CALA Settlement Procedures 4

Question 1

In a multi-vehicle accident where liability is shared, a state using 'pure comparative negligence' would:

Accepted Answer

Allow recovery reduced by the claimant's percentage of fault, regardless of degree

Answer

Bar recovery if the claimant is more than 50% at fault

Answer

Only allow recovery if the claimant is less than 1% at fault

Answer

Assign 100% liability to the driver with the most damage

Question 2

When multiple insurers cover the same loss, the principle that determines which pays first is called:

Accepted Answer

Coordination of benefits / other insurance provisions

Answer

Indemnification

Answer

Subrogation priority

Answer

Pro-rata allocation

Question 3

An adjuster closes a claim with payment. The insured later discovers additional related damage. Can they reopen the claim?

Accepted Answer

Yes, if a signed release was not obtained and the damage is clearly related to the original loss

Answer

Never, once a payment is made the claim is permanently closed

Answer

Only if they file a new policy claim with a fresh deductible

Answer

Only within 24 hours of the original payment

Question 4

What is the key difference between a 'release' and a 'covenant not to sue'?

Accepted Answer

A release extinguishes the claim entirely; a covenant not to sue preserves the right to sue but promises not to exercise it

Answer

A release is verbal; a covenant not to sue must be written

Answer

A covenant not to sue requires court approval; a release does not

Answer

They are legally identical in all US jurisdictions

Question 5

A claimant is represented by an attorney. The adjuster should:

Accepted Answer

Direct all communications through the attorney and not contact the claimant directly

Answer

Continue negotiating directly with the claimant to expedite settlement

Answer

Request the claimant fire the attorney before proceeding

Answer

Automatically increase the settlement offer by 25%

Question 6

What is 'loss of use' coverage designed to compensate?

Accepted Answer

The cost of a rental vehicle while the insured's car is being repaired

Answer

Mechanical breakdown during repair

Answer

Diminished resale value after a collision repair

Answer

Lost wages when the insured cannot drive to work

Question 7

When calculating rental reimbursement for a total loss, payment typically ends when:

Accepted Answer

The insured purchases a replacement vehicle or a reasonable replacement period expires, whichever comes first

Answer

The policy limit is exhausted regardless of circumstances

Answer

The insured requests termination of coverage

Answer

Exactly 30 days after the total loss determination