CALA Claims Processing & Documentation 3 — Questions and Answers
Question 1: What is the primary purpose of an Examination Under Oath (EUO) in the claims process?
- To finalize settlement amounts
- To obtain sworn testimony from the insured about the loss (Correct answer)
- To assign fault to a third party
- To document vehicle damage
Correct answer: To obtain sworn testimony from the insured about the loss
An EUO is a formal proceeding where the insured provides sworn testimony, allowing the insurer to investigate the claim details thoroughly.
Question 2: When processing a claim involving a lienholder on the vehicle, the settlement check should typically be made payable to:
- The insured only
- The repair shop only
- Both the insured and the lienholder (Correct answer)
- The lienholder only
Correct answer: Both the insured and the lienholder
When a vehicle has an active lien, settlement checks must name both the insured and the lienholder to protect the lender's financial interest.
Question 3: A claimant submits repair invoices totaling $4,200 but the adjuster's estimate is $3,500. The most appropriate action is to:
- Automatically pay the higher invoice amount
- Pay only $3,500 and close the claim
- Contact the repair facility to reconcile the difference before issuing payment (Correct answer)
- Deny the entire claim due to the discrepancy
Correct answer: Contact the repair facility to reconcile the difference before issuing payment
Reconciling differences with the repair facility through a supplement review ensures accurate and fair payment.
Question 4: Which type of coverage pays for the insured's vehicle damage regardless of who was at fault?
- Bodily injury liability
- Property damage liability
- Collision coverage (Correct answer)
- Uninsured motorist property damage
Correct answer: Collision coverage
Collision coverage pays for damage to the insured's own vehicle resulting from a collision, regardless of fault.
Question 5: In claims documentation, 'subrogation potential' should be evaluated:
- Only after the claim is fully closed
- At the time the claim is reported and throughout the investigation (Correct answer)
- Only if the loss exceeds $10,000
- Exclusively by the legal department
Correct answer: At the time the claim is reported and throughout the investigation
Subrogation potential should be identified early and tracked throughout the process to preserve the insurer's recovery rights.
Question 6: What does a 'non-waiver agreement' accomplish in the claims process?
- Waives the insured's right to appeal
- Allows the insurer to investigate a claim without waiving the right to later deny coverage (Correct answer)
- Prevents the claimant from hiring an attorney
- Extends the policy period during investigation
Correct answer: Allows the insurer to investigate a claim without waiving the right to later deny coverage
A non-waiver agreement lets the insurer conduct a full investigation while reserving the right to assert coverage defenses later.
Question 7: When documenting a rental car reimbursement claim, which factor determines the maximum daily benefit?
- The type of vehicle the insured prefers
- The rental company's standard rate
- The limits specified in the rental reimbursement endorsement (Correct answer)
- The repair shop's estimated repair duration
Correct answer: The limits specified in the rental reimbursement endorsement
Rental reimbursement benefits are capped by the daily limit stated in the policy endorsement, regardless of actual rental costs.
CALA Claims Processing & Documentation 3
What is the primary purpose of an Examination Under Oath (EUO) in the claims process?