CALA Legal & Regulatory Compliance in Auto Insurance 3

Question 1

A driver in a no-fault state files a claim for lost wages after an accident. Under no-fault laws, this benefit is typically paid by:

Accepted Answer

The claimant's own Personal Injury Protection (PIP) coverage

Answer

In no-fault states, PIP coverage under the claimant's own policy pays for lost wages regardless of fault, up to policy limits.

Question 2

What is the primary purpose of a reservation of rights letter sent by an insurer to an insured?

Accepted Answer

To notify the insured the claim is being investigated while preserving coverage defenses

Answer

A reservation of rights letter allows the insurer to investigate and defend without waiving its right to later deny coverage based on policy exclusions.

Question 3

Which doctrine holds that an insurer may be estopped from denying coverage if it led the insured to reasonably believe coverage existed?

Accepted Answer

Promissory estoppel

Answer

Promissory estoppel prevents a party from going back on a promise when another party reasonably relied on it to their detriment, including insurers who imply coverage.

Question 4

Under the Gramm-Leach-Bliley Act, what obligation does an insurer have regarding non-public personal information of claimants?

Accepted Answer

Provide privacy notices and limit disclosure to non-affiliated third parties

Answer

GLB requires financial institutions, including insurers, to provide privacy notices and restrict sharing of non-public personal information with non-affiliated third parties.

Question 5

When adjusting a total loss in a state with a title-washing law, the adjuster must ensure:

Accepted Answer

The salvage vehicle receives a branded title indicating its total loss history

Answer

Anti-title-washing laws require that totaled vehicles receive a salvage or rebuilt title to disclose the vehicle's history to future purchasers.

(CALA) Certified Automotive Loss Adjuster Practice Test

(CALA) Certified Automotive Loss Adjuster Practice Test

CALA Legal & Regulatory Compliance in Auto Insurance 3