Adjuster Professional Ethics 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 Adjuster Professional Ethics flashcards as text
An adjuster is handling a total loss claim and realizes the actual cash value they calculated is higher than the company's reserve. The adjuster should:
Answer: Report the accurate ACV calculation and update the reserve accordingly
Adjusters must report accurate valuations regardless of reserve implications; manipulating calculations to match reserves is fraudulent.
A claimant who is elderly and appears confused is attempting to negotiate their own settlement. Ethically, the adjuster must:
Answer: Ensure the claimant understands the process and consider recommending they seek assistance from a trusted family member or advisor
Adjusters must ensure vulnerable claimants genuinely understand the claims process and their options without exploiting cognitive limitations.
Which of the following constitutes 'bad faith' conduct by an automotive loss adjuster?
Answer: Knowingly misrepresenting the policy's coverage to avoid a valid payment
Intentionally misrepresenting policy terms to avoid a valid payment obligation is a textbook example of insurance bad faith.
An adjuster who is also a licensed contractor provides unsolicited repair advice to a claimant and then recommends specific contractors. This situation raises concerns about:
Answer: Conflicts of interest and potential steering violations
Using professional expertise outside one's adjuster role to recommend specific contractors may create undisclosed financial conflicts and steering issues.
When an insured and a third-party claimant make competing claims about how an accident occurred, the adjuster's ethical responsibility is to:
Answer: Conduct an impartial investigation and base findings solely on evidence
Adjusters must evaluate all claims impartially based on evidence, with no inherent bias toward either the insured or third-party claimants.
What is the purpose of an adjuster maintaining detailed, contemporaneous claim notes?
Answer: To document all actions, communications, and decisions transparently and accurately
Accurate contemporaneous notes create a transparent record of the claims process and demonstrate good faith handling to regulators and courts.
An adjuster who discovers their insurer has a blanket policy of automatically denying all claims over $50,000 pending litigation should:
Answer: Refuse to implement the policy and report the practice to the state insurance department if internal remedies fail
Systematic claim denial practices that violate good faith obligations must be reported to regulators when internal remedies are exhausted.