Los Angeles Claims Adjuster Property and Causality Practice Exam

What does draft authority allow claims adjusters to do?

1. Exceed limits for claim payments

2. Expedite payment of claims

3. Negotiate settlements directly

4. Handle only small claims

The correct answer is: Expedite payment of claims

Draft authority allows claims adjusters to expedite payment of claims by giving them the ability to authorize payments quickly without needing to go through multiple layers of approval. This is particularly important in insurance, as timely payment can significantly affect the policyholder's satisfaction and recovery process after a loss. When adjusters have draft authority, they can respond rapidly to claims, ensuring that claimants receive their funds as soon as possible, which is key in situations where financial support is urgently needed. The focus of draft authority is on facilitating efficient processing rather than handling negotiations or managing larger claims, which may require different approval processes. This makes the ability to expedite claims through draft authority a vital tool in an adjuster's role.