Catastrophe Claims Handling Flashcards
7 cards from real CALA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Catastrophe Claims Handling flashcards as text
A state declares a catastrophe emergency and activates its 'file and use' regulation for rate changes. What does this mean for adjusters?
Answer: Insurers may implement new rates immediately without prior approval, and adjusters must apply the new rates to qualifying claims
Under file-and-use rules, insurers submit rate changes to the regulator simultaneously with implementing them, so adjusters must use the current approved rates.
A catastrophe adjuster encounters an insured who also has a flood policy through the National Flood Insurance Program (NFIP). A storm surge loss is documented. Which policy covers storm surge?
Answer: The NFIP flood policy, because storm surge is classified as flooding
Storm surge is considered flood under NFIP definitions, so it is covered by the NFIP flood policy, not the standard homeowners policy.
What is the purpose of a 'reservation of rights' letter sent by an insurer during a catastrophe claim investigation?
Answer: To notify the insured that the insurer is investigating coverage while reserving the right to deny if coverage is found to be lacking
A reservation of rights letter protects the insurer from waiving policy defenses while still providing a good-faith investigation of the claim.
Under the standard NFIP Write-Your-Own (WYO) program flood policy, which of the following is covered?
Answer: Direct physical loss to the building caused by flood, including foundation damage
The NFIP building coverage pays for direct physical loss to the structure, including the foundation, from flooding, but excludes ALE, vehicles, and landscaping.
An adjuster discovers that a homeowner made unauthorized repairs before the inspection, preventing accurate documentation of the original damage. What should the adjuster do?
Answer: Request all receipts, photos taken before repairs, and contractor statements to reconstruct the original damage scope
The adjuster should gather all available documentation to reconstruct the pre-repair damage, honoring the insured's duty to mitigate while maintaining accurate loss valuation.
Which catastrophe-specific coverage feature allows a policyholder to receive payment for a full roof replacement even when only a portion is visibly damaged, due to matching issues?
Answer: Matching or uniformity endorsement
A matching endorsement requires the insurer to replace undamaged sections when damaged sections cannot be matched to existing materials, ensuring a uniform appearance.
In a multi-family apartment complex CAT loss, who has the insurable interest in the building structure versus the tenant's personal belongings?
Answer: The building owner has insurable interest in the structure; tenants have insurable interest in their personal property
Insurable interest in property follows ownership: the building owner insures the structure while tenants insure their own contents through renters policies.