Claims Adjuster Test State Laws and Regulations Questions and Answers — Questions and Answers
Question 1: In a state that follows the "comparative negligence" doctrine, a claimant is found to be 20% at fault for an accident that caused them $100,000 in damages. How will this assessment of fault typically affect the claimant's recovery?
- The claimant will be barred from recovering any damages.
- The claimant's recovery will be reduced by 20% to $80,000. (Correct answer)
- The claimant will recover the full $100,000 as they were not the primary cause.
- The claimant's recovery will be reduced by 50% regardless of their actual fault percentage.
Correct answer: The claimant's recovery will be reduced by 20% to $80,000.
Under comparative negligence, a claimant's recovery is reduced by their percentage of fault. In this case, 20% of the $100,000 in damages is $20,000, so the claimant's recovery is reduced to $80,000. The harsh doctrine of contributory negligence, used in only a few states, would bar any recovery if the claimant is even 1% at fault.
Question 2: Most states have adopted a version of the NAIC's Unfair Claims Settlement Practices Act. Which of the following is considered an unfair claims practice under this model act?
- Requesting a formal proof of loss form to verify claim details.
- Denying a claim after a reasonable investigation has been completed.
- Failing to acknowledge pertinent communications regarding a claim with reasonable promptness. (Correct answer)
- Offering a settlement that is identical to the amount ultimately recovered in a lawsuit.
Correct answer: Failing to acknowledge pertinent communications regarding a claim with reasonable promptness.
The NAIC's Model Unfair Claims Settlement Practices Act specifically lists 'Failing to acknowledge with reasonable promptness pertinent communications with respect to claims' as an unfair practice. The other options describe standard, acceptable practices in the claims handling process.
Question 3: An adjuster working for an insurance company is sent to evaluate a policyholder's property damage claim. This adjuster is not a salaried employee of the insurer but is contracted for this specific assignment. What type of adjuster is this?
- Public Adjuster
- Staff Adjuster
- Independent Adjuster (Correct answer)
- Emergency Adjuster
Correct answer: Independent Adjuster
An Independent Adjuster is contracted by an insurance company to investigate claims on its behalf. Unlike a staff adjuster (direct employee) or a public adjuster (hired by the policyholder), their loyalty lies with the insurer that hired them.
Question 4: A vehicle has been damaged to the extent that the insurer declares it a total loss and takes possession of it after paying the claim. State law requires the vehicle's title to be changed to reflect this status. What is this new title typically called?
- Rebuilt Title
- Junk Title
- Clear Title
- Salvage Title (Correct answer)
Correct answer: Salvage Title
When an insurer declares a vehicle a total loss and takes possession, the title must be branded as a 'Salvage Title'. This indicates the vehicle has sustained significant damage. A 'Rebuilt Title' is issued only after a salvage vehicle has been repaired and passed a state inspection.
Question 5: Most states require licensed insurance adjusters to complete a specific number of continuing education (CE) hours to maintain their license. What is the most common biennial (two-year) requirement for CE hours?
- 12 hours, with 1 hour in ethics
- 24 hours, with 3 hours in ethics (Correct answer)
- 30 hours, with 5 hours in ethics
- 40 hours, with no ethics requirement
Correct answer: 24 hours, with 3 hours in ethics
While requirements vary by state, the most typical standard is 24 hours of continuing education every two years, which includes a specific number of hours (often 3) dedicated to ethics.
Question 6: According to the California Fair Claims Settlement Practices Regulations, what is the maximum time an insurer has to accept or deny a claim after receiving all necessary documentation?
- 15 calendar days
- 21 working days
- 30 calendar days
- 40 calendar days (Correct answer)
Correct answer: 40 calendar days
The California Fair Claims Settlement Practices Regulations mandate that an insurer must accept or deny a claim within 40 calendar days after receiving proof of loss. They must acknowledge the claim within 15 days, but the decision window is longer.
Claims Adjuster Test State Laws and Regulations Questions and Answers
In a state that follows the "comparative negligence" doctrine, a claimant is found to be 20% at fault for an accident that caused them $100,000 in damages.
How will this assessment of fault typically affect the claimant's recovery?