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
A claimant's vehicle is declared a total loss. The insurer offers ACV of $12,000, but the claimant insists the car is worth $15,000. What is the BEST next step?
Answer: Obtain an independent appraisal or use an agreed-value process
When valuation disputes arise on total losses, obtaining an independent appraisal or invoking the policy's appraisal clause is the proper resolution method.
What is 'comparative negligence' and how does it affect a liability claim settlement?
Answer: It reduces the claimant's recovery in proportion to their own degree of fault
Under comparative negligence, a claimant's recovery is reduced by their percentage of fault; e.g., 30% at fault means 30% less in damages.
Which of the following scenarios BEST represents 'moral hazard' in an insurance context?
Answer: An insured drives less carefully because they know they are covered
Moral hazard refers to the tendency of insured individuals to take greater risks because they are protected from the financial consequences of loss.
An adjuster receives a demand letter with a 30-day deadline to respond or face litigation. What is the MOST appropriate action?
Answer: Acknowledge receipt and evaluate the demand promptly within the stated timeframe
Prompt acknowledgment and timely evaluation of settlement demands is required by good-faith claims handling standards and most state regulations.
What is the purpose of a 'non-waiver agreement' in a claims investigation?
Answer: To allow the insurer to investigate a claim without waiving any policy defenses
A non-waiver agreement, signed by both parties, allows investigation to proceed while preserving the insurer's right to later deny coverage based on policy defenses.
Which of the following is an example of 'consequential damages' in a property claim?
Answer: Loss of rental income while the home is being repaired
Consequential (or indirect) damages are losses that flow as a consequence of the direct damage, such as lost rental income during repairs.
When multiple insurers cover the same risk, how is the 'other insurance' clause used?
Answer: To determine how each insurer shares responsibility for a loss
Other insurance clauses (pro rata, excess, or escape clauses) coordinate payment among multiple insurers so the claimant is not over-indemnified.