CALA Catastrophe Claims Handling 2

Question 1

When a catastrophe event is declared, which organization typically assigns a CAT code to track claims from that event?

Accepted Answer

ISO (Insurance Services Office)

Answer

ISO assigns catastrophe codes (CAT codes) to qualifying events so insurers can uniformly identify, track, and report losses from the same occurrence.

Question 2

A homeowner's policy has a named-storm deductible of 2% of dwelling value ($300,000). A hurricane causes $18,000 in damage. What does the insurer owe after the deductible?

Accepted Answer

$12,000

Answer

The named-storm deductible is 2% × $300,000 = $6,000, so the insurer pays $18,000 − $6,000 = $12,000.

Question 3

In catastrophe operations, what is the primary purpose of a 'loss run' report?

Accepted Answer

To summarize open and closed claims, reserves, and paid losses for a given event or account

Answer

A loss run provides a summary of claim activity—counts, reserves, and payments—used by management to monitor CAT event performance.

Question 4

Which type of additional living expense (ALE) is NOT typically covered under a standard homeowners policy following a covered catastrophe?

Accepted Answer

Mortgage payments on the damaged home

Answer

ALE covers increased costs of living above normal expenses; mortgage payments are a pre-existing obligation, not an increased living cost caused by the loss.

Question 5

During a hurricane CAT deployment, an adjuster is assigned a zip-code territory. What is the main reason claims are assigned by geography?

Accepted Answer

To minimize drive time and maximize the number of inspections completed per day

Answer

Geographic territory assignment reduces travel time between inspections, enabling adjusters to handle more claims efficiently during a high-volume event.

(CALA) Certified All-Lines Adjuster Practice Test

(CALA) Certified All-Lines Adjuster Practice Test

CALA Catastrophe Claims Handling 2