Claims Handling and Investigation Flashcards
7 cards from real CCA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Claims Handling and Investigation flashcards as text
Which type of adjuster is an independent contractor hired by insurers on a per-claim basis?
Answer: Independent adjuster
Independent adjusters are self-employed or work for independent adjusting firms and are engaged by insurers when extra capacity or specialized expertise is needed.
A claimant hires a public adjuster after a storm loss. Whose interests does the public adjuster represent?
Answer: The claimant/policyholder's interests
Public adjusters are hired by and exclusively represent policyholders to help them document, file, and negotiate their insurance claims.
What is the significance of a 'reservation of rights' letter sent by an insurer?
Answer: It informs the insured that the insurer is investigating while reserving the right to deny coverage
A reservation of rights letter allows the insurer to investigate and defend a claim without waiving coverage defenses that may apply.
An adjuster discovers that the insured misrepresented a material fact on the application. What potential remedy does the insurer have?
Answer: Rescind the policy ab initio (from the beginning)
Material misrepresentation on an application may give the insurer grounds to void (rescind) the policy as if it never existed, subject to state law requirements.
Which of the following BEST describes the 'actual cash value' (ACV) method of loss valuation?
Answer: Replacement cost new minus depreciation
ACV is generally calculated as the cost to replace the damaged property with new property of like kind and quality, less depreciation for age and condition.
A claimant alleges soft-tissue injuries after an auto accident but has no objective medical findings. What investigative tool might an adjuster use to verify the claim?
Answer: Order an Independent Medical Examination (IME)
An IME by an independent physician can provide an objective medical opinion on the nature, extent, and causation of the claimant's injuries.
Under most state bad faith laws, what conduct could expose an insurer to bad faith liability?
Answer: Refusing to settle a claim within policy limits when liability is reasonably clear
Failing to settle within policy limits when liability is clear and the demand is reasonable is a classic example of bad faith claims handling.