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
What is the primary legal standard an adjuster must meet when handling claims under the duty of good faith?
Answer: Promptly, fairly, and thoroughly investigate and settle claims without unreasonable delay or denial
Good faith requires insurers to conduct prompt, thorough, and fair investigations and settlements without unreasonably favoring the insurer's interests.
An insured's collision claim is submitted 18 months after the accident occurred. The adjuster should first:
Answer: Review the policy's notice and cooperation provisions and assess prejudice caused by the delay
Late notice may be a coverage defense, but most states require the insurer to demonstrate actual prejudice from the delay before denying on that basis alone.
When an adjuster closes a claim file with a payment, which document formally acknowledges the settlement and releases the insurer from further obligation?
Answer: A signed release or settlement agreement
A signed release is the legal document by which the claimant accepts payment and waives future claims arising from the same loss.
Which of the following is a common indicator of a staged accident during the investigation?
Answer: Vehicles towed to a pre-arranged body shop with immediate attorney representation and multiple soft-tissue injury claimants
Staged accidents often involve a pattern of pre-arranged service providers and multiple soft-tissue injury claimants designed to maximize fraudulent payouts.
When an adjuster determines a vehicle is a total loss, what happens to the salvage vehicle?
Answer: The insurer typically takes title and sells the salvage to offset the total loss payment
After paying ACV, the insurer acquires title to the salvage and sells it, reducing the net cost of the total loss claim.
What does 'policy stacking' refer to in the context of uninsured motorist coverage investigation?
Answer: Attempting to collect UM benefits from multiple vehicles on the same policy or from multiple policies for a single loss
Stacking allows insured parties to combine UM limits from multiple vehicles or policies; many states restrict or prohibit it.
During investigation, the adjuster learns the insured vehicle was being used for rideshare driving at the time of loss, but the policy only covers personal use. The adjuster should:
Answer: Investigate the commercial use exclusion and issue a reservation of rights pending coverage determination
Commercial use exclusions may void coverage, but a reservation of rights and thorough investigation are required before any denial decision.