What This Assignment Covers
Insurance only matters when something goes wrong. That is when the claims function steps in to fulfill the insurer's promise. This assignment covers how claims departments are structured, the step-by-step process for handling a claim, the framework for analyzing whether a claim is covered, and how modern trends like social inflation and AI are transforming claims operations.
Exam Alert
Claims is one of the most heavily tested topics on CPCU 520. Expect questions on the six-step claims process, the coverage analysis framework (especially which question catches which type of problem), first-party vs. third-party claim differences, and good faith obligations. The case study format — applying the process to a real scenario — appears frequently.
After this assignment, you will be able to:
Describe the goals, structure, and personnel of the claims function and how it supports other departments in the value chain
Apply the six-step claims handling process and the coverage analysis framework to determine claim outcomes
Explain first-party vs. third-party claims, social inflation, modern claims technology, and alternative dispute resolution methods
Study Parts
Goals, Structure, and Personnel
Two primary goals, how claims supports other departments, department structure, five types of claims personnel, and performance measures.
Claims Handling Process and Coverage Analysis
The six-step claims process, the nine-question coverage analysis framework, a full case study, and good faith obligations.
Third-Party Claimants and Modern Claims
First-party vs. third-party claims, social inflation and nuclear verdicts, claims technology, ADR methods, subrogation, and salvage.
Assignment 2 Quick Reference
Two Goals
Fulfill the contractual promise + support insurer financial goals
6-Step Process
Acknowledge, identify policy, contact, investigate, determine, conclude
Coverage Analysis
9 questions that determine if a claim is covered and for how much
Good Faith
Bad faith = extracontractual damages beyond policy limits