PNC Final UPDATED Exam Questions and
CORRECT Answers
What are the main goals of the claims function? - CORRECT ANSWER - Comply with
contractual promise/satisfy policyholder obligation AND support insurer's financial goals
Special form coverage - CORRECT ANSWER - Property insurance coverage that covers
all causes of loss not specifically excluded
Staff claims representatives - CORRECT ANSWER - Employees of insurer who handle
claims working from branch or regional offices
Field claims representatives - CORRECT ANSWER - - Also called outside claims
representatives
- Handle claims that require tasks such as investigating scene of loss; meeting with insureds,
claimants, and lawyers involved in loss; inspecting damage
Independent adjusters - CORRECT ANSWER - - Hired by insurance company and paid a
fee
- Can be used when specialized skills are needed, for field work, staff claims representatives too
busy
Public adjusters - CORRECT ANSWER - - Hired by insured/claimant and paid a fee that's
a % of the settlement
- Can be used if claim is complex, or if settlement negotiations are not progressing satisfactorily
For __________________ the amount of loss payable is usually limited to damage or destruction
to tangible property - CORRECT ANSWER - Property damage claims
2 types of damages insured is liable for in liability claims - CORRECT ANSWER -
Compensatory damages and punitive damages
, Compensatory damages - CORRECT ANSWER - Payment awarded by court to reimburse
a victim for actual harm
2 types of compensatory damages - CORRECT ANSWER - - Special damages - specific
identifiable expenses (medical expenses or lost wages, funeral expenses)
- General damages - NOT specific identifiable expenses (pain and suffering)
Punitive damages - CORRECT ANSWER - - Punish the defendant for reckless, malicious,
or deceitful act
- Gross negligence is the worst type
What does insurer agree to pay in liability insurance policy - CORRECT ANSWER -
Judgements and settlements up to policy limit
Claims handling process - CORRECT ANSWER - - AIC IDC
- acknowledge/assign claim, identify policy and set reserves, contact the insured or their
representatives, investigate and document the claim, determine cause of loss and loss amount,
conclude the claim
Reservation of rights letter - CORRECT ANSWER - - Claims representative sends to
insured
- Specifies coverage issues and lets insured know that insurer is handling claim with the
understanding that the insurer may later deny coverage depending on the facts
Per risk excess of loss - CORRECT ANSWER - - Covers property insurance and applies
separately to each loss occurring to each risk
- Called property per risk excess
Excess of loss - CORRECT ANSWER - - Reinsurer responds to loss only if it exceeds
primary insurers attachment point
CORRECT Answers
What are the main goals of the claims function? - CORRECT ANSWER - Comply with
contractual promise/satisfy policyholder obligation AND support insurer's financial goals
Special form coverage - CORRECT ANSWER - Property insurance coverage that covers
all causes of loss not specifically excluded
Staff claims representatives - CORRECT ANSWER - Employees of insurer who handle
claims working from branch or regional offices
Field claims representatives - CORRECT ANSWER - - Also called outside claims
representatives
- Handle claims that require tasks such as investigating scene of loss; meeting with insureds,
claimants, and lawyers involved in loss; inspecting damage
Independent adjusters - CORRECT ANSWER - - Hired by insurance company and paid a
fee
- Can be used when specialized skills are needed, for field work, staff claims representatives too
busy
Public adjusters - CORRECT ANSWER - - Hired by insured/claimant and paid a fee that's
a % of the settlement
- Can be used if claim is complex, or if settlement negotiations are not progressing satisfactorily
For __________________ the amount of loss payable is usually limited to damage or destruction
to tangible property - CORRECT ANSWER - Property damage claims
2 types of damages insured is liable for in liability claims - CORRECT ANSWER -
Compensatory damages and punitive damages
, Compensatory damages - CORRECT ANSWER - Payment awarded by court to reimburse
a victim for actual harm
2 types of compensatory damages - CORRECT ANSWER - - Special damages - specific
identifiable expenses (medical expenses or lost wages, funeral expenses)
- General damages - NOT specific identifiable expenses (pain and suffering)
Punitive damages - CORRECT ANSWER - - Punish the defendant for reckless, malicious,
or deceitful act
- Gross negligence is the worst type
What does insurer agree to pay in liability insurance policy - CORRECT ANSWER -
Judgements and settlements up to policy limit
Claims handling process - CORRECT ANSWER - - AIC IDC
- acknowledge/assign claim, identify policy and set reserves, contact the insured or their
representatives, investigate and document the claim, determine cause of loss and loss amount,
conclude the claim
Reservation of rights letter - CORRECT ANSWER - - Claims representative sends to
insured
- Specifies coverage issues and lets insured know that insurer is handling claim with the
understanding that the insurer may later deny coverage depending on the facts
Per risk excess of loss - CORRECT ANSWER - - Covers property insurance and applies
separately to each loss occurring to each risk
- Called property per risk excess
Excess of loss - CORRECT ANSWER - - Reinsurer responds to loss only if it exceeds
primary insurers attachment point
