CALA - Certified Automotive Loss Adjuster Insurance Policy and Regulations Questions and Answers

Question 1

An insured's vehicle has an Actual Cash Value (ACV) of $10,000.
The cost to repair the damages is $7,000, and the salvage value is $3,500.
In a state that uses the Total Loss Formula (TLF), how should the adjuster classify this claim?

Accepted Answer

As a total loss, because the repair cost plus the salvage value is greater than the ACV.

Answer

As a partial loss, because the repair cost is below the ACV.

Answer

As a constructive total loss, only if the state has a 75% threshold.

Answer

As negotiable, depending on the policyholder's preference to keep the vehicle.

Question 2

Which of the following actions by an adjuster would most likely be considered an Unfair Claims Settlement Practice according to the model act created by the National Association of Insurance Commissioners (NAIC)?

Accepted Answer

Failing to acknowledge pertinent communications regarding a claim within a reasonable time.

Answer

Requesting a recorded statement from the claimant to understand the details of the loss.

Answer

Using a state-approved vendor for vehicle valuation.

Answer

Offering a settlement based on a detailed repair estimate from a reputable body shop.

Question 3

A policyholder has a standard auto policy but uses their vehicle to drive for a ridesharing service. They get into an accident while logged into the rideshare app but before accepting a ride. To ensure coverage for this specific situation, what is typically required?

Accepted Answer

A ridesharing endorsement.

Answer

A commercial auto policy.

Answer

A personal mobility endorsement.

Answer

An increase in liability limits on the personal auto policy.

Question 4

A loss adjuster is handling a claim in a state with a 75% total loss threshold. The vehicle's ACV is determined to be $20,000. At what estimated repair cost must the adjuster declare the vehicle a total loss?

Accepted Answer

$15,000 or more

Answer

$14,999

Answer

$20,000

Answer

$10,000

Question 5

An insurer advises a third-party claimant with clear liability against their insured to file the claim under the claimant's own collision coverage to avoid paying the claim. According to most state regulations based on the NAIC model act, this practice is:

Accepted Answer

Considered an unfair claims practice.

Answer

A standard procedure to expedite the repair process.

Answer

Permissible if the claimant agrees in writing.

Answer

Only prohibited if it results in a higher out-of-pocket cost for the claimant.

Question 6

What is the primary purpose of a policy endorsement in an automobile insurance contract?

Accepted Answer

To modify, add, or delete coverage in the standard policy.

Answer

To provide a discount on the premium.

Answer

To document the claims history of the policyholder.

Answer

To list all the drivers covered under the policy.

An insured's vehicle has an Actual Cash Value (ACV) of $10,000.The cost to repair the damages is $7,000, and the salvage value is $3,500.In a state that uses the Total Loss Formula (TLF), how should the adjuster classify this claim?

An insured's vehicle has an Actual Cash Value (ACV) of $10,000.
The cost to repair the damages is $7,000, and the salvage value is $3,500.
In a state that uses the Total Loss Formula (TLF), how should the adjuster classify this claim?