Property Damage Assessment 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 Property Damage Assessment flashcards as text
A loss-of-use claim is filed after a house fire makes the home uninhabitable. Under Coverage D of an HO-3, which expense is NOT typically covered?
Answer: The mortgage payment on the damaged home
Coverage D covers the increased cost of living (hotel, rent, excess food costs) but does not pay for normal ongoing expenses like mortgage payments the insured would have regardless of the loss.
When estimating the cost to repair a structure, an adjuster applies a regional cost factor. What does this factor account for?
Answer: Differences in labor and material costs between geographic markets
Regional cost factors adjust base estimates to reflect local labor rates and material costs, which vary significantly across different US markets.
Which of the following best defines 'subrogation' in property insurance?
Answer: The insurer's right to pursue a third party responsible for a loss after paying the insured's claim
Subrogation allows the insurer who paid the insured's claim to step into the insured's shoes and recover from the negligent third party who caused the loss.
An adjuster re-inspects a property and finds damage items not in the original estimate. What document is used to add these items to the claim?
Answer: A supplemental claim or supplemental estimate
A supplement is an additional estimate that captures discovered or additional damages not included in the original estimate, added to the existing claim without reopening it.
Under the appraisal process in a homeowners policy, what is the role of the 'umpire'?
Answer: A neutral third party who resolves disagreements between the two appraisers
When appraisers appointed by the insurer and insured cannot agree, they select an umpire whose decision, when joined by either appraiser, is binding on both parties.
What is the primary purpose of depreciation in a property damage claim under an ACV policy?
Answer: To account for the reduction in value of property due to age, wear, and obsolescence
Depreciation reduces the replacement cost to reflect the remaining useful life and current condition of damaged property, arriving at its actual cash value at the time of loss.
A tornado damages both the roof and an HVAC unit on a commercial property. How should the adjuster handle two different systems damaged in the same event?
Answer: Assess both under the same claim with separate line items in the estimate
All damages from a single covered event are handled under one claim, with individual line items in the estimate capturing each distinct damaged system or component.