Claims Settlement & Negotiation Flashcards

In negotiation, 'BATNA' stands for:

Answer: Best Alternative To a Negotiated Agreement

BATNA is the Best Alternative To a Negotiated Agreement—knowing it determines the minimum acceptable settlement for either party.

Which type of release protects the settling defendant from future claims by co-defendants seeking contribution?

Answer: Joint tortfeasor release

A joint tortfeasor release in most jurisdictions extinguishes contribution rights against the settling defendant from other liable parties.

An insured reports a claim that clearly exceeds the policy limit. What is the adjuster's primary obligation?

Answer: Notify the insured of excess exposure and recommend personal counsel

When damages may exceed policy limits, the adjuster must promptly notify the insured so they can retain personal counsel to protect their excess exposure.

'Subrogation waiver' in a settlement agreement means the settling insurer:

Answer: Gives up its right to recover from the at-fault third party

A subrogation waiver releases the third party from repaying the insurer for amounts paid on behalf of the insured.

In the context of CCP exam principles, 'loss of consortium' is classified as which type of damage?

Answer: General damages

Loss of consortium is a general (non-economic) damage representing the deprivation of companionship and support suffered by the claimant's spouse.

Which alternative dispute resolution method results in a binding decision imposed by a neutral third party?

Answer: Binding arbitration

Binding arbitration produces a final, enforceable award by an arbitrator that the parties must accept, unlike mediation which is non-binding.

When evaluating pain and suffering damages, adjusters most commonly use which method?

Answer: Per diem method, multiplier method, or a combination of both

Adjusters typically use a multiplier (1–5x specials) or a daily rate (per diem) method to estimate general damages for pain and suffering.