Claims Investigation Process 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 Claims Investigation Process flashcards as text
Which of the following best describes 'actual cash value' (ACV) in automotive loss adjustment?
Answer: Replacement cost minus depreciation, reflecting current market value
ACV represents what a vehicle was worth immediately before the loss, calculated as replacement cost minus depreciation.
An adjuster receives a repair estimate that includes 'betterment' charges. What does this mean for the settlement?
Answer: The insured may be required to contribute toward parts that improve the vehicle beyond its pre-loss condition
Betterment allows the insurer to share costs with the insured when new parts replace worn components, preventing the insured from profiting from the loss.
What is the 'indemnity principle' as it applies to auto claims?
Answer: The insured should be restored to the same financial position as before the loss, no better or worse
The indemnity principle ensures insurance compensates for actual loss without enriching the insured beyond their pre-loss financial position.
During investigation, an adjuster discovers the vehicle's odometer was rolled back before the loss. This finding primarily affects:
Answer: The vehicle's ACV since mileage directly impacts market value
Odometer rollback is fraud that inflates ACV; correcting the true mileage reduces the vehicle's pre-loss market value.
When investigating a vehicle fire loss, which initial resource provides the most objective information about the fire's origin and cause?
Answer: The fire department report and fire investigator's findings
Fire department reports and certified fire investigator findings provide expert, contemporaneous documentation of fire origin and cause.
A claimant reports theft of a vehicle but the adjuster finds no signs of forced entry. The best next investigative step is:
Answer: Obtain a recorded statement and investigate whether the vehicle had keyless entry or prior key duplication history
Modern vehicles can be stolen without forced entry through key fob cloning or spare keys, requiring thorough investigation before any coverage decision.
In a diminished value claim following a repaired collision loss, what does the claimant assert?
Answer: The vehicle is worth less after repairs than it was before the accident, even though fully repaired
Diminished value claims assert that a vehicle's resale value is permanently reduced due to its accident history despite quality repairs.