Arizona Adjuster Practice Exam

Which of the following may an adjuster use to encourage a claimant to settle a claim?

1. Draft authority

2. Settlement brochure

3. Legal counsel advice

4. Negotiation tactics

The correct answer is: Draft authority

An adjuster may use draft authority as a means to encourage a claimant to settle a claim. Draft authority typically refers to the adjuster's ability to create or draft settlement offers, which can instill confidence in the claimant that the adjuster has the authority to finalize a settlement. This power can facilitate discussions around settlement, as it demonstrates that the adjuster is capable of reaching an agreement without needing to seek additional approvals, thus streamlining the process for the claimant. While other choices may have some relevance in the context of managing claims, they do not directly serve the same purpose or effectiveness as draft authority in facilitating a settlement. For example, a settlement brochure may provide information but does not actively engage or persuade the claimant. Legal counsel advice may be valuable, yet it generally pertains to legal rights and options rather than acting as a direct encouragement in negotiations. Negotiation tactics can certainly play a role in settlements, but they often require a foundational authority for a successful outcome, which is where draft authority becomes particularly significant.