CAP Claims Processing & Investigation 4

Question 1

A Special Investigations Unit (SIU) is most likely to be activated when a claim exhibits which of the following characteristics?

Accepted Answer

Multiple prior claims for the same type of loss within a short period

Answer

A pattern of similar prior losses is a classic fraud indicator that triggers SIU referral for deeper investigation beyond routine claim handling.

Question 2

Under the principle of indemnity, the maximum amount an insurer should pay for a covered loss is:

Accepted Answer

The amount sufficient to restore the insured to their pre-loss financial position

Answer

Indemnity prevents the insured from profiting from a loss; payment is capped at restoring the insured to the same financial position as before the loss occurred.

Question 3

When an insurer formally denies a claim, the denial letter must typically include:

Accepted Answer

The specific policy provision and factual basis supporting the denial

Answer

Most state regulations and model unfair claims acts require denial letters to cite the exact policy language and the facts of the claim that justify the denial.

Question 4

In auto liability claims, the 'omnibus clause' of an auto policy extends coverage to:

Accepted Answer

Any person using the insured vehicle with the named insured's permission

Answer

The omnibus clause broadens coverage beyond the named insured to include permissive users, ensuring victims can seek recovery from the policy regardless of which licensed driver caused the accident.

Question 5

The concept of 'abandonment' in property insurance claims means the insured:

Accepted Answer

Surrenders the damaged property to the insurer in exchange for full policy limits

Answer

Abandonment occurs when the insured attempts to transfer title of damaged property to the insurer and demand total loss payment; most policies explicitly prohibit this without insurer consent.

(CAP) Certified Philanthropic Advisor Practice Test

(CAP) Certified Philanthropic Advisor Practice Test

CAP Claims Processing & Investigation 4