CALA Adjuster Professional Ethics 2 — Questions and Answers
Question 1: An automotive loss adjuster discovers that a claimant is also the adjuster's neighbor. What is the most appropriate course of action?
- Proceed normally since personal relationships don't affect professional judgment
- Disclose the relationship to a supervisor and request reassignment (Correct answer)
- Handle the claim but apply stricter scrutiny to avoid favoritism
- Deny the claim outright to avoid any appearance of bias
Correct answer: Disclose the relationship to a supervisor and request reassignment
Adjusters must disclose potential conflicts of interest and recuse themselves to maintain impartiality.
Question 2: Which action by an automotive loss adjuster would constitute a breach of confidentiality?
- Sharing claim details with the insured's attorney upon written authorization
- Discussing a high-profile claimant's settlement amount at a social gathering (Correct answer)
- Providing claim data to a reinsurer as required by the policy
- Releasing records to law enforcement under a valid subpoena
Correct answer: Discussing a high-profile claimant's settlement amount at a social gathering
Disclosing claim information in unauthorized social contexts violates the claimant's confidentiality rights.
Question 3: A body shop owner offers an adjuster tickets to a sporting event after the adjuster approved a large repair estimate. The adjuster should:
- Accept since the claim is already closed and no future conflict exists
- Accept only if the tickets are valued under $25
- Decline and report the offer to their supervisor or compliance department (Correct answer)
- Accept but disclose it on the next annual ethics form
Correct answer: Decline and report the offer to their supervisor or compliance department
Accepting gifts from vendors with whom you conduct business creates a conflict of interest regardless of claim status.
Question 4: What does the principle of 'utmost good faith' (uberrimae fidei) require of an automotive loss adjuster?
- Minimizing payouts to protect the insurer's financial interests
- Acting honestly, disclosing all material facts, and dealing fairly with all parties (Correct answer)
- Prioritizing the insured's interests above the insurer's at all times
- Verifying every claimant statement through independent investigation regardless of cost
Correct answer: Acting honestly, disclosing all material facts, and dealing fairly with all parties
Utmost good faith obligates adjusters to be honest and transparent with all material information affecting the claim.
Question 5: An adjuster is pressured by a supervisor to close claims quickly by offering low settlements before claimants consult attorneys. This practice is:
- Acceptable if claimants sign a release form
- Unethical and may violate unfair claims settlement practice laws (Correct answer)
- Standard industry practice to manage claim costs
- Only problematic if the claimant later files a complaint
Correct answer: Unethical and may violate unfair claims settlement practice laws
Discouraging claimants from seeking legal counsel and pressuring quick low settlements violates ethical standards and many state insurance codes.
Question 6: Which of the following best describes an adjuster's duty when they lack expertise to evaluate a specialized automotive damage claim?
- Estimate the damage using general knowledge and close the claim
- Consult a qualified specialist or appraiser before issuing a determination (Correct answer)
- Deny the claim pending the claimant providing their own expert assessment
- Refer the claim to a competitor adjuster without informing the insurer
Correct answer: Consult a qualified specialist or appraiser before issuing a determination
Professional ethics require adjusters to recognize the limits of their competence and obtain expert assistance when needed.
Question 7: An adjuster who willfully misrepresents facts in a claims report to benefit the insurer is subject to:
- Only an internal reprimand if the claim amount is under $1,000
- Disciplinary action, license revocation, and potential criminal liability (Correct answer)
- Mandatory ethics training with no further consequences
- Civil liability only, as fraud requires criminal intent beyond an adjuster's role
Correct answer: Disciplinary action, license revocation, and potential criminal liability
Deliberate misrepresentation in claims documents can result in professional sanctions, license loss, and criminal charges for fraud.
CALA Adjuster Professional Ethics 2
An automotive loss adjuster discovers that a claimant is also the adjuster's neighbor.
What is the most appropriate course of action?