Claims Handling Procedures & Ethics 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 Claims Handling Procedures & Ethics flashcards as text
An adjuster receives a subrogation opportunity after paying a homeowner's claim caused by a neighbor's contractor. What is the first step in pursuing subrogation?
Answer: Notify the insured and obtain an assignment of rights before pursuing the responsible party
Subrogation requires the insurer to stand in the insured's shoes, which begins with notifying the insured and properly documenting assignment of the right to recover.
A homeowner's policy has a co-insurance clause requiring the property to be insured to 80% of its replacement value. If the property is underinsured, how does this affect a partial loss claim?
Answer: The insurer's payment is reduced proportionally based on the co-insurance formula
The co-insurance formula requires the insurer to pay only the proportion of loss equal to the ratio of actual insurance carried to required insurance, penalizing underinsurance on partial losses.
An adjuster working on a catastrophe (CAT) deployment must handle 50+ claims simultaneously. Which ethical principle is most critical to maintain?
Answer: Maintaining consistent, fair evaluation standards despite volume and time pressure
High-volume CAT environments create pressure to cut corners, but adjusters must maintain consistent and fair evaluation standards for every claim regardless of workload.
A claimant requests copies of all documents the adjuster used to evaluate their claim. Under most state regulations, what is the adjuster's obligation?
Answer: Provide all documents upon request as required by most state claim file disclosure laws
Most states require insurers to provide claimants access to claim file documents related to their claim upon request as part of fair claims handling obligations.
When is it appropriate for a claims adjuster to use an independent medical examination (IME)?
Answer: When the treating physician's opinion is unclear or conflicting medical evidence exists
IMEs are appropriate tools when medical evidence is unclear, conflicting, or when there is a reasonable basis to question the scope or causation of claimed injuries.
An adjuster closes a claim and later discovers new evidence suggesting a higher payment was warranted. What ethical obligation does the adjuster have?
Answer: Reopen the claim and evaluate the new evidence to determine if additional payment is appropriate
Good faith requires adjusters to reopen closed claims when credible new evidence indicates an underpayment may have occurred.
An adjuster's personal religious beliefs conflict with paying a specific type of claim. How should this conflict be handled?
Answer: Recuse themselves and transfer the claim to another adjuster without personal bias
Personal beliefs must never influence claims decisions; recusal and transfer to an unbiased adjuster ensures fair handling and legal compliance.