CALA Claims Investigation Process 2 — Questions and Answers
Question 1: When investigating a total loss vehicle claim, which document is most critical for establishing the vehicle's pre-loss market value?
- The original purchase receipt
- A CCC ONE or comparable market valuation report (Correct answer)
- The owner's personal estimate of value
- The repair shop's labor rate sheet
Correct answer: A CCC ONE or comparable market valuation report
Market valuation reports from tools like CCC ONE use comparable sales data to establish fair market value for total loss settlements.
Question 2: During a recorded statement, a claimant's account of the accident contradicts the physical evidence on the vehicle. The adjuster should:
- Accept the claimant's version since they were present
- Immediately deny the claim based on the contradiction
- Document the inconsistency and continue investigating without confrontation (Correct answer)
- Contact law enforcement to report suspected fraud
Correct answer: Document the inconsistency and continue investigating without confrontation
Inconsistencies should be documented and investigated further; premature denial or accusation can expose the insurer to bad faith claims.
Question 3: Which type of lien search is most important when settling a total loss claim on a vehicle?
- UCC filing search
- DMV title and lien search (Correct answer)
- Property tax lien search
- Federal tax lien search
Correct answer: DMV title and lien search
A DMV title and lien search confirms ownership and identifies any lienholder who must be included in the settlement payment.
Question 4: An adjuster discovers the insured vehicle has aftermarket modifications not listed on the policy. How should these be handled?
- Automatically include full value of all modifications in the settlement
- Exclude all modifications since they weren't disclosed
- Investigate whether modifications were undisclosed and apply policy terms accordingly (Correct answer)
- Add the modifications' retail value to the ACV without investigation
Correct answer: Investigate whether modifications were undisclosed and apply policy terms accordingly
Policy terms govern coverage of aftermarket parts; undisclosed modifications may affect coverage, requiring investigation before inclusion or exclusion.
Question 5: What is the primary purpose of an examination under oath (EUO) in the claims investigation process?
- To intimidate the claimant into dropping the claim
- To obtain a formal, sworn statement when fraud or material misrepresentation is suspected (Correct answer)
- To replace the need for a recorded statement
- To satisfy subrogation requirements
Correct answer: To obtain a formal, sworn statement when fraud or material misrepresentation is suspected
An EUO is a formal, sworn examination conducted when there are serious questions about claim validity or potential fraud.
Question 6: When should an adjuster request a vehicle inspection by a Special Investigations Unit (SIU)?
- On every claim over $10,000
- When red flags such as recent policy changes, multiple prior claims, or conflicting damage patterns are present (Correct answer)
- Only after a claim is formally denied
- Whenever the claimant requests an attorney
Correct answer: When red flags such as recent policy changes, multiple prior claims, or conflicting damage patterns are present
SIU referrals are triggered by specific red flags indicating potential fraud, not automatically by claim value or legal representation.
Question 7: A claimant submits receipts for rental vehicle expenses that exceed the policy's daily rental limit. The adjuster should:
- Pay the full receipted amount to avoid a bad faith claim
- Pay only up to the policy's stated daily limit per the policy terms (Correct answer)
- Deny all rental reimbursement since the limit was exceeded
- Request that the claimant return the excess to the rental company
Correct answer: Pay only up to the policy's stated daily limit per the policy terms
Policy limits cap reimbursement; the adjuster must pay up to the contractual limit regardless of actual expenses incurred.
CALA Claims Investigation Process 2
When investigating a total loss vehicle claim, which document is most critical for establishing the vehicle's pre-loss market value?