Insurance Policies and Regulations Flashcards
7 cards from real CAA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Insurance Policies and Regulations flashcards as text
Many states regulate aftermarket (non-OEM) crash parts on estimates. What do these laws typically require?
Answer: Written disclosure that non-OEM parts are used, and that they are equal in fit, quality, and performance
State parts laws commonly require written disclosure on the estimate and that non-OEM parts be of like kind and quality.
Which model law forms the basis of most state rules against insurer misconduct such as lowballing or delaying claims?
Answer: NAIC Unfair Claims Settlement Practices Act
Most states have adopted versions of the NAIC Unfair Claims Settlement Practices model act, which prohibits unfair claim handling.
Under typical unfair claims practices regulations, an insurer may NOT:
Answer: Require the insured to use a specific repair shop
Most states bar insurers from requiring repairs at a particular shop, though they may recommend shops in their network.
In the United States, who primarily regulates auto insurance?
Answer: Each individual state's insurance department
Under the McCarran-Ferguson Act, the business of insurance is regulated mainly at the state level.
What does uninsured motorist property damage (UMPD) coverage pay for?
Answer: Damage to the insured's vehicle caused by an at-fault driver who has no insurance
UMPD pays for damage to the insured's vehicle when the at-fault driver is uninsured, and is available in many states.
When appraising a damaged vehicle, what is 'like kind and quality' (LKQ) usually used to describe?
Answer: Recycled or used parts that are equal to the original in type and condition
LKQ usually means salvage or recycled parts of the same type and comparable condition as the damaged part.
Under most state fair claims regulations, what must an insurer do once it determines a vehicle is a total loss?
Answer: Offer a settlement based on ACV and explain how it was calculated, if asked
States generally require insurers to base total loss offers on ACV and, on request, show the comparables or valuation source used.