Negotiation & Settlement Techniques 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 Negotiation & Settlement Techniques flashcards as text
What is 'structured settlement' in claims resolution?
Answer: Periodic payments over time instead of a single lump sum
A structured settlement provides a claimant with tax-free periodic payments over time rather than one lump-sum payment.
A claimant refuses all offers and demands a jury trial. Which negotiation tool can still be used before trial?
Answer: Participating in mediation or arbitration
Mediation and arbitration are alternative dispute resolution tools available before or during trial to resolve claims without a verdict.
What is 'comparative negligence' and how does it affect settlement negotiations?
Answer: It reduces the claimant's recovery by their percentage of fault
Under comparative negligence, a claimant's recovery is reduced proportionally by their percentage of fault, directly lowering settlement value.
When should an adjuster consider using a 'high-low' agreement in arbitration?
Answer: When both parties want to cap maximum exposure and guarantee a minimum recovery
A high-low agreement sets a floor and ceiling on the arbitration award, protecting both parties from extreme outcomes.
What is the significance of a 'Stowers demand' in Texas claims handling?
Answer: It is a demand within policy limits that triggers the insurer's duty to accept or risk excess liability
A Stowers demand obligates an insurer to accept a reasonable within-limits demand or potentially face liability for any excess judgment.
How does 'loss of consortium' affect bodily injury settlement values?
Answer: It adds a derivative claim for a spouse's loss of companionship, increasing overall settlement value
Loss of consortium is a separate derivative claim by a spouse for loss of companionship and services, which can significantly increase total settlement exposure.
What is the adjuster's role when a claim exceeds policy limits and the insured retains personal counsel?
Answer: Continue investigating and keep both the insurer and insured informed while cooperating with personal counsel
When personal exposure exists, the adjuster must cooperate with insured's personal counsel, keep all parties informed, and document all settlement efforts to avoid bad faith.