CCP Liability Claims Management 1 — Questions and Answers
Question 1: What is the difference between comparative and contributory negligence in liability claims?
- Comparative reduces damages proportionally; contributory bars recovery if claimant is even 1% at fault (Correct answer)
- They are identical legal concepts
- Comparative only applies to commercial claims
- Contributory negligence has been abolished in all U.S. states
Correct answer: Comparative reduces damages proportionally; contributory bars recovery if claimant is even 1% at fault
Comparative negligence reduces the claimant's recovery by their percentage of fault, while contributory negligence (still used in a few states) completely bars recovery if the claimant bears any fault.
Question 2: What are the essential elements a claimant must prove in a negligence claim?
- Duty of care, breach of duty, causation, and damages (Correct answer)
- Intent, motive, opportunity, and damages
- Warranty, product defect, and injury
- Criminal intent and property damage
Correct answer: Duty of care, breach of duty, causation, and damages
A negligence claim requires proving that the defendant owed a duty of care, breached that duty, the breach caused the injury (causation), and the claimant suffered actual damages.
Question 3: What is subrogation in insurance claims?
- The insurer's right to pursue recovery from the at-fault party after paying the insured's claim (Correct answer)
- The process of canceling an insurance policy
- A type of insurance fraud investigation
- The insured's right to sue their own insurance company
Correct answer: The insurer's right to pursue recovery from the at-fault party after paying the insured's claim
Subrogation allows an insurance company that has paid a claim to step into the insured's shoes and seek reimbursement from the party that caused the loss.
Question 4: What is a reservation of rights letter?
- A notice from the insurer that it will investigate a claim but may not be obligated to provide coverage (Correct answer)
- A letter reserving a conference room for a claims meeting
- A policyholder's request to add coverage
- A court order requiring the insurer to pay a claim
Correct answer: A notice from the insurer that it will investigate a claim but may not be obligated to provide coverage
A reservation of rights letter notifies the insured that the insurer is investigating the claim but reserves the right to deny coverage if the loss falls outside the policy terms.
Question 5: What is the statute of limitations and why is it critical in claims management?
- A legal deadline for filing a lawsuit, after which the claim is permanently barred (Correct answer)
- A limit on the amount of money that can be awarded
- A regulation governing insurance premium amounts
- A requirement for annual policy renewals
Correct answer: A legal deadline for filing a lawsuit, after which the claim is permanently barred
The statute of limitations sets the maximum time after an event within which legal proceedings may be initiated. Missing this deadline permanently bars the claim.
Question 6: What is bodily injury liability coverage?
- Insurance that covers the policyholder's legal responsibility for injuries caused to others (Correct answer)
- Insurance that covers the policyholder's own medical bills
- Coverage for damage to the policyholder's vehicle
- Life insurance coverage through an auto policy
Correct answer: Insurance that covers the policyholder's legal responsibility for injuries caused to others
Bodily injury liability coverage pays for injuries the policyholder causes to other people, including medical expenses, lost wages, pain and suffering, and legal defense costs.
CCP Liability Claims Management 1
What is the difference between comparative and contributory negligence in liability claims?