CALA Catastrophe Adjusting & Disaster Response 3 — Questions and Answers
Question 1: Under a homeowners policy, mold damage resulting from a hurricane is MOST likely covered when:
- The mold developed more than 90 days after the storm
- The mold is a direct result of covered water intrusion and the insurer was promptly notified (Correct answer)
- The homeowner performed their own mold remediation
- The mold affects only detached structures
Correct answer: The mold is a direct result of covered water intrusion and the insurer was promptly notified
Mold resulting directly from covered hurricane water intrusion is typically covered if the insured reported the loss promptly and mitigated damage.
Question 2: A 'catastrophe code' assigned by insurers to a specific disaster event is used primarily to:
- Determine coverage eligibility for individual claims
- Track and aggregate losses from a single event for statistical and reinsurance purposes (Correct answer)
- Notify policyholders of the disaster declaration
- Authorize emergency claim payments
Correct answer: Track and aggregate losses from a single event for statistical and reinsurance purposes
Catastrophe codes allow insurers to aggregate all claims from a single event for reinsurance reporting and industry loss tracking.
Question 3: When adjusting tornado losses, which area of damage is MOST commonly overlooked during initial inspections?
- Window glass breakage
- Garage door damage
- Foundation cracks and structural racking caused by wind pressure (Correct answer)
- Fence damage
Correct answer: Foundation cracks and structural racking caused by wind pressure
Tornadoes can cause structural racking and foundation damage that is not visible on the surface and is commonly missed in initial inspections.
Question 4: The 'anti-concurrent causation' clause in a homeowners policy is relevant in CAT claims because it:
- Requires two independent adjusters to evaluate every claim
- Can exclude a loss when an excluded peril (like flood) acts concurrently with a covered peril (like wind) (Correct answer)
- Mandates concurrent payment from two insurers
- Prevents duplicate claims under flood and homeowners policies
Correct answer: Can exclude a loss when an excluded peril (like flood) acts concurrently with a covered peril (like wind)
Anti-concurrent causation clauses deny coverage when an excluded peril contributes to a loss simultaneously with a covered peril.
Question 5: After a major disaster, an adjuster notices the insured has already hired a public adjuster. The CAT adjuster should:
- Refuse to communicate with the insured directly and only speak with the public adjuster
- Continue normal claim handling while directing all communications to the public adjuster as the insured's representative (Correct answer)
- Close the claim until the public adjuster withdraws
- Report the public adjuster to the state insurance department
Correct answer: Continue normal claim handling while directing all communications to the public adjuster as the insured's representative
When an insured is represented by a public adjuster, communications should be directed to that representative while the claim proceeds normally.
Question 6: In hail damage claims, 'functional damage' to a roof differs from 'cosmetic damage' in that:
- Functional damage affects only the appearance of shingles
- Functional damage compromises the roof's ability to perform its intended protective function (Correct answer)
- Cosmetic damage always results in higher claim payouts
- Functional damage only applies to metal roofs
Correct answer: Functional damage compromises the roof's ability to perform its intended protective function
Functional damage impairs the roof's protective performance (e.g., compromised granules leading to premature failure), while cosmetic damage affects only appearance.
Question 7: Which federal program provides temporary housing assistance to disaster survivors while their homes are being repaired?
- SBA Disaster Loan Program
- FEMA Individuals and Households Program (IHP) (Correct answer)
- HUD Community Development Block Grant
- USDA Rural Housing Service
Correct answer: FEMA Individuals and Households Program (IHP)
FEMA's Individuals and Households Program provides temporary housing assistance, home repair grants, and other needs assistance to disaster survivors.
CALA Catastrophe Adjusting & Disaster Response 3
Under a homeowners policy, mold damage resulting from a hurricane is MOST likely covered when: