Mixed Deck — All CALA Topics Flashcards

Under a personal auto policy, Medical Payments coverage (MedPay) pays for reasonable medical expenses regardless of:

Answer: Who was at fault for the accident

MedPay is a first-party, no-fault coverage that pays medical expenses for the insured and passengers without regard to fault.

In a total loss vehicle claim, which document establishes the insurer's right to take ownership of the salvage vehicle?

Answer: A signed title transfer or salvage certificate issued to the insurer

After paying a total loss, the insurer receives the vehicle title or salvage certificate, documenting the transfer of ownership needed to legally dispose of the salvage.

Which of the following best describes the 'insuring agreement' section of an insurance policy?

Answer: States the insurer's promise to pay covered losses in exchange for premium

The insuring agreement is the core promise of the policy where the insurer agrees to pay for covered losses, subject to the policy's terms, conditions, and exclusions.

A claimant refuses all offers and demands a jury trial. Which negotiation tool can still be used before trial?

Answer: Participating in mediation or arbitration

Mediation and arbitration are alternative dispute resolution tools available before or during trial to resolve claims without a verdict.

A claimant was injured in a state different from where the policy was issued. Which state's law governs the liability claim?

Answer: Typically the state where the accident occurred under the lex loci delicti doctrine

The lex loci delicti (law of the place of the wrong) doctrine traditionally applies the law of the state where the accident occurred to determine liability.

A claimant receiving temporary total disability benefits begins receiving Social Security Disability Insurance (SSDI). What typically occurs?

Answer: Workers compensation benefits may be offset to prevent the combined benefits from exceeding a statutory percentage of pre-injury wages

Most states allow an offset so that combined workers compensation and SSDI benefits do not exceed a set percentage (commonly 80%) of the worker's pre-injury average weekly wage.

Under the 'make whole' doctrine applied in many states, when can an insurer pursue subrogation recovery?

Answer: Only after the insured has been fully compensated for all losses

Under the make whole doctrine, the insurer cannot pursue subrogation until the insured has been fully compensated for all of their losses, including uninsured amounts.

What documentation practice is considered essential in Fraud Detection & Prevention within the Certified All-Lines Adjuster field?

Answer: Recording actions, observations, and outcomes in real-time or as close to the event as possible

Real-time or near-real-time documentation in Fraud Detection & Prevention ensures accuracy, provides a contemporaneous record, and is considered the gold standard for professional accountability and legal defensibility.

Under a personal auto policy, collision coverage would respond to which of the following scenarios?

Answer: The insured backs into a concrete pillar in a parking garage

Backing into a stationary object is a collision loss; storm damage, theft, and flood are comprehensive perils.

When an adjuster issues a reservation of rights letter, what is the primary purpose?

Answer: To notify the insured that the insurer is investigating while preserving the right to deny coverage

A reservation of rights letter allows the insurer to investigate and potentially defend a claim without waiving the right to later deny coverage if warranted.

A claimant speaks limited English and is having difficulty understanding settlement terms. What is the adjuster's ethical responsibility?

Answer: Arrange for translation or interpreter services to ensure informed consent

Fair claims handling requires that claimants fully understand settlement terms, which may require providing translation or interpreter assistance.

What is the significance of an 'excess judgment' in liability claims handling?

Answer: It occurs when a verdict exceeds the policy limits, potentially exposing the insurer to bad faith liability

When a judgment exceeds policy limits, the insured is personally liable for the excess, and if the insurer mishandled settlement, it may owe bad faith damages.

A third-party claimant asks an adjuster for legal advice on whether to accept a settlement offer. How should the adjuster respond?

Answer: Recommend the claimant consult an independent attorney for legal guidance

Adjusters must not practice law; advising claimants to seek independent legal counsel is the ethical and proper response.

In a comparative negligence state, how does shared fault affect an auto liability claim payout?

Answer: The claimant's recovery is reduced by their percentage of fault

Under comparative negligence, a claimant's compensation is reduced proportionally by their own percentage of fault in causing the accident.

Which documentation is most critical for an adjuster to obtain when closing a property damage claim?

Answer: A signed proof of loss and signed release or settlement agreement

Signed proof of loss and a signed release or settlement agreement create the legal record that the claim has been properly resolved.

Under the NAIC model regulation, when must an insurer provide written notice of its acceptance or denial of a claim after receiving proof of loss?

Answer: Within 30 business days

The NAIC model regulation generally requires insurers to accept or deny a claim within 30 business days after receiving a complete proof of loss.

What documentation practice is considered essential in Liability Claims Investigation within the Certified All-Lines Adjuster field?

Answer: Recording actions, observations, and outcomes in real-time or as close to the event as possible

Real-time or near-real-time documentation in Liability Claims Investigation ensures accuracy, provides a contemporaneous record, and is considered the gold standard for professional accountability and legal defensibility.

Under most state laws, once a proof of loss is submitted, within how many days must an insurer accept or deny a claim?

Answer: 30 days

Most state regulations require insurers to accept or deny a claim within 30 days after receiving a complete proof of loss.

An adjuster is negotiating with an unrepresented claimant. Which ethical rule is most critical?

Answer: Treat the claimant fairly and not take advantage of their lack of legal representation

Adjusters have an ethical and legal duty of good faith that requires fair dealing, especially with unrepresented parties.

A fire destroys inventory in a retail store. The business owner has a commercial property policy with a coinsurance clause of 80%. The building was insured for $400,000 but its replacement cost was $600,000. How does the coinsurance clause affect a $100,000 inventory loss?

Answer: The insured collects only a proportionate share: ($400k / $480k) × $100k

The coinsurance formula is (Amount Carried ÷ Amount Required) × Loss; required insurance = 80% × $600k = $480k, so the insured recovers ($400k ÷ $480k) × $100k ≈ $83,333.