CALA Claims Processing & Documentation 4 — Questions and Answers
Question 1: Which of the following is considered a 'red flag' indicator of potential claims fraud during documentation review?
- The loss was reported within 24 hours
- The claimant requests payment by check
- The insured recently increased coverage limits before a major loss (Correct answer)
- The insured has a long claims history with the same company
Correct answer: The insured recently increased coverage limits before a major loss
Significantly increasing coverage shortly before filing a large claim is a common fraud indicator that warrants further investigation.
Question 2: A properly completed proof of loss statement must be submitted within what timeframe under most standard auto policies?
- 7 days of the loss
- 30 days of the loss
- 60 days after the insurer's request (Correct answer)
- 1 year of the loss
Correct answer: 60 days after the insurer's request
Most auto policies require the insured to submit a signed proof of loss within 60 days after the insurer formally requests it.
Question 3: When an adjuster identifies pre-existing damage during vehicle inspection, the correct documentation approach is to:
- Ignore it since it was not caused by the current loss
- Note and photograph it separately, clearly distinguishing it from loss-related damage (Correct answer)
- Include it in the claim estimate to avoid disputes
- Deny the entire claim based on pre-existing conditions
Correct answer: Note and photograph it separately, clearly distinguishing it from loss-related damage
Pre-existing damage must be documented separately with photos to ensure the insurer only pays for loss-related repairs.
Question 4: The 'Agreed Value' method of settling total loss claims differs from ACV because it:
- Applies depreciation based on vehicle age
- Uses the value stated in the policy without depreciation deductions (Correct answer)
- Requires an independent appraisal
- Pays only the NADA book value
Correct answer: Uses the value stated in the policy without depreciation deductions
Agreed Value policies pay a predetermined amount stated in the policy, eliminating depreciation disputes common with ACV settlements.
Question 5: Under the Fair Claims Settlement Practices Act, insurers must acknowledge receipt of a claim within:
- 24 hours
- 10 business days (Correct answer)
- 30 days
- 60 days
Correct answer: 10 business days
Most state regulations based on the UCSPA require insurers to acknowledge claims within 10 working days of receipt.
Question 6: When a claimant hires a public adjuster, what changes in the claims process?
- The insurer must automatically increase its settlement offer
- The public adjuster represents the insured's interests in negotiations with the insurer (Correct answer)
- The claim must be referred to litigation immediately
- The insurer loses the right to conduct its own inspection
Correct answer: The public adjuster represents the insured's interests in negotiations with the insurer
A public adjuster is hired by the insured to advocate for a higher settlement and handles negotiations on the insured's behalf.
Question 7: Which document is required to transfer ownership of a totaled vehicle's title to the insurance company?
- Bill of sale only
- Signed title and odometer disclosure statement (Correct answer)
- Policy declarations page
- DMV registration only
Correct answer: Signed title and odometer disclosure statement
A properly signed title along with an odometer disclosure statement is required to legally transfer salvage ownership to the insurer.
CALA Claims Processing & Documentation 4
Which of the following is considered a 'red flag' indicator of potential claims fraud during documentation review?