Chapter 6 Loss Investigation

Question 1

What is an example of direct evidence?

a. An assumption based on evidence gathered

b. Evidence deliberately damaged prior to trial

c. Someone’s own account, such as a witness statement

d. Spoliation of evidence

Answer 1

c. Someone’s own account, such as a witness statement

Question 2

When getting ready for an interview, what do loss adjusters find helpful to prepare?

a. Contract

b. Checklist

c. Script

d. Existing documentation

Answer 2

b. Checklist

Question 3

What do loss adjusters seldom benefit from using?

a. Prosecutorial or judgmental questions

b. Open questions

c. Closed questions

d. Direct questions regarding facts about the accident

Answer 3

a. Prosecutorial or judgmental questions

Question 4

An agreement signed by the policyholder after a loss, agreeing that the investigation and determination of the amount of damage by the insurance company shall not be construed as an admission of liability. It is used when the insured is in violation of a policy condition and there is a question as to whether or not the company is liable for a loss but it wishes to investigate the loss and determine the amount of damage.

Answer 4

non-waiver agreement

Question 5

An insurer’s notification to an insured that coverage for a claim may not apply. Such notification allows an insurer to investigate (or even defend) a claim to determine whether coverage applies (in whole or in part) without waiving its right to later deny coverage based on information revealed by the investigation. In reserving its rights to later deny coverage, the insurer is merely telling the insured of its concerns that the claim, in whole or in part, may not be covered under the policy, pending further investigation.

Answer 5

reservation of rights letter

Question 6

(1) The destruction of evidence. (2) The alteration of a policy by a party other than the insurer or the insured without consent.

Answer 6

spoliation

Question 7

Someone connected to a court of law who can be hired by an insurer or an insured to appear in court as a witness. This expert combines knowledge of legal cases with the principles of a profession. The expert can help to prove or contradict the cause of a claim.

Answer 7

forensic expert

Question 8

Loss adjusters should schedule an interview with the insured within what timeframe following a reported loss?

a. -3 weeks

b. 24 hours

c. 3-4 days

d. 5-6 days

Answer 8

B. 24 hours

Question 9

What is the primary determinant of the scope of an investigation?

a. Cause of the loss

b. Events that caused the loss

c. Magnitude of the loss

d. Eyewitness statements detailing the loss

Answer 9

c. Magnitude of the loss

Question 10

What is included in a non-waiver agreement?

Answer 10

Identified parties
Date of loss
Location of loss
Issues that gave rise to insurers stance on coverage
Type of claim
Notice that the investigation is underway, requires signature of insured

Question 11

What is an indemnity clause?

Answer 11

Used in non-waivers on liability claims, insured agrees to pay back insurer for the fees

Question 12

What are the five question types?

Answer 12

Open ended -Phrasing that does not imply or suggest anything; leaves the respondent free to answer however he or she chooses:
Close-ended -Phrasing that requires a short answer, like yes, no, or a simple fact:
Leading - Phrasing that suggests a particular response:
Prosecutorial - Phrasing or tone that implies blame:
Judgmental -Phrasing or tone that suggests disapproval:

Question 13

What is the model interview approach?

Answer 13

Introduce yourself and your role
Start discussion with open ended question that encourages person to begin narrative
Listen patiently, a lull does not necessarily need action
Ask for explanation when something is unclear or there is a gap
Insurance company may have a general set of questions or forms
Adequate waiting between questions
Maintain composure in all circumstances
Evaluate body language
Note taking and allow them to amend info, as long as they initial
This will help guide further investigation

Question 14

What are the three types of evidence?

Answer 14

Oral - From interviewing a witness Oral evidence is established by interviewing a witness to obtain a description of how an accident happened.

Physical - Tangible objects, ‘real evidence’ photographs of the scene of an accident, medical reports, documents

Secondary - Reports from an expert presenting an opinion of value

Question 15

What is the difference between direct evidence and circumstantial evidence?

Answer 15

Direct is from the witness experience

Circumstantial can be inferred from other evidence

Question 16

What are the two definitions of spoilation?

Answer 16

1) destruction of evidence

2) alteration of a policy by a party other than the insurer or insured without consent

Question 17

What are some of the experts that adjusters may rely on?

Answer 17

Appraisers
Property restoration contractor
Suppliers
Engineers
Accident reconstruction specialists
Origin and cause specialists
Investigative specialists
Photographers
Doctors
Accountants
Lawyers

Question 18

What is a proof of loss form?

Answer 18

A formal statement of facts about a loss.
The form must be attested to by the claimant.
The form is specified by the insurer.
A proof of loss may need to be notarized.
An insurer must respond to a proof of loss after a specified time period with a formal disposition of the claim (approved or denied).

Question 19

What steps should you take in preparing for an interview?

Answer 19

• An action plan will focus on the task at hand.
• Schedule the interview as soon as possible following the loss.
• Review existing documentation to help focus the questioning:
  o background information from police reports
  o newspaper accounts
  o a prior visit to the accident scene
• Prepare a checklist of what must be accomplished.
• Anticipate any coverage issues and be prepared to answer questions about deductibles and other relevant terms and conditions of coverage.
• Allow enough time to properly conduct the interview.
• Conduct the interview in a professional setting in order to minimize interruptions.

Question 20

What is PIPEDA

Answer 20

Personal Information Protection and Electronic Documents Act (PIPEDA)

Question 21

What is a Reservation of rights letter

Answer 21

Unilateral assertion by the insurer that it is preserving its options and waiving none of its rights. The letter does not bind the insured, because it is not a contractual agreement.

Question 22

what is the difference between direct evidence and circumstantial evidence ?

Answer 22

Direct evidence is based on a witness’s own experience.
Circumstantial evidence can be inferred from other evidence

Question 23

What is spoliation

Answer 23

It is used to describe the alteration or destruction of evidence relevant to a legal proceeding. Courts will infer that spoliated evidence was not favorable to the spoliator.

Sometimes the expert hired by a loss adjuster to investigate causation may intentionally destroy the evidence or parts of it in the process of conducting tests. This is called destructive testing. When such destructive testing is required, any other interested parties to the action must be given an opportunity to participate in the testing.