CCA Damage Evaluation and Settlement Procedures 2

Question 1

When evaluating a total loss vehicle, which method determines the actual cash value (ACV) by referencing comparable vehicles currently available in the local market?

Accepted Answer

Market comparison approach

Answer

The market comparison approach determines ACV by analyzing the prices of comparable vehicles currently listed for sale in the claimant's local market.

Question 2

A claimant disputes the adjuster's damage estimate and hires a public adjuster. Under most insurance policies, what dispute resolution mechanism is available to both parties?

Accepted Answer

Appraisal clause

Answer

Most property insurance policies include an appraisal clause that allows each party to hire an independent appraiser, with disagreements resolved by an umpire.

Question 3

What is the primary purpose of a reservation of rights letter sent to an insured?

Accepted Answer

To notify the insured that coverage may not apply while the insurer investigates

Answer

A reservation of rights letter informs the insured that the insurer is investigating the claim without waiving its right to later deny coverage based on policy exclusions.

Question 4

During a structural damage inspection, an adjuster discovers pre-existing damage unrelated to the current loss. How should this be handled in the settlement?

Accepted Answer

Exclude the pre-existing damage and only cover loss caused by the covered peril

Answer

Adjusters must differentiate between damage caused by the covered peril and pre-existing damage, settling only for the loss attributable to the covered event.

Question 5

Which depreciation method calculates the reduction in value based on the ratio of an item's age to its total expected useful life?

Accepted Answer

Age-to-life method

Answer

The age-to-life method determines depreciation by dividing the item's age by its total expected useful life, then applying that percentage to the replacement cost.

(CCA) Certified Claims Adjuster Practice Test

(CCA) Certified Claims Adjuster Practice Test

CCA Damage Evaluation and Settlement Procedures 2