Chapter 7 Evaluation and Negotiation Flashcards
If the insured loses one earring, what clause of a property policy will determine the basis for settlement?
a. Parts clause
b. Replacement clause
c. Pair and set clause
d. Limit clause
c. Pair and set clause
Under the replacement clause, the insurer must inform the insured, in writing, of the decision to repair, rebuild, or replace within what timeframe?
a. 30 days after the claim is filed
b. 30 days after receipt of the proof of loss
c. 60 days after the claim is filed
d. 60 days after receipt of the proof of loss
b. 30 days after receipt of the proof of loss
A statutory condition provided by the policy allows for what option?
a. Mediation
b. Arbitration
c. Appraisal
d. Litigation
c. Appraisal
What is a method of resolving disputes between parties whereby impartial, neutral persons are chosen by the parties in dispute to determine their rights and/or obligations?
a. Mediation
b. Arbitration
c. Negotiation
d. Litigation
b. Arbitration
Who is responsible to substantiate or prove the loss?
a. Beneficiary
b. Insurer
c. Claimant
d. Agent or broker
c. Claimant
Whenever evidence is to be evaluated in court, a test of credibility is done. This test involves two elements. What are they?
a. The credibility of the lawyers presenting the evidence and their opening and closing statements
b. The credibility of the witness and the opinion of the judge
c. The credibility of the information disclosed and the impression a witness makes
d. The credibility of the prosecution and the weight of the evidence
c. The credibility of the information disclosed and the impression a witness makes
To achieve a reasonable settlement of a claim, the adjuster considers what type of communication in negotiation?
a. Litigation approach
b. Persuasion approach
c. Win-win approach
d. Evidentiary approach
c. Win-win approach
What should negotiations be based on?
a. Concessions
b. Subjective criteria
c. Constructive observations
d. Objective information
d. Objective information
What does the mediator do?
a. Decides the dispute
b. Appoints an appraiser
c. Submits points of contention to the umpire
d. Helps the parties identify the real areas of dispute
d. Helps the parties identify the real areas of dispute
Which situation involves a criminal act?
a. The insured provides replicated receipts.
b. The insured produces false documentation in order to get an insurance payment.
c. The adjuster has suspicions of a wrongful act on the part of the insured.
d. The insured requests overhead and profit on the work that he or she has performed.
b. The insured produces false documentation in order to get an insurance payment.
Establishes that loss or damage to one of a pair or set of individual items does not represent the loss of the entire pair or set.
pair and set clause
Establishes that loss or damage to one part of an item does not represent the loss of the entire item.
parts clause
A clause found in the conditions of property and automobile policies. Instead of making payment, the insurer has the option to repair, rebuild, or replace the property damaged.
replacement clause
An alternative method of dispute resolution in which representatives of each party meet in private with an impartial mediator to try to reach a settlement.
mediation
A method of resolving disputes between parties whereby impartial, neutral persons are chosen by the parties in dispute to determine their rights and/or obligations. The parties agree in advance to abide by the arbitrament. Each party has a chance to be heard, issues are examined, and a settlement is developed. The settlement can be final and binding.
arbitration
What are the common bases of cost evaluation?
Actual cash value (vale less depreciation)
Replacement cost (new object of same kind)
Competitive pricing (contractor bidding)
Safety requirements (ie. not up to code)
Court decisions (prior decisions)
What can be used to determine reasonable ACV?
Replacement less depreciation
Market value
Income value
Special value to owner
Define pair and set clause
Loss to one of a pair or set of individual items does not represent the loss of the entire pair/set
Define parts clause
Loss or damage to a part does not represent the loss of the entire item
Define replacement clause
Instead of payment, insurer has right to repair, rebuild or replace the property
How long does the adjuster have to inform the insured in writing of the usage of the replacement clause?
Within 30 days after the proof of loss is received
How soon must an adjuster starter repairs?
repairs within 45 days of the proof of loss and must proceed diligently until repairs are completed.
What tips can be used to resolve conflict?
Separate the person from the problem
Determine the options for mutual gain
Avoid being defensive or aggressive
Focus on the interests of both parties
What is the two-part test a document must pass to claim privilege?
1) Was litigation a reasonable prospect at the time the document was produced?
2) If so, was the dominant purpose of the documents production to conduct or aid in the conduct of litigation or to obtain a legal opinion?
Who administers the Intercompany Settlement Chart?
IBC Insurance Bureau of Canada
Who administers the Canadian Inter-Company Arbitration Agreement?
Canadian Insurance Claims Managers Association
What are the two forms of alternative dispute resolution?
Mediation
Arbitration
