CALA - Certified Automotive Loss Adjuster Settlement Procedures Questions and Answers

Question 1

A vehicle with an ACV of $25,000 is declared a total loss. The policyholder has a $500 deductible and owes $18,000 to a lienholder. What is the correct distribution of the settlement payment?

Accepted Answer

The lienholder receives $18,000, and the insured receives $6,500.

Answer

The lienholder receives $18,000, and the insured receives $7,000.

Answer

The insured receives $24,500 to pay the lienholder and keep the remainder.

Answer

The lienholder and the insured receive a joint check for $24,500.

Question 2

A third-party claimant signs a 'Release of All Claims' form after settling a property damage liability claim for their vehicle repairs. What is the primary legal effect of this document?

Accepted Answer

It prevents the claimant from pursuing any future claims against the at-fault party or their insurer for that specific incident.

Answer

It transfers the vehicle title to the insurance company.

Answer

It serves as a receipt for payment that can be used for tax purposes.

Answer

It authorizes the repair shop to begin work on the claimant's vehicle.

Question 3

A vehicle is not a mandatory total loss by the state's percentage threshold. However, the adjuster determines that the cost of repairs plus the anticipated salvage value is greater than the vehicle's ACV. This is known as a:

Accepted Answer

Constructive Total Loss

Answer

Statutory Total Loss

Answer

Partial Loss Settlement

Answer

Owner-Retained Salvage

Question 4

An insurance company takes possession of a vehicle after settling a total loss claim. What is the company's procedural responsibility regarding the vehicle's title before it can be sold?

Accepted Answer

Apply to the state's DMV for a branded 'Salvage Title'.

Answer

Shred the original title to prevent fraud.

Answer

Sign the title over directly to the salvage auction winner.

Answer

Return the title to the previous owner upon request.

Question 5

Which document authorizes an insurance company to pay a repair facility directly for the work performed on an insured's vehicle?

Accepted Answer

Direction to Pay

Answer

Release of All Claims

Answer

Proof of Loss

Answer

Salvage Certificate

Question 6

An adjuster is negotiating a repair settlement with a body shop whose posted labor rates are higher than what the insurer deems the 'prevailing competitive rate' for the area. The adjuster's most appropriate initial action is to:

Accepted Answer

Negotiate with the shop by providing data and explaining the basis for the prevailing rate.

Answer

Refuse to pay the claim until the shop lowers its rates.

Answer

Pay the full amount without question to avoid a dispute.

Answer

Advise the insured that they are responsible for the entire difference out-of-pocket.

A vehicle with an ACV of $25,000 is declared a total loss.The policyholder has a $500 deductible and owes $18,000 to a lienholder.What is the correct distribution of the settlement payment?

A vehicle with an ACV of $25,000 is declared a total loss.
The policyholder has a $500 deductible and owes $18,000 to a lienholder.
What is the correct distribution of the settlement payment?