CCA CCA Negotiation and Communication in Claims 2 — Questions and Answers
Question 1: An adjuster receives a policy limits demand with a short deadline. What is the primary risk to the insurer if they fail to respond in time?
- The claim automatically closes in favor of the insured
- The insurer could face a bad faith claim if a subsequent verdict exceeds policy limits (Correct answer)
- The policy is automatically canceled for non-response
- The claimant forfeits their right to sue
Correct answer: The insurer could face a bad faith claim if a subsequent verdict exceeds policy limits
Failing to respond to a policy limits demand within a reasonable time can expose the insurer to bad faith liability for amounts above the policy limit if the case goes to verdict.
Question 2: When a represented claimant's attorney is involved, the adjuster should typically:
- Contact the claimant directly to negotiate a faster settlement
- Direct all communications through the attorney and avoid direct claimant contact (Correct answer)
- Refuse to communicate with the attorney and request a different representative
- Only communicate in person at scheduled mediation sessions
Correct answer: Direct all communications through the attorney and avoid direct claimant contact
Once a claimant is represented by an attorney, ethical rules and professional standards require adjusters to communicate through the attorney rather than contacting the claimant directly.
Question 3: What is the purpose of a 'recorded statement' in a claims investigation?
- To replace the need for a written proof of loss
- To obtain a documented, verbatim account of the events surrounding the loss from the insured or witnesses (Correct answer)
- To record the adjuster's conclusions for internal use only
- To formally accept the claim and authorize payment
Correct answer: To obtain a documented, verbatim account of the events surrounding the loss from the insured or witnesses
A recorded statement captures an accurate, contemporaneous account of the events from the claimant, insured, or witnesses, creating a reliable record for the claims file.
Question 4: Which communication technique is most useful when a claimant is emotional or upset during a claim interview?
- Talking over them to redirect the conversation
- Empathetic listening and acknowledging their feelings before proceeding (Correct answer)
- Ending the interview and rescheduling when they are calm
- Immediately offering a settlement to diffuse the situation
Correct answer: Empathetic listening and acknowledging their feelings before proceeding
Acknowledging the claimant's emotional state and demonstrating empathy helps de-escalate tension and creates a more productive communication environment.
Question 5: A claimant's attorney sends a lien from a health insurer for medical payments. What obligation does this create for the adjuster?
- The adjuster must deny the claim to avoid the lien
- The adjuster must account for the lien in the settlement and ensure it is resolved before or as part of payment (Correct answer)
- Liens from health insurers are unenforceable and can be ignored
- The adjuster must pay the lien separately from any claimant settlement
Correct answer: The adjuster must account for the lien in the settlement and ensure it is resolved before or as part of payment
Health insurer liens must be acknowledged and addressed in the settlement process; ignoring them can expose the insurer to additional liability for failing to protect the lienholder's interest.
Question 6: What does 'BATNA' stand for, and why is it important in claims negotiation?
- Best Alternative To a Negotiated Agreement — it defines the strongest position if negotiations fail (Correct answer)
- Basic Adjustment Terms for Neutral Arbitration — it sets the default arbitration process
- Balanced Approach To Negotiating Agreements — it describes fair settlement principles
- Bureau of Adjuster Training for National Accreditation — it is a licensing body
Correct answer: Best Alternative To a Negotiated Agreement — it defines the strongest position if negotiations fail
BATNA (Best Alternative To a Negotiated Agreement) helps negotiators understand their walkaway point and strengthens their leverage in settlement discussions.
CCA CCA Negotiation and Communication in Claims 2
An adjuster receives a policy limits demand with a short deadline.
What is the primary risk to the insurer if they fail to respond in time?