Claims Investigation & Reporting Standards Flashcards
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Read the first 7 Claims Investigation & Reporting Standards flashcards as text
A claimant disputes the insurer's valuation of a property loss. Under most homeowners policies, the mechanism for resolving this valuation dispute is:
Answer: Invoking the policy's appraisal clause, with each party selecting an appraiser and agreeing on an umpire
The appraisal clause in most property policies provides a structured dispute-resolution process using two appraisers and a neutral umpire.
When an insured reports a claim late, potentially outside the policy's notice requirements, the adjuster should first determine:
Answer: Whether the insurer suffered actual prejudice from the late notice, as required by most state laws
Most states require the insurer to demonstrate actual prejudice from late notice before denying a claim solely on that basis.
An 'Examination Under Oath' (EUO) differs from a recorded statement primarily because:
Answer: An EUO is a formal policy-required process conducted under oath, often with legal counsel present
An EUO is a formal sworn examination required by the policy, legally equivalent to a deposition, and commonly includes counsel for both parties.
In handling a catastrophe (CAT) claim following a hurricane, which reporting standard becomes especially critical?
Answer: Timely deployment, triage of losses by severity, and adherence to state CAT-response regulatory requirements
CAT events trigger specific state regulations requiring rapid deployment, priority triage, and accelerated response timelines.
The 'Sworn Proof of Loss' in a property claim is significant because:
Answer: It is a policy-required formal statement of the loss amount that, if false, can void coverage
A Sworn Proof of Loss is a signed, sworn statement of the claimed amount required by most property policies; material misrepresentation on it can void the policy.
Which of the following BEST describes 'incurred but not reported' (IBNR) reserves in claims management?
Answer: An actuarial estimate of losses that have occurred but have not yet been reported to the insurer
IBNR reserves represent an actuarial estimate of claims that have occurred but not yet been reported, ensuring adequate financial provisioning.
When an adjuster identifies potential fraud during a claim investigation, the appropriate course of action is to:
Answer: Document all indicators, refer the matter to the Special Investigations Unit (SIU), and continue investigating per protocol
Suspected fraud must be referred to the SIU while thorough documentation continues; direct accusation without investigation can create legal liability for the insurer.