Free Claims Adjuster Test Claims Investigation and Settlement Questions and Answers

Question 1

An adjuster is investigating a slip-and-fall claim at a grocery store. The store manager provides a high-quality security camera recording of the incident. In the context of a claims investigation, what type of evidence is this recording?

Accepted Answer

Digital evidence

Answer

Digital evidence is any data stored or transmitted electronically, which includes CCTV footage, server logs, or images from mobile devices. While it documents the event, the recording itself is a digital file. Real evidence would be a tangible item from the scene, and testimonial evidence would be a witness's spoken account.

Question 2

Which type of settlement is most commonly used for catastrophic injury claims involving long-term medical care, where payments are made periodically over time rather than in a single lump sum?

Accepted Answer

Structured Settlement

Answer

A structured settlement is a negotiated financial arrangement where a claimant agrees to resolve a personal injury claim by receiving periodic payments over time. This method is often preferred for catastrophic injuries to ensure funds are available for future medical care and living expenses.

Question 3

An insurer receives a liability claim where a potential policy exclusion may apply. The insurer needs to begin investigating the facts of the loss immediately but has not yet concluded whether the policy covers the claim. What formal communication should the insurer send to the insured to proceed with the investigation without waiving its right to deny coverage later?

Accepted Answer

A Reservation of Rights Letter

Answer

A Reservation of Rights (ROR) letter is a formal notice from the insurer to the insured, stating that while the insurer will proceed to investigate the claim, it is 'reserving its right' to deny coverage later based on policy terms and conditions. This prevents the insured from later claiming the insurer waived its defenses by starting the investigation.

Question 4

In the context of a liability claim settlement, damages awarded for quantifiable, out-of-pocket monetary losses such as medical bills and lost wages are known as:

Accepted Answer

Special Damages

Answer

Special damages, also known as economic damages, are awarded for specific, out-of-pocket expenses that can be calculated to a precise dollar amount. This includes medical bills, lost income, and property repair costs. General damages, in contrast, are for non-economic losses like pain and suffering.

Question 5

During a settlement negotiation for a bodily injury claim, which of the following is an appropriate action for the adjuster?

Accepted Answer

Clearly explain the basis for the settlement valuation and make a reasonable opening offer.

Answer

Best practices and good faith principles require adjusters to conduct a thorough investigation, determine a fair valuation for the claim, and be able to explain that valuation. Making a reasonable offer based on the evaluation is a professional and ethical approach to opening negotiations. Making unreasonably low offers can be considered a bad faith tactic.

Claims Adjuster Test Practice Test

Claims Adjuster Test Practice Test

Free Claims Adjuster Test Claims Investigation and Settlement Questions and Answers