Claims Settlement & Negotiation Flashcards

Which element is NOT typically required to establish a valid release in claims settlement?

Answer: Notarization

While consideration, competent parties, and mutual agreement are required contract elements, notarization is generally not required for a valid release.

In workers' compensation claims, a 'compromise and release' settlement differs from a 'stipulated award' in that it:

Answer: Fully and finally resolves all past and future benefits in exchange for a lump sum

A compromise and release settles all workers' compensation benefits—including future medical—for a lump sum, closing the claim entirely.

What is the primary purpose of a 'reservation of rights' letter in the claims process?

Answer: To preserve the insurer's right to deny coverage while investigating

A reservation of rights letter allows the insurer to investigate and defend the claim without waiving potential coverage defenses.

In bodily injury negotiations, 'special damages' refer to:

Answer: Quantifiable out-of-pocket losses like medical bills and lost wages

Special damages are economic losses that can be calculated precisely, such as medical expenses, lost earnings, and property damage.

An adjuster settling a minor's claim must typically:

Answer: Obtain court approval of the settlement

Settlements involving minors require court approval via a guardian ad litem proceeding to protect the minor's interests.

Which mediation style involves the mediator offering a non-binding opinion on the merits of the case?

Answer: Evaluative mediation

Evaluative mediation involves the mediator assessing the case strengths and weaknesses and providing an opinion on likely outcomes.

The 'economic loss rule' in tort claims generally prevents recovery of:

Answer: Pure financial losses unaccompanied by physical injury or property damage

The economic loss rule bars tort recovery for purely economic damages when there is no accompanying physical injury or property damage.