CALA Auto & Vehicle Claims Flashcards

What does 'betterment' mean when applied to an auto repair claim?

Answer: A deduction applied when a new part improves the vehicle's condition beyond its pre-loss state

Betterment is a reduction in claim payment to account for the added value when a worn part is replaced with a new one, ensuring indemnity rather than improvement.

Under a standard personal auto policy, which coverage responds when the insured is struck by a driver who carries no liability insurance?

Answer: Uninsured Motorist Bodily Injury (UMBI) coverage

UMBI coverage is specifically designed to protect the insured when injured by an at-fault driver who has no liability insurance.

An adjuster discovers a vehicle's VIN has been altered. What is the primary concern?

Answer: Potential vehicle fraud or theft

An altered VIN is a red flag for vehicle fraud, including theft rings that swap VINs to disguise stolen vehicles as legitimately titled ones.

Which party is responsible for proving the amount of an auto property damage loss under a standard US policy?

Answer: The insured (burden of proof lies with the policyholder)

Under US insurance law, the insured bears the burden of proving the existence and amount of the claimed loss to trigger the insurer's duty to pay.

When an auto claim involves a lienholder on the vehicle, how should settlement proceeds be handled?

Answer: The payment check should be made jointly to the insured and the lienholder

Lienholders have a financial interest in the vehicle, so insurers are required to include the lienholder as a co-payee on settlement checks.

Which federal law governs the total-loss title branding requirements that adjusters must be aware of when settling vehicle claims?

Answer: The Anti-Car Theft Act and state salvage/branding laws

State salvage and branding statutes, reinforced by the federal Anti-Car Theft Act, require that total-loss vehicles receive a salvage or rebuilt title brand.