West Virginia Adjusters Practice Exam

Sara's vehicle was stolen and her insurer paid her theft claim for the total value of the car. A week later, the police found Sara's car and returned it to her. Which of the following statements is true?

1. Sara can keep both the car and the settlement payment.

2. Sara must notify the insurer but can decide to keep the settlement or the car.

3. The Recovered Property provision states that Sara must notify the insurer and either return the settlement payment or surrender the vehicle to the insurer.

4. The insurer will let Sara keep the settlement if she pays a recovery fee.

The correct answer is: Sara can keep both the car and the settlement payment.

The correct understanding revolves around the Recovered Property provision, which is a standard clause in insurance policies regarding claims for stolen property. When the insured property is recovered after a claim has been paid, the insured typically has an obligation to inform the insurer about the recovery. In this case, since Sara's vehicle was recovered after the insurance company had already compensated her for the total value of the car, she cannot simply keep both the settlement payment and the car. The obligation under the Recovered Property provision would require her to notify the insurer about the recovery. This means she must either return the settlement payment to the insurer or surrender the vehicle. Therefore, the most accurate statement is the one that reflects the need for Sara to inform her insurer and outlines that she must return the settlement or the vehicle. This ensures compliance with the policy terms and maintains the integrity of the insurance process.