CALA Adjuster Professional Ethics 3 — Questions and Answers
Question 1: A claimant asks an automotive loss adjuster for legal advice about whether to accept the settlement offer. The adjuster should:
- Provide advice since adjusters have broad knowledge of claims law
- Recommend the claimant consult a licensed attorney for legal guidance (Correct answer)
- Explain the policy terms and advise the claimant to accept quickly
- Refuse to answer any questions until the claimant retains counsel
Correct answer: Recommend the claimant consult a licensed attorney for legal guidance
Adjusters are not licensed attorneys and must refrain from providing legal advice, directing claimants to appropriate legal resources instead.
Question 2: Which scenario represents an improper steering practice by an automotive loss adjuster?
- Providing the insured with a list of several approved repair facilities
- Telling the insured they must use a specific shop or the claim will be denied (Correct answer)
- Explaining that using a preferred network shop may expedite repairs
- Informing the insured about direct repair program benefits
Correct answer: Telling the insured they must use a specific shop or the claim will be denied
Forcing insured parties to use specific repair facilities by threatening claim denial constitutes improper steering under most state regulations.
Question 3: When an adjuster has a financial interest in a repair shop that they frequently recommend to claimants, this represents:
- An acceptable business arrangement if the shop provides quality work
- A conflict of interest that must be disclosed and likely resolved by divestiture or reassignment (Correct answer)
- A minor ethical issue correctable by disclosing it only on annual compliance forms
- No ethical issue since quality outcomes justify the recommendation
Correct answer: A conflict of interest that must be disclosed and likely resolved by divestiture or reassignment
A financial interest in a recommended vendor creates an undisclosed conflict of interest that compromises the adjuster's impartiality.
Question 4: How should an adjuster respond when they discover a claimant has submitted exaggerated repair invoices?
- Pay the full invoice to avoid confrontation and move on
- Reduce the payment by an arbitrary amount and close the file
- Document the discrepancy, investigate thoroughly, and report suspected fraud per company protocol (Correct answer)
- Deny the entire claim and report the claimant to authorities immediately
Correct answer: Document the discrepancy, investigate thoroughly, and report suspected fraud per company protocol
Suspected fraud must be investigated thoroughly and documented before reporting through proper channels, not acted upon impulsively.
Question 5: An adjuster who routinely denies valid claims to improve their personal performance metrics is violating which ethical principle?
- Efficiency
- Impartiality and fair dealing (Correct answer)
- Confidentiality
- Continuing education requirements
Correct answer: Impartiality and fair dealing
Denying valid claims for personal gain rather than merit violates the adjuster's duty of impartiality and fair dealing toward claimants.
Question 6: What is the ethical obligation of an automotive loss adjuster when a claimant is unrepresented and unaware of their policy benefits?
- Remain silent to protect the insurer's financial interests
- Proactively inform the claimant of all applicable coverages that may benefit them (Correct answer)
- Advise the claimant only if they ask specific questions about coverage
- Direct all coverage questions to the insurer's legal department
Correct answer: Proactively inform the claimant of all applicable coverages that may benefit them
Adjusters have an affirmative duty to explain applicable coverages to unrepresented claimants who may not know what they are entitled to.
Question 7: An adjuster is offered a higher-paying role at a body shop with which they currently negotiate repair costs. Accepting this position:
- Is entirely ethical since employment choices are personal decisions
- Requires immediate disclosure to the employer and may necessitate recusal from dealings with that shop (Correct answer)
- Is acceptable after a 30-day cooling-off period from the last negotiation
- Only becomes an issue if the adjuster directly supervised that shop's approvals
Correct answer: Requires immediate disclosure to the employer and may necessitate recusal from dealings with that shop
A job offer from a vendor creates a conflict of interest requiring immediate disclosure and likely recusal from any business dealings with that party.
CALA Adjuster Professional Ethics 3
A claimant asks an automotive loss adjuster for legal advice about whether to accept the settlement offer.
The adjuster should: