CALA Claims Processing & Documentation 2 — Questions and Answers
Question 1: When a claimant disputes the adjuster's damage assessment, what is the most appropriate first step?
- Close the claim and deny further review
- Conduct a joint re-inspection with the claimant present (Correct answer)
- Immediately escalate to litigation
- Reduce the settlement offer to account for dispute costs
Correct answer: Conduct a joint re-inspection with the claimant present
A joint re-inspection allows both parties to review damage together, often resolving disputes without escalation.
Question 2: Which document establishes the legal basis for an insurance company's right to pursue a third party after paying a claim?
- Proof of Loss form
- Subrogation agreement (Correct answer)
- Release of liability
- Assignment of benefits
Correct answer: Subrogation agreement
A subrogation agreement allows the insurer to recover costs from the at-fault third party after compensating the insured.
Question 3: A vehicle is declared a total loss when repair costs exceed what threshold in most states?
- 50% of ACV
- 60% of ACV
- 75% of ACV (Correct answer)
- 100% of ACV
Correct answer: 75% of ACV
Most states use a total loss threshold of 75% of actual cash value, though this varies by jurisdiction.
Question 4: What information must be included in a reservation of rights letter?
- Only the policy number and claim date
- Specific policy provisions that may limit or exclude coverage (Correct answer)
- The adjuster's personal opinion on fault
- A final coverage determination
Correct answer: Specific policy provisions that may limit or exclude coverage
A reservation of rights letter must identify specific policy provisions that may affect coverage while the investigation continues.
Question 5: When documenting a salvage vehicle claim, which detail is most critical to record?
- The color of the vehicle
- The salvage value and disposition method (Correct answer)
- The number of previous owners
- The vehicle's original purchase price
Correct answer: The salvage value and disposition method
Salvage value and how the vehicle will be disposed of (auction, scrap, etc.) directly affect the net claim cost.
Question 6: An adjuster receives a claim where the reported loss date falls outside the policy period. What should be done?
- Process the claim normally since it is probably a clerical error
- Issue a coverage denial based on the policy period exclusion
- Contact the insured to clarify the actual date of loss before making a coverage decision (Correct answer)
- Transfer the claim to another adjuster
Correct answer: Contact the insured to clarify the actual date of loss before making a coverage decision
Clarifying the actual date of loss with the insured ensures an accurate coverage determination before denying or approving the claim.
Question 7: Which of the following best describes 'betterment' in automotive claims?
- Improvements made to the vehicle before the loss
- A deduction applied when new parts replace worn components, improving the vehicle's condition (Correct answer)
- The increase in vehicle value after repairs
- Additional coverage purchased by the insured
Correct answer: A deduction applied when new parts replace worn components, improving the vehicle's condition
Betterment is a deduction from repair costs that accounts for the improvement in condition when new parts replace old, worn parts.
CALA Claims Processing & Documentation 2
When a claimant disputes the adjuster's damage assessment, what is the most appropriate first step?