4: Valuing Auto Physical Damage Claims Questions and Answers(Graded A)
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Course
4: Valuing Auto Physical Damage
Institution
4: Valuing Auto Physical Damage
Special investigation unit (SIU) - ANSWER-A division set up to investigate suspicious claims, premium fraud, or application fraud.
Subrogation - ANSWER-The process by which an insurer can, after it has paid a loss under the policy, recover the amount paid from any party (other than the insured) ...
4: Valuing Auto Physical Damage Claims
Questions and Answers(Graded A)
Special investigation unit (SIU) - ANSWER-A division set up to investigate suspicious
claims, premium fraud, or application fraud.
Subrogation - ANSWER-The process by which an insurer can, after it has paid a loss
under the policy, recover the amount paid from any party (other than the insured) who
caused the loss or is otherwise legally liable for the loss.
Replacement cost - ANSWER-The cost to repair or replace property using new
materials of like kind and quality with no deduction for depreciation.
Actual cash value (ACV) - ANSWER-The cost to replace property with new property of
like kind and quality less depreciation.
Direct repair program (DRP) - ANSWER-A program by which insurers provide a network
of repair facilities that meet the insurer's criteria for quality work at cost-effective prices.
Original equipment manufacturer (OEM) part - ANSWER-A new vehicle part that is
made by the vehicle's original equipment manufacturer.
Aftermarket (AM) part - ANSWER-A new vehicle part that is made by a manufacturer
other than the vehicle manufacturer.
Like kind and quality (LKQ) part - ANSWER-A vehicle part that is taken from a salvage
yard and that is of like kind and quality to the original part.
Remove and install - ANSWER-The process of removing a part and reinstalling the
same part after repairs are completed.
Remove and replace - ANSWER-The process of removing a part and replacing it with a
new or replacement part.
Overhaul (OH) - ANSWER-A repair term for completely disassembling and
reassembling a group of related parts, replacing the damaged parts in the process.
Included operation - ANSWER-Any labor operation completed in its entirety while
another, concurrent operation is performed.
Assembly - ANSWER-A portion of a vehicle that is made up of several parts that, when
combined, form a unit.
, Body-on-frame (conventional full frame) - ANSWER-A type of auto body usually found
on trucks and large passenger autos, characterized by a separate steel frame to which
the body of the vehicle is bolted.
Unibody construction (unitized construction) - ANSWER-Passenger vehicle design by
which sheet metal panels are welded together so that the body is in one piece rather
than two.
The two main steps of the investigation process in auto physical damage claims are
determining the cause of the loss and
A. Notifying the special investigation unit (SIU).
B. Determining the amount of damage.
C. Arranging prompt repairs.
D. Determining liability. - ANSWER-B. Determining the amount of damage.
The two main steps of the investigation process in auto physical damage claims are
determining the cause of the loss and determining the amount of damage.
Understanding and verifying the vehicle identification number (VIN) is critical to auto
claims investigation. From the first three characters of the VIN, a claims rep can
determine the vehicle's
A. Country of origin, manufacturer and vehicle type.
B. Manufacturer, body style and engine type.
C. Country of origin, year and model.
D. Year of production, model and manufacturer. - ANSWER-A. Country of origin,
manufacturer and vehicle type.
Country of origin, manufacturer and vehicle type are denoted by the first three
characters of a VIN.
In examining diminished value claims, most courts have deemed that the policy
obligates the insurer to
A. Restore the vehicle to its pre-loss value.
B. Provide full replacement cost in the event of a total loss.
C. Restore the vehicle to its pre-loss condition.
D. Restore the claimant to his or her pre-loss financial condition. - ANSWER-C. Restore
the vehicle to its pre-loss condition.
Most courts have deemed that the policy obligates the insurer to restore the vehicle to
its pre-loss condition, not to restore the claimant to his or her pre-loss financial
condition. This is among the reasons why many diminished value claims are rejected.
Daria is a claims rep for an insured whose vehicle is declared a total loss because it has
been stolen. This is called a(n)
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