2.) ADJUSTING LOSSES QUIZ QUESTIONS Flashcards
Which of the following is NOT a reason why litigation is considered a “last resort” for the insurer?
A. The insurer’s reputation may be at stake.
B. It is an expensive process.
C. It is unpredictable because control is relinquished to a potentially prejudice jury.
D. Courts and laws favor litigation to negotiation.
D. Courts and laws favor litigation to negotiation.
Barbara is preparing to negotiate an auto claim on behalf of XYZ Insurance. She knows the circumstances of the loss and has completed the investigation and evaluation. What other piece of information must Barbara know before entering into negotiation with the claimant?
A. The maximum punitive damages the claimant will likely have to pay
B. The amount of the claimant’s monthly premium
C. The maximum amount XYZ Insurance will pay for the claim
D. A good auto body shop to whom she can refer the claimant
C. The maximum amount XYZ Insurance will pay for the claim
While at work, Barry suffered a spinal cord injury in a forklift accident. His employer’s insurer settled the claim and paid all of Barry’s initial medical bills, but it also agreed to continue to pay for his weekly visits to the rehabilitation therapist. Which settlement option did Barry receive?
A. Full release
B. Advance payment
C. Partial release
D. Scheduled payment release
D. Scheduled payment release
Allen is adjusting an auto claim on behalf of ABC Insurance, which has given Allen $5,000 in draft authority. The total damages in the auto claim come to $7,200. Which of the following is true?
A. Allen can adjust the claim, but ABC Insurance must write the settlement check.
B. Allen can write a check for a half of the damages and ABC Insurance will write another check for the other half.
C. Allen must negotiate with the claimant to reach an agreement on a settlement amount of $5,000 or less.
D. Allen is not allowed to adjust this claim, because the amount of damages exceeds his draft authority.
A. Allen can adjust the claim, but ABC Insurance must write the settlement check.
Why might an insurer send a claimant a Reservation of Rights letter?
A. When the insurer has decided not to cover the loss
B. When the insurer needs more information before making a final decision
C. To let the claimant know that the insurer has received all necessary paperwork
D. To let the claimant know that there is a coverage dispute
D. To let the claimant know that there is a coverage dispute
Which of the following is NOT a characteristic of a full release settlement?
A. The insurer pays for certain future “incidentals” related to the claim.
B. All damages are paid at once.
C. The claimant signs a Full Release Form.
D. The insurer pays an immediate, single lump sum to the claimant.
A. The insurer pays for certain future “incidentals” related to the claim.
Which of the following statements about arbitration is TRUE?
A. An arbitrator tries to get both sides to come together in agreement.
B. An arbitrator plays no role in the outcome of negotiations.
C. An arbitrator makes a legally binding decision based upon the evidence.
D. An arbitrator costs significantly more than a civil trial.
C. An arbitrator makes a legally binding decision based upon the evidence.
Which of the following statements is TRUE of a claim dispute litigated in a state that follows the doctrine of Contributory Negligence?
A. The settlement amount will be reduced by the percentage of the defendant’s negligence.
B. If the defendant is found to be at all negligent, she will receive no settlement.
C. If the plaintiff is found to be at all negligent, she will receive no settlement.
D. The settlement amount will be reduced by the percentage of the plaintiff’s negligence.
C. If the plaintiff is found to be at all negligent, she will receive no settlement.
Jake is selling insurance policies for XYZ Insurance. Olivia buys a homeowners policy from Jake and asks him to write down on a separate piece of paper all the perils the policy covers so she can show her husband. Jake writes “hail,” but when Olivia’s house is damaged by hail, the adjuster says “hail isn’t covered in your policy.” Olivia produces the piece of paper and threatens to sue XYZ Insurance if they don’t pay. Does she have grounds for a lawsuit? Why or why not?
A. Yes; hail coverage is standard in property policies, and the insurer should have included it in the first place.
B. No; Jake was unaware of the policy’s hail coverage exclusion.
C. Yes; Jake exercised apparent authority when he wrote that Olivia had hail coverage.
D. No; Jake had no authority to promise coverage that was not listed in Olivia’s policy.
C. Yes; Jake exercised apparent authority when he wrote that Olivia had hail coverage.
Jake exercised apparent authority because he was acting in accordance with accepted practices that are considered to be within the scope of his express authority, although not specifically stated in his contract.
A/An ____________ plays an advisory role in the negotiation process, working from a neutral position to assist the opposing parties to come to an equitable resolution.
A. adjuster
B. mediator
C. arbitrator
D. judge
B. mediator
An adjuster acts as an agent for the insurer. As such, it is essential that the adjuster understand:
A. her duty to profit from every claim investigation.
B. that she must always offer a settlement favorable to the claimant.
C. her duty to check-in daily with the insurance company.
D. that her words or actions may bind the insurance company.
D. that her words or actions may bind the insurance company.
An insurance claim is essentially:
A. a formal offer to repair the damage.
B. a formal request to settle the damage.
C. a formal explanation of insurance coverage.
D. a formal request to repair the damage.
B. a formal request to settle the damage.
What do you call a self-employed adjuster who works as a contractor for insurers or claims-handling companies?
A. Independent adjuster
B. Emergency adjuster
C. Staff adjuster
D. Public adjuster
A. Independent adjuster
Which item would NOT belong in an adjuster’s initial report on a claim?
A. The date that the adjuster first contacts the claimant
B. A list of all known circumstances surrounding the claim
C. The final settlement amount
D. A detailed list of the damages being claimed
C. The final settlement amount
For a bodily injury liability claim, the adjuster must determine all of the following, EXCEPT:
A. the severity of the injury.
B. the amount of punitive damages requested.
C. the type of injury.
D. the presence of any pre-existing conditions.
B. the amount of punitive damages requested.