Claims Handling Procedures & Ethics Flashcards
7 cards from real CALA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Claims Handling Procedures & Ethics flashcards as text
An adjuster discovers during investigation that the claimant's damages are significantly higher than initially reported. What is the adjuster's ethical obligation?
Answer: Revise the estimate to accurately reflect actual damages discovered
Adjusters have an ethical duty to fairly evaluate and compensate all damages actually discovered during investigation, regardless of initial estimates.
Under the Unfair Claims Settlement Practices Act (UCSPA), which of the following constitutes a prohibited practice?
Answer: Misrepresenting pertinent facts or policy provisions to deny a claim
The UCSPA prohibits misrepresenting facts or policy provisions as a method of denying or reducing claims.
A claimant contacts an adjuster after hours regarding a time-sensitive fire loss. What is the most appropriate response?
Answer: Provide a referral to an emergency contact or on-call service
Insurers should have protocols for emergency after-hours contact so claimants with urgent losses can receive timely assistance.
When an adjuster issues a reservation of rights letter, what is the primary purpose?
Answer: To notify the insured that the insurer is investigating while preserving the right to deny coverage
A reservation of rights letter allows the insurer to investigate and potentially defend a claim without waiving the right to later deny coverage if warranted.
An adjuster learns that a claimant has exaggerated medical expenses by 15%. What is the proper course of action?
Answer: Document the discrepancy, investigate further, and only pay legitimate expenses
Adjusters must document discrepancies, investigate potential fraud, and compensate only legitimate, verified losses.
Which standard governs how quickly an insurer must acknowledge receipt of a claim under most state regulations?
Answer: Within 10 calendar days
Most state regulations following the NAIC model require insurers to acknowledge claims within 10 working or calendar days of receipt.
A third-party claimant asks an adjuster for legal advice on whether to accept a settlement offer. How should the adjuster respond?
Answer: Recommend the claimant consult an independent attorney for legal guidance
Adjusters must not practice law; advising claimants to seek independent legal counsel is the ethical and proper response.