West Virginia Adjusters Practice Exam

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In a situation where an insurer and claimant agree to a settlement amount, what additional payment is mandatory in West Virginia?

The insurer must pay the policyholder a loyalty bonus.
The insurer must pay interests on the claim amount.
The insurer must pay the consumer sales tax on the settlement amount.
The insurer must pay a depreciation fee.

The correct answer is: The insurer must pay the policyholder a loyalty bonus.

The correct answer is that the insurer must pay interest on the claim amount. In West Virginia, when a settlement amount is agreed upon, it is mandatory for the insurer to pay interest on the claim from the date of the loss until the date the payment is made. This regulation is designed to ensure that claimants are fairly compensated for the time they have to wait for their settlement after filing a claim. The other options do not reflect mandatory obligations under West Virginia law. A loyalty bonus is not a standard requirement in insurance settlements. Similarly, while some states may impose sales tax in certain circumstances, it is not a mandated payment in this context. The mention of a depreciation fee also does not align with the legal frameworks governing insurance settlements in West Virginia. Thus, the emphasis on interest payment ensures that claimants receive compensation that reflects the time value of money while their claim is being processed.