CALA Claims Handling Procedures & Ethics 1 — Questions and Answers
Question 1: What is the first step in the claims handling process?
- Send a settlement check
- Deny the claim
- Acknowledge receipt of the claim (Correct answer)
- Request a police report
Correct answer: Acknowledge receipt of the claim
Acknowledging the claim is the initial and critical step to initiate communication and begin documentation.
Question 2: Which of the following is considered an unethical claims practice?
- Paying claims in a timely manner
- Providing clear claim procedures
- Delaying payment of a valid claim without cause (Correct answer)
- Communicating investigation results
Correct answer: Delaying payment of a valid claim without cause
Delaying claim payments without valid reason is an unfair claims practice under most state regulations.
Question 3: Why is accurate documentation essential in claims handling?
- It is only required in court
- It reduces the adjuster’s workload
- It helps prevent fraud
- It creates a clear record for compliance and communication (Correct answer)
Correct answer: It creates a clear record for compliance and communication
Documentation supports transparency, regulatory compliance, and helps resolve disputes if they arise.
Question 4: What should an adjuster do if a conflict of interest arises?
- Ignore the conflict
- Disclose the conflict of interest to appropriate parties (Correct answer)
- Speed up the claim process
- Approve the claim without review
Correct answer: Disclose the conflict of interest to appropriate parties
The adjuster must disclose the conflict and may need to recuse themselves to uphold ethical standards.
Question 5: What is the main goal of the investigation phase in claims handling?
- To delay claim resolution
- To verify policyholder’s identity
- To determine facts and coverage (Correct answer)
- To market new insurance products
Correct answer: To determine facts and coverage
The goal is to determine the facts of the claim, coverage, liability, and extent of damages to make a fair decision.
Question 6: When must an adjuster maintain confidentiality?
- Only after claim settlement
- During litigation only
- Throughout the claim process (Correct answer)
- Only for property damage claims
Correct answer: Throughout the claim process
Confidentiality must be maintained throughout the claim unless disclosure is legally required or authorized by the claimant.
CALA Claims Handling Procedures & Ethics 1
What is the first step in the claims handling process?