CALA - Certified Automotive Loss Adjuster Adjuster Professional Ethics Questions and Answers

Question 1

An automotive loss adjuster is handling a claim where the insured's chosen repair facility is owned by the adjuster's brother-in-law.
To avoid a potential conflict of interest, what is the adjuster's most ethical course of action?

Accepted Answer

Disclose the relationship to their supervisor and ask for the claim to be reassigned.

Answer

Handle the claim as usual, since a family relationship does not automatically constitute a conflict of interest.

Answer

Advise the insured to use a different shop without explaining the personal connection.

Answer

Proceed with the claim, but ensure the estimate from the family-owned shop is significantly lower than competitors.

Question 2

Which of the following actions is the best example of an adjuster upholding their duty of good faith and fair dealing?

Accepted Answer

Providing a clear, prompt, and detailed explanation for a partial denial of a claim, citing specific policy language.

Answer

Delaying communication with a claimant in the hope they will accept a lower offer out of frustration.

Answer

Using a vehicle valuation service that is known to produce consistently below-market values to save the company money.

Answer

Informing a body shop that future referrals are dependent on them providing lower labor rates on all claims.

Question 3

While explaining a total loss settlement to an insured, an adjuster knowingly omits the fact that the valuation report included a large negative adjustment for a 'salvage history' that the vehicle does not actually have. This omission results in a lower settlement offer. Which ethical violation has the adjuster committed?

Accepted Answer

Misrepresentation

Answer

Subrogation

Answer

Defamation

Answer

Betterment

Question 4

An adjuster's fiduciary duty to their employing insurance company primarily requires them to:

Accepted Answer

Act in good faith to protect the company's financial assets while fulfilling all contractual obligations to the insured.

Answer

Attempt to settle every claim for the lowest possible amount, regardless of the policy provisions or fairness.

Answer

Prioritize the company's quarterly profitability targets above the fair and timely treatment of the insured.

Answer

Pay the full amount requested by the insured or their repair shop without conducting a thorough investigation.

Question 5

A key component of professional ethics for an automotive loss adjuster is maintaining objectivity. This is best demonstrated by which of the following?

Accepted Answer

Basing all claim decisions on verifiable facts, evidence, and policy provisions, free from personal bias or outside influence.

Answer

Always agreeing with the insured's opinion of vehicle value to ensure high customer satisfaction scores.

Answer

Consistently siding with a preferred repair facility's estimate to maintain a good long-term working relationship.

Answer

Applying a standard, predetermined settlement amount for all claims of a similar type to ensure speed.

Question 6

An adjuster is handling a third-party liability claim with a claimant who is not represented by an attorney and seems unaware of their right to claim for a rental vehicle (loss of use). From an ethical standpoint, the adjuster should:

Accepted Answer

Not provide legal advice, but fairly explain the types of damages generally recoverable in such a claim, including loss of use.

Answer

Advise the claimant that they must hire an attorney to discuss any part of the settlement.

Answer

Avoid mentioning loss of use entirely in order to keep the total settlement amount as low as possible for the company.

Answer

Immediately offer a low, final settlement for all damages before the claimant can learn about loss of use.

An automotive loss adjuster is handling a claim where the insured's chosen repair facility is owned by the adjuster's brother-in-law.To avoid a potential conflict of interest, what is the adjuster's most ethical course of action?

An automotive loss adjuster is handling a claim where the insured's chosen repair facility is owned by the adjuster's brother-in-law.
To avoid a potential conflict of interest, what is the adjuster's most ethical course of action?