Settlement Procedures Flashcards

When a claimant disputes the adjuster's vehicle damage estimate, what is the most appropriate first step?

Answer: Request an independent appraisal

Requesting an independent appraisal is the standard dispute resolution mechanism before escalating to litigation.

A 'reservation of rights' letter in a settlement context primarily serves to:

Answer: Preserve the insurer's right to deny coverage while still investigating

A reservation of rights letter allows the insurer to continue investigating without waiving any coverage defenses.

Under the Unfair Claims Settlement Practices Act, how many days does an insurer typically have to acknowledge receipt of a claim?

Answer: 10 days

Most state regulations based on the UCSPA require acknowledgment within 10 days of receiving a claim.

What does 'accord and satisfaction' mean in automotive loss settlement?

Answer: A disputed claim is fully resolved when a claimant cashes a check marked 'payment in full'

Accord and satisfaction occurs when a claimant accepts a settlement offer, typically by cashing a check tendered as full payment.

Which settlement option allows the insured to keep a totaled vehicle while receiving a reduced payment?

Answer: Salvage retention by insured

When an insured retains salvage, the insurer deducts the salvage value from the ACV payment.

In a third-party bodily injury settlement, a structured settlement differs from a lump-sum payment in that it:

Answer: Distributes payments over time, often for catastrophic injuries

Structured settlements provide periodic payments over time, commonly used in catastrophic or long-term injury cases.

When settling a claim involving a minor, what additional step is generally required?

Answer: Court approval of the settlement is typically required

Settlements involving minors usually require court approval to protect the minor's legal interests.