An Adjuster at Succeed Insurance is handling a personal auto claim for an insured who...

To determine if a transaction requires approval, we must compare the proposed transaction against the Adjuster's Authority Limits and the current financial state of the claim.

Current State:Total Reserves = $3,000 ($2,500 Indemnity + $500 Expense). Total Paid = $0.

Adjuster Limits:

Claim Total Reserves Limit: $5,000

Payments Exceed Reserves Limit: $500

Evaluation of Options:

Option B (No Approval Required):Making a $2,000 payment against the "Claim Cost - Auto body" reserve.

The available reserve is $2,500. Since $2,000 < $2,500, the payment does not exceed the reserve.

The total payments on the claim would be $2,000, which is well below the "Claim payments to date" limit of $5,000.

Option D (No Approval Required):Increasing the Expense reserve to $550.

This increases the total claim reserves from $3,000 to $3,050 ($2,500 + $550).

Since $3,050 is below the Adjuster's "Claim total reserves" limit of $5,000, no approval is triggered.

Why other options require approval:

Option A:A payment of $1,100 against a $500 reserve means the payment exceeds the reserve by$600. The Adjuster's limit for "Payments exceed reserves" is only$500. Since $600 > $500, approval is required.

Option C:Increasing the Auto body reserve to $6,000 would raise the total claim reserves to$6,500($6,000 + $500). This exceeds the Adjuster's "Claim total reserves" limit of $5,000, triggering an approval.