodily Injury coverage
Correct answer: Medical Payments (MedPay) coverage
Medical Payments coverage reimburses the insured and passengers for medical expenses arising from an auto accident without regard to fault.
CALA CALA Auto & Vehicle Claims 1
When determining total loss on a vehicle claim, which valuation method is most commonly used by US insurers?