Study 7

Question 1

Why the loss adjuster may call upon experts

Answer 1

to appraise damage,
assess fault, or
determine causation.

Question 2

Whenever evidence is to be evaluated at court, what is important?

Answer 2

the credibility of witnesses and claimants

Question 3

What two elements do judges ask jurors to weigh when evaluating the credibility of testimony in court?

Answer 3

The credibility of the information,
and
disclosed and the impression the witness makes

A loss adjuster’s work can provide important evidence regarding the credibility of the information.

Question 4

What are the common bases of evaluation?

Answer 4

Actual cash value (RC less depreciation)
Replacement cost (cost of an item of like kind and quality)
Scheduled item value (an appraisal for an item to have it scheduled on the policy.)
Competitive pricing (contractor bidding)
Safety requirements (ie. not up to code)
Court decisions (prior court decisions)

Question 5

What can be used to determine reasonable ACV?

Answer 5

Replacement less depreciation
Market value (fair market value)
Income value
Special value to owner (not cover by insurance)

Question 6

How did the court rule on the valuation of rundown property in Leger v. Royal Insurance (1968), N.B.C.A.?

Answer 6

a rundown property could best be valued on the basis of its rental income.

Question 7

Define pair and set clause

Answer 7

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.

Question 8

Define parts clause

Answer 8

Establishes that loss or damage to one part of an item does not represent the loss of the entire Item.

Question 9

Define replacement clause

Answer 9

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.

Question 10

in common Law jurisdictions, how long does the adjuster have to inform the insured in writing of the usage of the replacement clause?

Answer 10

Within 30 days after the proof of loss is received

Question 11

in common Law jurisdictions, How soon must an adjuster start repairs?

Answer 11

Within 45 after the proof of loss is received

Question 12

How does replacement differ in Quebec?

Answer 12

Article 1075 - exception for a “substantial loss” to property jointly owned by a group of co-owners.
Article 2497 - recognizes the rights of mortgagees or lienholders. The timing for replacement is not specified.

Question 13

Why should strive for a “win–win” approach?

Answer 13

Solutions where both parties can feel they have gained something.

Question 14

What questions may be brought up in court as the result of a negotiation?

Answer 14

Was the insured placed under duress?
Did the loss adjuster ask the insured to sign an agreement, such as a non-waiver agreement, before it was properly or thoroughly explained?
Did the insured have a legal disability that the loss adjuster should have considered?
Should the insured have sought independent legal advice?

Question 15

What tips can be used to resolve conflict?

Answer 15

Separate the person from the problem.
Determine the options for mutual gain.
Avoid being defensive or aggressive.
Focus on the interests of both parties.

Question 16

When to Involve Legal Counsel?

Answer 16

When litigation seems probable on a claim, the insurer may consider involving counsel early.
E.g. serious injuries with high exposures.

Question 17

What is the two-part test a document must pass to claim privilege?

Answer 17

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?

Question 18

Name 2 claims agreements that the insurance industry has created to resolve claims disputes economically:

Answer 18

the Intercompany Settlement Chart,
the Canadian Inter- Company Arbitration Agreement

Question 19

Who administers the Intercompany Settlement Chart?

Answer 19

IBC

Question 20

Who administers the Canadian Inter-Company Arbitration Agreement?

Answer 20

Canadian Insurance Claims Managers Association

Question 21

What are the two forms of alternative dispute resolution?

Answer 21

Mediation,

Arbitration

Question 22

What is a mediation

Answer 22

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.

Question 23

Mediation is non-binding unless the parties agree on a settlement, what does that mean?

Answer 23

any offers and oral or written statements made during the mediation are inadmissible in subsequent litigation or arbitration.

Question 24

What is Arbitration

Answer 24

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.

Question 25

Why it is less often to use arbitration?

Answer 25

it is more formal than mediation, or
because of legislative changes in jurisdictions such as Ontario concerning its use in disputes over automobile accident benefits.

Question 26

Why use ADR

Answer 26

saving time and money for all the parties involved
reduces the chances of ill will between the parties.

Question 27

When do appraisals get invoked?

Answer 27

For automobile policies : when the insurer has received proof of loss and disagrees with the insured on the nature and extent of required repairs or the amount payable for the loss.
For property policies : when the insured and the insurer disagree on the value of the property insured, the property saved, or the amount of the loss.