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

Under pure comparative negligence, a claimant can recover even if 99% at fault, but the award is reduced proportionally.

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

Coordination of benefits rules and 'other insurance' policy provisions determine primary vs. excess insurer obligations.

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

Without a signed release, a claimant may reopen a claim if supplemental damage is discovered and tied to the original event.

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 fully discharges the claim, while a covenant not to sue retains the underlying right but contractually bars its exercise.

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

Once a claimant is represented, ethical and legal standards require the adjuster to communicate exclusively through the attorney.

(CALA) Certified Automotive Loss Adjuster Practice Test