CALA Claims Investigation Process 3 — Questions and Answers
Question 1: In a multi-vehicle accident, how does the adjuster determine which state's laws govern the claim when vehicles are from different states?
- The state where the insured purchased the policy always governs
- The state where the accident occurred typically governs liability (Correct answer)
- The state with the highest policy limits governs
- Federal law supersedes all state laws in multi-state accidents
Correct answer: The state where the accident occurred typically governs liability
Liability for an accident is generally governed by the law of the state where the loss occurred (lex loci delicti).
Question 2: What does 'subrogation' mean in the context of automotive claims investigation?
- The insurer's right to recover paid claim amounts from the at-fault third party (Correct answer)
- The process of splitting liability between multiple insurers
- The insured's right to sue their own insurer
- The depreciation applied to a damaged vehicle
Correct answer: The insurer's right to recover paid claim amounts from the at-fault third party
Subrogation allows the insurer to step into the insured's shoes and pursue recovery from the responsible party after paying a claim.
Question 3: When photographing a damaged vehicle during investigation, which sequence best supports the investigation?
- Close-up damage photos only to save time
- Overview shots of the scene, then mid-range vehicle photos, then close-up damage details (Correct answer)
- Only the damage visible to the insured
- Photos taken after repairs begin to show extent of damage
Correct answer: Overview shots of the scene, then mid-range vehicle photos, then close-up damage details
A systematic photo sequence from overview to detail creates a complete visual record that supports liability analysis and damage assessment.
Question 4: An adjuster is investigating a hit-and-run claim where no witnesses are present. Which coverage would typically apply for the insured's vehicle damage?
- Liability coverage
- Uninsured motorist property damage (UMPD) or collision coverage (Correct answer)
- Comprehensive coverage
- Medical payments coverage
Correct answer: Uninsured motorist property damage (UMPD) or collision coverage
Hit-and-run damage to the insured's vehicle is typically covered under UMPD (where available) or collision coverage, subject to applicable deductibles.
Question 5: What is the significance of 'comparative negligence' in a claims investigation?
- It allows the insurer to deny any claim where the insured is partially at fault
- It allocates fault percentages among parties, potentially reducing recoverable damages proportionally (Correct answer)
- It requires equal payment from all involved insurers
- It only applies in total loss situations
Correct answer: It allocates fault percentages among parties, potentially reducing recoverable damages proportionally
Comparative negligence systems apportion fault among parties, reducing the plaintiff's recovery by their percentage of fault.
Question 6: During an investigation, the adjuster finds that the insured's vehicle had pre-existing damage in the same area as the claimed loss. The correct action is to:
- Deny the claim entirely due to pre-existing damage
- Document the pre-existing damage and only compensate for damage attributable to the current loss (Correct answer)
- Ignore the pre-existing damage and pay the full estimate
- Refer the claim to SIU and suspend investigation
Correct answer: Document the pre-existing damage and only compensate for damage attributable to the current loss
The insurer is only obligated to restore the vehicle to its pre-loss condition, not to repair pre-existing unrelated damage.
Question 7: What is a 'reservation of rights' letter and when should it be sent?
- A letter confirming full coverage sent at claim opening
- A letter notifying the insured that coverage may be limited or denied while investigation continues (Correct answer)
- A demand letter sent to the at-fault party
- A letter requesting the insured's recorded statement
Correct answer: A letter notifying the insured that coverage may be limited or denied while investigation continues
A reservation of rights letter protects the insurer's right to deny or limit coverage while fulfilling its duty to investigate and defend.
CALA Claims Investigation Process 3
In a multi-vehicle accident, how does the adjuster determine which state's laws govern the claim when vehicles are from different states?