1) Raymond, a claim representative, was assigned to a claim involving a break-in at a business and theft of property from the insured premises. The police report indicated that the window at the premises had been broken from the inside, but there was no other source of damage to indicate how any thief had entered the premises. Raymond has decided to do further investigation to obtain more information about the break-in. Describe the action Raymond must take to protect his company’s right to later deny the claim if the claim is found to be fraudulent. (Be sure to include the specific correspondence between Raymond and the insured in your answer).
2) Charlotte was severely injured when the new ladder that she had purchased collapsed while she was cleaning the gutter on her house. Investigation revealed that the ladder had been improperly constructed. The manufacturer was aware of the defect and had received multiple complaints about the problem. Charlotte sued the ladder manufacturer and received the following for her injuries: · $300,500 for her hospital bills and rehabilitation · $30,000 for her lost wages · $500,000 for loss of use of her left hand and scarring to her arm · $750,000 awarded as punishment against the ladder manufacturer for careless disregard for the safety of its customers Categorize each bulleted item according to the type of damages it represents.
3) Depending on the policy provisions, property losses may be valued on an actual cash value basis, a replacement cost basis, or an agreed value basis. a. Explain the relevance, if any, of depreciation to EACH of the three (3) valuation methods mentioned above. b. A fifteen-year-old sofa, insured for its actual cash value, is destroyed in a house fire. The claim representative finds that the destroyed sofa was of a type that is usually considered to have a “useful life” of ten years. Does this mean that the insurer will not need to pay anything for the destroyed sofa? Explain.
4) Identify the four (4) questions for which the claim representative must seek answers to verify that a claim is covered.
5) Describe the basic purpose of subrogation.