Insurance Claims Handling Basics FINAL EXAM (CT 109890)

What kind of statutes do many states have associated with claims involving death due to an accident?

Wrongful death statutes

The best way to get the most accurate and illuminating information from a witness is to do which of the following?

Get the signed statement ASAP

Which of the following terms describes a condition that increase the chances or severity of a loss?

Hazard

Which of the following is NOT true of medical examinations?

It is not true that med exams should be assigned routinely

The most important aspect of an exclusion, if the insurer wants the exclusion to stand in court, is which of the following?

It's understandable

Extraordinary items, with values that extend beyond their material or intended purpose, are not susceptible to which of the following?

Replacement value coverage is not allowed for these, they must be insured separately

Which of the following is true of independent adjusters?

Self employed, but hired by the insurer

Which department should have the final say about issues concerning the cancellation of policies?

Strictly the underwriting department

How does communication between the claims department and the underwriting department benefit the insurer?

1. The claims department explains obstacles they encounter and the underwriters alter their assessment of risks accordingly.

What is the fundamental purpose of insurance?

1. To provide protection against risks of loss

Claim experts think most excess claims and customer dissatisfaction can be avoided if a claims person does which of the following?

1. Works diligently to reduce problems in first 48 hours

Which is true of an adjuster's relationship with medical information?

2. An adjuster can acquire a good working knowledge of medical reports and their implications for claimants.

What is one simple way to reduce litigation costs and policy overlaps while creating standard rates and payouts across similar clients?

3. Creating standard or uniform policies

Which of the following is an accurate definition of a premium?

3. Periodic payments made during the policy period by the insured to the insurer

For the sake of risk management, all financial losses can be placed into which of the following categories?

3. Property losses, net income loss, liability losses, and personnel losses

What is typically the first step of the claims process?

3. The insured or a third party notifies the insurer of a loss.

The actual cash value is determined by which of the following?

4. What a willing seller could expect to receive if selling the property to a willing buyer in a fair market

Which of the following is a basic element of a valid casualty or property claim?

all the above In order for a casualty or a loss to be covered by insurance, a few basic elements must exist: Losses must be fortuitous - Losses covered by normal wear and tear or deterioration are the result of a known condition, and therefore are not covered. Losses must be occasioned by an extraneous factor - If a loss is caused by an inherent physical condition rather than an external agent, coverage will not apply. Losses cannot be intentionally caused by the policyholder - Damages caused by a suicide attempt more than two years after the purchase of a policy is a typical exception to this rule. Only legal property can be the subject of a valid claim - Illegal property cannot be the subject of a valid binding contract. A loss must be sustained - The mere happening of a perilous occasion involving insurable property cannot be the subject of a valid claim unless an actual loss has been sustained. There must be an "insurable interest" in the property - A policyholder must have some degree of legal interest in the property which is the subject of an insurance claim. Rights of a Claimant - One of the most significant laws that provides protection to consumers while impacting investigation, evaluation and settlement of claims on the part of an insurance carrier is the "Model Unfair Claim Settlement Practices Act," which has been adopted in one form or another by a substantial number of states. The enumeration of such rights is not by any means exclusive as other legal rights of policyholders that have been established both by legislation and by case law. Also, such rights may serve as a guideline to some courts when confronted with the question of an unfair settlement practice.

Which of the following terms could be used to describe a predictable reduction of value on an economic basis?

expense

What should a adjuster try to establish during his initial meeting with a claimant?

he role of the professional adjuster in the early stages of a loss is to inspire realistic expectations by explaining provisions and procedures in the claim process.

Which type of policy would extend coverage for actions that occur over a policy period, even if the claim is brought at a later date?

occurance

Which party bears the burden of proving that a loss took place?

policyholder

Which of the following terms specifically describes actions that focus more on avoiding and reducing HARM caused by risk, rather than finances or other aspects of risk?

risk control

Which of the following is the name of the practice where an insurer is allowed to file a lawsuit against a third party to recoup the losses they paid to their insured for damages for which the third party was liable?

subrogation