Study 7 - Evaluation and Negotiation

Question 1

What are the common bases of evaluation?

Answer 1

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)

Question 2

What can be used to determine reasonable ACV?

Answer 2

• Replacement less depreciation
• Market value
• Income value
• Special value to owner

Question 3

What was the relevance of Leger v. Royal Insurance?

Answer 3

Rundown value could be valued based on the rental income

Question 4

Define pair and set clause

Answer 4

Loss to one of a pair or set of individual items does not represent the loss of the entire pair/set

Question 5

Define parts clause

Answer 5

Loss or damage to a part does not represent the loss of the entire item

Question 6

Define replacement clause

Answer 6

Instead of payment, insurer has right to repair, rebuild or replace the property

Question 7

How long does the adjuster have to inform the insured in writing of the usage of the replacement clause?

Answer 7

Within 30 days after the proof of loss is received

Question 8

How soon must an adjuster starter repairs?

Answer 8

Within 45 after the proof of loss is received

Question 9

How does replacement differ in Quebec?

Answer 9

• Exception for substantial loss to property jointly owned
• 2497; rights of mortgagees or lienholders
• Timing for replacement is not specified

Question 10

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

Answer 10

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 11

What tips can be used to resolve conflict?

Answer 11

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

Question 12

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

Answer 12

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 13

Who administers the Intercompany Settlement Chart?

Answer 13

IBC

Question 14

Who administers the Canadian Inter-Company Arbitration Agreement?

Answer 14

Canadian Insurance Claims Managers Association

Question 15

What are the two forms of alternative dispute resolution?

Answer 15

Mediation

Arbitration

Question 16

When do appraisals get invoked?

Answer 16

Auto - Insurer has received proof of loss and disagrees with the nature and extent of required repairs

Prop - Disagree on prop insured, saved or amount of the loss