CALA Catastrophe Claims Handling 3

Question 1

A state declares a catastrophe emergency and activates its 'file and use' regulation for rate changes. What does this mean for adjusters?

Accepted Answer

Insurers may implement new rates immediately without prior approval, and adjusters must apply the new rates to qualifying claims

Answer

Under file-and-use rules, insurers submit rate changes to the regulator simultaneously with implementing them, so adjusters must use the current approved rates.

Question 2

A catastrophe adjuster encounters an insured who also has a flood policy through the National Flood Insurance Program (NFIP). A storm surge loss is documented. Which policy covers storm surge?

Accepted Answer

The NFIP flood policy, because storm surge is classified as flooding

Answer

Storm surge is considered flood under NFIP definitions, so it is covered by the NFIP flood policy, not the standard homeowners policy.

Question 3

What is the purpose of a 'reservation of rights' letter sent by an insurer during a catastrophe claim investigation?

Accepted Answer

To notify the insured that the insurer is investigating coverage while reserving the right to deny if coverage is found to be lacking

Answer

A reservation of rights letter protects the insurer from waiving policy defenses while still providing a good-faith investigation of the claim.

Question 4

Under the standard NFIP Write-Your-Own (WYO) program flood policy, which of the following is covered?

Accepted Answer

Direct physical loss to the building caused by flood, including foundation damage

Answer

The NFIP building coverage pays for direct physical loss to the structure, including the foundation, from flooding, but excludes ALE, vehicles, and landscaping.

Question 5

An adjuster discovers that a homeowner made unauthorized repairs before the inspection, preventing accurate documentation of the original damage. What should the adjuster do?

Accepted Answer

Request all receipts, photos taken before repairs, and contractor statements to reconstruct the original damage scope

Answer

The adjuster should gather all available documentation to reconstruct the pre-repair damage, honoring the insured's duty to mitigate while maintaining accurate loss valuation.

(CALA) Certified All-Lines Adjuster Practice Test

(CALA) Certified All-Lines Adjuster Practice Test

CALA Catastrophe Claims Handling 3