Adjusting exam

After an insurance claim has been filed in Florida, how soon must the insurer respond to the claim? A. Within 14 days B. Within 30 days C. Within the time period requested by the claimant D. With reasonable promptness

A. Within 14 days

Guaranty Associations are funded by: A. insurers. B. the state. C. the federal government. D. the insurance commissioner.

A. insurers.

Of the following adjuster duties, which would be first? A. Prepare adjustment reports B. Open lines of communication C. Assess the damages D. Investigate liability

B. Open lines of communication

When we say that a claims file is "discoverable," we mean that: A. The insurer has the right to review the file weekly B. The file can be used as evidence in a court case C. The adjuster must keep a copy of the file for at least 10 years D. The insured is entitled to a copy of the entire file

B. The file can be used as evidence in a court case

Coverage B of the BOP would provide indemnification for damages to all of the following except: A. Office furniture B. Windows C. Inventory D. An office copy machine

B. Windows

To meet the 80% level of co-insurance required by his lender, Tom discovers he must insure his home for at least $320,000. What is the value of Tom's home? A. $256,000 B. $320,000 C. $400,000 D. $440,000

C. $400,000

From the point of view of an insurer, which of the following is a risk? A. A large tree growing next to a house B. A hurricane C. An insured automobile D. A thunderstorm

C. An insured automobile

The Department of Financial Services can discipline an adjuster who doesn't follow Florida insurance law by doing all of the following, EXCEPT: A. imposing fines and warnings. B. suspending the adjuster's license. C. imposing prison sentences. D. revoking the adjuster's license.

C. imposing prison sentences.

What is the HO-6 form?

Condo form Named peril for finished surfaces and owner's belongings

What is the most an adjuster could be fined for knowingly and illegally offering rebates? A. $500 B. $2,500 C. $5,000 D. $3,500

D. $3,500

Actual production history (APH) is based on farmer's previous crop yields. A farmer must provide how many years of records to determine the APH? A. 10 years B. 2 years C. 5 years D. 4 years

D. 4 years

Which of the following statements regarding scheduled fidelity bonds is FALSE? A. Employees can be bonded for different amounts B. A limit of liability is defined for each employee or position C. They are applicable to only select employees or positions D. All employees are bonded for the same aggregate amount

D. All employees are bonded for the same aggregate amount

Residual market insurance programs are funded by: A. banks. B. private owners. C. investment companies. D. insurers and their policyholders.

D. insurers and their policyholders.

Define: Recoverable depreciation

Amount an insured can be paid after making repairs to damaged property

Define: Fixed deductible

A set amount

An "occurrence" is defined as: A. An unexpected event that causes loss B. The likelihood of experiencing a loss C. An insured item D. Something that increases the chance of a loss

A. An unexpected event that causes loss

There are several terms that are often interchangeable with "endorsements." Which of the following is NOT one of these terms? A. Binders B. Addendums C. Riders D. Attachments

A. Binders

What is the title of the insurance professional who processes claims for compensation? A. Insurance adjuster B. Insurance salesman C. Insurance broker D. Insurance agent

A. Insurance adjuster

Which of the following losses would be covered by Section II of a BAP? A. Legal defense costs B. Damaged factory-installed speakers C. Stolen CDs D. Punctured tires

B. Damaged factory-installed speakers

The Homeowners 6 policy would likely NOT cover which of the following? A. Furniture inside the unit B. Light fixtures on the building's exterior C. Paint on the walls of the insured's unit D. Carpet inside the insured's the unit

B. Light fixtures on the building's exterior

In a government crime policy, computer fraud coverage specifically excludes all of the following losses EXCEPT: A. If proof of loss depends on calculation of inventory or profit and loss B. Losses due to employee theft via computer C. Losses due to credit card transactions D. Losses due to an insured following fraudulent instructions to transfer funds out of a transfer account

B. Losses due to employee theft via computer

Which of the following is NOT a duty of a captive agent? A. Representing the insurer B. Negotiating settlements C. Selling insurance policies D. Servicing policies

B. Negotiating settlements

Mark belongs to a non-profit organization that engages in charitable activities and provides Mark with death and disability insurance coverage. To what kind of organization does Mark belong? A. Reciprocal insurer B. Risk retention group C. Fraternal benefit society D. Mutual insurance company

C. Fraternal benefit society

When responding to a claim, the adjuster's primary motivation should be: A. Negotiate effectively B. Find a way to deny the claim C. Settle the claim quickly and fairly without litigation D. Settle the claim for the least possible amount

C. Settle the claim quickly and fairly without litigation

In a BOP, the general aggregate limit is: A. Twice the products-completed operations aggregate limit B. Equal to the claims-made limit C. Twice the per occurrence limit D. Twice the claims-made limit

C. Twice the per occurrence limit

Participation in the Florida Automobile Joint Underwriting Association is mandatory for: A. all residents of the state of Florida. B. the 10 largest auto insurers in Florida. C. all insurers who can sell auto insurance in Florida. D. Florida insurers who provide only personal lines auto insurance.

C. all insurers who can sell auto insurance in Florida.

Taylor is involved in a hit and run accident. He is stunned by the encounter and doesn't get the make, model, or license plate of the hit and run offender. Which of Taylor's insurance coverages could help him pay for the damages to his car? A. Liability coverage B. Bodily injury uninsured motorist coverage C. Comprehensive coverage D. Collision coverage

D. Collision coverage

Jane's shed burns to the ground during a tornado, when the high winds break a wall of the shed, knocking over a lantern inside. What is the proximate cause of the loss? A. The lantern B. Fire C. Wall collapse D. Wind

D. Wind

Define: First party claim

Made by policyholder on her own policy

Driving home one night, Jeff runs a red light and crashed into another car, injuring all three passengers: Clair, John, and Richard. Clair suffered $25,000 in injuries, John $45,000, and Richard suffered the most at $62,000. Assuming Jeff's liability policy limits are set at 50 / 150 / 75, how much, if any, will Jeff be required to pay for the passengers' injuries? A. $12,000 B. $62,000 C. $132,000 D. $0

A. $12,000

Jerome was shopping at ABC Imports when a light fixture fell from the ceiling and hit him on the head. Jerome's injuries resulted in an extended hospital stay, so he sued ABC Imports and was awarded $400,000. Assuming ABC Imports carries a CGL with a General Aggregate of $750,000 and a Per Occurrence limit of $250,000, what will the new General Aggregate Limit be after this claim is paid? A. $500,000 B. $750,000 C. $250,000 D. $350,000

A. $500,000

Which of the following best describes the insurance concept of "exposure"? A. The possibility of damage or loss B. The cause of damage or loss C. The reduction in value of an insured item D. A condition that increases the possibility of a loss

A. The possibility of damage or loss

Nicole swerves to avoid a deer in the road and crashed into a guardrail. She causes $2,400 in damages to her car. How much might Nicole expect to receive from her insurance company if she has a fixed deductible of $500 on her auto insurance? A $2,400 B. $1,900 C. $1,400 D. $500

B. $1,900

Anyone who registers or drives a car in Florida must have PIP coverage of at least: A. $20,000 B. $10,000 C. $15,000 D. $5,000

B. $10,000

Jerome was shopping at ABC Imports when a light fixture fell from the ceiling and hit him on the head. Jerome's injuries resulted in an extended hospital stay, so he sued ABC Imports and was awarded $400,000. Assuming ABC Imports carries a CGL with a General Aggregate of $750,000 and a Per Occurrence limit of $250,000, what will the new Per Occurrence Limit be after this claim is paid? A. $150,000. B. $250,000 C. $0 D. $100,000

B. $250,000

The Newly Acquired Property extension in a commercial property policy provides ________ in coverage for buildings under construction at the insured premises, or for any newly acquired business property off the insured premises. A. $50,000 B. $250,000 C. $100,000 D. $1 million

B. $250,000

Which of the following properties would NOT qualify for a dwelling policy? A. A four-plex with 5 tenants B. A 5-family dwelling C. A permanently installed mobile home D. A single-family dwelling owned by a partnership

B. A 5-family dwelling

Which of the following applicants would NOT be eligible for a homeowner's policy? A. An individual owner of a residential building under construction B. A small business that makes less than $70,000 per year C. A tenant of an apartment building D. An owner who occupies one unit of a tri-plex

B. A small business that makes less than $70,000 per year

When Jeanette shows up to handle a claim on behalf of ABC Insurance, she evaluates the claim and negotiates a settlement. Maintaining her integrity and acting ethically, Jeanette is fulfilling her: A. Double duty B. Fiduciary duty C. Sales duty D. Insurance duty

B. Fiduciary duty

Which of these statements about multi-peril crop insurance is true? A. MPCI is too expensive for most farmers B. MPCI cannot be purchased after the sales closing date C. MPCI must be run by the state D. MPCI does not cover earthquake

B. MPCI cannot be purchased after the sales closing date

Elizabeth has a personal laptop worth $1,400. One night, while Elizabeth is out, a thief breaks into her home and steals her laptop. How much can Elizabeth expect to be indemnified by her insurer for the loss of her laptop (ignoring any deductible)? A. $2,100 B. $1,500 C. $1,400 D. $500

C. $1,400

If a Florida HO policy has only been in effect for 45 days, the insurer must notify the policyholder at least ____ days before cancelling it for non-payment of premiums, or at least ____ days before cancelling it for any other approved reason. A. 20; 100 B. 10; 45 C. 10; 20 D. 20; 30

C. 10; 20

Congress first authorized federal crop insurance in the 1930s. IT remained experimental, covering only major crops in central producing areas, until the federal crop insurance act was passed in: A. 1978 B. 1994 C. 1980 D. 1996

C. 1980

Barbara is negotiating a property claim, but things are not going well - both sides are beginning to become unsettled and frustrated. Barbara offers to take a second look at the policy and suggests that they reconvene in a couple days to finish working out the negotiations. What negotiation technique has Barbara just employed? A. Demonstration B. Flexibility C. Diversion D. Silence

C. Diversion

An adjuster who acts as a fiduciary agent for an insurer must: A. Represent the policyholder in her interactions with the insurer B. Be a salaried employee of that insurer C. Have authority granted by the insurer through a contract D. Deal with the insurer's lawyer instead of directly with the insurer

C. Have authority granted by the insurer through a contract

Which homeowners policy form is intended for renters? A. Homeowners 8 B. Homeowners 3 C. Homeowners 4 D. Homeowners 5

C. Homeowners 4

An equipment breakdown endorsement would indemnify the insured for losses related to: A. Hired autos B. Inoperable non-owned autos C. Malfunctioning refrigeration systems D. Stored inventory

C. Malfunctioning refrigeration systems

The amount of Permanent Partial Impairment Benefits that an injured employee might receive is based on: A. the number of her dependents B. the cost of her medical care C. her impairment rating D. her position in the company before the accident

C. her impairment rating

When a fire burns through The Chronicle newspaper company, it takes out two permanently-installed printing presses, three employees' personal laptops, five rolls of newspaper stock, and in a twist of irony, two fire extinguishers. Which of these would be covered under Coverage A - Buildings and Structures? A. The printing presses only B. The employees' personal laptops C. The printing presses and newspaper stock D. The printing presses and fire extinguishers

D. The printing presses and fire extinguishers

Individuals CANNOT purchase comprehensive health or catastrophic health insurance plans: A. Through a health maintenance organization (HMO) B. Through a point of service (POS) plan C. Directly from an insurance provider D. Through an out of pocket (OOP) plan

D. Through an out of pocket (OOP) plan

Which of the following automobile components is NOT covered by a mechanical breakdown insurance policy? A. Drive train B. Engine C. Steering assembly D. Tires

D. Tires

Why might an insurer send a claimant a Reservation of Rights letter? A. When the insurer has decided not to cover the loss B. When the insurer needs more information before making a final decision C. To let the claimant know that the insurer has received all necessary paperwork D. To let the claimant know that there is a coverage dispute

D. To let the claimant know that there is a coverage dispute

Define: Warranty

Guarantee of action or condition

Define: Part E - Duties after an accident or loss

Lists eight duties, such as reporting accidents promptly and cooperating with the insurer's investigation

Which dispute resolution should be a last resort?

Litigation

Describe coverage B:

Other detached structures

Define: Physical hazard

Physical conditions that make losses more likely

What is the third step in the claims process?

Preparing necessary paperwork

Define: Crop-hail insurance

Privately sold, offering coverage for a few specified perils

Define: Agent

Receives the authority to act on behalf of another

What is the HO-3 form?

Special form All peril for structure Named peril for contents

What are the 2 categories of risk?

Speculative Pure

Define: Report to the principal

The adjuster must give the principal detailed information on how each claim is going

Define: Exposure

The possibility or likelihood of damage or loss

Matching: 1. Utmost good faith 2. Adhesion 3. Unilateral 4. Personal 5. Conditional 6. Aleatory A. The insured person is protected from losses, not the covered property. B. Both parties must act honestly and openly in order for the contract to be valid. C. One party sets the terms of the contract; the other may simply agree or not agree. D. The insurer must only honor the contract if the insured meets certain conditions. E. Only the insurer makes a promise to act; the insured can void contract at any time. F. The execution of the contract depends on an unknown future event.

1 - B 2 - C 3 - E 4 - A 5 - D 6 - F

How many steps are there in the claims process?

9

Under which law is an insurer required to explain its reasons for denying coverage? A. IIPPA B. AAA C. FCRA D. HIPAA

A. IIPPA

In Florida, every driver must have $10,000 in property damage liability coverage and $10,000 in PIP in order to operate a motor vehicle. If the driver is in a wreck and is found to be at fault, how much liability coverage must the driver have for total bodily injury per accident? A. $15,000 B. $20,000 C. $30,000 D. $10,000

B. $20,000

Dr. Smith has a claims-made malpractice insurance policy with a policy period from June 30, 2006 to June 30, 2007. Which claim would trigger this policy? A. A claim filed on September 20, 2007 for surgery performed on June 1, 2007 B. A claim filed on January 13, 2007 for surgery performed on June 28, 2005 C. A claim filed on October 24, 2007 for surgery performed on November 15, 2006 D. A claim filed on December 7, 2007 for surgery performed on June 1, 2006

B. A claim filed on January 13, 2007 for surgery performed on June 28, 2005

Describe: Additional coverages

Can be added to policy

Which of the following businesses would NOT need bailee coverage? A. A jewelry repair shop B. A dry cleaner C. A shoe repair shop D. A record store

D. A record store

Following a covered loss, which of these expenses would NOT be covered under Coverage F - Medical Payments in a homeowners policy? A. Funeral services B. Dental costs C. Hospital stays D. Weight loss surgery

D. Weight loss surgery

Define: Deductible

Predetermined amount of money that a policyholder must pay before the insurance company will pay the remaining cost

Define: Government support

Subsidized by the Federal Crop Insurance Corporation (FCIC) and regulated by the U.S. Department of Agriculture (USDA)

Define: Default judgment

Issued if policyholder fails to answer complaint

Define: Payment of property damage, bodily injury pending

Insurer indemnifies for property damage first; then bodily injury, when the amount is availalbe

How many negotiation techniques are there?

Eight

What is the fifth step in the claims process?

Investigating the losses

When a severe flood is imminent, Erica goes out and spends $600 on sandbags, $200 on plastic sheeting and lumber, and $500 on a pump. Then she works for 8 hours, applying the protective measures to her home. After the flood passes, Erica files a claim for these expenses. Assuming the federal minimum wage at that time is $10 per hour, how much will her flood policy indemnify her? A. $1,000 B. $1,080 C. $1,380 D. $1,300

A. $1,000

Half of Kevin's 100 acre corn farm was destroyed by wildfire. His MPCI policy has a yield guarantee of 60 bushels per acre per season, but due to the fire, he only actually produced 20 bushels per acre. Kevin's policy pays $3 per bushel. How much will his policy pay him for his loss? A. $12,000 B. $3,000 C. $9,000 D. $6,000

A. $12,000

Define: Breach of product warranty

Manufacturers are strictly liable for producing faulty or dangerous products

Define: Causes of loss forms

Attached to each farm coverage; either basic, broad, or special form

Define: Punitive damages

Awards money for malicious, willful misconduct on the part of the tortfeasor

Define: Compensatory damages

Awards money for tangible and intangible damages

What does the DP-1 basic form cover?

Fire Lightening Explosion

What are the 3 types of authority?

Express authority implied authority apparent authority

Define: Apparent authority

Granted when the insurer does not stop the agent from acting in a certain way, even when those actions do not adhere to the authority granted in the contract

Define: Fraud

Using dishonesty to profit from an insurance policy

Define: Insured

Individual or organization that pays premiums in exchange for protection

Define: Waiver of sovereign immunity

Individuals may sue government entities in certain cases

Darren suffers a $15,000 loss on his $250,000 home. Darren's homeowners' policy limit is $150,000. His insurer decides to apply the coinsurance penalty for not meeting the 80% coverage requirement. Ignoring any deductibles, how much money will Darren receive in indemnification?

$11,250

Under a BAP, a total loss is settled according to: A. Actual cash value B. Trade-in value C. Salvage value D. Replacement cost

A. Actual cash value

Which of the following is NOT one of the roles of the Florida Department of Financial Services? A. Licensing and regulating insurance companies B. Licensing adjusters and agents C. Investigating insurance fraud D. Acting as receiver for insolvent insurers

A. Licensing and regulating insurance companies

Define: Endorsements

Add or change coverage

Define: Risk retention group

An alternative to traditional insurance, owned by its members; provides liability coverage for multiple companies in the same business

Define: Occurrence

An event or circumstance that causes a loss

Define: Depreciation

An item's loss of value due to wear, tear, age, or obsolescence

Define: Speculative risk

Any risk in which gain is possible. Not insurable

What are the five options to dispute a resolution?

Arbitration Mediation Appraisal Declaratory Judgement Litigation

M City has a government crime discovery form with employee theft coverage of $50,000 per occurrence. One day, two of M's employees, Jarred and Damian, steal $45,000 and $50,000 respectively from M and skip town. M will receive _____ from its insurer. A. $0 B. $95,000 C. $50,000 D. $20,000

C. $50,000

Knowingly preventing disclosure of materially relevant facts in an insurance case is called: A. Fraud B. Representation C. Concealment D. Warranty

C. Concealment

Mental anguish would be an example of: A. Punitive damages B. Special damages C. General damages D. Tangible damages

C. General damages

Which of the following medical conditions would NOT be covered under the terms of a typical accident insurance contract? A. A dislocated shoulder B. A burn suffered in an explosion C. The removal of a cancerous tumor D. A broken leg suffered in a skiing accident

C. The removal of a cancerous tumor

Frank purchases an automobile policy from publicly-traded XYZ Insurance. He pays regular monthly premiums, and also purchases stock in XYZ and receives dividends when the company turns a profit. From which type of company has Frank purchased insurance? A. Re-insurer B. Mutual insurer C. Reciprocal insurer D. Stock insurer

D. Stock insurer

When Shawn purposefully set fire to Jim's restaurant, Jim was covered under his commercial property policy. Which condition allows Jim's insurer to attempt to reclaim those damages from Shawn? A. Vandalism B. Legal Action Against the Insurer C. Misrepresentation D. Subrogation

D. Subrogation

A Florida company that is assigned to "Tier 2" for coverage under FWCJUA must pay: A. a fee of up to 10% of its entire payroll. B. a fee of up to 5% of its entire payroll. C. rates that are 25% higher than voluntary market rates. D. rates that are 50% higher than voluntary market rates.

D. rates that are 50% higher than voluntary market rates.

Define: Hard fraud

Deliberately causing or faking losses

Define: Policy period

Inclusive period between inception and termination dates (usually ends at 12:01 AM on termination date)

Define: Liability policy limits

Maximum payout for each policy

Define: Statute of limitation

A plaintiff has a limited time to file a complaint after an occurrence

According to the employee retirement income security act (ERISA), an individual or corporation who exercises discretionary authority or control over the management of an employee benefit plan is called: A. A fiduciary B. An operations manager C. A broker D. An investor

A. A fiduciary

Jack has been appointed to manage Margaret's financial estate, but Margaret requires Jack to be bonded. What kind of bond might Jack seek? A. A fiduciary bond B. A performance bond C. A license or permit bond D. A payment bond

A. A fiduciary bond

In what part of a commercial property policy would you look to see if flood damage to your factory is covered? A. Causes of Loss Forms B. Declarations page C. Conditions page D. Coverage Forms

A. Causes of Loss Forms

If covered by an insurance policy, an insured may be indemnified for all of the following except: A. Home remodels B. Hotel bills C. Property repairs D. Rental cars

A. Home remodels

Direct excess coverage in the garage-keeper's policy compensates for gaps in which sort of insurance? A. Liability insurance B. Comprehensive coverage C. Uninsured and underinsured coverage D. Collision coverage

A. Liability insurance

Dennis was injured when Ruby rear-ended his car while he was stopped at a red light. Which of the following would NOT be a duty that Ruby's liability insurer may require of Dennis? A. Promptly report the occurrence to his insurer B. Submit tp a physical examination C. Provide proof of the accident D. Authorize access to his medical records

A. Promptly report the occurrence to his insurer

Amy needs more floor space in her antique furniture store, so she buys a storage building 3 miles away. She is worried about keeping the furniture in the storage building safe, so she puts in an alarm system and smoke detectors. By purchasing the alarm system and smoke detectors, Amy is practicing: A. Risk reduction B. Risk transference C. Risk avoidance D. Risk retention

A. Risk reduction

In a typical commercial property policy, an insured building is considered "vacant" when: A. for 60 days, the building is either closed or has less than 31% of its available square footage occupied. B. for 25 days, the building is either closed or has no business personal property located in the building. C. for 30 days, the building is either closed or has less than 61% of its available square footage occupied. D. for 45 days, the building is either closed or has no business personal property located in the building.

A. for 60 days, the building is either closed or has less than 31% of its available square footage occupied.

According to the workers' compensation policy conditions, the insurer has the right to: A. inspect the workplace at any time. B. interview the employer at any time. C. cancel the policy at any time. D. increase premiums at any time.

A. inspect the workplace at any time.

Citizens Insurance: A. is available to certain people who are not residents of Florida. B. can provide coverage for hotels. C. has no deductible for hurricane coverage. D. can provide coverage for a vacant property.

A. is available to certain people who are not residents of Florida.

In Florida, Uninsured/Underinsured Motorist Coverage: A. is required in every auto policy, unless the insured declines it in writing. B. cannot be stacked. C. is not available in a Personal Auto Policy. D. is mandatory for all drivers.

A. is required in every auto policy, unless the insured declines it in writing.

A homeowner's policy is called a "package" policy because: A. it bundles property and liability insurance into one policy. B. it bundles dwelling and auto insurance into one policy. C. another name for a "dwelling" is a "package." D. it bundles residential and commercial insurance into one policy.

A. it bundles property and liability insurance into one policy.

A company that wishes to obtain Workers Compensation insurance through FWCJUA must prove that: A. it has been denied coverage by at least two insurers in the voluntary market. B. it has been offered rates in the voluntary market at least 25% higher than the rates offered by FWCJUA. C. it has been denied coverage by at least three insurers in the voluntary market. D. it has been offered rates in the voluntary market at least 15% higher than the rates offered by FWCJUA.

A. it has been denied coverage by at least two insurers in the voluntary market.

What are the four options for responding to a claim?

Accept the request and pay the claim Reject the request and deny the claim Negotiate a settlement Dispute the resolution

What is the first step in the claims process?

Acknowledging the claim

Debris removal, reasonable repairs, ordinance or law, fire department service charge, and trees / shrubs / plants are all examples of what?

Additional coverages

What are the 3 responsibilities of an agent?

Adhere to contract at all times Use reasonable judgment Supply all pertinent information to the insurer

What are the four qualifications of a contract?

Agreement Consideration Competent parties Legal purpose

What are the duties of the insured?

Alert insurer if taken to court Send insurer all information pertaining to the case

Define: Valued policy (guaranteed value)

Assigns a set value to each insured item

Define: Supplementary payments

Assists policyholder with a variety of accident-related expenses (such as lost wages or bail bonds) and is not subject to liability limit

Define: Implied waiver

Assumed based on practice

What does risk retention do?

Assumes or accepts risk

Mark is driving along and looking for an address on the East side of Walker Street. As he squints to see the numbers posted on the buildings, he plows into the back of a car waiting at a stoplight. Both the driver and the passenger of the struck car are injured. The driver suffers $60,000 in bodily injury, the passenger suffers $55,000 in bodily injury, and the vehicle Mark hit sustains $30,000 in damage. Mark has liability coverage with split limits of 50 / 100 / 25. How much will Mark be responsible for out of pocket after this accident? A. $15,000 B. $20,000 C. None; Mark is totally covered by his policy D. $45,000

B. $20,000

Mark's house sustained $226,000 of damage in a flood. When Mark applies for the permits needed to repair the damage, he discovers that there are new building codes, and he will have to raise his house nine inches to bring it into compliance, which adds $20,000 to his repair costs. Mark's flood policy has a coverage A limit of $240,000. Ignoring the deductible, how much will Mark's SFIP pay him for this claim? A. $240,000 B. $246,000 C. $256,000 D. $250,000

B. $246,000

Kelly Supply purchases a claims-made CGL policy with a policy period of March 15, 2005 to March 15, 2006. The retroactive date is established as January 1, 2001. Which of the following events would trigger Kelly Supply's policy to respond? A. The policy would respond to any injury suffered during the policy period. B. A claim filed on May 10, 2005, for an injury suffered on March 1, 2004 C. A claim filed on May 10, 2005, for an injury suffered on November 15, 2000 D. An occurrence on November 2, 2005, regardless of when the claim is filed

B. A claim filed on May 10, 2005, for an injury suffered on March 1, 2004

Which of the following statements regarding actual cash value is FALSE? A. A replacement cost valuation will generally be more than the ACV valuation B. Actual cash value is always most beneficial to a policyholder C. The actual cash value generally reflects the market value of an item D. Actual cash value includes the depreciation on an item

B. Actual cash value is always most beneficial to a policyholder

Which of the following statements about health maintenance organizations is FALSE? A. An HMO assigns a primary physician to each policyholder B. An HMO will pay for both in-network and non-network care, but only up to the amount established by network providers C. An HMO establishes a network of care providers D. HMO's promote health and wellness programs for policyholders in order to curb healthcare costs

B. An HMO will pay for both in-network and non-network care, but only up to the amount established by network providers

Which of the following statements is FALSE? A. An agent is authorized to act as a representative of another party B. An agent always has a fiduciary duty to defend the claimant C. An agent may represent more than one party D. An agent's actions are construed as those of the party she represents

B. An agent always has a fiduciary duty to defend the claimant

Which of the following is NOT a qualification of an insurable risk? A. An insurable risk must have definable parameters B. An insurable risk must have guaranteed protection from damage C. An insurer must be able to charge premiums high enough to pay out claims D. An insurable risk must have a quantifiable value

B. An insurable risk must have guaranteed protection from damage

Driving home after a 14-hour shift, Sam falls asleep at the wheel and plows into Sandra's home, causing extensive damage to the East wall and roof. As a result, Sandra and her family must move into a hotel until the repairs are completed. Sam's car crashing into the house would be considered: A. An out-of-pocket expense B. An occurrence C. A physical hazard D. An indirect loss

B. An occurrence

A reciprocal insurer is: A. A publicly-traded insurance company owned by stockholders, which provide capital and participate in the insurer's profits and losses B. An unincorporated organization of subscribers that operates through an attorney-in-fact to provide insurance benefits for its members C. An insurance company that is owned by its policyholders, is not traded publicly, and is governed by a board of directors elected by the policyholders D. A non-profit mutual aid organization that engages in charitable or benevolent activities and provides insurance to its members

B. An unincorporated organization of subscribers that operates through an attorney-in-fact to provide insurance benefits for its members

Greg was in the process of completing the CE for his Florida adjuster license when unforeseen circumstances made it necessary for him to drop everything and take care of his aging mother for a year. Now, Greg's license is about to expire and he does not have the CE credits he needs. What should he do? A. Surrender his license to the Department of Financial Services for one year. B. Apply to the Department of Financial Services for an extension. C. Pay a fine of $500 before renewing his license. D. Submit a written request to the Department of Financial Services for a waiver of the CE requirements.

B. Apply to the Department of Financial Services for an extension.

In order to adjust claims for the NFIP, adjusters must meet several requirements. Which of the following is NOT one of these requirements? A. Have at least 4 consecutive years of full time property loss adjusting experience B. Attend an NFIP claims presentation every 3 months C. Be NFIP certified D. Attend an NFIP claims presentation annually

B. Attend an NFIP claims presentation every 3 months

Bobby just purchased an insurance policy for his home from XYZ Insurance. Which of the following would be a reason this policy may not be legally binding? A. Bobby paid his first premium when he and his agent agreed on a policy, but he is waiting for the policy documents to be prepared so he can sign them B. Bobby has been diagnosed as mentally incompetent C. Bobby has an outstanding warrant for selling marijuana D. Bobby is only 19 years old

B. Bobby has been diagnosed as mentally incompetent

Amanda is walking her dog in a rural area when a small plane suddenly crashes only 15 feet in front of her. Amanda is not hurt, but she is so distressed that she files an insurance claim for mental anguish. Which aviation coverage would pay this claim? A. Passenger bodily injury liability B. Bodily injury excluding passengers C. All risks - ground and flight D. All risks - not in motion

B. Bodily injury excluding passengers

Argo Sciences Inc. wants to build a new testing laboratory for their line of chemicals. They want insurance coverage to protect their insurable interest in the building and materials while under construction. What commercial property coverage might Argo Sciences Inc. purchase to protect their new facility while it's under construction? A. Preservation of Property B. Builder's Risk coverage C. Extra Expense coverage D. Business Income coverage

B. Builder's Risk coverage

A government crime policy: A. Is always primary B. Can provide primary or excess coverage C. Only provides excess coverage D. Always pays on a pro-rata basis along with any other applicable policy

B. Can provide primary or excess coverage

Which of the following is NOT a benefit of a co-insurance clause? A. The policyholder gets sufficient coverage B. Co-insurance reduces the risk of damage to a home C. Partial losses to insured property will be covered at 100% D. The insurer receives ample premiums to cover the risk of providing an insurance policy

B. Co-insurance reduces the risk of damage to a home

X County has a government crime policy in place. During the policy period, X County hires twelve new deputies for the sheriff's office and five new employees for the county's public libraries. X County: A. Must inform its insurer of the new employees, and its premiums are likely to increase as a result B. Has no obligation to notify its insurer of the new employees, and its premiums will not increase during the current policy period C. Must notify its insurer of the new hires, but its premiums will not increase during the current policy period D. Must have written consent from its insurer before finalizing the new hires

B. Has no obligation to notify its insurer of the new employees, and its premiums will not increase during the current policy period

Which of the following statements is TRUE about a suretyship? A. An obligee always guarantees the work of the surety B. If a principal fails to meet the terms of the contract, the surety is responsible for completing the contract for the obligee C. An indemnitor is always responsible for indemnifying the principal D.A surety bond requires two or more parties

B. If a principal fails to meet the terms of the contract, the surety is responsible for completing the contract for the obligee

A thief breaks into XYZ Metals and steals 100 travelers checks the company had purchased for their employees as a bonus. Which commercial crime coverage would indemnify XYZ Metals for their loss? A. Inside the premises - robbery or safe burglary of other property B. Inside the premises - theft of money and securities C. Forgery or alteration D. Employee theft

B. Inside the premises - theft of money and securities

Jim is currently working on a property damage claim, gathering evidence, reviewing police reports, and interviewing witnesses. In which stage of the claim adjusting process is Jim currently working? A. Evaluation B. Investigation C. Resolution D. Negotiation

B. Investigation

Nancy and Drew borrow Joe's car so they can have a picnic at the old water tower. On their way to the picnic, Drew accidently rear ends Mr. Jackley, causing $2,900 in damage. Whose liability insurance will pay first for the damages? A. Mr. Jackley's B. Joe's C. Nancy's D. Drew's

B. Joe's

Knightley Insurance Co. decides not to renew Emma's homeowners policy, which she has had for 6 years. Which of these statements is TRUE? A. Emma can keep her policy active by paying the next year's annual premium in advance. B. Knightley Insurance must notify Emma of the non-renewal at least 120 days before her policy expires. C. Knightley Insurance must submit an application on Emma's behalf for coverage under the Citizens Property Insurance Corporation. D. Knightley Insurance may not terminate Emma's policy because it has been in effect for over 5 years.

B. Knightley Insurance must notify Emma of the non-renewal at least 120 days before her policy expires.

Which of the following BEST describes how covered losses are settled under a typical equipment breakdown protection coverage form? A. Losses are paid at replacement cost if the replacement or repair occurs within 12 months of the accident B. Losses are normally paid at replacement cost, but an insured may change this with an actual cash value endorsement C. Losses are paid at actual cash value D. Losses are normally paid at actual cash value, but an insured may change this with a replacement cost endorsement

B. Losses are normally paid at replacement cost, but an insured may change this with an actual cash value endorsement

Matt offers to lend Shawn his truck so he can pick up some stones from his landscaping project. Matt tells Shawn, "Don't worry, my truck is insured." What is Matt really saying? A. Shawn is protected from damage while driving Matt's truck B. Matt's financial interest in the truck is protected, should a covered loss occur C. Shawn's financial interest in the truck is protected, should a covered loss occur D. Matt's truck is protected from damage

B. Matt's financial interest in the truck is protected, should a covered loss occur

A witness who has had a recorded interview: A. Must have a lawyer present during the interview B. Must have a chance to correct anything that is incorrect C. Is taken more seriously D. Must do so under oath

B. Must have a chance to correct anything that is incorrect

Josephine has purchased a business owners policy. She insures both the real and personal property at 80% under the policy. Assuming no endorsements apply, the losses will be adjusted on a(n) _____ basis. A. Market value B. Replacement cost C. Actual cash value D. Functional replacement cost

B. Replacement cost

How can insurance companies afford to pay for an individual's catastrophic loss? A. The insurer will deny claims if it doesn't have enough money in the bank B. The insurer collects premiums from all policyholders and pools them to pay the claims of the few C. The insurer puts each insured's premium payments into an interest-bearing account, which is then used to pay for that insured's claims, if they occur D. The insurer will only pay up to the amount already collected from each insured

B. The insurer collects premiums from all policyholders and pools them to pay the claims of the few

Adam has a treacherous drive to work every day. Not only does he have to drive down the pothole-strewn access road to the highway, but he also must traverse several icy bridges on the way to work. Why does the insurance company call these hazards "physical hazards"? A. Adam is indifferent to any losses he may suffer B. The roads present a physical condition that increases the chance of a loss C. Adam doesn't consciously choose to take this route D. They take a toll on Adam physically, increasing the chance of a loss

B. The roads present a physical condition that increases the chance of a loss

Jill arrives to open the bank one morning to find the door hanging open. Upon entering the bank she sees the vault door has been blown open, most of the money has been stolen, and a large amount of money was burned when the explosive charge went off. Luckily, the bank has a commercial crime policy. Which of the following best describes what would be covered under inside the premises: theft of money and securities? A. The stolen money and the damage to the vault B. The stolen money, the destroyed money, and the damage to the vault C. The stolen money D. The stolen money and the destroyed money

B. The stolen money, the destroyed money, and the damage to the vault

Which of the following is NOT a reason to purchase umbrella liability coverage? A. To avoid paying out of pocket for liability exceeding the limit of your liability insurance B. To reduce your insurance costs C. To provide higher liability limits and broader coverage D. To provide coverage for things the underlying coverage excludes

B. To reduce your insurance costs

When Bill's business is interrupted because of a fire, he must provide a profit and loss statement to his insurer so they can determine an accurate amount of indemnification. Which three core elements from the profit and loss statement are used to calculate the net income? A. Operating expenses, inflation, cost of goods sold B. Total revenue, cost of goods sold, operating expenses C. Inflation, depreciation, cost of goods sold D. Total revenue, inflation, operating expenses

B. Total revenue, cost of goods sold, operating expenses

Vicarious liability _____ negligence. A. Negates B. Transfers C. Causes D. Prevents

B. Transfers

Which of the following types of insurance will sometimes cover losses that the base (underlying) policy will not? A. Stand alone excess liability B. Umbrella C. Base-plus liability D. Follow form excess liability

B. Umbrella

An insurance applicant revealing his convictions for drunk driving to an insurer is an example of: A. An aleatory contract B. Utmost good faith C. A contract of adhesion D. A unilateral contract

B. Utmost good faith

Insurers often protect themselves from providing insurance to people who are already ill by inserting which type of clause into a health insurance contract? A. Grace period B. Waiting period C. Time limit on defenses D. Double indemnity

B. Waiting period

A risk retention group can provide all of the following kinds of insurance, EXCEPT: A. Professional liability B. Workers compensation C. Medical malpractice D. Product liability

B. Workers compensation

A typical workers' compensation policy combines two basic forms of coverage. They are: A. Workers' Compensation and Products Liability B. Workers' Compensation and Employers Liability C. Professional Liability and Medical Payments D. Bodily Injury and Health

B. Workers' Compensation and Employers Liability

Define: Common law

Based on court cases and customs

Define: Statutory law

Based on written, legislated laws

Frank purchased a $150,000 insurance policy for his home, which is valued at $125,000, with the hopes of making a $25,000 profit in the event his home is destroyed. After Frank burns his house down, he files a claim against his homeowners policy. Assuming that Frank's policy includes an over-insurance provision, how much will his insurer indemnify Frank for his loss? A. $125,000 B. $25,000 C. $0 D. $150,000

C. $0

In which of the following cases would mechanical breakdown insurance NOT apply? A. Sam's car transmission wears out B. During a long incline in Colorado, Seth's engine overheats, damaging the pistons C. A rock strikes and shatters Horace's windshield D. The air conditioning

C. A rock strikes and shatters Horace's windshield

Which of the following losses would NOT be covered under the hull coverage of an ocean marine policy? A. A ship catches fire and sinks 10 miles from the destination port B. A bolt of lightning damages the wheelhouse of a ship during a storm C. A ship wanders into a war zone, is fired upon, and is struck by a missile D. A ship is hijacked by pirates and grounded in a war-torn country

C. A ship wanders into a war zone, is fired upon, and is struck by a missile

Adam is shopping for a car in a local automobile dealership. While visiting the showroom, he trips over a rug that has folded over and breaks his arm in the fall. Which of the following is true? A. The automobile dealership may file a third party claim with its own insurance company B. Adam may file a first party claim with the dealership's insurance company C. Adam may file a third party claim with the dealership's insurance company D. The automobile dealership may file a first party claim with its own insurance company

C. Adam may file a third party claim with the dealership's insurance company

During catastrophes, which of the following is TRUE? A. Emergency adjusters from other states must leave the state of Florida immediately after 90 days. B. An adjuster licensed in another state can get a temporary license to adjust claims in Florida, valid for 240 days. C. Adjusters licensed in other states can act as emergency adjusters in Florida. D. Anyone with construction experience can act as an emergency adjuster in Florida.

C. Adjusters licensed in other states can act as emergency adjusters in Florida.

Which of the following statements is NOT true of an insurance adjuster? A. An insurance adjuster who settles claims on behalf of an insurer has the power to bind that insurer, even if she makes a mistake B. An insurance adjuster is an agent C. An insurance adjuster receives her authority to sell products on behalf of the insurer through a written contract D. An insurance adjuster must always use reasonable judgment for both the insurer and the claimant

C. An insurance adjuster receives her authority to sell products on behalf of the insurer through a written contract

Which of the following lines of coverage could be found in a commercial package policy? A. Workers' compensation insurance B. Disability insurance C. Business auto insurance D. Health insurance

C. Business auto insurance

In the Business and Personal Property Form of a commercial property policy, Coverage B - Business Personal Property coverage applies to all of the following EXCEPT: A. Leased office equipment B. Office furniture C. Commercial flooring D. Business stock

C. Commercial flooring

Josephine's gas stations suffered severe damage when one of the fuel tanks caught fire and exploded. After completing his inspection, the adjuster determines that Josephine's claim is not covered because she did not have automatic shut-offs for the fuel tanks. If this safety measure was in fact required in order for coverage to apply, where might Josephine find it on the policy? A. Endorsements B. Exclusions C. Conditions D. Declarations

C. Conditions

Which Business Auto Policy endorsement covers employees while using their personal cars for business purposes? A. Mobile Equipment B. Drive Other Car The Drive Other Car endorsement names specific people who are covered, with their spouses, for the use of cars that they do not own and that are not covered under the BAP. Employee as Additional Insured covers employees while driving their own car for business purposes. C. Employee as Additional Insured D. Individual Named Insured

C. Employee as Additional Insured

James signed a contract with XYZ Insurance that enables him to sell insurance policies and collect premiums on their behalf. What authority has James been granted? A. Implied authority B. Full authority C. Express authority D. Apparent authority

C. Express authority

ABC Paving owns a warehouse where they store all their pavers. Lightning strikes the warehouse, which burns to the ground and destroys the entire fleet of pavers. In order to complete the projects they are currently working on, ABC Paving has to lease four pavers from another company. What commercial insurance coverage might pay for this expense? A. Preservation of Property B. Legal Liability C. Extra Expense D. Order of Civil Authority

C. Extra Expense

Jane owns an aquarium supplies store and purchases a business owners policy to protect her assets. Which of the following protections can Jane expect from her standard BOP with no endorsements? A. Insurance for her company-owned vehicles B. Malpractice insurance C. Extra expense coverage D. Named peril coverage

C. Extra expense coverage

Bill's insurance policy will pay for the entire loss, up to the limit, as long as the loss exceeds a set amount. What type of deductible does Bill have? A. Fixed deductible B. Percentage deductible C. Franchise deductible

C. Franchise deductible

ABC Paints needs to ship 100,000 gallons of house paint to China. The cost of actually shipping the paint would be called the: A. Indemnity B. Cargo C. Freight D. Fee on-board

C. Freight

In a commercial property policy, Extra Expense Coverage provides indemnification to the policyholder for additional expenses incurred during which of the following time frames? A. From 72 hours after the initial damage until the business is up and running again B. From 72 hours after the initial damage until 72 hours before the business is up and running again C. From the point of initial damage until the moment the business is up and running again D. From the point of initial damage until 72 hours before the business is up and running again

C. From the point of initial damage until the moment the business is up and running again

Ben's automobile was struck by another driver, Roxanne. Ben files a claim with Roxanne's insurer, who accepts the claim. Ben signs a release form and is issued a check that covers all damage to his car. Which settlement type would this fall under? A. No release settlement B. Partial release settlement C. Full release settlement D. Advanced payment

C. Full release settlement

This provision in Ocean Marine insurance obligates insurers of various interests to share the cost of losses associated with a captain's decision to voluntarily sacrifice a part of the ship or its cargo. A. Particular Average B. Loss of Vessel C. General Average D. Sue and Labor

C. General Average

An adjuster who has just taken witness statements for a claim she is currently investigating, but is not yet ready to close the claim, may submit to the insurer a / an: A. Preliminary report B. Witness deposition report C. Interim report D. Full report

C. Interim report

Roger is an insurance adjuster. He has just arrived at the claimant's home with an engineer in order to determine the exact repair costs of repairing the home's foundation that was damaged in an earthquake. Which step of the claim process is Roger currently engaged in? A. Reporting B. Negotiation C. Investigation D. Claims management

C. Investigation

Which of the following statements about multi-peril crop insurance is FALSE? A. It is subsidized by the government B. It covers frost C. It covers losses caused by "poor farming practices" D. It covers hail

C. It covers losses caused by "poor farming practices"

Which of the following statements about federal crop insurance is FALSE? A. It was first authorized in the 1930s B. It is regulated by the Risk Management Agency under the USDA C. It is mandatory for all farmers who sell their produce for a profit on the open market D. It is supervised on a national level by the National Crop Insurance Services

C. It is mandatory for all farmers who sell their produce for a profit on the open market

Which of the following statements about the livestock floater is FALSE? A. It would not indemnify Grayson for the loss of his chickens in a hailstorm B. It would provide coverage for Shari's mules, regardless of whether she itemized the animals on the application or not C. It would provide open peril coverage for Dale's horses, cattle, and sheep D. It would indemnify Kate if her goats were killed during transport in a collision with another vehicle

C. It would provide open peril coverage for Dale's horses, cattle, and sheep

Jason has an MPCI policy on his corn crop. All of the following statements could be true of Jason's policy, EXCEPT: A. Jason's policy covers him for damage to his crop caused by weather0related perils B. Jason's policy protects him against damage to his crop from wildlife and insects C. Jason's policy was rated per acre D. Jason's policy coverage is based on a percentage of his actual production history

C. Jason's policy was rated per acre

Joe's homeowners policy has a single limit of $150,000 for bodily injury liability coverage. One day, Joe's friend was injured in an accident on Joe's property, and the medical bills came to $15,000, which were covered by Joe's homeowners policy. Which of the following is TRUE? A. Joe's policy still has $150,000 available for bodily injury liability coverage B. Joe's per occurrence limit has been reduced by $15,000, but the aggregate limit is unchanged C. Joe's aggregate limit has been reduced by $15,000, but the occurrence limit is unchanged D. Joe's policy now has a $135,000 available for bodily injury liability coverage

C. Joe's aggregate limit has been reduced by $15,000, but the occurrence limit is unchanged

Acme Insurance is trying to attract new commercial clients, so they decide to broaden coverage for business personal property items without increasing the premium. Which condition would allow the current clients of Acme Insurance to benefit from the newly expanded coverage? A. Policy Period B. Changes in Policy C. Liberalization D. Control of Property

C. Liberalization

Jim has several trailers in the supply yard of his business which belong to his respective buyers. Jim's business loads the trailers and then contracts with another company to ship the goods to their final destination. One day while loading up a trailer, Jim accidentally pierced the side of a covered trailer with his forklift. The damage to the trailer would be covered by the _____________ coverage extension. A. Newly-Acquired Property B. Outdoor Property C. Non-Owned Detached Trailers D. Property of Others

C. Non-Owned Detached Trailers

ABC Computers experiences a fire overnight at their corporate offices. ABC Computers had purchased an older building to house their offices, and the repair costs include upgrading the old building to adhere to modern fire codes. Which coverage might indemnify ABC Computers for the added expense of these upgrades? A. Legal Liability coverage B. Builders Risk coverage C. Ordinance or Law endorsement D. Extra Expense coverage

C. Ordinance or Law endorsement

Ryan occasionally uses his new personal iPad at work to handle business matters since it's portable and can easily set up video conferences. He has a computer and another tablet at home, so he usually leaves the iPad at work, locked in his desk drawer. One morning Ryan arrives at work to find a massive sinkhole has opened up underneath the business, swallowing the interior. Which coverage extension in a commercial property policy may pay for Ryan's iPad? A. Newly Acquired Property B. None C. Personal Effects and Property of Others D. Property Off-Premise

C. Personal Effects and Property of Others

A discussion of ethics in insurance adjusting would not focus on: A. Bias B. Equality C. Premiums D. Fiduciary duty

C. Premiums

Sean is negotiating a claim with a claimant and wants to show his flexibility. By making minor changes in the acceptance offer, he shows there is some "wiggle room." The two reach an agreement, and Sean heads back to the office, only to find that he has drastically over-extended the offer. Where did Sean go wrong in the negotiating process? A. Sean should have called the insurer after reaching an agreement with the claimant, making sure he didn't exceed the maximum amount the insurer was willing to pay B. Sean needed to make sure he received something in return - in favor of the insurer C. Sean failed to know his limits and did not use "stop marks" when modifying the acceptance offer D. Sean violated the first rule of negotiations: never give in

C. Sean failed to know his limits and did not use "stop marks" when modifying the acceptance offer

The valuable papers and records floater can cover losses to all of the following, EXCEPT: A. Deeds B. Books C. Securities D. Maps

C. Securities

For a bodily injury liability claim, the adjuster must determine all of the following, EXCEPT: A. The severity of the injury B. The presence of any pre-existing conditions C. The amount of punitive damages requested D. The type of injury

C. The amount of punitive damages requested

A fidelity bond provides a guarantee that an employee will NOT perform certain acts, such as theft or fraud. Who is the obligee in a fidelity bond? A. The employee B. The customer C. The employer D. The insurer

C. The employer

Which item would NOT belong in an adjuster's initial report on a claim? A. The date that the adjuster first contacts the claimant B. A list of all known circumstances surrounding the claim C. The final settlement amount D. A detailed list of the damages being claimed

C. The final settlement amount

Sovereign immunity restricts an individual's ability to file a lawsuit against: A. An insurance company B. A defendant C. The government D. An individual or organization that deals with dangerous instrumentalities

C. The government

What is the primary distinguishing characteristic of a contract of adhesion? A. A contract of adhesion takes precedence over a contract of utmost good faith B. A contract of adhesion benefits only one party to the contract C. The amounts exchanged over the course of the contract are unequal D. A contract of adhesion implies an unequal balance of power in the creation of the contract

D. A contract of adhesion implies an unequal balance of power in the creation of the contract

Which of the following personal property items does NOT have a special limit of liability in the Homeowners forms? A. Firearms B. Jewelry C. Cash D. Books

D. Books

Which of these claims would NOT be covered by Personal and Advertising Injury coverage in a Commercial General Liability policy? A. False arrest B. Wrongful eviction C. Libel D. Physical impairment

D. Physical impairment

When Emma's house was burglarized, the thieves stole several pieces from her art collection. Although the pieces were only prints, Emma files a claim stating that they were originals, and therefore worth a good deal more than they really are. What has Emma committed? A. Hard fraud B. Concealment C. Tortfeasor D. Soft fraud

D. Soft fraud

Define: Complaint

Filed by a claimant against a policyholder

What is included in a preliminary report?

Initial investigation results, timeline of claim, initial claim reserve

An _____ must also cooperate with the insurer's investigation (not just the policyholder)

Injured third party

Mobile agricultural machinery and equipment and livestock floater are examples of what?

Inland marine forms

Define: Personal lines

Insurance an individual takes out on a risk owned for personal reasons (a home, a minivan, land, etc.)

Define: Re-insurer

Insurance for insurers

Define: Homeowners insurance

Insurance for property inhabited by the insured, includes house, apartment, and condos

These two clauses protect lender's interest:

Loss Payee Mortgagee

Describe: Coverage D

Loss of use

Define: Third party claim

Made by anyone other than the policyholder

Define: Part B - medical payments

Optional, no-fault coverage for insured's own bodily injuries resulting from car accidents

Define: Insured

Person or organization purchasing the policy

What are the 3 types of adjuster reports?

Preliminary Interim Final

What is the ninth step in the claims process?

Preparing final reports

Define: Control of property policy provision

Protects insured's property from negligent actions committed by other people

Define: Waiver

Relinquishing a right, claim, or privilege

Define: Principle of indemnity

Restoration to previous financial condition; no more, no less

What are the 4 risk management techniques?

Risk avoidance Risk reduction Risk transference Risk retention

Define: Independent agent

Self-employed; sells insurance from many insurers

Define: Binder

Temporary coverage until policy is issued

Define: Fiduciary agent

The adjuster acts on behalf of principal and must protect the principal's interests

Define: Peril

The cause of damage or loss

Define: Tortfeasor

The defendant in the court case

Define: Liability limits

The insured may also pay a higher premium in exchange for higher liability limits (such as 50 / 100 / 50 or 100 / 200 / 100)

Who has the right to inspect a company's insured premises, as well as company books and records?

The insurer

Define: Lender interest

The lender's financial stake in an insured item

Define: General agent

Trains and supervises exclusive agents for an insurer

Define: Insurance

Transfers risk of financial losses from one party to another

Define: Negligent tort

Unintentional wrongful act

What is included in an interim report?

Update on progress of claim due at set intervals

Define: Loss settlement valuations

Usually ACV; coinsurance required for RC valuations

Define: Salvage

Value remaining after a loss

What is the acronym for extended coverages?

W.C. SHAVER

When should you negotiate a settlement?

When the claimant's offer is within a reasonable range of the insurer's

Define: Actual total loss

When the insured item is completely destroyed beyond repair or recovery

Define: Express waiver

Written

During a sudden thunderstorm, a small tree in Herman's yard is blown down. One of the branches breaks a window, allowing rain to enter the living room and damage a sofa. Is this loss covered?

Yes

Define: Insurer

Agency or company providing indemnity for loss

3,200 acres of Jonathan's 40,000 acre farm of green beans were destroyed by wildfire. Jonathan has crop-hail insurance with a $60,000 limit and a 10% minimum loss threshold. How much indemnification can Jonathan expect to receive when he files a claim for this loss? A. $6,000 B. $0 C. $4,800 D. $2,133

B. $0

Cost, insurance, and freight (CIF) coverage would be purchased by the _____ of goods. A. Buyer B. Seller C. Receiver D. Insurer

B. Seller

An insured's _____ does not relieve the insurer from its obligation to pay covered claims

Bankruptcy

In January, a faulty pipe burst at Sunshine Farms, letting animal waste flow from some of their farms into the county's water supply. In September of that year, the EPA inspects Sunshine Farms' facility, discovers the animal waste pollution, and fines the company $500,000. In addition to the fine, Sunshine Farms will have to pay $300,000 in decontamination expenses and $150,000 to build an EPA-compliant waste management system for the farm. How much of this will be covered under Sunshine Farms' pollution cleanup and removal insurance? A. $800,000 B. $300,000 C. $0 D. $650,000

C. $0

While making a right-hand turn from the right lane, Ben is sideswiped by Roxanne, totaling the car he bought new 12 years ago for $15,000. Roxanne is judged to be at fault. She has an auto policy with a $500 deductible on her collision coverage. Assuming Ben's car depreciates at a rate of $1,100 a year, how much will Roxanne have to pay out of pocket when Ben files a claim against her insurer for the damages? A. $1,800 B. $500 C. $0 D. $1,100

C. $0

Melanie owns a set of 3 antique crystal vases that is worth $2,800, but during her most recent move, one of the vases was broken beyond repair. Melanie and her insurer have been unable to find a replacement vase to complete the set and bring it back to its original value. Without the broken vase, the remainder of the set is only worth $1,000. What should Melanie receive from the insurer under the pair and set provision of her personal articles floater? A. $933 B. $0 C. $1,800 D. $2,800

C. $1,800

A cargo ship's hull policy has a franchise deductible of $100,000. The vessel sustains $150,000 worth of damage due to a fire. How much will the insurer be responsible for? A. $50,000 B. $0 C. $150,000 D. $100,000

C. $150,000

Define: Insurer

Company, group, or government agency offering financial protection

Which of the following statements about the standard flood insurance policy is FALSE? A. It is available through the direct program and the write your own program B. It is governed by federal law C. IT is not subject to local courts D. IT is subject to state courts

D. IT is subject to state courts

What is the insurer obligated to do?

Defend the insured in a court case

What does risk avoidance do?

Eliminates risk

What are the 2 types of waivers?

Express waivers Implied waivers

_____ must fulfill several duties after a loss.

Insureds

Define: Direct loss

Physical harm to tangible property

What does risk reduction do?

Reduces or mitigates risk

Define: Part F - General provisions

Rules regarding cancellation or changes to the policy, subrogation, legal action against the insurer, etc.

Define: Single limit

A fixed limit for each type of damage

Define: Soft fraud

Exaggerating a claim

Define: Replacement cost claims process

Insurer only pays full amount after repairs are done

Define: Proximate cause

The original occurrence in an unbroken chain of events that results in a loss

What is the co-insurance penalty equation?

"Had" / "should have had" x the partial loss

Darren suffers a $15,000 loss on his $250,000 home. Darren's homeowners' policy limit is $150,000. His insurer decides to apply the coinsurance penalty for not meeting the 80% coverage requirement. How much insurance should Darren have had in order to avoid the coinsurance penalty?

$200,000

Loggers, roofers, and coal miners would fall into which of the following categories? A. High-risk employees B. High-maintenance employees C. Low-risk employees D. Low-maintenance employees

A. High-risk employees

Matching: 1. Conditions 2. Declarations 3. Exclusions 4. Endorsements 5. Definitions 6. Insuring agreement A. Lists requirements that the insured must meet for coverage to apply. B. Essence of the contract. Summarizes what the insurer will cover and how. C. Information that makes the policy unique to a specific insured. D. Add, reduce, or change the coverage of the policy in some way. E. Explains exactly what specific words mean in the context of the policy. F. Causes of loss or items of property that are not covered by the policy.

1 - A 2 - C 3 - F 4 - D 5 - E 6 - B

Matching: 1. Replacement cost 2. Actual cash value 3. Annual depreciation 4. Accumulated Depreciation 5. Valued policy 6. Valuation A. An item's annual depreciation multiplied by its age B. Assigns a set value to each insured item C. Replacement cost divided by item's useful life D. The process of estimating what an item is worth E. Cost to replace an item at today's market value F. Replacement cost minus accumulated depreciation

1 - E 2 - F 3 - C 4 - A 5 - B 6 - D

Put the claims process in order: 1. The insurer accepts or rejects the claim 2. The insurer acknowledges the claim and requests all items necessary to prove the loss 3. The claimant contacts the insurer and files a claim 4. If valid, the adjuster evaluates the claim 5. The adjuster investigates the claim and determines whether it is valid

3, 2, 5, 4, 1

Darren suffers a $15,000 loss on his $250,000 home. Darren's homeowners' policy limit is $150,000. His insurer decides to apply the coinsurance penalty for not meeting the 80% coverage requirement. What percentage of the loss will be paid after the application of the coinsurance penalty?

75%

Define: Insurance policy

A legally binding contract in which the insurer agrees to take on specific risks in exchange for the insured's premiums

Define: Representation

A statement assumed to be true

Define: Percentage deductible

A percentage of the property's value

Define: Claimant

A person or entity that requests indemnification for losses under the terms of an insurance policy

Rejecting the request and denying the claim requires what?

A written explanation

Lightning destroys a $5,000 satellite dish that Farmer Carla recently installed. Assuming Carla meets the 80% coinsurance requirement, how much would her farm policy pay for the damages to the satellite dish? A. $1,000 - The policy covers only satellites and antennas at $1,000 per occurrence B. $4,000 - The policy covers 80% of the satellite dish C. $5,000 - The full cost of the satellite is covered D. $0 - Satellites and antennas are not covered

A. $1,000 - The policy covers only satellites and antennas at $1,000 per occurrence

Jerome was shopping at ABC Imports when a light fixture fell from the ceiling and hit him on the head. Jerome's injuries resulted in an extended hospital stay, so he sued ABC Imports and was awarded $400,000. Assuming ABC Imports carries a CGL with a General Aggregate of $750,000 and a Per Occurrence limit of $250,000, how much will ABC Imports have to pay out-of-pocket? A. $150,000 B. $400,000 C. $250,000 D. $0

A. $150,000

Mark is driving along and looking for an address on the East side of Walker Street. As he squints to see the numbers posted on the buildings, he plows into the back of a car waiting at a stoplight. Both the driver and the passenger of the struck car are injured. The driver suffers $70,000 in bodily injury, the passenger suffers $65,000 in bodily injury, and the vehicle Mark hit sustains $30,000 in damage. Mark has liability coverage with split limits of 50/100/25, and both injured people carry the minimum PIP for Florida. How much will Mark be responsible for out-of-pocket after this accident? A. $20,000 B. None; Mark is totally covered by his policy. C. $15,000 D. $45,000

A. $20,000

Terry is fully insured by his farm policy. When a tornado rips through Terry's farm, it destroys a barn with $15,600, a corral and two livestock chutes worth $6,200, and a light pole worth $400. How much indemnification can Terry expect to receive for this claim? A. $22,050 B. $21,800 C. $22,200 D. $22,750

A. $22,050

Extended coverage under a commercial policy often provides coverage for damage to outdoor trees, plants, and shrubs. When covered, what is the maximum per-plant amount? A. $250 B. $200 C. $100 D. $50

A. $250

A fire in John's factory causes him to shut the doors for 90 days. While repairs take place, John rents another building, along with some machinery and manufacturing supplies, for $90,000. John's total loss is $300,000, but by renting the new building and equipment he manages to reduce that loss by $50,000. Assuming John's commercial property policy provides Business Income Coverage Without Extra Expense, how much will his insurer indemnify him? A. $300,000 B. $210,000 C. $260,000 D. $50,000

A. $300,000

Noreen is a professional photographer, and she has a personal articles floater that covers her best camera for up to $6,000. While she is working a wedding, the camera gets knocked into a pool and is ruined. Before the accident, her camera was worth $5,000, but a new, comparable one would cost her $7,000. How much will Noreen's PAF pay her for this loss? A. $5,000 B. $6,000 C. $0 D. $7,000

A. $5,000

George owns a shipping company that transports goods all over the world. While sailing across the Atlantic, a mighty storm gathers and his vessel sustains $700,000 worth of damage. Assuming the ship had a $550,000 franchise deductible, how much of the damages would George's policy cover? A. $700,000 B. $550,000 C. $150,000 D. $0

A. $700,000

The HIPAA was enacted by the US Congress in _________. A. 1996 B. 1986 C. 2003 D. 1967

A. 1996

In a BOP, newly acquired properties coverage provides _____ of insurance for new buildings under construction or newly acquired business properties located off the insured premises. A. 30 days B. 60 days C. 14 days D. 4 days

A. 30 days

Under the Longshore and Harbor Workers' Compensation Act, how much would the surviving spouse of a deceased worker receive in benefits? A. 50% of the deceased worker's Average Weekly Wage B. 66 2/3% of the deceased worker's Average Weekly Wage C. 16% of the deceased worker's Average Weekly Wage D. 100% of the deceased worker's Average Weekly Wage

A. 50% of the deceased worker's Average Weekly Wage

Because of the lack of a bailee agreement, which of the following establishments would NOT be held liable for damages to a vehicle in the business' care? A. A public parking garage B. A transmission repair shop C. A muffler and exhaust garage D. A body shop

A. A public parking garage

In which section of a standard fire policy would you find information on rules of conduct and obligations the policyholder must follow in order for insurance coverage to apply? A. Conditions B. Declarations C. Exclusions D. Insuring agreement

A. Conditions

Jim applies for a homeowners policy with his agent, who gives him immediate temporary coverage. However, after checking Jim's background information, the agent discovers that Jim has been convicted or arson, so she declines his application. What type of coverage did Jim have before the agent declined his application? A. A binder B. A warranty C. An estoppel D. A representation

A. A binder

Which of the following is TRUE concerning a business owners policy? A. A business owners policy offers liability protection B. Business owners policies are popular among large corporate vendors C. Bars and taverns are eligible for business owners policies D. A business owners policy is a good option for large multi-national corporations

A. A business owners policy offers liability protection

Dwelling coverage would provide indemnification for damages to all of the following items EXCEPT: A. A car parked in a detached garage B. A sun porch built away from the home C. A pool house on the property D. A stairwell leading up to the front door

A. A car parked in a detached garage

Coverage B - Personal and Advertising Injury in a CGL policy will cover all of the following, EXCEPT: A. A professional advertising firm knowingly publishes untrue statements about a company. B. A shop owner accuses an innocent person of shoplifting. C. A landlord uses improper means to repossess an apartment from a tenant. D. A children's clothing manufacturer uses the image of a popular cartoon character in its advertisements without permission.

A. A professional advertising firm knowingly publishes untrue statements about a company.

A reservation of rights letter must include all of the following, EXCEPT: A. A reminder that there will be a default judgement if the policyholder does not respond B. The insurer's name, the policy number, and the event or loss that is being discussed C. An explanation that the policyholder may not receive compensation or may have to defend himself in court D. An explanation of potential consequences and that the policyholder might have to reimburse the insurer

A. A reminder that there will be a default judgement if the policyholder does not respond

Which of the following accurately characterizes aviation insurance? A. A small insurance pool and enormous exposure B. A small insurance pool and minimal exposure C. An extraordinarily large insurance pool and minimal exposure D. An extraordinarily large insurance pool and enormous exposure

A. A small insurance pool and enormous exposure

Removal of Debris coverage would pay for the cleanup of which of the following occurrences? A. A windstorm blows shingles from the policyholder's roof all over the policyholder's front yard. B. A neighbor's trampoline blows over the policyholder's fence and into the policyholder's yard. C. A windstorm overturns a dumpster near a policyholder's home, blowing hundreds of pounds of garbage onto the policyholder's property. D. Several very large branches fall from a dead tree in the policyholder's backyard, without causing damage to the home.

A. A windstorm blows shingles from the policyholder's roof all over the policyholder's front yard.

Which of the following is most likely a third party claim? A. A woman files an insurance claim when she is injured by an employee at a local bar B. A woman files an insurance claim after she backs her car into a guardrail C. A man files a claim against his health insurer for a surgery to remove his appendix D. A man files a homeowners claim when his house is struck by lightning

A. A woman files an insurance claim when she is injured by an employee at a local bar

ABC Homebuilders hires Frank's Roofing to work on several units in its new subdivision. While roofing one of the homes, a worker drops a bag of nails onto a neighbor's AC unit. Some nails fall inside, destroying the unit. Who is ultimately responsible for the damage done to the air conditioning unit? A. ABC Homebuilders B. ABC Homebuilders & Frank's Roofing are each 50% responsible C. The owner of the AC unit D. Frank's Roofing

A. ABC Homebuilders

Three weeks after Susan bought a DP-3 from Acme Insurance, the insurer decided to attract more customers by broadening the coverage offered by their DP-3, at no additional cost. Which of the following is TRUE? A. Acme Insurance must automatically apply the broader coverage to Susan's policy B. Acme Insurance must apply an automatic, pro-rated discount to Susan's policy C. Acme Insurance must notify Susan of the change within 10 days and allow her to cancel and re-issue her policy with the new coverage D. Susan must submit a new application to benefit from the new, broader coverage

A. Acme Insurance must automatically apply the broader coverage to Susan's policy

Trevor is heading toward his gate, hoping to catch his flight on time, when he slips on a spilled slushie and breaks his ankle. Which liability coverage would pay for Trevor's injuries? A. Airport liability insurance B. Guest voluntary insurance C. Trevor's health insurance D. Bodily injury excluding passengers

A. Airport liability insurance

Acme Bottling Co. makes bottles for a large food manufacturer. Acme has dozens of machines, including conveyors, fillers, and cappers, to name a few. Acme Bottling Co. has a boiler and machinery insurance policy to protect its financial investment in these machines. On their policy, each of their machines would be referred to as: A. An "object" B. A "machine" C. A "covered peril" D. An "item"

A. An "object"

A Commercial General Liability policy could protect a business in all of the following situations, EXCEPT: A. An employee moving a pallet of plasma televisions accidentally hits the brakes. The pallet falls, destroying the stack of televisions. B. A consumer purchases an appliance from XYZ Company. When the consumer plugs in the appliance, it catches on fire and burns down the consumer's kitchen. C. An employee gets in a fight with a customer and tackles the customer to the floor, causing serious back injuries to the customer. D. A woman is browsing through an antique store when a shelf collapses on top of her, causing her serious injuries.

A. An employee moving a pallet of plasma televisions accidentally hits the brakes. The pallet falls, destroying the stack of televisions.

Which of the following people would NOT be covered under Section II of a BAP? A. An employee's spouse, who finds the keys to a company car and makes a quick run to the grocery store B. The wife of the CEO, whose husband brought a company car home for her to use while her own car is in the shop C. An employee who is unpacking crates of surplus makeup products from the company van D. An employee who is using a company car to pick up an interviewee from the airport

A. An employee's spouse, who finds the keys to a company car and makes a quick run to the grocery store

Which of the following statements is NOT true of endorsements? A. An endorsed policy will always provide more coverage than an unendorsed policy B. An endorsed policy has been changed from the original version C. Endorsements may be added to a policy at any time during the policy period D. Endorsements may be added to a policy at the time of purchase and at renewal

A. An endorsed policy will always provide more coverage than an unendorsed policy

A legally binding contract where the risk of financial loss is transferred in exchange for premiums is called: A. An insurance policy B. The principle of indemnity C. A reserve D. A claim

A. An insurance policy

OBC Inc. is an online retail business that ships several thousand packages nationwide every year. Which type of inland marine policy would OBC Inc. likely use to protect their shipments until they reach their customers? A. Annual transit policy B. Block policy C. Trip transit policy D. Motor truck cargo policy

A. Annual transit policy

Which of the following BEST describes a "kickback"? A. Any compensation given as a reward for favorable treatment in an insurance transaction or interaction B. Intentional trickery aimed at convincing a policyholder to cancel one policy and purchase another C. False, maliciously critical, or derogatory statements about a competitor D. Something of value that is given to someone to convince him to purchase an insurance policy

A. Any compensation given as a reward for favorable treatment in an insurance transaction or interaction

When a storm rolled through town a month ago, John's home suffered substantial damage. He files a claim, but his insurer has offered a settlement much lower than John feels is fair. Both Jon and his insurer have each selected an appraiser, who in turn have agreed on an umpire, to help settle the claim. What type of dispute resolution is this? A. Appraisal B. Litigation C. Mediation D. Arbitration

A. Appraisal

An offeree may legally reject a contract offer by any of the following means, EXCEPT: A. Asking for clarification or additional information B. Proposing a new offer C. Explicitly rejecting the offer D. Accepting the offer on one condition

A. Asking for clarification or additional information

Which of the following crops is covered under a small grains provision? A. Barley B. Corn C. Grain sorghum D. Soybeans

A. Barley

XYZ Carpet Manufacturing's main factory burns down during the night due to faulty electrical wiring. No longer able to manufacture carpeting, XYZ Carpet faces a serious cash flow dilemma. Which insurance coverage might help pay XYZ Carpet's bills while the factory is repaired? A. Business Income coverage B. Control of Property coverage C. Preservation of Property coverage D. Builders Risk coverage

A. Business Income coverage

Jordan is moving from San Francisco to Philadelphia, and he is bringing his private plane along with him. While it's being transported, the plane is damaged in a minor accident. Which of the following is true? A. Because the damage took place while the plane was being transported, the deductible won't apply to this loss B. Because the damage took place while the plane was being transported, the loss will not be covered C. Jordan's plane was considered to be "in motion" at the time of the loss D. Jordan's loss will be covered under all risks - ground and flight

A. Because the damage took place while the plane was being transported, the deductible won't apply to this loss

Bobby is adjusting a complicated auto claim. Which of the following is TRUE? A. Because the policyholder (Jane) is 84 years old and seems to have trouble remembering what happened before the accident, Bobby should feel free to contact her 45 year old caretaker for clarification B. Since the policyholder (Jane) and the third party claimant (Neil) disagree as to who was at fault, Bobby must advise Jane to hire an attorney C. Bobby needs to obtain permission from Neil, the claimant, before he interviews Jessica, who was riding in the car with Neil and witnessed the accident D. Since the policyholder (Jane) and the third party claimant (Neil) disagree as to who was at fault, Bubby must advise Neil to hire an attorney

A. Because the policyholder (Jane) is 84 years old and seems to have trouble remembering what happened before the accident, Bobby should feel free to contact her 45 year old caretaker for clarification

Bob has a home in Florida with full replacement cost insurance coverage. After a severe hurricane levels his home, the property is declared a total loss. Bob is so discouraged that he takes several months to decide whether it is worth it to rebuild. Which of the following statements is TRUE? A. Bob's insurer must pay the full replacement cost of the property without waiting for proof that Bob has rebuilt his home. B. Bob must submit all receipts for completed work to his insurer within 6 months of the loss in order to be indemnified. C. Bob must notify his insurer of his intent to rebuild within 180 days of the loss in order to be indemnified. D. Bob's insurer must pay the ACV of Bob's property immediately, but can wait until Bob submits proof of his rebuilding expenses before paying the full replacement cost.

A. Bob's insurer must pay the full replacement cost of the property without waiting for proof that Bob has rebuilt his home.

Lanny was unloading his steers from the transport when the ramp slipped off the back of the trailer and two steers fell and broke their legs. As a result of this accident, Lanny had to put down the injured steers. Which farm policy cause of loss form would indemnify Lanny for this loss? A. Broad form and special form B. Broad form only C. Special form only D. Basic, broad, and special forms

A. Broad form and special form

Ben built a small shed in the backyard of the house he's renting, to hold his lawn equipment and other tools. One afternoon, a strong storm brought a tree down on Ben's shed, practically destroying it. Which type of coverage in Ben's HO-4 policy could indemnify him for the cost of replacing the shed? A. Building Additions and Alterations coverage B. The shed would not be covered under an HO-4. C. Debris Removal coverage D. Reasonable Repairs coverage

A. Building Additions and Alterations coverage

"Permanently installed fixtures" would fall under which coverage of a commercial property policy? A. Building and Structures B. Personal Property of Others C. Preservation of Property D. Business Personal Property

A. Building and Structures

XYZ Computer's production building for circuit boards is struck by lightning, which results in a fire that burns down the entire facility. XYZ Computer cannot continue the production of computers until the facility is rebuilt. Which insurance coverage might indemnify XYZ Computer for lost revenue until a new facility is built? A. Business Interruption B. Extra Expense C. Builders Risk D. Leasehold Interest

A. Business Interruption

Which of the following is TRUE of the Policy Territory condition of a Commercial General Liability policy? A. CGL policies cover most occurrences only if they happen in the US, Puerto Rico, and Canada. B. CGL policies only cover product liability claims where the damage occurred in the US, Puerto Rico, and Canada. C. CGL policies will cover occurrences anywhere in the world, as long as the company's headquarters is based in the US, Puerto Rico, or Canada. D. CGL policies cover product liability claims anywhere in the world, regardless of where the product was made.

A. CGL policies cover most occurrences only if they happen in the US, Puerto Rico, and Canada

Claim disputes are usually settled in: A. Civil trials B. Show trials C. Bench trials D. Criminal trials

A. Civil trials

Jim's health insurance policy states that he is responsible for 10% of the total cost of his medical bills. This percentage might be referred to as a: A. Coinsurance payment B. Capitation C. Copayment D. Subrogation

A. Coinsurance payment

D'Anton spills coffee in his lap while driving, causing him to veer off the road and smash into a telephone pole. Which part of his auto insurance policy will help him pay for the repairs to his car? A. Collision coverage B. Comprehensive coverage C. McDowells coffee coverage D. Liability coverage

A. Collision coverage

Which of the following statements best applies to commercial crime insurance? A. Commercial crime insurance can protect a business form losses due to theft from employees and outsiders B. Commercial crime insurance coverage is free additional coverage in a commercial liability policy C. Commercial crime insurance cannot single out coverage for specific employee positions D. Commercial crime insurance is designed to only cover risks associated with employee crime

A. Commercial crime insurance can protect a business form losses due to theft from employees and outsiders

When Louise goes online and fills out phony applications with XYZ Auto Insurance in order to print the temporary insurance cards and sell them for a profit on the black market, she is: A. Committing hard fraud B. Using a Ponzi scheme C. Committing soft fraud D. Using a regular business practice

A. Committing hard fraud

Which coverage in a BAP would indemnify the insured for damage caused by a tree branch falling onto a company car? A. Comprehensive coverage B. Property damage liability C. Liability coverage D. Collision coverage

A. Comprehensive coverage

If insured cargo can be salvaged from a damaged vessel, but the cargo is damaged beyond repair and the repair costs would exceed the cost to replace, an insurer would consider the cargo a / an: A. Constructive total loss B. Actual total loss C. Total loss D. Freight loss

A. Constructive total loss

In Ocean Marine insurance, this term of sale states that the seller of goods is responsible for damage to the cargo during shipment: A. Cost, Insurance, and Freight (CIF) B. Free on Board (FOB) C. Cost and Freight (C&F) D. General Average (GA)

A. Cost, Insurance, and Freight (CIF)

Dan has a DP-3 policy on his $100,000 home. A tree falls onto his detached garage during a storm and breaks through the roof, causing $5,000 in damage. Under which coverage within the dwelling policy would the damage to the roof possibly be covered? A. Coverage A B. Coverage B C. Coverage D D. Coverage C

A. Coverage A

All of the following are coverages in a Commercial General Liability policy, EXCEPT: A. Coverage C- Prohibited Substances Liability. B. Coverage A- Bodily Injury and Property Damage Liability. C. Damage to Premises Rented to You. D. Coverage B- Personal and Advertising Injury Liability.

A. Coverage C- Prohibited Substances Liability.

John is doing some lawn maintenance using a steel blade on his weed-whacker. He fails to properly tighten the blade and it comes loose while he is trimming some tall grass at the edge of his property. The blade flies off towards his neighbor's house and crashes into the HVAC unit, severing the lines and effectively destroying the unit. Which coverage in John's homeowners policy might pay for the damage he caused to his neighbor's HVAC system? A. Coverage E - Personal Liability B. Coverage B - Other Structures C. None D. Coverage A - Dwelling

A. Coverage E - Personal Liability

the Severability of Interest condition states that: A. Coverage applies to each insured separately, as if no other insured existed B. An insurer has the right to cancel an insurance policy at any time C. An insured has the right to cancel an insurance policy at any time D. When an insurer pays a total loss settlement, policy coverage may terminate and any unearned premiums will be refunded to the insured

A. Coverage applies to each insured separately, as if no other insured existed

Sam works on commission only, selling only insurance products from XYZ Insurance. What type of agent is Sam? A. Exclusive agent B. Independent sales agent C. Direct writer D. General agent

A. Exclusive agent

Frank's home burned to the ground under suspicious circumstances. Upon further investigation of the claim, the adjuster finds an accelerated burn pattern near the electrical box in the basement, consistent with the use of an accelerant, such as gas or kerosene. Frank is charged by the state with arson, and thus will be tried in what kind of trial? A. Criminal trial B. Contributory negligence trial C. Civil trial D. Comparative negligence trial

A. Criminal trial

Francois has a DP-3 policy on his home, which covers him from most losses on an open-peril basis. He likes to collect old films, many of which are recorded on safety film (cellulose acetate). The problem is that cellulose acetate film gradually breaks down over time and will eventually "self destruct." The films are uninsurable for gradual breakdown under the DP-3 policy because: A. Damage caused by an inherent vice is excluded B. They are extremely flammable C. They are essentially food products D. They have depreciated to have no actual cash value

A. Damage caused by an inherent vice is excluded

Which of the following would NOT be covered under part A of a personal auto policy? A. Damage the insured causes to his own garage B. Damage the insured causes while driving his friend's car C. Legal defense costs D. Lost wages

A. Damage the insured causes to his own garage

Susan accidently rear-ended Dana in an auto accident and caused Dana several thousand dollars in injuries and damages. Susan's insurer offered Dana a settlement, but Dana felt the amount was too low, and after negotiations failed, the case ended up in court. Who is the claimant in this scenario? A. Dana B. Susan C. Susan's insurer D. The state

A. Dana

Darren is new to the farming business and has just planted his second year of barley. He is currently applying for multi-peril crop insurance with his agent, but he doesn't have the 4 years of records needed to calculate his APH. Which of the following statements is true in Darren's case? A. Darren can use 80% of the county transitional yield for the missing 3 years of records B. Darren can use the county transitional yield as his APH until he has four years of records C. Darren can use 90% of the county transitional yield for the missing 2 years of records D. Darren can use 65% of the county transitional yield for the missing 3 years of records

A. Darren can use 80% of the county transitional yield for the missing 3 years of records

Kirk is adjusting an auto liability claim submitted by Christine, who has retained an attorney to represent her in the claim. Kirk should: A. Deal directly with the attorney, not Christine B. Advise the insurer that new he will also need an attorney present in every discussion relating to the claim C. Make sure both Christine and her attorney are included in every discussion relating to the claim D. Case his adjustment process and let the claim go to court

A. Deal directly with the attorney, not Christine

Stand owns ABC Mattress Supply. During a storm, lightning strikes a large tree, causing it to fall through the front of his building, resulting in $23,000 in damages. Which coverage in a BOP would pay for the extraction of the tree from Stan's store? A. Debris removal coverage B. Business interruption coverage C. Liability coverage D. Extra expense coverage

A. Debris removal coverage

Which of the following is NOT an Unfair Claims Settlement Practice in the state of Florida? A. Denying a claim when the insured has violated a policy condition B. Failing to acknowledge claims promptly C. Denying a claim without explanation D. Denying a claim without conducting a reasonable investigation

A. Denying a claim when the insured has violated a policy condition

Which of the following statements about scheduled farm personal property coverage is TRUE? A. Each item has a separate cause of loss form B. Each item is insured under blanket coverage C. Coverage insures all items, but only during certain periods of the policy D. It lists the items specifically excluded from coverage

A. Each item has a separate cause of loss form

If a Building and Personal Property Form has a Causes of Loss - Basic Form attached, which damages are NOT covered by this commercial property policy? A. Earthquake damage B. Damage caused by striking employees C. Smoke damage D. Damage caused by a non-owned airplane

A. Earthquake damage

Risk avoidance is a risk management technique that: A. Eliminates risk B. Reduces risk C. Increases risk D. Counterbalances risk

A. Eliminates risk

This agent works for only one insurer and is paid commission. A. Exclusive agent B. Independent agent C. Independent adjuster D. General agent

A. Exclusive agent

Charlotte's son just turned 16 and got his driver's license. She wants him to be covered, so she adds him to her auto insurance policy. Where would this addition be found in Charlotte's policy? A. Endorsements B. Insuring agreement C. Exclusions D. Conditions

A. Endorsements

Which of the following statements about the principle of estoppel is TRUE? A. Estoppel protects the insured party from an insurer who initially approves coverage, but then later denies coverage after the insured pays for repairs B. Estoppel protects the insurer from the effects of a warranty C. Estoppel allows an insurer to change the coverage in an insurance policy without the policyholder's consent D. Estoppel essentially guarantees no increases in the policyholder premiums after a policy term expires

A. Estoppel protects the insured party from an insurer who initially approves coverage, but then later denies coverage after the insured pays for repairs

The health insurance contract, also called the _____, spells out the exact provisions of a policyholder's health insurance coverage. A. Evidence of coverage B. Conditions page C. Exclusions page D. Declarations page

A. Evidence of coverage

Which statement BEST describes a stand alone excess liability policy? A. Excess liability insurance that "follows" the base policy, but includes its own set of limitations and exclusions B. Excess liability insurance that "follows" the base insurance policy to the letter C. Excess liability insurance that often covers more risks than the base policy D. Insurance coverage for damages caused by an excess of any one peril

A. Excess liability insurance that "follows" the base policy, but includes its own set of limitations and exclusions

Christine was looking quickly at her cell phone when she crashed into her garage, smashing the door. Since her auto liability won't cover the damage because it doesn't extend to property she owns, she hopes her excess liability policy will cover the damage to the garage door. Why is this NOT possible? A. Excess liability policies cover only what is also covered by the base policy B. Excess liability policies only cover bodily injury C. Excess liability policies only cover damages to the insured's house, not attached structures D. Christine's auto liability policy will cover the damages to her garage

A. Excess liability policies cover only what is also covered by the base policy

Which of these is a typical exclusion in a crop-hail policy? A. Failure to harvest mature crop B. Excessive moisture C. Fire D. Transit to storage after harvest

A. Failure to harvest mature crop

Sydney has just been sued by several residents of the town downstream from her farm. According to the lawsuit, the residents have been getting sick from pesticide runoff from Sydney's bean fields. What type of insurance coverage will protect Sydney in this case? A. Farm pollution liability B. Farm product liability C. Custom farming liability D. Farm employees liability

A. Farm pollution liability

In which report to the principal would an adjuster include all witness statements and other supporting evidence, in addition to the total settlement amount? A. Final report B. Preliminary report C. Settlement report D. Interim report

A. Final report

Richard's auto policy states his deductible is $250. what type of deductible does Richard have? A. Fixed deductible B. Percentage deductible C. Franchise deductible

A. Fixed deductible

Oversea Industries transports multiple shipments of goods every year, to and from ports all over the world. What type of cargo coverage would Oversea Industries purchase to protect its cargo? A. Floating, open or long term B. International cargo form C. Single risk form D. Port-to-port

A. Floating, open or long term

Flora is driving in the rain when she skids off the road and slams into Cam's billboard, totaling her car and causing $2,000 in damage to the billboard. Flora has an auto policy with ABC Insurance, and both Cam and Flora submit claims against this policy for their damages. Which of the following is TRUE? A. Flora will file a first party claim for the damage to her car, and Cam will file a third party claim for the damage to his billboard B. Flora will file a first party claim for the damage to Cam's billboard and a third party claim for the damage to her car C. Flora will file a third party claim for the damage to her car, and Cam will file a first party claim for the damage to his billboard D. Flora will file a third party claim for the damage to Cam's billboard and a first party claim for the damage to her car

A. Flora will file a first party claim for the damage to her car, and Cam will file a third party claim for the damage to his billboard

The standard fire policy divides a basic property insurance policy into _____ parts. A. Four B. Two C. Three D. Five

A. Four

Which one of the following statements about freight insurance is TRUE? A. Freight insurance protects the vessel owner in the event the freight costs are not paid B. Freight insurance is a form of liability insurance that protects against damages or injuries in the event of a collision with another vessel C. Freight insurance protects the owner of the shipped cargo in the event that the freight costs are not paid D. Freight insurance protects the goods and property in transport

A. Freight insurance protects the vessel owner in the event the freight costs are not paid

When Sally slips and falls at XYZ Furniture, she injures her back and incurs $145,000 in covered medical expenses. Assuming XYZ Furniture carries a CGL policy with a General Aggregate of $400,000, and a Per Occurrence limit of $100,000, what will the new limits be after paying this claim? A. General Aggregate: $300,000; Per Occurrence: $100,000 B. General Aggregate: $400,000; Per Occurrence: $100,000 C. General Aggregate: $255,000; Per Occurrence: $0 D. General Aggregate: $300,000; Per Occurrence: $0

A. General Aggregate: $300,000; Per Occurrence: $100,000

Each insurance coverage in a commercial property insurance policy will contain a Causes of Loss form. Which of the following is NOT an example of a Causes of Loss form? A. General Form B. Basic Form C. Special Form D. Broad Form

A. General Form

This agent works for only one insurer, and supervises and trains other agents. A. General agent B. Captive agent C. Exclusive agent D. Direct writer

A. General agent

Which ISO homeowners form is designed for renters and covers personal property only? A. HO-4 Contents Broad Form B. HO-2 Broad Form C. HO-1 Form D. HO-3 Special Form

A. HO-4 Contents Broad Form

John owns a storage facility for idle aircrafts. What type of liability insurance should be purchase to protect himself in case one of the planes is damaged while in his care? A. Hangarkeepers liability B. Cargo liability C. Airport liability D. Admitted aircraft liability

A. Hangarkeepers liability

Haley takes a bottle of water into a store, pours some of it on the floor when no one is looking, and then pretends to slip and fall. She cries out for help in apparent pain until someone comes to her aid. She then sues the store for her fake injury in an effort to collect an insurance settlement. What has Haley committed? A. Hard fraud B. Soft fraud C. Tortfeasor D. Misrepresentation

A. Hard fraud

James was a licensed adjuster in Louisiana and Florida. His license is revoked in Louisiana. Which of the following is NOT a possible result of this revocation? A. He is fined $5,000 by the FL Department of Financial Services. B. His adjuster license is revoked in Florida. C. His adjuster license is suspended in Florida. D. He is placed on probation by the FL Department of Financial Services.

A. He is fined $5,000 by the FL Department of Financial Services.

Strict liability: A. Holds a person liable for his actions regardless of how much care he demonstrates B. Does not hold up in a court of law C. Releases an individual from liability in dealing with dangerous objects D. Holds an individual to a lower level of care

A. Holds a person liable for his actions regardless of how much care he demonstrates

Jennifer bought a foreclosed home at a great bargain of $25,000. The home needs a lot of work; so, for now, Jennifer only wants to protect her initial investment in her new home with a very basic homeowner's policy. Which policy would best fit Jennifer's needs? A. Homeowners 8 B. Homeowners 3 C. Homeowners 6 D. Homeowners 5

A. Homeowners 8

Graham is negotiating a claim, but the claimant is beginning to become frustrated and uncomfortable. Graham decides to tell a story with a particularly funny ending to put the claimant at ease. Which negotiating technique is Graham employing? A. Humor B. Diversion C. Flexibility D. Pleasant surprise

A. Humor

Because fraud is such a big problem, the federal government has become more active in preventing it. In addition to enacting tougher penalties and expanding current fraud laws, the federal government has also: A. Imposed stiff prison sentences and heavy fines B. Reduced the number of insurance licenses issued nationally C. Made insurance fraud a forcible felony D. Significantly increased awareness training, incorporating law enforcement investigation practices

A. Imposed stiff prison sentences and heavy fines

A plane was damaged while on its takeoff run down the airport runway. by policy definition, this damage is considered to have occurred while the aircraft was: A. In flight B. In conveyance C. Not in flight D. Not in conveyance

A. In flight

In the CGL coverage for Damage to Premises Rented by You, how is the coverage for fire damage different than for other perils? A. In the case of fire, only the rented premises are covered, not personal property. B. Fire damage is excluded. C. Fire damage is only covered if the policyholder has met the coinsurance requirement. D. In the case of fire, coverage is only provided on an ACV basis. All other perils are covered on an RC basis.

A. In the case of fire, only the rented premises are covered, not personal property.

A "scheduled payment release" is a settlement option most commonly used: A. In workers' compensation claims B. In claims that seek damages for property damage C. In flood claims D. When an insurer cannot pay all its claimants and still remain solvent

A. In workers' compensation claims

The XYZ Company has an attached balcony on the top floor of their headquarters. During a summer storm, a lightning bolt strikes the metal railing of the balcony, splitting the balcony into two. XYZ Company would like to repair the balcony, but new building codes require more expensive construction materials. What commercial property coverage pays for this extra expense? A. Increased Construction Costs B. Extra Expense C. Newly Acquired Properties D. Preservation of Property

A. Increased Construction Costs

Which of the following refers to being restored to the financial condition you were in before a loss? A. Indemnification B. Subrogation C. Estoppel D. Restoration

A. Indemnification

ABC Insurance decides to take on the role of a surety, guaranteeing the performance of Gradient Industries in the construction of a new shopping complex. ABC Insurance wants to provide themselves a safety net in case Gradient Industries fails to deliver and ABC Insurance ends up on the hook for millions of dollars. ABC Insurance turns to a fourth company, who agrees to indemnify ABC Insurance in the even Gradient Industries fails to perform. This fourth party would be considered a / an: A. Indemnitor B. Principal C. Trust D. Obligee

A. Indemnitor

Paul lives in an area where property values are appreciating rapidly. He would like his homeowner's policy to reflect the increase in the value of his home. Which endorsement might Paul purchase to accomplish this? A. Inflation Guard B. Increased Limits on Personal Property C. Additional Structures D. Valuation Endorsement

A. Inflation Guard

Which of the following would not be covered under Employers' Liability insurance? A. Injuries caused by an employer's physical abuse of an employee B. Claims by others for the liabilities of the insured's employees C. Injuries caused by an employer's negligence D. Claims by an injured employee's relatives for consequential damages

A. Injuries caused by an employer's physical abuse of an employee

Direct financial interest in protecting something or someone is called: A. Insurable interest B. Lender investment C. Subrogation D. First party claim

A. Insurable interest

Which of the following best describes crop-revenue insurance? A. Insurance that guarantees a minimum amount of income from a crop B. Insurance that protects against physical damage to a crop due to any weather-related peril C. Insurance that guarantees a minimum amount of yield on a crop D. Insurance that protects against damage caused by poor farming practices

A. Insurance that guarantees a minimum amount of income from a crop

Bob's home was severely damages by a thunderstorm and he claims it will cost $74,000 to repair. His insurer has investigated the claim, found the repairs could be done for $49,000, and has offered Bob this amount of indemnification. Taking the case to court could be risky for the insurer because: A. It places the outcome of a claim in the hands of an unpredictable jury, who may have prejudices against insurers B. The insurer must prove its case beyond a reasonable doubt C. Bob doesn't have an adjuster license and therefore will be unable to adequately argue his case D. The insurer must prove contributory negligence on behalf of the claimant

A. It places the outcome of a claim in the hands of an unpredictable jury, who may have prejudices against insurers

Which of the following statements does NOT apply to the standard fire policy? A. It automatically covers wind and vandalism B. It is a named peril policy C. It pays actual cash value D. It is the basis for all homeowners policies

A. It automatically covers wind and vandalism

Which of the following statements does NOT apply to the standard fire policy? A. It automatically covers wind and vandalism B. It is the basis for all homeowners policies C. It is a named peril policy D. It pays actual cash value

A. It automatically covers wind and vandalism

Which of the following is NOT one of the advantages of no-fault insurance? A. It helps to eliminate insurance fraud. B. It reduces the number of liability lawsuits. C. It is a simple and straightforward form of coverage. D. It enables the policyholder to deal directly with her own insurer.

A. It helps to eliminate insurance fraud.

All of the following may be considered beneficial characteristics of a commercial package policy, except: A. It is a single policy that covers personal and business needs B. It has a common declarations page an a common conditions page C. It reduces premiums D. It eliminates coverage gaps

A. It is a single policy that covers personal and business needs

Why are there implied warranties in an ocean marine insurance contract? A. It is difficult for underwriters to fully investigate the risks involved in ocean marine insurance B. Insurers and policyholders prefer to keep ocean marine policies as brief and simple as possible C. Ocean marine is the oldest form of insurance, and in all old insurance contracts, the warranties are implied D. There are fewer risks involved in ocean marine insurance than in other kinds of insurance

A. It is difficult for underwriters to fully investigate the risks involved in ocean marine insurance

Which statement about the Federal Employers Liability Act is TRUE? A. It protects only interstate railroad workers and their families. B. It protects injured seamen by allowing them to sue for damages and to choose a jury trial. C. It provides federal government insurance for civilian employees. D. It provides benefits in the form of monthly payments and medical coverage to coal miners.

A. It protects only interstate railroad workers and their families.

Dwelling policies exclude inherent vice because: A. Items containing inherent vice will eventually breakdown or self-destruct B. Theft of anything not attached to the structure is excluded C. It is passed down from one vice to the next D. Vandalism usually occurs when inherent vice overrides the will

A. Items containing inherent vice will eventually breakdown or self-destruct

Jake grows soybeans and strawberries on his farm. He is currently applying for crop-hail insurance with his agent. Which of the following statements is true in Jake's case? A. Jake's coverage will be based on the amount of acreage he has B. Jake[s policy will provide coverage against flood damage to his crops C. Both of Jake's crops can be covered under this policy D. Part of Jake's policy premiums are subsidized by the federal government

A. Jake's coverage will be based on the amount of acreage he has

Which of the following occurrences would be covered under other than collision coverage? A. Jane's windshield is cracked when she hits a bird B. Jessica's car is confiscated by the federal government C. Jordan runs over a big pothole and ruins one of his tires D. Jimmy's car is completely destroyed in a nuclear explosion

A. Jane's windshield is cracked when she hits a bird

When record-breaking rainfall causes severe flooding in Janie's home town, Janie's rental property suffers extensive damage. Which of the following is an indirect loss? A. Janie loses a month of rental income when her tenant must move out while repairs are made to the home B. Janie must pay to have the wood floors replaced in her rental unit C. Janie's tenant has to replace his sofa that was damaged by the water D. Janie must hire a contractor to reinforce a damaged retaining wall in the backyard of her rental unit

A. Janie loses a month of rental income when her tenant must move out while repairs are made to the home

Farmer Jim crashes his truck while moving some cattle form one pasture to another. Jim had insured the cattle under his scheduled farm personal property, but his claim won't be covered because: A. Jim's cattle were in the process of being transported B. Jim's livestock were considered "off premises" C. The accident was Jim's fault D. Scheduled farm personal property does not cover damage caused by vehicles

A. Jim's cattle were in the process of being transported

Which of the following does NOT have an insurable interest in Big Ed's Steak House, a local restaurant? A. Jim, who regularly eats at Big Ed's Steak House because it's his favorite restaurant B. Ed's partner, Bill who owns 49% of the restaurant C. ABC Bank, which holds the mortgage on Big Ed's Steak House D. Ed, who owns 51% of the restaurant

A. Jim, who regularly eats at Big Ed's Steak House because it's his favorite restaurant

While out driving, Jacob doesn't stop at a stop sign and hits Josefina, who's resulting injuries cost $15,000. if Josefina's insurance policy pays first and maxes out at $10,000 of coverage, which of the following is TRUE? A. Josefina has the right to collect the remaining $5,000 from Jacob or Jacob's insurer B. Josefina does not have a right to the remaining $5,000 C. Josefina has the right to collect $10,000 from her insurer and $15,000 from Jacob D. Josefina has the right to collect the remaining $5,000 from her insurer

A. Josefina has the right to collect the remaining $5,000 from Jacob or Jacob's insurer

Julie maintains collision coverage with a $1,000 deductible on her 2007 pickup truck. While returning home from work, Julie swerves to miss a deer and ends up crashing into a telephone pole. Julie's truck sustains $35,000 in damages, yet the actual cash value of the vehicle is only $11,000. Which of the following statements is TRUE? A. Julie will be indemnified by her insurer for $10,000 B. Collision coverage will not pay for Julie's accident C. Julie will be indemnified by her insurer for $11,000 D. Julie will be indemnified by her insurer for $34,000

A. Julie will be indemnified by her insurer for $10,000

Pat posts a scathing review of a rival business in the local paper. A week later he gets a phone call from the rival company's lawyer saying he will see him in court. According to Pat's CGL, this claim would be considered _____ and may be covered under Coverage B - Personal and Advertising Injury. A. Libel B. Wrongful Entry C. Malicious Prosecution D. Slander

A. Libel

Which of these is NOT typically excluded from coverage in a property insurance policy? A. Lightning B. Off-premises power failure C. Civil confiscation D. Nuclear events

A. Lightning

J. Darby's Local Bar is being sued for selling alcohol to minors who then vandalized several houses. Fortunately for J. Darby's, it has _____ to help cover the costs of the lawsuit. A. Liquor liability insurance B. Commercial liability insurance C. Employment practices liability insurance D. Dram shop liability insurance

A. Liquor liability insurance

Which of the following is NOT one of the requirements that a "fast food restaurant" business must meet in order to qualify for a BOP? A. Liquor must not account for more than 25% of total annual sales B. The restaurant must maintain appropriate fire extinguishing equipment C. The restaurant must not exceed 7,500 square feet D. The restaurant may not seat more than 150 people

A. Liquor must not account for more than 25% of total annual sales

Logan has a small plane that he enjoys flying on the weekends, but he never takes friends or passengers with him. Which of the following is TRUE? A. Logan should buy bodily injury excluding passengers and property damage liability, but he doesn't need to spend the money on passenger bodily injury liability B. If Logan does not purchase passenger bodily injury liability, he won't be able to get a single limit liability policy C. If Logan never plans to bring a passenger on board, he doesn't need to worry about purchasing any liability insurance D. Logan is required to purchase passenger bodily injury liability

A. Logan should buy bodily injury excluding passengers and property damage liability, but he doesn't need to spend the money on passenger bodily injury liability

Which of the following statements about insurable interest is FALSE? A. Maintaining property values allows your neighbor to have an insurable interest in your house B. When a renter leases your house, your insurable interest in the home remains C. Insurable interest reduces the incentive for someone to cause damages intentionally to insured property D. Purchasing an insurance policy on your home helps protect your insurable interest in a home

A. Maintaining property values allows your neighbor to have an insurable interest in your house

A policyholder can expect the highest amount of coverage for medical care under which of the following plans? A. Major medical plan B. Point of service plan C. Preferred provider organization D. Health maintenance organization

A. Major medical plan

Jim is out turkey hunting on a private ranch when he hears some movement in the brush. Assuming it's a turkey, Jim raises his shotgun and fires. Unfortunately for Jim, he has not taken a turkey, but has severely injured one of the landowner's calves instead. Jim is responsible for the cost of the calf because he acted with: A. Negligence B. Great care C. Responsibility D. Liability

A. Negligence

Jason crashes his single-engine plane while Jim and Barbara are on board. Jim has a broken leg and Barbara has a concussion. Jason has a broken wrist. Which coverage in Jason's aviation insurance policy could cover Jim's broken leg? A. Medical payments B. All risks - ground and flight C. All risks - not in motion D. Bodily injury excluding passengers

A. Medical payments

Jim is beginning negotiations with Sally and notices that her demeanor seems standoffish and defensive - almost angry. While reviewing his estimate, Jim notices a small clerical error which, once corrected, will increase Sally's indemnification by $300. He apologizes for the mistake and informs her of the favorable result. Which negotiating tip is Jim following? A. Minor details B. Attitude C. Give and take D. First impression

A. Minor details

Bob recently had a fire totally destroy his auto servicing garage. When an adjuster comes to investigate the fire, he asks whether Bob had stored any large containers of fuel in the garage. Bob did store two large containers of fuel in the garage, but he knows that, if the insurance company finds out, they will not indemnify him and he will be financially ruined. Bob tells the adjuster "no." Which of the following most accurately describes Bob's statement to the adjuster? A. Misrepresentation B. Moral hazard C. Hard fraud D. Warranty

A. Misrepresentation

Which unfair claims settlement practice involves an adjuster making false statements about policy coverage in order to reduce the settlement? A. Misrepresentation B. Interference C. Defamation D. Coercion

A. Misrepresentation

Grant works at ABC Convenience. One day, a man pulls up in an expensive car and pays cash for his gas with a hundred dollar bill. Grant accepts the bill without checking its validity. When Grant's manager checks the bill later, he discovers it is a fake. Which commercial crime coverage could protect ABC Convenience from financial loss associated with accepting the fake hundred dollar bill? A. Money orders and counterfeit paper currency B. Funds transfer fraud C. Inside the premises: theft of money and securities D. Forgery or alteration

A. Money orders and counterfeit paper currency

Randy runs a business where he takes on the possessions of others and transports them from one location to another for a fee. Randy also keeps his business model diverse by occasionally taking on legal passengers as clients, and helping them get from one place to another for a fee. Randy would be best described as a: A. Motor carrier B. Delivery driver C. Trucker D. Salesman

A. Motor carrier

Randy runs a business where he takes on the possessions of others and transports them from one location to another for a fee. Randy also keeps his business model diverse by occasionally taking on legal passengers as clients, and helping them get from one place to another for a fee. Randy would be best described as a: A. Motor carrier B. Salesman C. Trucker D. Delivery driver

A. Motor carrier

Cindy holds an insurance policy from Sine Nomine Insurance. This is not a publicly traded company, and Cindy can participate in the election of the board, receiving dividends if the company does well. Sine Nomine Insurance could be best described as a: A. Mutual insurance company B. Stock insurance company C. Fraternal benefits society D. A risk retention group

A. Mutual insurance company

While backing out of his driveway, Gary accidentally puts the car into drive and plows through several yards of his privacy fence. The total damage to the fence comes to $3,500. Assuming Gary has an HO-2 Broad Form policy, how much of the damages will be covered? A. None B. $2,500 C. $1,500 D. $3,500

A. None

Pointing out a piece of evidence that works in a claimant's favor, and then conceding that point to a claimant is a negotiating technique known as a / an: A. Pleasant surprise B. Demonstration C. Diversion D. Agreement

A. Pleasant surprise

The BOP offers liability coverage on a / an _____ basis. A. Occurrence B. Statutory C. Claims-made D. Regressive

A. Occurrence

When is someone considered a passenger, and thus covered under passenger bodily injury liability? A. Once she begins to board the plane B. After clearing the airport security checkpoint C. Once she takes a seat on the plane D. After booking a plane ticket

A. Once she begins to board the plane

James runs a window washing business and services a lot of the city's large skyscrapers. While out on a job, James accidentally knocks the wash bucket off his scaffold from seven stories up. It lands on a parked car, injuring no one, but causing $12,000 in damage to the vehicle. What type of coverage in James' Commercial General Liability policy would a claim for this damage fall under? A. Operations Liability B. Product Liability C. Premises Liability D. Falling Objects Coverage

A. Operations Liability

When Herb was just starting out in the textile business, he purchased an older factory building in order to acquire as much square footage as possible, for the lowest cost. After a massive storm blows the roof off the building, Herb finds that the structure will require massive upgrades to bring it up to code. Which endorsement to his commercial property policy can help with this added cost? A. Ordinance or Law B. Legal Liability C. Protective Safeguard D. Differences in Conditions

A. Ordinance or Law

After the collapse of the Smiths' balcony, they find there are many new code requirements than there must have been when the balcony was originally constructed. Which type of of additional coverage can help with the added expenses needed to rebuild their balcony to current standards? A. Ordinance or Law coverage B. Collapse coverage C. Product Liability coverage D. Loss of Use

A. Ordinance or Law coverage

The Commissioner of Insurance Regulation oversees the Office of Insurance Regulation. Which of the following is NOT one of the functions of the OIR? A. Overseeing licensing of all adjusters in the state of Florida. B. Enforcing statutes related to the insurance industry. C. Monitoring the financial stability of insurers. D. Overseeing licensing of all insurers in the state of Florida.

A. Overseeing licensing of all adjusters in the state of Florida.

Which of the following is NOT an example of property eligible for coverage under the outdoor property coverage extension in a BOP? A. Patio furniture B. Trees C. Detached signs D. Fences

A. Patio furniture

Who can purchase flood insurance through the NFIP? A. People who live in participating communities B. Only low-income families C. Only government employees D. Anyone

A. People who live in participating communities

When shelving falls on two of Phil's customers at his store, his CGL covers their medical expenses under Medical Payments coverage. Which of the following will tell Phil the most his policy will pay to each injured party? A. Per Occurrence Sub-Limits B. General Aggregate C. Conditions section D. Products—Completed Operations Aggregate

A. Per Occurrence Sub-Limits

During a violent summer storm in Tulsa, a bolt of lightning hits Mr. Jones' house, damaging a large portion of the roof. In this case, the insurer would call the lightning bolt a: A. Peril B. Hazard C. Loss D. Risk

A. Peril

James works for a contracting company that has a business owners policy in place. One day, James brings his laptop to work and leaves it in the manager's office while he heads out to a jobsite. While he is gone, a fire breaks out and destroys the office, with James' laptop inside. Which coverage extension could cover the loss of James' laptop? A. Personal effects and property of others B. Electronic data C. Computer operation interruptions D. Personal property off-premises

A. Personal effects and property of others

Sarah suffers acute back pain. Not satisfied with the specialists in her own network, Sarah elects to see a back specialist outside the network established by her healthcare provider. Her healthcare provider pays the amount that the same appointment would reasonably have cost with an in-network specialist, and Sarah has to pay the additional costs out of her own pocket. Which type of healthcare provider does Sarah belong to? A. Preferred provider organization B. Health maintenance organization C. Point of service plan D. Major medical plan

A. Preferred provider organization

Lance slips and falls in the icy parking lot of XYZ Consulting. Under which part of Coverage A in XYZ Consulting's CGL policy would this claim be covered? A. Premises Liability B. Product Liability C. Parking Liability D. Operational Liability

A. Premises Liability

Craig purchased some additional machinery for his business so that he can keep up with customer demand. The problem is that Craig does not have enough space for the newly purchased machinery. He rents a storage unit to house the machinery until he can bring it to the company, but when the storage unit burns down, Craig's equipment goes with it. Which coverage extension might indemnify Craig for his loss? A. Property Off-Premise B. Preservation of Property C. Outdoor Property D. Newly Acquired Property

A. Property Off-Premise

An insured may only add utility interruption coverage to her equipment breakdown policy if at least one of three other coverages are also present. Which of the following is NOT one of these other coverages? A. Property damage B. Extra expense only C. Business income and extra expense D. Spoilage damage

A. Property damage

What kind of adjuster represents the insured rather than the insurer? A. Public adjuster B. Emergency adjuster C. Independent adjuster D. Staff adjuster

A. Public adjuster

According to the "definitions" section of a personal auto policy, which of the following is NOT "occupying" her vehicle? A. Rachel leaves her cat in her car, with the windows cracked, while she goes into the drugstore to fill a prescription B. Trishey is leaning on her car during a lunch break while she eats her lunch C. Jaminda is sitting on top of her car as she talks to her best friend on the phone D. Jordan is sitting in her parked car listening to music while she waits for her sister to finish yoga class

A. Rachel leaves her cat in her car, with the windows cracked, while she goes into the drugstore to fill a prescription

When an insurance policy does not accurately express the true agreement between the insurer and the policyholder, and then the insurer denies a claim based on this inaccurate information, a court of law may reverse that action and correct the policy. This is known as: A. Reformation B. Revocation C. Modification D. Termination

A. Reformation

In which state(s) is workers' compensation insurance elective? A. Texas only B. New York and Texas C. New Jersey only D. New Jersey and Texas

A. Texas only

Don works as an adjuster for ABC Insurance. Which of the following is most likely NOT one of Don's responsibilities? A. Represent the insured if a claim goes to court B. Provide ABC Insurance with complete claim documentation C. Always use reasonable care and judgment D. Adhere to the terms of his contract

A. Represent the insured if a claim goes to court

The Cancellation / Non-renewal provision: A. Requires the insurer to provide notice before cancelling a policy B. States that policies may only be canceled within the first policy term - canceling a renewed policy is prohibited C. States that if the insured fails to cancel a policy at least 20 days prior to the renewal date, the policy will remain in effect for at least another policy term D. Limits the allowable reasons an insured may cancel a policy

A. Requires the insurer to provide notice before cancelling a policy

Ron's truck experiences a mechanical breakdown and he has it towed to an auto repair facility. Upon further examination of Ron's claim, his mechanical breakdown insurance provider denies coverage. Which of the following would be a valid reason for this denial? A. Ron had been hauling a large boat, which overloaded the vehicle and caused the breakdown B. The repairs were very expensive C. The auto shop determines the transmission caused the breakdown of the automobile D. The auto shop determines the alternator caused the breakdown of the automobile

A. Ron had been hauling a large boat, which overloaded the vehicle and caused the breakdown

Which of the following statements is TRUE about coverage C under a DP-2 or DP-3? A. Rowboats and canoes are covered, but only while on the premises B. Boats of any kind are covered, but only while on the premises C. Coverage for boats of any kind is excluded under "general exclusions" D. Coverage for rowboats and canoes is excluded; other boats are covered

A. Rowboats and canoes are covered, but only while on the premises

Ryan must complete continuing education courses before the deadline for his Florida license. He knows it's important, but he has been putting off his coursework, and now the credits are overdue. Ryan is 8 hours short; what can he expect? A. Ryan will have to send a written request for an extension to the Department of Financial Services. B. Ryan must pay a penalty of $400, after which he will have another 3 months to finish the missing hours. C. Ryan will have a 30-day grace period to complete the missing hours. D. Ryan's license will be revoked and he will have to find a new career.

A. Ryan will have to send a written request for an extension to the Department of Financial Services.

Farmer Ron wants to make some changes to the insurance policy covering his wheat crop, but he must do so before the: A. Sales closing date B. Production reporting date C. Final planting date D. Debt termination date

A. Sales closing date

While driving the company car, Lloyd is distracted and rear-ends the car in front of him. Which section of the BAP policy would cover the damage Lloyd caused to the other car? A. Section II B. Section III C. Section IV D. Section I

A. Section II

April, an independent adjuster, gets paid on a fee schedule. This means that the larger the claim, the more money April makes form adjusting it. In order to increase her commission, she normally adds an additional 1% to the amount of the settlement. This illegal practice is known as: A. Settlement padding B. Inducement C. Kickbacks D. Commission inflation

A. Settlement padding

Bill is an independent adjuster who gets paid on a commission basis. The larger the claim, the more money he makes. Because of this, Bill usually increases the settlement amount by about 1 or 2%, to increase his commission. This practice is known as: A. Settlement padding B. A percentage deductible C. Commission inflation D. Inducement

A. Settlement padding

Jim leases a vessel in order to ship a collection of antique cars from Los Angeles to Tokyo. He is only making one trip, but wants to purchase insurance on his cargo so he won't be found personally liable if anything happens to the valuable cars. What type of ocean marine policy might Jim purchase? A. Single risk form coverage B. Inland marine coverage C. Hull coverage D. Floating, open or long term coverage

A. Single risk form coverage

Which of the following is NOT a characteristic of social insurance programs? A. Social insurance programs are for-profit programs B. Social insurance programs involve mandatory participation C. Social insurance programs are designed to meet the needs of the general public as a whole D. The benefits of a social insurance program may be prescribed by federal law

A. Social insurance programs are for-profit programs

Tim is the plaintiff in a case involving an auto accident. To recover monies he feels are due him, Tim produces documents to prove he had to pay over $55,000 in medical bills. If the court were to award Tim $55,000, the damages would be classified as: A. Special damages B. Tort damages C. General damages D. Imperative damages

A. Special damages

Florida Insurance Code states the qualifications required to become a licensed insurance adjuster in the state of Florida. Which of the following is NOT one of the requirements for applicants? A. Spend 20 hours in the field working with a licensed insurance adjuster B. Be at least 18 years of age C. Be trustworthy D. Be a US citizen or legal alien authorized to work in the United States

A. Spend 20 hours in the field working with a licensed insurance adjuster

Jim has a liability insurance policy with three limits: one for the maximum amount of bodily injury per person, one for the maximum amount of bodily injury for all persons, and one for the maximum amount of property damage. Each of these limits apply to any one occurrence. What type of limits does Jim's policy have? A. Split limits B. Situational limits C. Aggregate limits D. Single limits

A. Split limits

The Liberalization Cause in an insurance policy: A. States that any change to a policy form that broadens coverage without increasing the premium will automatically apply to existing policies B. States that, in the event of a loss, the insurer will only pay up to the insured value of the risk C. States that the insurer is obligated to pay for covered losses only up to the limit set by the policy D. Voids the policy if the insured deliberately conceals or mis-states pertinent info

A. States that any change to a policy form that broadens coverage without increasing the premium will automatically apply to existing policies

While driving, Sue looks down to adjust the radio and crashes the car into Jane's car, damaging both cars and injuring herself. Which of the following statements applies to Sue? A. Sue is legally liable for the damages to Jane's car B. In order to be indemnified by Sue's insurer, Jane must prove Sue's legal liability in court C. Jane is liable for Sue's injuries D. Sue's liability insurance would cover Sue's injuries

A. Sue is legally liable for the damages to Jane's car

Jim has a small business and wants to buy comprehensive coverage for all of the vehicles that he owns in order to protect his investments. Which coverage symbol will insure that ALL his owned automobiles are covered under comprehensive coverage? A. Symbol 2 B. Symbol 1 C. Symbol 3 D. Symbol 4

A. Symbol 2

Which of the following is NOT an acceptable reason for the Commissioner of Insurance to revoke an adjuster's license? A. Taking on too many claims at one time B. Having been convicted of a felony C. Intentionally misrepresenting the terms of a contract D. Forging another's name on an insurance document

A. Taking on too many claims at one time

Ted gets into an argument with his neighbor over parking arrangements. In a fit of anger, Ted goes over to his neighbor's home and scratches up her car with a key, causing $2,000 in damages. The next day, Ted realizes his poor behavior and files a claim with his insurer for his liability in the damages to his neighbor's car. Why might Ted's insurer deny his claim? A. Ted's vandalism was intentional, and therefore excluded under his policy B. Ted's neighbor will have to file a claim with her own insurer C. Insurance policies do not cover vandalism D. Ted's neighbor was partially responsible for the damage, and thus will pay a pro rata portion of the loss

A. Ted's vandalism was intentional, and therefore excluded under his policy

What is the primary difference between the Pollution Liability Coverage-Broad Form and the Pollution Liability Limited Coverage Form? A. The Broad Form pays for pollution clean-up costs, while the Limited Form does not. B. The Broad Form applies only to independent contractors, while the Limited Form applies to the hiring business. C. The Broad Form is cheaper than the Limited Coverage Form. D. The Broad Form covers bodily injury and property damage, while the Limited Form only covers bodily injury.

A. The Broad Form pays for pollution clean-up costs, while the Limited Form does not.

When an insurer assigns an adjuster to a claim, which of the following best describes the adjuster's role in relation to the claimant? A. The adjuster acts as a liaison between the claimant and the insurer B. The adjuster agrees to get the claimant the highest possible insurance settlement C. The adjuster agrees to represent the claimant in court D. The adjuster collects the premiums from the claimant

A. The adjuster acts as a liaison between the claimant and the insurer

Which of the following is NOT a condition for payment on a mechanical breakdown insurance claim? A. The cause of the breakdown cannot be associated with the front-end suspension B. The insured must provide the insurer proof of regular maintenance prior to the breakdown C. The insurer has the right to inspect the vehicle before repairs are made D. The operator of the vehicle must have made a reasonable effort to minimize repair costs

A. The cause of the breakdown cannot be associated with the front-end suspension

In which of the following situations is an insurer justified in waiting more than 90 days after receiving proof of loss forms to pay a claim? A. The claimant has been unwilling to cooperate in the settlement process. B. The claimant has made several late premium payments within the past 2 years. C. The claimant filed a Personal Injury Protection claim. D. The claimant is making a third party claim.

A. The claimant has been unwilling to cooperate in the settlement process.

In an investigation, "critical evidence" could include all of the following, EXCEPT: A. The claimant's premium payment history B. Statements from the claimant and at-fault party C. Photographs of the damage D. Sketches of the property

A. The claimant's premium payment history

Which of the following is NOT a rating factor for a personal auto liability policy? A. The condition of the vehicle B. The location of use C. The driving record D. The driver's age

A. The condition of the vehicle

The purpose of the increased cost of construction coverage in a BOP is to provide coverage for: A. The cost of bringing property up to code after a covered loss B. Damage to the insured's building while under construction C. The cost of keeping the business running while the covered property is being repaired after a covered loss D. Lost business income while the company's building is under construction after a covered loss

A. The cost of bringing property up to code after a covered loss

In insurance terms, which of the following statements about salvage is FALSE? A. The insured may compel the insurer to take the damaged property to keep the salvage value from being deducted from the claim settlement B. The insurer may choose how to handle salvage, depending on the policy C. The insure may take ownership of damaged property after paying the claimant for a total loss D. The insurer may deduct the salvage from the amount paid to the claimant for the loss

A. The insured may compel the insurer to take the damaged property to keep the salvage value from being deducted from the claim settlement

According to the "definitions" section of a personal auto policy, which of the following would NOT qualify as a "family member?" A. The insured's ex-wife who moved out of the house 4 months ago B. The insured's foster child C. The insured's adopted daughter D. The insured's cousin who is living with the insured

A. The insured's ex-wife who moved out of the house 4 months ago

A neighbor stepped on a rusty rake while walking through Jake's backyard, unannounced. He ends up with a bad case of tetanus and has to stay in the hospital for three days. He files a claim against Jake, who protests any wrongdoing because he believes his neighbor was trespassing and should be responsible for his own injury. Jake wants a court of law to settle the dispute. How can the insurer settle the claim put forth by Jake's neighbor? A. The insurer can settle anyway it finds advantageous to its interests. B. The insurer must use arbitration since Jake feels he is not at fault. C. The insurer can only settle in court if Jake demands a lawsuit. D. The insurer must settle however Jake's neighbor wishes.

A. The insurer can settle anyway it finds advantageous to its interests.

Which of the following statements best describes the Law of Large Numbers? A. The larger the number of units insured, the more accurately the insurer can predict the number of claims from that group B. The larger the number of insurance policies written, the more an insurer will pay out C. The larger the number of insurance policies written, the higher the profit for the insurer D. The larger the amount an insurance company can charge in premiums, the less likely a policyholder will file a claim

A. The larger the number of units insured, the more accurately the insurer can predict the number of claims from that group

As a way of preventing and working against insurance fraud, the Coalition Against Insurance Fraud developed the model law. Which of the following is NOT a part of the model law? A. The model law states that insurance companies must form or enlist fraud busting units B. The model law requires insurance forms to state that insurance fraud is a serious crime C. The model law requires insurers to develop ways of preventing and detecting fraud D. The model law creates state fraud bureaus

A. The model law states that insurance companies must form or enlist fraud busting units

Which characteristic would prohibit a convenience store / gas station from purchasing a BOP? A. The operation of a car wash B. The use of microwave ovens C. Gasoline accounts for over 50% of sales D. Over 4,000 square feet of retail space

A. The operation of a car wash

Greg plays trombone in his school band during football games. During a rally song in the stands one day, Greg annoys one of the opposing team's fans, who grabs his $400 trombone and hurls it down the bleachers, completely destroying it. Greg's insurance pays him $400 to replace the trombone, but then the opposing team's coach also offers to replace the instrument, at whatever cost. So Greg orders a new $3,200 trombone and has the opposing team's athletic department absorb the cost. Which principle has Greg violated? A. The principle of indemnity B. The principle of legal purpose C. The principle of consideration D. The principle of the opposing team

A. The principle of indemnity

Which of the following does not describe one of the implied warranties of ocean marine insurance? A. The vessel must not travel in stormy or otherwise dangerous weather conditions B. The route of the voyage must be clearly stated prior to departure, and adhered to throughout the voyage C. The owner of the cargo must guarantee that the cargo is sound and loaded properly D. The vessel must be seaworthy, and have a competent captain and crew

A. The vessel must not travel in stormy or otherwise dangerous weather conditions

Laura's corn crop is covered under a multi-peril crop insurance policy. Under this policy, Laura is covered for all of the following perils, except: A. Theft B. Low / poor crop yield C. Frost D. Flood

A. Theft

All of the following are universal exclusions in a commercial crime policy, EXCEPT: A. Theft of money or securities outside the insured premises in the care of a messenger B. Indirect losses C. Seizure or destruction of property by government authority D. Theft or dishonest acts committed by the insured

A. Theft of money or securities outside the insured premises in the care of a messenger

Theft is a covered peril under a homeowner's policy, but not all theft losses are covered. Which of the following theft losses IS covered? A. Theft of the insured's property while the insured is on vacation B. Theft of the insured's tenant's property C. Theft from the insured's under-construction dwelling D. Theft by the insured's husband who lives with the insured

A. Theft of the insured's property while the insured is on vacation

Which of the following is TRUE about aviation insurance? A. There are no standard policy forms B. Each state imposes minimum liability insurance limits for aircraft C. The insurance pool is extraordinarily large, and the exposure is enormous D. Non-paying passengers are not covered

A. There are no standard policy forms

A fire breaks out in a toy factory, damaging the building and causing the business to lose income while the property is being repaired. What type of coverage would provide indemnification for the loss of income during the repair period? A. Time element insurance B. Extra expense insurance C. Excess damage insurance D. There is no coverage for this type of loss

A. Time element insurance

Tom decides to purchase an insurance policy to protect his home. According to the definition of a personal contract, which of the following most accurately describes what Tom's insurance actually protects? A. Tom's financial interest in the home B. The house itself C. Tom's entire family D. Tom's house and the entire property

A. Tom's financial interest in the home

Lee was watching out his kitchen window and saw his neighbor, Sam, reach across the fence with a pole saw and cut down one of Lee's trees. When the tree fell, it landed on Lee's gazebo and damaged it. Lee is furious and sues Sam for the damages. When they go to court, Sam is considered the: A. Tortfeasor B. Plaintiff C. Tort D. Intentional tort

A. Tortfeasor

Which coverage under a trucker's policy covers damage to other people's trailers in the care of the insured for transport purposes? A. Trailer interchange coverage B. Motor carrier coverage C. Trucker liability coverage D. Direct excess trailer coverage

A. Trailer interchange coverage

Micah owns an antique grand piano that is worth $38,000, and he is planning to ship the instrument to a famous auction house, in the hopes of selling it for top dollar. If Micah wants to insure the piano against any damage during this shipment, which policy would best meet his needs? A. Trip transit policy B. Annual transit policy C. Motor truck cargo policy D. Instrumentalities of transportation and communication policy

A. Trip transit policy

At the very LEAST, a commercial package policy will contain _____ coverage sections. A. Two B. Three C. Five D. Four

A. Two

No-fault insurance in a personal auto policy: A. Typically only provides coverage for bodily injury B. Is limited, but will pay for any damages an insured may cause without requiring proof of loss C. Is mandatory in all states D. Provides liability coverage for a third party, regardless of who is at fault

A. Typically only provides coverage for bodily injury

In excess liability insurance, the follow form: A. Uses the same provisions, exclusions, and coverages as the base policy B. Can act as the primary policy, if necessary C. Is an essential part of an umbrella policy, listing the umbrella's coverages and provisions D. Must be submitted to the insurer with every liability claim

A. Uses the same provisions, exclusions, and coverages as the base policy

Which of the following is NOT a feature of a typical business owners policy? A. Usually actual cost valuation B. Liability protection for lawsuits from accidents or products C. Extra expense coverage D. Built-in inflation protection

A. Usually actual cost valuation

When a storm collapses the roof of Joshua's surveying business, rain soaks the interior and destroys most of his documents. Deeds, maps, drawings, and mortgages that Joshua kept on file have all been ruined and will need to be replaced. Which additional coverage could help defray some of the cost associated with replacing these documents? A. Valuable papers business insurance B. Electronic data processing insurance C. Pollution, cleanup, and removal insurance D. Law and ordinance insurance

A. Valuable papers business insurance

Matt, a real estate developer, must submit a report to his insurer every 30 days listing the value of all his properties over the past month. In turn, the insurer adjusts Matt's premiums based on the values he submits. Which optional coverage does Matt subscribe to? A. Value Reporting B. Optional Reporting C. Agreed Value D. Adjusted Income

A. Value Reporting

In order to qualify for an insurance policy, Lydia's Fine Jewels must agree to have a security guard on the premises 24 / 7. this is called a: A. Warranty B. Binder C. Representation D. Waiver

A. Warranty

Which of the following perils is excluded from coverage in a national flood insurance program policy? A. Water-main breakage B. Mudflow C. Collapse of shorelines D. Accumulation and run-off of surface waters

A. Water-main breakage

Which of the following is considered an Unfair Claims Settlement Practice in Florida? A. Withholding payment on a legitimate, undisputed claim, or delaying payment beyond 90 days B. Denying a claim on the basis of a policy exclusion C. Attempting to settle claims for less than the claimant is demanding D. Requesting more information before approving or denying a claim

A. Withholding payment on a legitimate, undisputed claim, or delaying payment beyond 90 days

When a company acquires a new vehicle under symbol #7, specifically described autos, when must the company report the new vehicle to the insurer? A. Within 30 days B. Within 4 days C. Within 45 days D. Within 14 days

A. Within 30 days

If a claim dispute goes to trial, the adjuster is usually a: A. Witness B. Defendant C. Plaintiff D. Juror

A. Witness

In a garage-keepers policy, PIP coverage is: A. available with an endorsement. B. included unless the insured declines it in writing. C. not available. D. mandatory.

A. available with an endorsement.

Which of the following insurers is NOT engaging in an Unfair Claims Settlement Practice? A. XYZ Insurance Company owns its own auto repair shop and sends policyholders' cars there to be repaired. B. Nellis Insurance Company does not usually send an explanation of why claims are denied, unless a policyholder specifically requests one. C. Antelope Insurance Company is understaffed and generally does not respond to claims until after a couple of months have passed. D. ABC Insurance Company routinely requires additional information from claimants but does not specify what information is needed.

A. XYZ Insurance Company owns its own auto repair shop and sends policyholders' cars there to be repaired.

Which of the following is NOT a reason to buy more insurance than the minimum amount required by Florida? A. Your premiums will be lower when you purchase more coverage. B. Drivers are liable for all damages they cause. C. The cost of an F-250 Super Duty can be upwards of $60,000. D. An auto policy pays for liability, but only up to the set limits.

A. Your premiums will be lower when you purchase more coverage.

Coverage C - Personal Property can apply to losses that occur: A. anywhere in the world. B. outside of the insured's dwelling only. C. in the U.S. or Canada only. D. in the insured's dwelling only.

A. anywhere in the world.

An injured employee's PPI rating (or Impairment rating) is NOT: A. awarded before the employee reaches his Maximum Medical Improvement. B. determined by a doctor. C. paid weekly at 75% of the average weekly Temporary Total Disability benefit the employee was receiving before. D. stated as a percentage of loss of use.

A. awarded before the employee reaches his Maximum Medical Improvement.

According to Lonnie's health insurance policy, she is responsible for paying 15% of all of her medical costs. This percentage is Lonnie's: A. coinsurance payment. B. deductible C. copayment. D. capitation.

A. coinsurance payment.

Risk retention groups do NOT: A. have the support of state Guaranty Funds. B. provide liability insurance. C. spread liability exposure to their members. D. have permission to operate in Florida.

A. have the support of state Guaranty Funds.

In a commercial property policy, Coverage C of the Building and Personal Property Coverage Form provides coverage for: A. personal property of others. B. liability and medical payments. C. business personal property. D. buildings and structures.

A. personal property of others.

In a commercial property policy, the Monthly Limit of Indemnity coverage option for Business Income insurance: A. requires an insured to parcel the stated policy limit into a fractional maximum amount of coverage available per month during the period of restoration. B. automatically raises the policy limit every month, to protect against the effects of inflation. C. requires the insured to maintain at least an 80% level of coinsurance on the insured property. D. establishes a separate aggregate limit for each month of the entire policy period.

A. requires an insured to parcel the stated policy limit into a fractional maximum amount of coverage available per month during the period of restoration.

Greg owns a four-unit townhouse, in which he and three other families reside. Greg decides to finish the basement and leases it out as a garden apartment to another family, generating more income. After an intense blizzard causes the roof to collapse under the weight of the snow, Greg files a claim against his HO-3 policy. The claim comes back denied because: A. there are now five families living in the building. B. collapse is not a standard covered peril. C. the temperature outside had fallen below ten degrees Fahrenheit, weakening the roof. D. natural disasters are not covered under homeowner's policies since they are an "act of God."

A. there are now five families living in the building.

*The main purpose of an Insurance Guaranty Association is: A. to make sure that insurers are able to pay claims, even in the event of an insolvency. B. to punish insolvent insurers. C. to oversee the Commissioner of Insurance Regulation. D. to make sure that policyholders are able to pay their premiums.

A. to make sure that insurers are able to pay claims, even in the event of an insolvency.

In Florida, an insurer may not: A. wait 60 days before paying an undisputed PIP claim. B. require an insured to submit a preliminary claim report before moving forward on the claim. C. pay undisputed settlements under one portion of a claim before the entire claim has been settled. D. consult with the insured before instructing a body shop to conduct repairs on the insured's vehicle.

A. wait 60 days before paying an undisputed PIP claim.

Define: Fraternal benefit society

Non-profit, mutual aid organization that will usually offer insurance benefits to members and their families

Bill carries $10,000 in PIP coverage with a $500 deductible. One day, he accidentally crashes into a car stopped at a red light. The driver of the stopped car is miraculously free from injury, but Bill's medical bills from the collision come to $14,000. How much will Bill's PIP pay for his injuries? A. $10,800 B. $10,000 C. $9,500 D. $11,200

B. $10,000

Lori's property was damaged in a recent flood. The damages to her home and detached garage came to $80,000 and $15,000, respectively. Lori has a dwelling form flood policy with a $100,000 limit. How much indemnification can Lori expect to receive for the damage to her garage? A. $90,000 B. $10,000 C. $0 D. $15,000

B. $10,000

Define: Pure risk

Any risk in which no gain is possible. Insurable

Define: Hazard

Anything that increases exposure

Sam's house is underinsured. It has a replacement cost of $200,000, but Sam's policy only covers losses up to $80,000. During a violent hailstorm, Sam's $20,000 roof is completely destroyed. Assuming his insurer requires the standard 80% level of coverage, how much will Sam receive as a settlement for the roof (ignore the deductible)? A. $20,000 B. $10,000 C. $15,000 D. $5,000

B. $10,000

What is the minimum amount of PIP coverage required by the state of Florida? A. $5,000 B. $10,000 C. $50,000 D. $25,000

B. $10,000

What is the seventh step in the claims process?

Applying all policy coverages and provisions

Christina owns a home insured by a $200,000 DP-3 policy. When she purchased the home, she fixed up the detached garage, turning it completely into a studio apartment, which she now rents out. One day, a fierce windstorm blows the roof off her home and the studio rental. How much of her detached garage will be covered under this DP-3 policy? A. 10% under coverage B B. $0 C. Up to $50,000 D. $200,000 maximum for both structures

B. $0

A windstorm passes over Blake's property, causing damage to his roof and tearing up several trees and shrubs in the process. Assuming Blake carries a $120,000 DP-2 on his home, with a trees, shrubs, and other plants endorsement, what is the maximum Blake can receive for his 15 damaged plants? A. $7,500 - All perils are covered and all damaged plants are covered at $500 per plant B. $0 - Wind is not a covered peril under the trees, shrubs, and other plants coverage C. $500 - Only one occurrence is paid D. $6,000 - All perils are covered and damaged plants are covered at $500 per plant, up to 5% of coverage A limit

B. $0 - Wind is not a covered peril under the trees, shrubs, and other plants coverage

Elizabeth has a laptop computer that she takes everywhere she goes. While she is at the grocery store, her car is broken into and the laptop is stolen. Assuming it is valued at $2,000, how much can Elizabeth expect to be indemnified by her insurer (ignoring any deductible)? A. $500 B. $1,500 C. $2,000 D. $1,000

B. $1,500

A storm travels through town, partially destroying Wilma's business. Wilma maintains a Business Income coverage policy with $120,000 limit, and the Monthly Limit of Indemnity coverage option. Wilma's business incurred the following expenses: Monthly Expenses Month - Amount Month 1 - $29,000 Month 2 - $36,000 Month 3 - $24,000 Month 4 - $31,000 How much would her policy pay for lost income if Wilma had a monthly limit of 1/4 in place? A. $129,000 B. $113,000 C. $136,000 D. $120,000

B. $113,000

A dryer fire scorches the interior of Bill's home, and he is billed $627 by the fire department. Assuming Bill has the fire department service charge additional coverage, how much will Bill have to pay out of pocket? A. $0 B. $127 C. $427 D. $377

B. $127

James is walking down the street when Andrea, an uninsured motorist, strikes him with her car. James suffers $12,000 in injuries from the accident. He has personal injury protection of $10,000 from his own automobile insurance policy, which immediately pays him the full amount. By accepting $10,000 from his own insurance company, James has waived the right to sue Andrea for more than _____ for personal injury. A. $10,000 B. $2,000 C. $5,000 D. $12,000

B. $2,000

Jeremy owns a business with several machines covered under an equipment breakdown protection coverage form with a $500,000 limit. He has three deductibles on his policyL 1) a percentage deductible of 3% per loss, 2) a minimum deductible of $500, and 3) a maximum deductible of $10,000. After experiencing a covered loss of $85,000, how much will Jeremy have to pay out of his own pocket for the loss? A. $15,000 B. $2,550 C. $10,000 D. $500

B. $2,550

A storm travels through town, partially destroying Wilma's business, which is covered by a commercial property policy. Wilma maintains Business Income Coverage with a $100,000 limit, and the Maximum Period of Indemnity coverage option. Wilma's business incurred the following losses: Monthly Losses Month - Amount Month 1 - $19,000 Month 2 - $16,000 Month 3 - $14,000 Month 4 - $11,000 Month 5 - $6,000 How much would her policy pay for lost income? A. $100,000 B. $60,000 C. $120,000 D. $66,000

B. $60,000

Farmer Steve barely escapes a massive tornado, but the storm does completely destroy one of the barns on his property. Luckily, Steve has an insurance policy on his barn without a replacement cost endorsement, and the barn was fully insured. At the time of the loss, the actual cash value of the barn was $65,000, and its replacement cost is currently $85,000. What is the most Steve can collect from his insurer before he completes the repairs? A. $68,000 B. $65,000 C. $85,000 D. $52,000

B. $65,000

Zane's farmhouse was burglarized. The thieves stole his $4,000 sofa, his $3,000 silverware collection, and his $5,000 watch. Under Zane's farm insurance policy, which has a coverage A limit of $150,000, how much can he expect to receive in indemnification for this loss, assuming there are no endorsements and ignoring any deductibles? A. $7,500 B. $9,000 C. $8,000 D. $12,000

B. $9,000

An emergency insurance adjuster license in the State of Florida is good for ____ days. A. 90 B. 180 C. 60 D. 45

B. 180

If an insurer receives an inquiry from the Office of Insurance Regulation regarding a claim, it must respond appropriately within _______ days. A. 30 B. 21 C. 14 D. 90

B. 21

What requirements must wholesalers and distributors meet in order to be eligible for a BOP? A. 25% or less floor space is available to the general public, and less than 50% of gross income may come from retail sales B. 25% or less of floor space is available to the general public, and less than 25% of gross income may come from retail sales C. More than 10% of the floor space must be devoted to product storage, and less than 20% of expenditures may involve food service D. Less than 20% of annual expenditures may involved food service, and less than 10% of building area may be open to the public

B. 25% or less of floor space is available to the general public, and less than 25% of gross income may come from retail sales

In the Business and Personal Property Form of a commercial property policy, Coverage A - Buildings and Structures coverage would apply to which of the following features of a commercial enterprise? A. A small copy machine in the break room B. A 40-ton printing machine affixed to a factory floor C. A briefcase left in the lunchroom by a client D. A leased mainframe computer

B. A 40-ton printing machine affixed to a factory floor

Which of the following statements regarding commercial package policies (CPP) is TRUE? A. A CPP is an example of a monoline policy B. A CPP is an elective-based policy C. A CPP requires a separate declarations page for each coverage D. Workers' compensation insurance is automatically included with a CPP

B. A CPP is an elective-based policy

What is a base flood? A. A base flood is any flood caused by runoff waters B. A base flood is a flood that has a 1% chance of being equaled or exceeded in any given year C. A base flood is the highest flood level that has been reached in the previous 50 years D. A base flood is the average flood level expected in any given year

B. A base flood is a flood that has a 1% chance of being equaled or exceeded in any given year

Which of the following BEST describes a contract bond? A. A contract bond guarantees that all principal and interest will be repaid in compliance with a contractual agreement or promissory note B. A contract bond guarantees that a party will fulfill certain terms of a specific contract C. A contract bond protects an employer from losses resulting from employee dishonesty D. A contract bond guarantees an employee will perform his duties faithfully

B. A contract bond guarantees that a party will fulfill certain terms of a specific contract

Which of these statements about foreign insurers in Florida is TRUE? A. A foreign insurer must offer lower rates, but with higher deductibles, than domestic insurers. B. A foreign insurer can usually only issue insurance to someone who was denied coverage by domestic insurers. C. A foreign insurer can usually only issue insurance in amounts above regular policy limits. D. A foreign insurer does not need a certificate of authority from the state of Florida as long as it has one from its home state.

B. A foreign insurer can usually only issue insurance to someone who was denied coverage by domestic insurers.

All of the following would be covered by the NFIP general property form, except: A. A motel lobby's furnishings B. A homeowner's living room furniture C. A furniture store's inventory D. A medical office

B. A homeowner's living room furniture

Janine is in a car accident that is covered by per personal auto policy. What information does Janine NOT have to submit to her insurer? A. A proof of loss, when requested B. A list of the witnesses of the accident C. The report from a damage appraisal D. Medical bills from the collision

B. A list of the witnesses of the accident

Dr. Jones' current occurrence malpractice policy is in effect from July 1, 2005 through July 1, 2006. Which lawsuit would trigger this malpractice insurance policy? A. A man sues Dr. Jones on February 36,2007 for misdiagnosing cancer on December 21, 2006 B. A man sues Dr. Jones on July 26, 2009 for a damaging knee surgery performed on March 3, 2006 C. A woman sues Dr. Jones on July 17, 2005 for a poor nose job he performed on May 2, 2005 D. A woman sues Dr. Jones on January 24, 2006 for an eye surgery he performed on July 1, 2004

B. A man sues Dr. Jones on July 26, 2009 for a damaging knee surgery performed on March 3, 2006

Harold wants to buy an insurance policy for his home in Atlanta. The insurance company writes him a policy. To the insurance company, Harold's home is considered: A. A hazard B. A risk C. A loss D. An asset

B. A risk

Which of the following BEST describes the difference between surety bonds and fidelity bonds? A. Surety bonds are similar to insurance policies, but fidelity bonds don't usually involve insurance companies B. A surety bond guarantees one party that another party will perform certain duties; but a fidelity bond guarantees that a party will not perform certain acts C. A surety bond covers an employer against losses incurred from employee dishonesty, but a fidelity bond guarantees that an employee will fulfill his stated duties competently D. Surety bonds are only purchased by companies, but fidelity bonds may be purchased by companies or individuals

B. A surety bond guarantees one party that another party will perform certain duties; but a fidelity bond guarantees that a party will not perform certain acts

Actual losses incurred for increased expenses over and above what you normally would spend for food, shelter, or related items is called: A. Unscheduled personal property B. Additional living expenses C. Household personal property limits D. Fair rental value

B. Additional living expenses

Which of the following expenses would NOT be covered under a homeowners policy additional coverage called Claims Expenses? A. Interest accrual on judgements B. Administrative costs related to renewing the insured's policy C. Premiums for bonds required in a lawsuit defended by the insurer D. Up to $250 per day for the insured's lost wages while the insured is helping with the claim investigation

B. Administrative costs related to renewing the insured's policy

Dr. Nelson routinely schedules her patients for lab tests that they don't need so she can charge their insurers for more money. Dr. Nelson is: A. Operating within the letter of the law, if not its intent B. Committing health insurance fraud C. Committing subrogation D. Committing a tortfeasor

B. Committing health insurance fraud

Shirley was severely injured in a car accident and now cannot work as a result. Even though she filed her claim promptly, her insurer is taking a long time to decide on a final settlement amount. What kind of settlement option would be most convenient for both Shirley and the insurer? A. No release settlement B. Advanced payment settlement C. Full release settlement D. Scheduled payment release

B. Advanced payment settlement

Eric works in Florida for Gemutlich Insurance. His company is licensed to sell insurance in Florida, but is based out of Munich, Germany. Gemutlich Insurance was formed under German law, but follows all applicable Florida laws and possesses a Florida Certificate of Authority to sell their product. Which type of insurer does Eric work for? A. Surplus Insurer B. Alien Insurer C. Foreign Insurer D. Domestic Insurer

B. Alien Insurer

which of the following would NOT be covered under a personal auto policy? A. A 15-passenger van weighing 7,200 lbs. B. An 18-wheeler with a driver and a passenger C. A passenger car used by a son or daughter who is home from college D. A passenger car loaned to a friend

B. An 18-wheeler with a driver and a passenger

Angie just got her adjuster license in Florida on May 11, 2016. Her birthday is March 10, 1983. When will her license expire? A. March 31, 2018 B. Angie's license will only expire if she goes 4 years without an appointment. C. May 11, 2018 D. March 10, 2018

B. Angie's license will only expire if she goes 4 years without an appointment.

An item's replacement cost divided by the number of years its expected or useful life is its: A. Annual replacement cost B. Annual depreciation C. Accumulated depreciation D. Actual cash value

B. Annual depreciation

After her business suffered damage in a fire, Jane filed a claim with Acme Insurance, which dispatched Bob to adjust it, even though he was not allowed to adjust commercial claims. He investigated Jane's losses and submitted his estimate to Acme Insurance, which issued her a settlement check based on that estimate. Bob had _____ because Acme Insurance accepted his estimate and paid Jane's claim. A. Agency authority B. Apparent authority C. Express authority D. Expert authority

B. Apparent authority

Arlene's house suffered structural damage in an earthquake last year, but her policy does not cover earthquake damage, so Arlene never got it fixed. When a tornado rips through her neighborhood, it causes some roof damage totaling in $2,000, and Arlene sees an opportunity in the situation. She files a claim for the roof damage, but also claims that the tornado caused the structural damage to her house that was actually caused by the earthquake last year. Which of the following statements is true? A. Arlene has just created a morale hazard B. Arlene has just committed soft fraud C. Arlene has just created a physical hazard D. Arlene has just committed hard fraud

B. Arlene has just committed soft fraud

Kyle operates a collision repair garage and has many vehicles in his care, some for extended periods of time. Which type of coverage protects Kyle from any liability claims which may arise if one of the cars is further damaged or destroyed while in his possession? A. Non-Owned Vehicle Coverage B. Bailee Coverage C. Bailment Bailee Coverage is the insurance which protects the party responsible for the possessions of another. D. Subrogation

B. Bailee Coverage

Bonnie's PAP includes Comprehensive coverage. Which of the following losses could this coverage pay for? A. Bonnie's car breaks down due to an engine malfunction. B. Bonnie's car catches fire. C. Bonnie rolls her vehicle in a one-car accident. D. Bonnie rear-ends another vehicle.

B. Bonnie's car catches fire.

Which of the following is NOT excluded from coverage under a mechanical breakdown insurance policy? A. Breakdown due to racing or reckless driving B. Breakdown due to the cracking of an engine block C. Breakdown covered by regular auto insurance D. Breakdown due to neglect or delay in maintenance

B. Breakdown due to the cracking of an engine block

Which of the following provides basic property insurance for consumers who cannot secure coverage in the regular insurance market? A. Umbrella Coverage B. Citizens Property Insurance Corporation C. HO Coverage C D. FECA - Federal Employees Compensation Act

B. Citizens Property Insurance Corporation

As Paul is driving up to the mountains to do some hunting, a deer sprints out in front of him. He strikes the deer, causing $5,000 in damage to his truck at $1,000 in injuries to himself. What insurance coverage would pay for the damage to Paul's truck? A. PIP B. Comprehensive C. Collision D. Liability

B. Comprehensive

A lightning strike causes one of the storage building on John's farm to burn to the ground, aided by the fuel tanks he kept in the building. John knows he wasn't supposed to store any fuel in the building, so he keeps that piece of information to himself when he files a claim. John's insurer may deny has claim based on his: A. Arson B. Concealment C. Liberalization D. Hard fraud

B. Concealment

Which of the following activities would most likely not be a useful negotiation technique? A. Producing a backup offer if the first offer is completely rejected by the claimant B. Conceding to a claimant's point that is an obvious ploy C. Making minor changes to the offer that still fall within the insurer's parameters D. Lengthening your silence to an uncomfortable point

B. Conceding to a claimant's point that is an obvious ploy

In which section of the policy might you find the following statement? "Damage to insured property must be reported within 15 days of the damaging occurrence." A. Exclusions B. Conditions C. Definitions D. Declarations page

B. Conditions

Bill purchased a policy from ABC Insurance. Several months later, he filed a claim which was denied. While reviewing his policy, he found several ambiguities in the policy and decided to challenge the insurer's decision. When the dispute went to trial, the court ruled in Bill's favor. This is because insurance policies are: A. Aleatory contracts B. Contracts of adhesion C. Personal contractions D. Contracts of utmost good faith

B. Contracts of adhesion

Which of the following crops is covered under a coarse grains provision? A. Oats B. Corn C. Barley D. Wheat

B. Corn

Which of the following is NOT a reason why litigation is considered a "last resort" for the insurer? A. The insurer's reputation may be at stake B. Courts and laws favor litigation to negotiation C. It is unpredictable because control is relinquished to a potentially prejudice jury D. It is an expensive process

B. Courts and laws favor litigation to negotiation

In a BOP, the purpose of supplementary payments in conjunction with liability coverage is to: A. Cover the cost of additional damage that was discovered after the settlement was paid B. Cover costs associated with defending and investigating a claim against the insured C. Make incidental payments to an injured claimant before the final settlement amount is reached D. Cover a claimant's lost wages after suffering an injury caused by the insured

B. Cover costs associated with defending and investigating a claim against the insured

During a terrible storm, a tree falls right next to Jill's home, nearly taking out her roof. Fortunately the tree missed her house, but it landed on her air conditioning compressor, destroying it completely. Which coverage form might cover the loss of Jill's air conditioning compressor? A. Coverage C - Personal Property B. Coverage A - Dwelling C. Coverage D - Loss of Use D. Coverage B - Other Structures

B. Coverage A - Dwelling

Bob owns a farm that has been handed down through his family for six generations. One night, a fierce storm brings down several trees onto the family's private cemetery, damaging three headstones. Which coverage would help Bob with the cost of replacing the headstones? A. Coverage D - loss of use B. Coverage A - dwelling C. Coverage C - personal property D. Coverage B - detached structures

B. Coverage A - dwelling

In a dwelling policy, coverage for a stand-alone lamp post in the front yard would fall under: A. Coverage C B. Coverage B C. Coverage A D. Coverage D

B. Coverage B

Under Coverage F - Medical Payments to Others, the Payment of Claim provision states: A. all payments made under Coverage F will be paid at actual cash value. B. Coverage F is voluntary coverage: even if a claim is paid, it is not an admission of the insurer's liability. C. no payments will be made until the insurer's liability has been determined. D. the insurer reserves the right to demand a proof of loss before paying an indemnity under Coverage F.

B. Coverage F is voluntary coverage: even if a claim is paid, it is not an admission of the insurer's liability.

Insurance that provides coverage against the loss of crop value is called: A. Crop-yield insurance B. Crop-revenue insurance C. Multi-peril crop insurance D. Crop-hail insurance

B. Crop-revenue insurance

Farmer Fred hired Farmer Bob to apply chemicals to a field of tomatoes. Thinking that Fred was talking about a field of potatoes, Bob inadvertently destroyed the field of tomatoes by applying chemicals that were meant for potatoes. What type of coverage would protect Bob? A. Bodily injury and property damage liability B. Custom farming liability C. Farm employee's liability D. Farm product liability

B. Custom farming liability

NOP Systems, a U.S. company, has just signed a contract with Xen Electronics, a Malaysian company, to sell its superconductors overseas. One of the terms of the contract was that NOP Systems guarantee that they will pay all applicable taxes and fees, as well as follow all exportation laws. NOP Systems can accomplish this by purchasing a: A. Fidelity bond B. Customs bond C. Fiduciary bond D. Ocean marine bond

B. Customs bond

A company that wants to insure itself against losses due to data breach should purchase: A. Directors and officers (D & O) liability insurance B. Cyber and privacy insurance C. Fiduciary liability insurance D. Malpractice insurance

B. Cyber and privacy insurance

Errors and omissions coverage in an equipment breakdown protection policy provides coverage for: A. Losses sustained by the insured's customers because of the insured's error or omission of material information B. Damage that would not otherwise be covered because the insured made a mistake or unintentionally omitted information required by the insurer C. Damage sustained by the insured after a contingent business made a mistake or unintentionally omitted information required by the insured D. Losses sustained by the insured because of the insurer's error or omission of material information

B. Damage that would not otherwise be covered because the insured made a mistake or unintentionally omitted information required by the insurer

All of the following are typically excluded from liability coverage in a BOP, except: A. Property damage to the insured's products B. Damage to premises rented by the insured C. Employee injuries D. Contractual liability

B. Damage to premises rented by the insured

In an insurance policy, where might one find the make and model of the covered vehicle? A. Definitions B. Declarations C. Conditions D. Exclusions

B. Declarations

John works for ABC Insurance. He is paid on a commission basis and needs to meet certain sales goals in order to draw a reasonable salary. To help in this endeavor, John regularly tells potential clients that XYZ Insurance and Integritas Insurance often fail to pay claims, and that they charge unreasonably high premiums. In speaking falsely of his competition, John has indulged in which unethical practice? A. Kickbacks B. Defamation C. Boycott D. Twisting

B. Defamation

A store manager issues a customer a refund check for $1.00. One year later, an auditor going over the books discovers that the customer altered the check and cashed it for $1,000. What type of commercial crime coverage might indemnify the store owner for the loss? A. Employee theft - scheduled positions B. Forgery or alterations C. Inside the premises - theft of money and securities D. Employee theft- scheduled persons

B. Forgery or alterations

Chandler is a photographer who is taking pictures at a reenactment of the Battle of Gettysburg, when Harper (Union Cavalry) crashed through the brush and into Chandler, breaking both his arms and his camera. In court, Chandler demands payment not only for his medical bills and broken camera, but for future lost business; now that he is unable to take pictures for the next 6 months, his clients are moving on and entering into contracts with other photographers. When Chandler speaks of this total amount of all damages that have resulted and will result from Harper's mistake, he is referring to: A. Reservation of rights B. Diminution of value C. Joint tortfeasors D. Punitive damages

B. Diminution of value

Going over the numbers, Henry notices that his annual sales revenue seems to be lower than it should be. He suspects that this may be caused by employee dishonesty, and discreetly launches an investigation into his business. He finds that a theft occurred two years ago. Which type of commercial crime coverage would be best suited to cover Henry's loss? A. Loss sustained form B. Discovery form C. Subrogation form D. Past and present theft

B. Discovery form

Dwelling policies and homeowners policies provide a variety of insurance protections for consumers. What is the primary difference between a typical homeowners policy and a dwelling policy? A. Dwelling policies do not provide coverage for personal possessions B. Dwelling policies do not provide liability insurance C. Dwelling policies do not cover owner-occupied properties D. Dwelling policies do not offer "loss of use" coverage

B. Dwelling policies do not provide liability insurance

A severe storm rages through Oklahoma City, with tornados causing multiple square miles worth of damage. All the licensed adjusters in the area are already occupied or deployed to the scene. Who can the insurance commissioner look to for temporary help resolving the rest of the claims from this storm? A. Staff adjusters B. Emergency adjusters C. Independent adjusters D. Public adjusters

B. Emergency adjusters

Ken, an editor for a major newspaper, is fired after arriving to work late. He files suit against his employer for wrongful termination. Which type of insurance would Ken's employer need to help cover the costs of the lawsuit? A. Commercial liability insurance B. Employment practices liability insurance C. Workers compensation insurance D. Fiduciary liability insurance

B. Employment practices liability insurance

All of the following are elements of the adjuster code of ethics, EXCEPT: A. Acting with speed and care in completing the adjusting process B. Ensuring that the claimant's attorney understands his rights C. Disclosing all direct and indirect financial interest the adjuster has in adjusting a claim D. Treating all claimants equally

B. Ensuring that the claimant's attorney understands his rights

Jim is working a claim. Currently, he is applying all financial provisions of the policy, including the policy limits, co-insurance, valuation, and deductibles. In which stage of the claims process is Jim currently working? A. Negotiation B. Evaluation C. Investigation D. Reporting

B. Evaluation

Jane caused an auto accident while driving the company vehicle for work. Unfortunately, the van she ran into was carrying 6 passengers, all of whom were injured in the accident. The total of everyone's injuries comes to $210,000. Jane's company's business auto policy only covers up to $100,000 in bodily injury per accident. Which of the following might help cover the remaining liability caused by Jane's accident? A. Extended liability policy B. Excess liability policy C. Business owners policy D. Commercial general liability policy

B. Excess liability policy

A captive insurance company: A. Provides insurance that is designed to meet the needs of the general public B. Exists solely to provide insurance for its parent company C. Provides insurance for insurers D. Operates through an attorney-in-fact to provide insurance benefits for its members

B. Exists solely to provide insurance for its parent company

When one of Frank's ovens breaks down at his wholesale bakery, it causes a dip in production that drastically affects the bottom line of the business. Luckily for Frank, he has an equipment breakdown protection coverage form that can help cover the cost of repairing the expensive oven. Which policy coverage can help pay for costs associated with making temporary repairs and speeding up the permanent repairs? A. Oven repair and operations B. Expediting expenses C. Automatic coverage D. Supplementary payment

B. Expediting expenses

An insurer can rescind a policy if the policyholder does nay of the following, EXCEPT: A. Lies or conceals information in the application B. Fails to pay the premium C. Makes a mistake in the application that significantly affects the insurer D. Makes a fraudulent claim to get benefits

B. Fails to pay the premium

RWW Insurance creates a radio promotion where they advertise that they will insure any car for $200 a year. They don't actually offer such a plan, but they figure they will be able to sell hundreds of policies to people who show up looking for the bargain. What type of unfair insurance trade practice does this behavior exemplify? A. Unfair discrimination B. False information and advertising C. Misrepresentations D. Illegal kickbacks

B. False information and advertising

Which government entity is responsible for subsidizing multi-peril crop insurance policies? A. US Department of agriculture B. Federal crop insurance corporation C. National crop insurance services D. Federal crop administration

B. Federal crop insurance corporation

Which of the following is not a common exclusion from aviation policies? A. Losses to tires B. Fire C. War risks D. Mechanical breakdown

B. Fire

Which of the following statements is NOT true of the "give and take" nature of the negotiation process? A. It is not always possible to prevail on every point B. Flexibility prevents negotiation and causes frustration C. "Give and take" is the heart and soul of a successful negotiation session D. Conceding some points increases the likelihood of the opposing party also conceding points

B. Flexibility prevents negotiation and causes frustration

Bill lives in a state which doesn't require adjuster licensing, but he wants to get a job in Florida as an adjuster. He is confused about which state he should list as his home state, since his home state does not actually license claims adjusters. Bill should list _______ as his home state. A. Not Applicable B. Florida C. Independent D. Maine

B. Florida

An insurer that adheres to the laws of a state but is located outside of that state is called a(n) _____ insurer. A. Alien B. Foreign C. Domestic D. National

B. Foreign

From a legal standpoint, when a policyholder files a claim against her insurance policy, she is essentially submitting a / an: A. Indemnification B. Formal request to settle the damage C. Order for damage repairs D. Bill for damage repairs

B. Formal request to settle the damage

An explosion takes place at Acme manufacturing plant. Four employees are injured. Gina broke her leg and has third degree burns on 10% of her body. George's left leg is hurt so seriously that it later needs to be amputated. Taylor is permanently blind in one eye, and Jason has third degree burns on 15% of his body. Which of these employees is eligible for Permanent Total disability benefits? A. Jason B. George C. Taylor D. Gina

B. George

Hank has collision coverage with a $2,000 deductible on his 2010 truck. One dark, rainy night, Hank's truck slips off the road and rolls down the embankment. The truck sustains $45,000 in damages, but the actual cash value of the vehicle is only $25,000. Which of the following statements is TRUE? A. Collision coverage will not indemnify Hank for this accident B. Hank will be indemnified by his insurer for $23,000 C. Hank will be indemnified by his insurer for $25,000 D. Hank will be indemnified by his insurer for $43,000

B. Hank will be indemnified by his insurer for $23,000

Which of the following ISO forms is most commonly used? A. Homeowners 6 B. Homeowners 3 C. Homeowners 4 D. Homeowners 5

B. Homeowners 3

Which of the following is NOT a form of insurance fraud? A. Faking a death B. Increasing your insurance coverage when you think a loss is likely C. Lightning a candle and leaving it next to your window curtains before leaving for work D. Staging an accident

B. Increasing your insurance coverage when you think a loss is likely

Which of the following is a feature typically found in a business owners policy? A. Coverage for company-owned vehicles B. Inflation guard for buildings and structures C. Professional liability coverage D. Malpractice coverage

B. Inflation guard for buildings and structures

Which of the following statements about inland marine insurance is FALSE? A. Inland marine insurance can provide coverage for television towers B. Inland marine insurance only covers goods that travel over inland waters C. An inland marine insurance policy can cover goods shipped by plane D. Inland marine insurance policies are often called "floaters"

B. Inland marine insurance only covers goods that travel over inland waters

The Risk Management Agency is responsible for all of the following, except: A. Assigning commodity prices B. Issuing crop assignments to farmers C. Reimbursing private crop insurers for administrative costs D. Setting critical production dates

B. Issuing crop assignments to farmers

Which of the following is NOT an "auto" according to the BAP? A. Minivan used for shuttle B. Cherry picker truck C. Owner's car D. Front end loader

D. Front end loader

Which of the following is NOT among the reasons why insurers seek to avoid litigation? A. It is expensive B. It invariably harms the insurer's reputation C. It is unpredictable D. Juries might be prejudiced against insurers

B. It invariably harms the insurer's reputation

Which of the following statements about the standard fire policy is TRUE? A. It is an open peril policy B. It is the basis of all property insurance policies C. It offers coverage against wind and hail damage D. It offers replacement cost valuations

B. It is the basis of all property insurance policies

Berry Techie is a graphic animation and design company. Their commercial property insurance policy includes electronic data processing coverage. Which of the following statements about Berry Techie's EDP coverage is FALSE? A. It will cover lost income as a result of a loss to Berry Techie's electronic data B. It only provides coverage for the electronic data, not the computer equipment C. It has a limit of coverage D. It cannot stand alone as its own policy. Rather, it is only sold as an endorsement

B. It only provides coverage for the electronic data, not the computer equipment

What is the main purpose of an Owners and Contractors Protective Liability Form that can be added to a CGL policy? A. As opposed to a CGL, it provides Medical Payments coverage to the insured. B. It provides separate insurance coverage for specific jobs performed by an independent contractor. C. It increases the General Aggregate limits on a standard CGL. D. It provides Completed-Operations liability for multiple locations at one time.

B. It provides separate insurance coverage for specific jobs performed by an independent contractor.

Which of the following statements is TRUE regarding mechanical breakdown insurance? A. It would indemnify a policyholder for damage to an engine caused by the owner inadvertently driving into a lake B. It will not cover the cost of repairs that exceed the value of a vehicle C. It covers oil changes and tire rotation D. It covers damage caused by the towing process

B. It will not cover the cost of repairs that exceed the value of a vehicle

Which of the following is TRUE regarding loss settlement in a jewelers block? A. Historical or antique value is factored into the value of damaged property at the time of the loss B. It will pay the least of ACV, the cost to restore, the cost to replace, or the lowest amount listed on the company's books C. It pays on an agreed value basis D. Value of insured property is agreed upon at the policy inception and cannot change until the next policy period

B. It will pay the least of ACV, the cost to restore, the cost to replace, or the lowest amount listed on the company's books

Jessica is trying to earn the trust of a claimant with whom she is negotiating a settlement. Which of the following actions will probably NOT help her to earn his trust? A. Jessica makes sure that she is dressed professionally B. Jessica goes into the negotiation with a "win at all costs" attitude C. Jessica makes eye contact with the claimant, smiles, and shakes his hand D. Jessica refrains from commenting on the way the claimant is dressed, and keeps her opinions about his appearance to herself

B. Jessica goes into the negotiation with a "win at all costs" attitude

ABC Park Construction recently won a bid to reconstruct the town park. They secure a suretyship from Parker Sureties and begin work on the project. Parker Sureties occasionally comes by to check on the progress of the project, and to make sure things are staying on schedule and on budget. Parker Sureties is exercising: A. Micro-management B. Joint control C. Fidelity stewardship D. Surety stewardship

B. Joint control

A(n) _____ allows an insurer to specifically exclude insurance coverage from a claims-made CGL policy for a product with a spotty safety record. A. Basic Extended Reporting Period B. Laser Beam endorsement C. Insured Contract D. Contractual liability

B. Laser Beam endorsement

All of the following are covered under coverage A of a business owners policy, except: A. Flooring and floor coverings B. Leased business personal property that must be insured C. Owner's furniture in an apartment that is rented as furnished D. Building maintenance equipment, such as fire extinguishers

B. Leased business personal property that must be insured

While working on a customer's industrial copier in the repair facility, an employee at RZJ Electronics Repair accidentally destroys the copier, causing $3,000 in damage. What commercial property coverage might apply? A. Extra Expense coverage B. Legal Liability coverage C. Business Interruption coverage D. Employees Personal Property coverage

B. Legal Liability coverage

When the Coast Guard stops and boards a ship operated by XYZ Herbal Shipping, they find four pounds of contraband mixed in with other herbal supplements imported from South America. The Coast Guard seizes all the cargo and arrests the operators of the vessel. XYZ Herbal Shipping files a claim with its insurer for the seized cargo, but the claim comes back denied. Which implied warranty explains why this coverage was denied? A. Condition of cargo B. Legality C. No deviation in voyage D. Seaworthiness

B. Legality

Lemon Insurance Co. decides not to renew Hugh's Personal Auto policy, which is set to expire on May 31. Which of the following statements is TRUE? A. Lemon Insurance must notify Hugh at least 10 days before the policy expires. B. Lemon Insurance must notify Hugh at least 45 days before the policy expires. C. Hugh's policy will be effective until 12:00 AM on June 1. D. Hugh's policy will be effective until 11:59 PM on May 31.

B. Lemon Insurance must notify Hugh at least 45 days before the policy expires.

A recent flood caused $5,000 in damages to Maxwell's outdoor furniture and professional grade barbeque grill that he keeps on his patio. If Maxwell has a flood insurance policy with $25,000 of personal property coverage, which of the following statements is true? A. Maxwell's insurer will pay $5,000 to indemnify him for his damaged property B. Maxwell's insurer will pay nothing for this loss, because the damaged property was not inside a building C. Maxwell's insurer will pay nothing for this loss, because the damaged items are not considered personal property D. Maxwell's flood policy will cover the flood-damaged property, but only up to $2,500

B. Maxwell's insurer will pay nothing for this loss, because the damaged property was not inside a building

Jane, an interior designer, is helping her client Grace choose new curtains and furniture. While at Jane's office, Grace trips on some material and falls, breaking her arm. Which CGL coverage would help pay for Grace's resulting expenses? A. Product Liability B. Medical Payments C. Operations Liability D. Grace's homeowners insurance

B. Medical Payments

Which of the following coverages would need to be added by endorsement to a DP-3? A. Other structures B. Medical payments C. Loss of use D. Personal property

B. Medical payments

Which of these statements about the jewelers bock is FALSE? A. Coverage for theft of money form the insured's vault is an optional coverage that may be added to the policy B. Merchandise that is still in the jeweler's custody is not covered if it has already been sold C. Property of others in the insured's custody is covered, regardless of whether it is in the jewelry trade D. It is meant for jewelers with up to $250,000 in stock

B. Merchandise that is still in the jeweler's custody is not covered if it has already been sold

Which of the following best describes how losses are valued under a commercial crime policy? A. Money is valued at face value; securities are set at their value on the day the loss is discovered; and other property is valued at actual cash value B. Money is valued at face value; securities are set at their value on the day the loss is discovered; and other property is valued at the lesser of the cost to repair or replace C. Money is valued at face value; securities are set at their value on the day the settlement is paid; and other property is valued at the lesser of the cost to repair or replace D. Money is valued at face value; securities are set at their value on the day the settlement is paid; and other property is valued at replacement cost

B. Money is valued at face value; securities are set at their value on the day the loss is discovered; and other property is valued at the lesser of the cost to repair or replace

During a heavy rainstorm, Ben's basement flooded and suffered extensive water damage. Which section of Ben's Homeowners 3 policy will cover this damage? A. Coverage C - Personal Property B. None C. Discharge of Steam or Water D. Coverage A - Dwelling

B. None

Joe has a basic DP-1 policy on his home, without any endorsements. During a storm, a tree limb is blown down onto his attached garage. The limb crashes through the roof and lands on Joe's water softener tank, destroying it completely. Which of these damages would be covered under coverage A in Joe's policy? A. The water softener B. None C. The roof D. Both the water softener and the roof

B. None

Joe has a basic DP-1 policy on his home, without any endorsements. During a storm, a tree limb is blown down onto his attached garage. The limb crashes through the roof and lands on Joe's water softener tank, destroying it completely. Which of these damages would be covered under coverage B in Joe's policy? A. The roof B. None C. Both the water softener and the roof D. The water softener

B. None

As a requirement for getting his California adjuster license, Danny is required to submit proof of bonding with his application. He purchases a surety bond from PBJ Bonds. In this contract, Danny is considered the: A. Guarantor B. Obligor C. Obligee D. Indemnitor

B. Obligor

PIP coverage will pay for injuries to all of the following persons, EXCEPT: A. Your passenger without PIP B. The driver you struck C. You, when riding in another person's automobile D. Your family member

B. The driver you struck

ABC Paving would like to purchase comprehensive coverage for all the passenger vehicles in their fleet of 87 cars. They don't feel it's necessary to get this coverage for their 4 tractors and 8 pavers. How would a business auto policy most likely apply this comprehensive coverage? A. Any auto B. Owned private passenger autos only C. Specifically described autos D. Non-owned autos

B. Owned private passenger autos only

ABC Paving would like to purchase comprehensive coverage for all the passenger vehicles in their fleet of 87 cars. They don't feel it's necessary to get this coverage for their 4 tractors and 8 pavers. How would a business auto policy most likely apply this comprehensive coverage? A. Non-owned autos B. Owned private passenger autos only C. Specifically described autos D. Any auto

B. Owned private passenger autos only

When XYZ Shipping's vessels sets off from port, it is carrying $150,000 in cargo for Sally's Salamander Oil, and $250,000 in cargo for Frank's Feline Air Fresheners. When a fire on deck totally destroys Frank's Feline Air Fresheners cargo, the insurer for Sally's Salamander Oil is not obligated to pay for any of the loss. This is because of the: A. Sue and labor clause B. Particular average clause C. General average clause D. Cost and freight clause

B. Particular average clause

Which of the following would NOT be covered under barns, outbuildings, and other farm structures coverage? A. Silo B. Pasture fencing C. A feeding pen D. A temporary structure used in the storage of hay

B. Pasture fencing

Ben owns a souvenir shop in a small town. During the winter time, the population consists of about 2,000 locals, but once the summer season hits, it's a mad-house. The island can see over a million travelers during the summer season, and Ben must be ready with enough inventory to handle the demand. Which endorsement to his commercial property policy could temporarily increase Ben's coverage limits during this high-volume time? A. Legal Liability B. Peak Season C. Protective Safeguard D. Tourism Endorsement

B. Peak Season

In a surety bond, the maximum amount a surety is required to pay is known as a: A. Maximum allowance B. Penal sum C. Contract fee D. Top rate

B. Penal sum

Rhonda's homeowners policy states her deductible is 2% of the value of her home. What type of deductible does Rhonda have? A. Fixed deductible B. Percentage deductible C. Franchise deductible

B. Percentage deductible

Which of the following terms refers to the time elapsed between a covered loss to a commercial building and the return to full business operations of the same building? A. Period of Construction B. Period of Restoration C. Period of Indemnity D. Property Preservation Window

B. Period of Restoration

Jackie files a lawsuit against Ginger after Ginger's three-year-old daughter ruins Jackie's laptop during a flight. When they go to court, Jackie is the: A. Tortfeasor B. Plaintiff C. Tort D. Defendant

B. Plaintiff

Once a claimant files a complaint to the court, the claimant will become the: A. Defendant B. Plaintiff C. Negligent party D. Answering party

B. Plaintiff

Frank's computer store lies in the direct path of a rapidly approaching wildfire. In an attempt to diminish possible damages, Frank loads his most valuable computers into a truck and drives them to a remote storage facility. However, as he is unloading the computers, someone hijacks his truck and steals all of the merchandise still inside. What commercial property coverage would indemnify Frank for the theft of the computers? A. Electronic Data B. Preservation of Property C. None D. Extra Expense

B. Preservation of Property

Grace purchased a recliner from XYZ Furniture. After getting it home, she decided to try out the new chair. While leaning back, the chair broke and Grace injured her neck. She sued XYZ Furniture and was awarded $300,000. Under which limit in XYZ Furniture's CGL policy would these damages be paid? A. General Liability Limit B. Products-Completed Operations Limit C. General Aggregate Limit D. Negligence Limit

B. Products-Completed Operations Limit

Which of these statements about Hurricane coverage in Florida is FALSE? A. The minimum deductible for this coverage is $500. B. Properties along the coast are required to buy this coverage through the Citizens Property Insurance Corporation. C. The deductible for this coverage is often higher than the deductible that applies to the rest of the policy. D. All Florida residential property insurance policies must include it.

B. Properties along the coast are required to buy this coverage through the Citizens Property Insurance Corporation.

Which of the following can NOT cover the death of the insured's cow due to a lightning strike? A. Unscheduled farm personal property coverage B. Property damage liability C. Livestock floater D. Scheduled farm personal property coverage

B. Property damage liability

Which of the following is NOT one of the typical duties of the insured after a loss? A. Sign a sworn proof of loss B. Provide a loss estimate from an appraiser C. Cooperate with the adjuster's investigation D. Protect the property from further losses

B. Provide a loss estimate from an appraiser

Which of the following does NOT count as "bodily injury" according to a personal auto policy? A. Sickness B. Psychological trauma C. Death D. Disease

B. Psychological trauma

Eileen has been the victim of libel and slander. She decides to take the culprit to court and is awarded damages. Which type of damages best describes those awarded to Eileen? A. No-fault damages B. Punitive damages C. Medical payments D. BAP liability

B. Punitive damages

Asking questions can be a useful negotiation technique. Which of the following would NOT help the adjuster during negotiations? A. Sincere questions to better understand any new facts presented by the claimant B. Questioning the claimant's ethics when the claimant is apparently lying C. Clarifying questions to attempt to understand the claimant's perspective D. Detailed questions to discover the claimant's ultimate goal

B. Questioning the claimant's ethics when the claimant is apparently lying

Which of the following people committed soft fraud? A. Ian, who works as a claims processor for ABC Insurance, regularly creates fake claims and has the settlement checks sent to his brother B. Rafael accidently slipped on a wet floor at the supermarket. Although his only injury was a sprained ankle, he claimed he had back and neck pain when he sued the supermarket in an effort to get more money in the settlement C. Taariq slammed on the brakes in order to make the person behind him run into the back of his truck, so he could collect a settlement from their insurance D. Farah doused her sofa with gasoline, started a fire, and burned down her house so she could collect money from her insurer

B. Rafael accidently slipped on a wet floor at the supermarket. Although his only injury was a sprained ankle, he claimed he had back and neck pain when he sued the supermarket in an effort to get more money in the settlement

When an insurer buys insurance to reduce its exposure to loss, this is called: A. Mitigation B. Re-insurance C. Co-insurance D. Loss reduction

B. Re-insurance

Strong winds have blown many shingles off of Mark's roof, and the weather forecast is predicting an 80% chance of thunderstorms tomorrow. Mark heads to his local hardware store and purchases a ladder and tarp so he can temporarily keep water out of his home until the roof can be repaired. Which type of additional coverage might reimburse Mark for the cost of the materials purchased? A. Property Removal B. Reasonable Repairs C. Loss Assessment D. Debris Removal

B. Reasonable Repairs

Lightning strikes a tree in Pam's front yard, sending a limb crashing through her bay window. Pam hires a contractor to put up some plywood, temporarily sheltering the living room from the elements until she can get a few estimates and have the window replaced. Which coverage in her DP-3 could help with the cost of installing the plywood? A. Trees, shrubs, other plants B. Reasonable repairs C. Debris removal D. Improvements, alterations, and additions

B. Reasonable repairs

What is the formula for actual cash value? A. Replacement cost minus annual depreciation B. Replacement cost minus total depreciation C. Original cost minus total depreciation D. Fair market value minus annual depreciation

B. Replacement cost minus total depreciation

When an applicant for a homeowners insurance policy lists the address, size, and description of his home, he is providing: A. Misrepresentations B. Representations C. Declarations page D. Factual misrepresentations

B. Representations

Jim has been an adjuster for several years. He is always candid and genuine in his negotiations, and he listens to his claimants' needs. Jim exercises an appropriate amount of "give and take" in his negotiations, and he always does extensive research on every claim, to ensure that he offers a fair and equitable settlement. Jim's actions help to build his: A. Attitude B. Reputation C. First impression D. Portfolio

B. Reputation

The employee retirement income security act (ERISA): A. Regulates how insurance companies collect, use, and share personal information about their policyholders B. Requires that every fiduciary of an employee benefit plan and every person who handles funds or other property of those plans must be bonded C. Regulates how financial institutions collect, share, and use consumers' personal and financial information D. Safeguards medical patient privacy and establishes rules about how patients' personal information should be treated

B. Requires that every fiduciary of an employee benefit plan and every person who handles funds or other property of those plans must be bonded

A passenger on a commercial airline flight was injured when the plane crashed due to a mechanical problem. In court, the injured passenger's lawyer could invoke the doctrine of: A. Contributory negligence B. Res Ispa Loquitur C. Comparative negligence D. Assumption of risk

B. Res Ispa Loquitur

The statute of limitations is intended to: A. Limit the amount of damages awarded in a lawsuit B. Restrict the jurisdiction in which a claimant can file a lawsuit C. Limit the amount of financial damages a claimant can request in a lawsuit

B. Restrict the jurisdiction in which a claimant can file a lawsuit

Six Stars Development Company has just been offered a great deal on ten large properties in Las Vegas. The economy in Las Vegas has been declining recently, but the CEO of Six Stars expects it to recover soon. This could be an exceptional opportunity for Six Stars, but it's also pretty risky. Ultimately, the Six Stars executive team decides not to purchase the properties. This is an example of: A. Risk transference B. Risk avoidance C. Risk retention D. Risk reduction

B. Risk avoidance

Six Stars Development Company has just purchased several large properties in Las Vegas. As a result of this large purchase, they are a little short on money and decide to save money by not purchasing insurance on their new properties. Six Stars is practicing: A. Risk avoidance B. Risk retention C. Risk reduction D. Risk transference

B. Risk retention

Which of the following statements about risk retention groups is FALSE? A. Risk retention groups are subject to state laws regarding Unfair Claims Settlement practices B. Risk retention groups must be licensed in every state in which they operate C. Risk retention groups are a form of self-insurance D. Risk retention groups con provide commercial liability insurance

B. Risk retention groups must be licensed in every state in which they operate

Diane needs to insurer her new $90,000 combine. She already has an insurance policy for her farm, but it currently doesn't provide enough coverage for such an expensive piece of equipment. What type of coverage does Diane need to purchase to cover the combine? A. Unscheduled farm personal property B. Scheduled mobile agricultural machinery and equipment form C. Excess machinery floater D. Scheduled farm personal property

B. Scheduled mobile agricultural machinery and equipment form

The write your own program allows private insurers to: A. Change coverage after a claim has been filed B. Sell standardized NFIP policies C. Give policyholders the opportunity to design their own policies D. Write their own flood policies

B. Sell standardized NFIP policies

Greg is sitting in his home when he feels the ground shake and give way beneath him. He is just able to escape before a large portion of his house falls into an enormous hole. Which endorsement would help Greg cover the losses caused by the ground falling out from underneath his home? A. Sewer Backup endorsement B. Sinkhole Collapse endorsement C. Hurricane Damage endorsement D. Earthquake endorsement

B. Sinkhole Collapse endorsement

When Jane rear-ends Frank, she causes minor damage to Frank's car, but Frank is not hurt. However, when Jane's insurer asks him about the accident, Frank claims that his back and neck have been hurting a lot because of the collision, even though he is actually fine. Frank is guilty of: A. Insurer fraud B. Soft fraud C. Hard fraud D. Medical fraud

B. Soft fraud

Sonia maintains collision coverage with a $1,000 deductible on her 2015 sedan. While returning home from work, Sonia swerves to miss a raccoon and ends up crashing into a telephone pole. Sonia's car sustains $25,000 in damages, yet the actual cash value of the vehicle is only $15,000. Which of the following statements is TRUE? A. Sonia will be indemnified by her insurer for $24,000. B. Sonia will be indemnified by her insurer for $14,000. C. Sonia will be indemnified by her insurer for $11,000. D. Collision coverage will not pay for Sonia's accident.

B. Sonia will be indemnified by her insurer for $14,000.

Which of the following is not a necessary preliminary step for the adjuster who is entering negotiations? A. Investigate the loss and complete an evaluation of the claim B. Speak with the claimant beforehand to get an idea of the minimum amount she will accept C. Know the maximum amount the insurer will pay D. Be familiar with the circumstances of the loss

B. Speak with the claimant beforehand to get an idea of the minimum amount she will accept

James owns a metal machining shop where he does contract work for local mechanics, manufacturing hard-to-find parts or custom fittings. Being a cautious man, James wants commercial property insurance that provides coverage on an open-peril basis. Which Causes of Loss Form would best suit James' needs? A. Universal Form B. Special Form C. Basic Form D. Broad Form

B. Special Form

Which financial institution bond is designed for all types of insurance companies? A. Standard form 24 B. Standard form 25 C. Standard for 23 D. Standard form 15

B. Standard form 25

In an insurance policy, the abandonment clause: A. States that if the property is abandoned, it becomes uninsurable B. States that the insured is prohibited from forcing the insurer to take possession of damaged property C. States that the insured may abandon the policy at any time D. Ensures that the insurer has the right to take possession of any abandoned property

B. States that the insured is prohibited from forcing the insurer to take possession of damaged property

What does "implied warranties" mean in the context of ocean marine insurance? A. Mid-route deviation in voyage must be documented upon arrival B. Strict adherence to good maritime practices is required C. Coverage is implied for all cargo on an insured vessel, regardless of legality D. All cargo must be new and under warranty in order to be covered

B. Strict adherence to good maritime practices is required

Sally throws a cigarette butt into Neal's dumpster, starting a fire on Neal's property that costs him $10,000. Neal files a claim with his insurer. The insurer pays Neal and then demands $10,000 from Sally to pay for the loss she caused. What gives the insurer the right to collect payment from Sally? A. Right of recovery B. Subrogation C. Estoppel D. Vicarious liability

B. Subrogation

In a business auto policy, which symbol applies to private passenger autos owned by the insured, excluding trucks, buses, and specialty vehicles? A. Symbol #7 B. Symbol #3 C. Symbol #1 D. Symbol #19

B. Symbol #3

The Royal Wedgewood Hotel is a fancy hotel located in a prime neighborhood downtown. As part of their five-star service, they own several limousines for transporting clients, as well as a custom-built luxury bus for larger parties. Obviously, comprehensive coverage is essential for such a specialty vehicle. Which coverage symbol would specifically describe the luxury bus and its coverage? A. Symbol 4 B. Symbol 7 C. Symbol 1 D. Symbol 19

B. Symbol 7

Frank owns a catering business and uses three vans for transporting food products; four passenger vehicles for his employees; and one large box truck to haul around tables and chairs, etc. Which set of coverage symbols could Frank use to cover all of his company's vehicles? A. Symbols 4 & 9 B. Symbols 3 & 4 C. Symbols 4 & 19 D. Symbols 3 & 8

B. Symbols 3 & 4

When an adjuster is engaging in salvage misappropriation, he is: A. Taking possession of damaged property on behalf of the insurer B. Taking possession of salvaged property for his own use or benefit C. Incorrectly calculating the salvage value or the damaged property D. Failing to account for the salvage value in the loss estimate

B. Taking possession of salvaged property for his own use or benefit

An adjuster acts as an agent for the insurer. As such, it is essential that the adjuster understand: A. Her duty to check in daily with the insurance company B. That her words or actions may bind the insurance company C. Her duty to profit from every claim investigation D. That she must always offer a settlement favorable to the claimant

B. That her words or actions may bind the insurance company

The term "jurisdiction" means: A. The body of law that addresses and provides remedies for any civil wrongdoing performed on another party B. The authority of a court or judge to hear a case and to make a judgment C. The designation of a geographic area over which a particular court has jurisdiction D. When all the facts of a civil case are heard, and a judge makes the final decision about the court case

B. The authority of a court or judge to hear a case and to make a judgment

A "transitional yield," or "T-yield" is: A. A supplemental crop planted between growing seasons of the farmer's primary crop B. The average yield of other farms in the county, used to calculate a farmer's APH when the farmer does not have 4 years of production records C. The threshold for the amount of damage sustained to a crop before insurance coverage will apply D. The average yield of an entire farm for at least the 4 previous years

B. The average yield of other farms in the county, used to calculate a farmer's APH when the farmer does not have 4 years of production records

In order for the contents of a home to qualify for flood insurance protection, which of the following conditions must be met? A. At least 25% of the contents must be waterproof B. The contents must be located in a fully enclosed building C. The contents must be worth less than $5,000 D. The contents must not be covered by any other insurance

B. The contents must be located in a fully enclosed building

In a declaratory judgment action: A. The court's decision about the legal rights of the parties is not binding B. The court decides the legal rights of both parties C. The court makes a judgment about the insurer's unfair settlement practices D. The court resolves the case

B. The court decides the legal rights of both parties

When a fire burns through The Chronicle newspaper company, it takes out two permanently-installed printing presses, three employees' personal laptops, five rolls of newspaper stock, and in a twist of irony, two fire extinguishers. Which of these would be covered by the Building & Personal Property form under Coverage C - Personal Property of Others? A. The printing presses and fire extinguishers B. The employees' personal laptops C. The printing presses and newspaper stock D. The rolls of newspaper stock

B. The employees' personal laptops

Which of the following best defines premium? A. A legal agreement providing temporary evidence of insurance until a policy is issued B. The fee paid by the insured in exchange for an insurance policy C. A legally enforceable agreement between parties D. Transfer of risk of financial loss from one party to another

B. The fee paid by the insured in exchange for an insurance policy

Jamie is hauling a load of hay from the market to her farm when a strong gust of wind tops over the trailer on the highway and scatters her hay everywhere. If Jamie has scheduled farm personal property coverage, why won't the insurer pay for her loss? A. Scheduled farm personal property coverage always excludes hay and grain B. The hay was being transported C. The hay was not on the farm premises D. Wind is not a covered peril

B. The hay was being transported

According to the inspection and surveys provision: A. The insured must respond to insurer surveys, which are used to gather information about the insured's payroll or annual sales B. The insured must allow the insurer to inspect the insured premises at any time C. The insurer will conduct a survey at the end of each policy period to determine its actual exposure over the course of the past policy period D. The insured must submit regular self-inspection reports to the insurer, which are used to determine insurability and premiums

B. The insured must allow the insurer to inspect the insured premises at any time

ABC Masonry, Inc. has an aggregate liability policy with limits of 100,000 / 300,000. One day, an accident at a construction site leads to $150,000 in damage to public property. Assuming the cause of loss is covered under ABC Masonry's liability policy, how will this claim be paid? A. The insurer pays $100,000; the aggregate limit is still $300,000; and ABC Masonry must pay $50,000 B. The insurer pays $100,000; the aggregate limit is now $200,000; and ABC Masonry must pay $50,000 C. The insurer pays $150,000 and the aggregate limit is still $300,000 D. The insurer pays $150,000 and the aggregate limit is now $200,000

B. The insurer pays $100,000; the aggregate limit is now $200,000; and ABC Masonry must pay $50,000

An out-of-control motorist careens off the road and smashes through Sally's front yard and into her attached garage, taking out several lamp posts, her mailbox, and a small gazebo along the way. Under Sally's homeowners policy, which items might be covered under Coverage B - Other Structures? A. The garage only B. The lamp posts, mailbox, and gazebo C. The lamp posts, mailbox, gazebo and garage D. The gazebo and garage

B. The lamp posts, mailbox, and gazebo

In a personal auto policy, the term "family member" would include: A. The named insured's 18 year old daughter, who lives with her husband in New Jersey B. The named insured's 26 year old son who lives at home C. The named insured's ex-husband, who moved out 4 months ago D. The named insured's ex-husband, who moved out 5 months ago

B. The named insured's 26 year old son who lives at home

Which of the following would NOT be covered under a typical Ocean Marine policy? A. The vessel is robbed of its cargo by pirates. B. The owner sustains a financial loss when her vessel is confiscated by the government. C. The vessel's galley catches fire, and the fire spreads to the sleeping quarters. D. A bolt of lightning strikes the vessel and fries its communication system.

B. The owner sustains a financial loss when her vessel is confiscated by the government.

Which of the following is an example of appropriate language for an adjuster's claim file? A. I didn't need to ask the claimant any questions, because I knew she was going to lie to me B. The physical damage to the insured's roof appears inconsistent with that of typical hail damage C. The claimant obviously caused the roof damage herself, and was dumb enough to leave the hammer that she used up on the roof next to the damage D. Just left a message - asked the mamasita to call me back

B. The physical damage to the insured's roof appears inconsistent with that of typical hail damage

The City of Seagoville has two primary government crime discovery forms in place which have the same terms and conditions, but Policy A's coverage is set at a $500,000 limit, and Policy B's limit is $100,000. If a large loss occurs, how will the policies go about paying for damages? A. The policies will share the cost of damages equally B. The policies will pay on a pro-rata basis C. Policy B will pay the excess after Policy A's limits are exhausted D. Policy A will pay the excess after Policy B's limits are exhausted

B. The policies will pay on a pro-rata basis

When damages or losses fall under the terms of an insurance contract: A. The policyholder immediately forfeits his right to collect compensation from the negligent party, because of the subrogation condition B. The policyholder has an immediate right to claim payment according to the terms of the policy C. The policyholder must wait a period of five days before filing a third party claim D. An adjuster files the third party claim on behalf of the policyholder

B. The policyholder has an immediate right to claim payment according to the terms of the policy

Ocean marine insurance gives the policyholder 45 days to pay the full premium or develop a payment plan with the insurer. If the policyholder cancels the policy before paying the premium, what happens? A. The insurer will refund the policyholder for all premium payments B. The policyholder pays the appropriate portion of the premium on a pro rata basis C. The insurer can sue the policyholder for the full premium amount D. The policyholder has 90 days to pay the full premium, or develop a payment plan with the insurer

B. The policyholder pays the appropriate portion of the premium on a pro rata basis

John and Lucy both apply for policies with Acme Insurance at the same time. They are exposed to similar hazards and would present essentially the same amount of risk to Acme Insurance. Acme Insurance offers Lucy a premium policy at excellent rates, but restricts John to a very limited policy with high premiums. Acme Insurance may be guilty of: A. Boycotting. B. Unfair discrimination. C. Coercion. D. Misrepresentation.

B. Unfair discrimination.

Which of the following is an implied warranty in ocean marine insurance policies? A. The vessel must not carry cargo with values higher than the policy's limit of coverage B. The route of the voyage must be clearly stated prior to departure, and the vessel must not deviate from that route C. The vessel must be insured for at least 80% of its replacement value D. The vessel must not travel during stormy weather

B. The route of the voyage must be clearly stated prior to departure, and the vessel must not deviate from that route

While traveling abroad, Christopher's belongings are stolen out of his hotel room. He is fortunate enough to have planned ahead for this by maintaining a DP-3 policy with which additional coverage? A. Theft: special form B. Theft: broad form C. Theft: limited form D. Theft: abroad form

B. Theft: broad form

Which of the following statements is typically TRUE regarding "additional coverages"? A. They can only be added to commercial policy packages B. They are endorsements added to a policy's major coverage C. They can only be added to residential policy packages D. They are endorsements to cover large, general losses

B. They are endorsements added to a policy's major coverage

After Tom and his neighbor get into a heated argument, Tom destroys his neighbor's A/C compressor with a baseball bat, causing $2,500 in damages. The next day, Tom realizes his poor behavior and files a claim with his insurer for his liability in the damages to his neighbor's A/C unit. Why might Tom's insurer deny his claim? A. Tom's neighbor must be the one to file a claim with Tom's insurer. B. Tom's vandalism was intentional, and therefore excluded under his liability policy. C. Homeowner's coverage does not include vandalism. D. Tom's neighbor was partially responsible for the damage, since he made Tom angry.

B. Tom's vandalism was intentional, and therefore excluded under his liability policy.

Greg, an agent for ABC Insurance Brokers, is trying to sell a new policy to Sally. Sally, however, is perfectly happy with her current policy and has no intention of cancelling it. Greg tells Sally that upcoming legislation is set to increase the minimum requirements for insurance, and that her current policy will not be available once the bill passes. He fails to tell her that if her policy is already in effect, this legislation won't affect her insurance. Which unlawful or unfair practice is Greg guilty of? A. Baiting B. Twisting C. Libel D. Defamation

B. Twisting

Veronica is in the process of building an extra structure for the sole purpose of kiln firing her pottery. After 40 days of waiting for it to be completed, she decides to go ahead and begin using it, since the kiln is already set up, even though the interior drywall isn't completely finished. Her Builder's Risk Coverage Form is then terminated because: A. interior drywall isn't covered under a Builder's Risk Coverage Form. B. Veronica has now put the building to its intended use. C. Builder's Risk policies are only good for 30 days. D. the risk of fire voided the policy.

B. Veronica has now put the building to its intended use.

When would a default judgment occur? A. When a defendant submits an answer B. When a defendant does not answer a complaint C. When an insurer sends a reservation of rights D. In cases that involve an intentional tort

B. When a defendant does not answer a complaint

Under the requirements in case loss occurs provision, the insurer typically requires that the claimant make a claim inventory form: A. At the end of the settlement process B. When he files a property claim C. Only in the case of total loss D. IN a commercial policy

B. When he files a property claim

When is a self-insured retention applies in an umbrella policy? A. When the umbrella policy excludes the peril in question B. When the umbrella policy covers a loss that is excluded by primary policies C. Whenever the umbrella policy covers a claim D. There are no self-insured retentions in umbrella policies

B. When the umbrella policy covers a loss that is excluded by primary policies

Bill works for an alien insurer operating in Florida. His company began business overseas and follows all applicable Florida laws. In order to operate his business in Florida, in addition to following all the state's insurance laws, Bill's company must also possess: A. a certificate of authenticity. B. a certificate of authority. C. a green card. D. a governing board with at least three Florida residents.

B. a certificate of authority.

According to the Other Insurance provision in Commercial General Liability policies: A. claims-made forms will always pay out via contribution by equal shares. B. a claims-made form will always pay the excess after an occurrence form. C. an occurrence form will always pay the excess after a claims-made form. D. all CGL policies will cover claims on a pro rata basis.

B. a claims-made form will always pay the excess after an occurrence form.

Willa lives in a state that does not license adjusters, and she wants to get a Florida adjuster license. She must submit all of the following, EXCEPT: A. a license application. B. a medical history. Your Answer C. a completed state exam. D. an application fee.

B. a medical history.

Third Party Administrators: A. are not subject to the FL Department of Financial Services. B. do not assume any risk for the policies they handle. C. do not underwrite policies. D. are not licensed in Florida.

B. do not assume any risk for the policies they handle.

*"Defamation" means: A. making a false statement on an insurance application. B. making false or derogatory statements about other insurers or their representatives. C. coercing a consumer into buying a product. D. intentionally tricking a policyholder into lapsing or forfeiting her policy so that she can purchase a new one.

B. making false or derogatory statements about other insurers or their representatives.

"Take-out credits" A. reward private insurers who transfer risks into the residual market. B. reward private insurers who take risks out of the residual market. C. reward policyholders who choose to leave the residual market and be insured in the voluntary market. D. are a form of illegal kickback.

B. reward private insurers who take risks out of the residual market.

In a Commercial General Liability policy, the basic extended reporting period is also known as a(n): A. representation. B. tail. C. premium. D. insured contract.

B. tail.

Coverage C - Medical Payments in a CGL policy will ONLY cover claims IF: A. the named insured caused the injuries through negligence. B. the expenses are reported within one year of the occurrence. C. the injured party has been hospitalized for more than 24 hours. D. the expenses are reported within one year of the policy's expiration.

B. the expenses are reported within one year of the occurrence.

Workers' compensation premiums are based on all of the following EXCEPT: A. the size of payroll. B. the race of the employee. C. the location of the business. D. the risk level of the work performed.

B. the race of the employee.

ABC Homebuilders hires Frank's Roofing to work on several units in its new subdivision. While roofing one of the homes, a worker drops a bag of nails onto a neighbor's AC unit. Some nails fall inside, destroying the unit. ABC Homebuilders is ultimately responsible for the destruction of the air conditioning unit through: A. personal liability. B. vicarious liability. C. homeowner's liability. D. subcontractor liability.

B. vicarious liability.

Define: Part C - uninsured motorist

Optional, no-fault coverage for damage and injuries caused by drivers who have no insurance or not enough insurance

Define: Tort law

Body of law that applies to civil court cases and addresses any civil wrongdoing

Define: Structured settlement

Breaks up the indemnity into a series of smaller payment

What is the HO-2 form?

Broad form Named peril

Jesse's home is worth $200,000 and he has a homeowners policy with a $160,000 limit. After a covered loss, Jesse is left with a total of $10,000 in damages. Assuming the insurer requires the standard 80% level of insurance for coinsurance purposes, and ignoring any deductibles, how much will Jesse receive in indemnification? A. $9,500 B. $8,000 C. $10,000 D. None

C. $10,000

Acme Construction, Inc. has one contractor and one receptionist. The contractor makes $25/hr, and the receptionist makes $10/hr. The contractor worked exactly 8 hours in 2010, so he made $200. The receptionist worked 10 hours, so she made $100. Therefore, Acme's entire payroll for 2010 was $300. Assume that, for every $100 of payroll, the WC rate for contractors is $50 and the rate for receptionists is $5. How much did Acme owe in WC premiums? A. $110 B. $60 C. $105 D. $55

C. $105

Melanie's $300,000 home suffers $90,000 in damage from a fire. The adjuster finds the home's value since 2008 has depreciated 25%, making the ACV loss $67,500. Although Melanie's policy covers repairs at their replacement cost, she receives $67,500 at the time of loss. Repairs to her home end up totaling $79,500. How much, if any, further indemnification may Melanie receive from the loss? A. $10,500 B. $0 C. $12,000 D. $22,500

C. $12,000

In a farm policy, what is the limit of coverage for the theft of furs, jewelry, precious stones, and wristwatches? A. $3,000 B. $1,500 C. $2,500 D. No limit

C. $2,500

Tom leaves his personal laptop at Smith & Co. so a colleague can work on a presentation. While the laptop is in the care of Smith & Co., it is destroyed by a fire in the break room. The laptop was worth $3,200. How much indemnification would Smith & Co.'s Business and Personal Property Form provide for the damaged laptop? A. $0 B. $700 C. $2,500 D. $3,200

C. $2,500

Kelly took her eyes off the road and ended up smashing into the back of a passenger van. All five passengers were injured, each one ended up with $25,000 in medical costs. Assuming Kelly has liability coverage with limits of 50 / 100 / 50, how much will she have to pay out of pocket? A. $15,000 B. $50,000 C. $25,000 D. $10,000

C. $25,000

Wilson is a Florida resident who maintains a liability policy with limits of 10/20/10. Recently, he was visiting a friend in Georgia when he ran a red light and hit a BMW, causing $30,000 in property damage. The minimum liability requirement in Georgia is 25/50/25. How much will Wilson's liability insurance pay in this situation? A. $50,000 B. $10,000 C. $25,000 D. $20,000

C. $25,000

An out-of-control motorist careens off the road and smashes through Sally's front yard and into her attached garage, taking out several lamp posts, her mailbox, and a small gazebo along the way. If Sally has a $100,000 homeowner's policy and the replacement costs for the damaged items were as follows: the lamp posts and mailbox: $700; the gazebo: $2,500; and the garage: $12,500, what will Sally's Coverage B - Other Structures pay for her losses (assuming no deductible)? A. $15,700 B. $12,500 C. $3,200 D. $10,000

C. $3,200

A fire in John's factory causes him to shut the doors for 90 days. While repairs take place, John rents another building, along with some machinery and manufacturing supplies, for $90,000. John's total loss is $300,000, but by renting the new building and equipment he manages to reduce that loss by $50,000. Assuming John's commercial property policy includes Business Income Coverage With Extra Expense, how much will his insurer indemnify him? A. $420,000 B. $300,000 C. $340,000 D. $120,000

C. $340,000

To meet the 80% level of co-insurance required by his lender, Tom discovers he must insure his home for at least $320,000. What is the value of Tom's home? A. $440,000 B. $256,000 C. $400,000 D. $320,000

C. $400,000

When Sally slips and falls at XYZ Furniture, she injures her back and incurs $145,000 in covered medical expenses. Assuming XYZ Furniture carries a CGL policy with a General Aggregate of $400,000, and a Per Occurrence limit of $100,000, how much would XYZ Furniture have to pay out-of-pocket? A. $100,000 B. $0 C. $45,000 D. $145,000

C. $45,000

Sue owns a home and property valued at $600,000. In order to be considered "fully insured," Sue would have to insure the home for at least: A. $600,000 B. $300,000 C. $480,000 D. $700,000

C. $480,000

Norris borrows Arnold's truck to pick up some lumber from the hardware store. On the way to the store, Norris collides with a car, injuring the three people inside. The driver suffers $15,000 in injuries, one passenger suffers $25,000, and the other passenger suffers $20,000. Norris has a PAP with liability limits of 50 / 100 / 50, and Arnold's policy has liability limits of 25 / 50 / 10. How much will the primary policy pay for the injuries? A. $100,000 B. $60,000 C. $50,000 D. $25,000

C. $50,000

Which of the following statements about a personal articles floater (PAF) policy is FALSE? A. A PAF offers worldwide coverage B. A PAF is used to provide personal property floaters in a single policy form C. A PAF always pays actual cash value for damaged property D. A PAF provides coverage on an open-peril basis

C. A PAF always pays actual cash value for damaged property

What is the standard deductible on an equipment breakdown protection coverage form? A. $0 B. $1,000 C. $500 D. $250

C. $500

Ron works from home. After a kitchen fire renders his home uninhabitable, he is forced to rent an apartment in town while the repairs are made. Not knowing how long the repairs will take, Ron signs a 6 month lease at $1,500/month. The repairs are completed in just four months time. Assuming Ron holds a $200,000 standard HO-3 policy, how much will he be covered under Coverage D - Loss of Use? A. $2,000 B. $9,000 C. $6,000 D. $3,000

C. $6,000

Stan built a porch for his home three years ago at a cost of $10,000. The value of the porch has depreciated by $6,000, and it would cost $12,000 to replace it today. After Stan's porch burnt down during a BBQ today, how much would a standard fire policy indemnify Stan for his porch? A. $10,000 B. $12,000 C. $6,000 D. $4,000

C. $6,000

A lightning strike sparks a fire on the grounds of Blake's property, causing damage to several trees and shrubs in the process. Assuming Blake carries a $120,000 DP-2 on his home with a trees, shrubs, and other plants endorsement, what is the maximum Blake can receive for his 15 damaged plants? A. $500 - Only one occurrence is paid B. $7,500 - All perils are covered and all damaged plants are covered at $500 per plant C. $6,000 - Lightning is a covered peril and damaged plants are covered at $500 per plant up to 5% of coverage A limit D. $0 - Lightning is not a covered peril with the trees and shrubs additional coverage

C. $6,000 - Lightning is a covered peril and damaged plants are covered at $500 per plant up to 5% of coverage A limit

John has purchased a homeowners insurance policy with a percentage deductible based on the total limit of insurance for his home. John insures his home for $600,000, and the policy includes a 3% deductible. A huge thunderstorm passes through one night and blows the roof off his house. The insurance company estimates that covered damage totals $80,000. How much indemnification should John expect for the losses to his roof? A. $80,000 B. $77,600 C. $62,000 D. $18,000

C. $62,000

Acme Boats experiences a devastating fire in their factory. They turn to their Business Income coverage to recover their loss of income due to the fire. When Acme Boats initiated the policy, they chose the Maximum Period of Indemnity coverage option with a policy limit of $150,000. Acme Boats experienced the following loss of business income in the months after the fire: Monthly Income Losses Month - Amount Month 1 - $20,000 Month 2 - $20,000 Month 3 - $15,000 Month 4 - $15,000 Month 5 - $10,000 Month 6 - $10,000 How much money might Acme Boats be indemnified for the loss of business income? A. $40,000 B. $90,000 C. $70,000 D. $20,000

C. $70,000

Sue decides to get a valued insurance policy on her antique car. She and her insurance company agree to a value of $85,000. three years later, the car is destroyed when a tree falls on it in a parking lot. The car depreciates at $2,000 a year, and its replacement cost is $100,000. ignoring any deductible, how much can Sue expect her insurer to indemnify her? A. $94,000 B. $79,000 C. $85,000 D. $83,000

C. $85,000

Helen owns a manufacturing company. She maintains a commercial property policy that includes Business Income and Extra Expense coverage. One evening, a windstorm blows a tree through the side of her building, leaving a hole in the wall and damaging a production machine. When Helen has to rent another machine to keep her business in operation, how long will she have to wait before she can be indemnified for this indirect loss? A. 24 hours B. 72 hours C. 0 hours—Extra Expense coverage kicks in immediately D. 12 hours

C. 0 hours—Extra Expense coverage kicks in immediately

Veronica needs to expand her pottery business and add an extra building to her property for the sole purpose of kiln firing her pottery. She adds Builder's Risk coverage to her commercial property policy to cover the new structure (which is yet to be completed), and finds out she must carry: A. 125% coinsurance. B. 80% coinsurance. C. 100% coinsurance. D. 50% coinsurance.

C. 100% coinsurance.

The BOP provides loss of income on an "actual loss" sustained basis for up to: A. 18 months B. 24 months C. 12 months D. 6 months

C. 12 months

Mary Jane's house is damaged by a kitchen fire, and the tenant that has been renting her upstairs bedroom has to move out. It takes Mary Jane two months to repair the damage, plus an additional four months to find a new tenant. How many months of lost rental income can Mary Jane expect to receive from her insurer? A. None - loss of rental income is not covered under a homeowner's policy B. 4 months C. 2 months D. 6 months

C. 2 months

An employee receiving income benefits under Workers' Compensation insurance cannot receive more than: A. his own Average Weekly Wage. B. 75% of his own Average Weekly Wage. C. 66 2/3% of the State Average Weekly Wage. D. the Statewide Average Weekly Wage.

C. 66 2/3% of the State Average Weekly Wage.

Which of the following is NOT one of the differences between a BAP and a truckers policy? A. Liability coverage in a truckers policy includes coverage for people who hire out or lend their cars to the insured for business purposes. B. A BAP typically excludes businesses that transport the property of others. C. A BAP uses coverage symbols to designate covered autos. D. A truckers policy includes trailer interchange coverage.

C. A BAP uses coverage symbols to designate covered autos.

The "consent to settle" clause in the professional liability policy is best described as: A. A clause that requires the insured's approval before the insurance company discusses settlement options with a claimant B. A clause that requires the insurance company to settle all claims C. A clause that requires the insurance company to get approval from the insured before settling a claim D. A clause that requires the insured to get the consent of the insurer prior to settlement

C. A clause that requires the insurance company to get approval from the insured before settling a claim

During a storm, lightning strikes a tree in Harry's yard and starts a fire that spreads to his shed where he keeps all his equipment for his landscaping business. In addition to the shed, Harry has to purchase all new equipment to stay in business. The cost to replace the equipment would be considered: A. An occurrence B. A peril C. A direct loss D. An indirect loss

C. A direct loss

An insurance claim is essentially: A. A formal request to repair the damage B. A formal explanation of insurance coverage C. A formal request to settle the damage D. A formal offer to repair the damage

C. A formal request to settle the damage

Edward is a member of the Knights of Columbus, a religious group dedicated to voluntary service to the benefit of society. He also recently purchased a $100,000 life insurance policy from the organization. This was possible because Knights of Columbus is: A. A risk retention group B. A mutual insurer C. A fraternal benefit society D. A reciprocal insurer

C. A fraternal benefit society

Which of the following best describes a Fraternal Benefit Society? A. A fraternal benefit society is a for-profit provider of insurance B. A fraternal benefit society uses investors' money to pay claims C. A fraternal benefit society is a social organization based around common interests and beliefs D. A fraternal benefit society pays dividends to its stockholders

C. A fraternal benefit society is a social organization based around common interests and beliefs

Fred has decided to store his fuel tanks inside his garage where he builds automobiles. To the insurer, the fuel tanks would be considered: A. A risk B. A peril C. A hazard D. An exposure

C. A hazard

Joe's driveway has a very steep grade with several sharp turns, and it gets very muddy during rains. To an insurance company, Joe's driveway might be considered: A. A loss B. A risk C. A hazard D. A peril

C. A hazard

James and Eric want to play a prank on Bob for Halloween. They dress up like headless horsemen and throw ignited Jack O'Lanterns at his house. Unfortunately, one of the inflamed pumpkins catches the porch on fire, causing $3,500 in damages. Bob doesn't find this tomfoolery very entertaining and sues both James and Eric for the cost of the repairs. In court, James and Eric would be: A. Intentional tort B. A tortfeasor C. A joint tortfeasor D. The plaintiffs

C. A joint tortfeasor

All of the following would fall under the definition of a "personal injury" in a Commercial General Liability policy, EXCEPT: A. A prominent businessman sues his competitor for slandering him in a TV commercial. B. A woman sues a company, claiming that they sued her for no reason. C. A man is justly fired and files for unemployment benefits from his previous employer. D. A woman sues her landlord for wrongful entry after being evicted from her apartment.

C. A man is justly fired and files for unemployment benefits from his previous employer.

What is a reserve, in insurance terms? A. A set of rules governing how the insurance industry should work B. A group of policyholders who pay into the same pool of premiums C. A pool of collected premiums that the insurer sets aside to pay claims D. The amount of revenue that the insurer sets aside to pay employee salaries

C. A pool of collected premiums that the insurer sets aside to pay claims

Which of the following items would NOT be covered against loss or damage under Coverage C - Personal Property of a homeowners insurance policy? A. A set of appliances stored in the main dwelling B. A camera taken on vacation by the insured C. A television that belongs to the insured's tenant staying in the guest house D. A set of golf clubs stored in a detached structure

C. A television that belongs to the insured's tenant staying in the guest house

In property insurance claims, the claimant is commonly the insured, whereas in liability insurance claims, the claimant is typically: A. A tortfeasor B. Always the insured C. A third party D. The insurer

C. A third party

Which of the following would NOT be considered an instrumentality of transportation and communication? A. A dock B. A bridge C. A truck D. A road

C. A truck

Which of the following would NOT result in disciplinary action from the Department of Financial Services? A. Failing to pay child support B. Providing false information on a license application C. Accepting advance premiums D. Committing unfair trade practices

C. Accepting advance premiums

A cause of loss - special form provides open peril coverage for direct losses to physical property. This special form excludes all of the following EXCEPT: A. Acts of war B. Vandalism C. Accident D. Rust, corrosion, or decay

C. Accident

Which of the following is NOT one of the responsibilities of Florida's Chief Financial Officer? A. Provide information and advice about the insurance industry to consumers B. Oversee the Florida Department of Financial Services C. Act as liaison between Florida and the federal government D. Oversee the licensing of Florida's insurance adjusters and agents

C. Act as liaison between Florida and the federal government

Andrew's friend Mario asked for a ride form Detroit to Cleveland, and Andrew decided to take Mario in his plane. Getting out of the plane, Mario trips and falls into the propeller and ends up losing 3 fingers on his right hand. Mario also signed a form agreeing to release Andrew from further liability in exchange for a sum of money. Which of the following is FALSE? A. Andrew has a form of coverage called guest voluntary settlement B. Andrew has a form of coverage that will make it possible to avoid a lawsuit with his friend Mario C. After Mario has received his monetary sum to indemnify him for the loss of his fingers, he can sue Andrew because of recurring back pain D. Andrew can decided whether he would like his friend's injuries to be covered under his base liability policy

C. After Mario has received his monetary sum to indemnify him for the loss of his fingers, he can sue Andrew because of recurring back pain

A man wanders onto the runway of a small airport and is injured by a taxiing plane. Which insurance policy would pay for his injuries? A. Hangarkeepers liability insurance B. Passenger bodily injury liability insurance C. Airport liability insurance D. Aircraft hull insurance

C. Airport liability insurance

Allen is adjusting an auto claim on behalf of ABC Insurance, which ahs given Allen $5,000 in draft authority. The total damages in the auto claim come to $7,200. Which of the following is true? A. Allen can write a check for a half of the damages and ABC Insurance will write another check for the other half B. Allen must negotiate with the claimant to reach an agreement on a settlement amount of $5,000 or less C. Allen can adjust the claim, but ABC Insurance must write the settlement check D. Allen is not allowed to adjust this claim, because the amount of damages exceeds his draft authority

C. Allen can adjust the claim, but ABC Insurance must write the settlement check

The conditions page in an insurance contract may allow a lender all of the following provisions EXCEPT: A. Allowing a lender to be listed as a payee on the policy B. Permitting the lender to pay the policy premium if the insured fails to do so to maintain coverage C. Allowing the lender to cancel the insurance policy at any time D. Promising to give the lender notice of the policy is canceled, reduced, or has expired without payment

C. Allowing the lender to cancel the insurance policy at any time

Inducement can be defined as: A. Allowing one's emotions and feelings to dictate one's course of action B. Withholding material information in order to get a claimant to accept a lower settlement amount C. An action, item, or promise made to someone to motivate him toward certain desired behaviors D. Falsely increasing the settlement figure to increase the adjuster's income

C. An action, item, or promise made to someone to motivate him toward certain desired behaviors

Ark Inc. purchases a CGL policy to protect the company against lawsuits for which they might be found legally liable. Which would NOT be covered by their CGL? A. An employee of Ark Inc. assaults a retailer during a routine delivery. B. A popular product produced by Ark Inc. causes a child to choke. C. An employee drives a forklift into a wall of Ark Inc.'s owned factory, causing it to collapse. D. A woman slips on the floor at Ark Inc. headquarters and breaks both of her arms.

C. An employee drives a forklift into a wall of Ark Inc.'s owned factory, causing it to collapse.

One day, a customer at Jim's Tire Sales was severely injured when a rack of tires collapsed and fell on her. Later, the customer filed a lawsuit against Jim for $750,000. Jim has a commercial general liability policy, but the limit for this type of loss is only $500,000. Not wanting to use his entire limit on this one claim, Jim tries to use his excess liability policy first, which has a limit of $1,000,000, so he can retain most of the aggregate limit in his base policy. Unfortunately for Jim, this is not possible because: A. Excess liability policies cannot follow commercial general liability policies B. Jim's excess liability policy is a stand alone policy C. An excess liability policy pays only after the base policy's limit has been exhausted D. All excess liability policies have a 10% per occurrence clause

C. An excess liability policy pays only after the base policy's limit has been exhausted

Sam was tired of the neighbor's trees along the fence line poking through the fence and dropping leaves in his yard, so he reaches across the fence with his pole saw and cut down the neighbor's tree. Sam's neighbor was upset and sued him for the damages. Sam's actions could be classified as: A. A negligent tort B. A tortfeasor C. An intentional tort D. A defendant

C. An intentional tort

Joe's restaurant business has been steadily losing money from the moment it started. Joe decides to stage a fire in the kitchen after dismantling the fire-safety equipment, so he can collect the insurance money for the place. This course of action is known as: A. Soft fraud B. Medical fraud C. Arson D. Fire fraud

C. Arson

Bill has experienced a loss covered under the business income and extra expense coverage in his equipment breakdown protection coverage form. When does the period of restoration begin? A. 72 hours after the breakdown occurred B. Five days after repair re replacement of covered equipment C. At the time of the breakdown or 24 hours before Bill was notified of the breakdown, whichever is later D. After a length of time in which Bill should have reasonable been able to repair or replace the damaged equipment

C. At the time of the breakdown or 24 hours before Bill was notified of the breakdown, whichever is later

Kyle operates an auto body repair shop, where customers sometimes leave their cars in his car for extended periods of time. This exchange of control of property is best described as: A. Subrogation B. Non-owned vehicle coverage C. Bailment D. Bailee coverage

C. Bailment

Patricia is a new adjuster whose primary goal is her employer's financial benefit. This goal makes Patricia susceptible to the ethical challenge of: A. Kickbacks B. Emotional or unruly claimants C. Bias for the insurer D. Inducements

C. Bias for the insurer

Which of the following would NOT be covered under errors and omissions insurance? A. Discrimination claim B. Sexual harassment claim C. Bodily injury claim D. Wrongful termination claim

C. Bodily injury claim

Which of the following activities is considered a speculative risk? A. Driving a car B. Flying in an airplane C. Buying a lottery ticket D. Leaving your jewelry on a bed stand

C. Buying a lottery ticket

Sam suffers $6,000 in injuries when Nicole runs a red light and crashes her uninsured car into Sam's. Sam's own insurance company, ABC Insurance, immediately pays him $5,000 for his injuries. Sam then ponders whether to file a $6,000 lawsuit against Nicole. Why can't Same sue Nicole for the full amount of his injuries? A. Nicole has already forfeited her rights to Sam's insurance company B. Sam first needs to wait and see how much Nicole pays to ABC Insurance C. By accepting payment from ABC Insurance, Sam forfeited his right to collect this amount from Nicole D. Once ABC Insurance indemnifies Sam for $5,000, Sam is blocked form any further legal action

C. By accepting payment from ABC Insurance, Sam forfeited his right to collect this amount from Nicole

Tom is looking for a job in the insurance industry. He wants to work for only one insurance company, selling policies on commission basis. Which type of insurance agent position best fits what Tom is looking for? A. General agent B. Direct writer C. Captive agent D. Independent agent

C. Captive agent

Chuckie broke his ankle while waiting tables at the Grande Luxe hotel. He can no longer work as a waiter, where he was making about $750 per week, but Grande Luxe transferred him to Reservations, where he answers phones and doesn't need to walk around. At Reservations, Chuckie makes $800 per week. Chuckie is hoping that he'll qualify for Temporary Partial Disability benefits under his Workers' Comp insurance. Why will Chuckie not be qualified to receive these benefits? A. Chuckie is not qualified because he was not laid off by Grande Luxe due to his injuries. B. Chuckie qualifies for Impairment Income benefits but not for Temporary Income benefits. C. Chuckie is not qualified because he did not suffer any loss of wages. D. Chuckie is not qualified because waiters are specifically excluded from WC benefits.

C. Chuckie is not qualified because he did not suffer any loss of wages.

While adjusting the radio station, Jazmine accidentally pulls the steering wheel to the right and heads off the road, crashing into a telephone pole. She is not injured, but her car is ruined. Which coverage type can help pay for Jazmine's car even though she was at fault? A. Liability coverage B. Comprehensive coverage C. Collision coverage D. Uninsured motorist coverage

C. Collision coverage

Sarah is playing with a basketball on the stairs at Bob's house. In doing so, she trips, falls, and breaks her leg. She files a claim against Bob's insurance policy for her injuries. The adjuster determines that Sarah was 50% responsible for her own injuries, and therefore should only receive indemnification for 50% of her medical bills. What defense is the adjuster using? A. Contributory negligence B. Third party negligence C. Comparative negligence D. Assumption of risk

C. Comparative negligence

Having purchased a very nice used car yesterday, Ian decides to drive to Cheryl's house and ask if she would like to go to the movies. On his way over, a dog runs out in front of him. Ian veers hard left to avoid the animal, but overcorrects and flips the car, causing $16,500 in damage to his auto. To make matters worse, Ian hasn't even reported the purchase to his insurer yet, and he doesn't have collision or comprehensive coverage. However, Ian need not fret too much. Why is that? A. Since Ian was on his way to see Cheryl, her homeowner's policy will cover his loss B. Comprehensive and Collision coverage automatically apply to his newly purchased car for the first 14 days after purchase C. Comprehensive and collision coverages automatically apply to his newly purchased car for the first 4 days after purchase D. Since Ian hasn't yet made his first car payment, he isn't responsible for the car

C. Comprehensive and collision coverages automatically apply to his newly purchased car for the first 4 days after purchase

Sam is a claimant seeking damages from XYZ Insurance. The XYZ adjuster comes to meet with Sam to hear the circumstances of her injury. The adjuster determines that Sam played an active role in her own injuries, and therefore XYZ Insurance will pay her nothing at all for her injuries. What defense is the adjuster using? A. No negligence B. Comparative negligence C. Contributory negligence D. Full negligence

C. Contributory negligence

Jerry owns a hardware store and employs Bill. One day, while Bill is driving a forklift, he gets careless and crashes into a fully stocked shelf, damaging thousands of dollars worth of merchandise and other store property in the process. What policy condition allows Jerry to collect for the loss on his insurance contract? A. Legal action against an insurer B. Subrogation C. Control of property D. Separation of interests

C. Control of property

Susan purchases a health insurance package. Looking it over, she realizes her policy requires her to pay $20 out of pocket every time she uses the benefits of the policy. That $20 is Susan's: A. Coinsurance B. Upfront C. Copayment D. Capitation

C. Copayment

In a commercial property policy, the Building and Personal Property Form contains three coverages. Which of the following coverages is NOT a part of this form? A. Coverage C - Personal Property of Others B. Coverage B - Business Personal Property C. Coverage D - Loss of Use D. Coverage A - Buildings and Structures

C. Coverage D - Loss of Use

What are the two main types of crop-yield insurance? A. Crop-yield and MPCI B. Crop-hail and RMA C. Crop-hail and MPCI D. Crop-yield and crop-revenue

C. Crop-hail and MPCI

A fierce windstorm blows through town, stripping the shingles off of the roof and shattering all of the windows at Gradient Industries. What commercial property coverage might pay for the cost of cleaning up the shingles and broken glass? A. Legal Liability coverage B. Preservation of Property C. Debris Removal D. Increased Construction Costs

C. Debris Removal

In which section of the policy might you find the following statement? "Property Address: 246 Rosemead Drive." A. Exclusions B. Definitions C. Declarations D. Conditions

C. Declarations

Which of the following sections of a homeowners policy lists the facts that are particular to the homeowner and the insured property? A. Definitions page B. Insuring agreement C. Declarations page D. Insured conditions page

C. Declarations page

What is the first step of the evaluation process of a claim? A. Investigating the claim B. Determining the cause of the loss C. Determining time and cost of repairs D. Acknowledging the claim

C. Determining time and cost of repairs

Tom owns a home in Florida that has been insured with Diamond Insurance Co. for six months. Now he is thirty days late in paying his monthly premium, and Diamond Insurance Co. wants to cancel his policy. Which of the following is TRUE? A. Diamond Insurance may cancel Tom's policy, but must notify Tom about the cancellation at least 20 days in advance. B. Diamond Insurance cannot cancel coverage until they receive notification from Tom about his desire to cancel the policy. C. Diamond Insurance may cancel Tom's policy, but must notify Tom about the cancellation at least 10 days in advance. D. Diamond Insurance must wait an additional 60 days before cancelling Tom's policy.

C. Diamond Insurance may cancel Tom's policy, but must notify Tom about the cancellation at least 10 days in advance.

ABC Trucking owns a nice vacation house in the country, to which they regularly bring high-ticket clients as a benefit for staying loyal to them. They would like to purchase a policy to insure the property from things like fire, windstorm damage, or vandalism. What policy type should ABC Trucking purchase to cover the property? A. Standard fire policy B. Homeowner's policy C. Dwelling policy D. Commercial liability policy

C. Dwelling policy

Frank recently purchased some rural property that he would like to use as a hunting lodge. He won't be able to live there year-round, but will keep it furnished with the regular camping equipment. Frank needs to purchase insurance to protect his investment. Which type of policy would best fit Frank's needs? A. Commercial general liability B. Standard fire policy C. Dwelling policy D. Homeowners policy

C. Dwelling policy

Phil is moving to a new town, but he's having a new house built. He hires a home builder and purchases a DP-3 policy to cover the new home. Which endorsement will help insure his house, even before it is finished? A. Ordinance or law B. Reasonable repairs C. Dwelling under construction D. Debris removal

C. Dwelling under construction

Which of the following represent the four most common endorsements for dwelling policies? A. Debris removal, reasonable repairs, fire department service charge, and liability B. Liability, theft (limited or broad), debris removal, reasonable repairs C. Dwelling under construction, theft (limited or abroad), automatic increase, and liability coverage D. Liability coverage, theft (limited or broad), automatic increase, debris removal

C. Dwelling under construction, theft (limited or abroad), automatic increase, and liability coverage

Which statement BEST describes the "follow form" in excess liability coverage? A. Excess liability insurance that often covers more risk than the base policy B. Insurance coverage that is written on the standard liability insurance form provided by NAIC C. Excess liability insurance that "follows" the base insurance policy to the letter D. Excess liability insurance that "follows" the base policy, but includes its own set of limitations and exclusions

C. Excess liability insurance that "follows" the base insurance policy to the letter

ABC Markets is concerned about declining revenues. Though business seems to have increased, ABC can't quite figure out the source of the poor sales performance. When the president suggests that employees might be stealing money, ABC Markets decides to purchase commercial crime insurance that would protect against theft by all 1,320 employees of the chain. Which type of commercial crime coverage would best apply in this situation? A. Forgery or alteration B. Employee theft - scheduled persons C. Employee theft - all employees D. Employee theft - scheduled positions

C. Employee theft - all employees

Tina owns Peachtree Savings and Loan, which has many different jobs with varying levels of security and risk. For the tellers and customer service representatives she uses blanket employee theft coverage, but there are certain high-security jobs that need significantly more coverage, such as vault controller and branch manager. Tina wants to buy extra theft coverage for these employees, but not have to worry about updating her policy every time she hires a new person to fill one of these roles. Which coverage would be the best choice for Tina's needs? A. Employee theft: high-security B. Employee theft: all employees C. Employee theft: scheduled positions D. Employee theft: scheduled persons

C. Employee theft: scheduled positions

Janelle wants to change her coverage for personal property in her Homeowners policy from ACV to Replacement Cost. She visits her local insurance agent and asks him to make this change to her policy while keeping all the other details the same. Which section of her policy would the agent use to make this change? A. Exclusions B. Insuring agreement C. Endorsements D. Conditions

C. Endorsements

Mark wants to add "towing and labor costs" coverage to his auto insurance policy. Under which part of the policy would he add this coverage? A. Declarations B. Exclusions C. Endorsements D. Conditions

C. Endorsements

Which section of a PAP would include a provision allowing the insured to suspend coverage on a vehicle for an extended amount of time? A. Part B B. Conditions C. Endorsements D. Declarations

C. Endorsements

Which of the following is not a part of the adjuster code of ethics? A. Promptly reporting conduct violations of licensed insurance representatives B. Making truthful and unbiased reports C. Ensuring that a settlement favors the insurer D. Exercising care when dealing with elderly clients

C. Ensuring that a settlement favors the insurer

Evangeline is negotiating a settlement with a claimant, who becomes dissatisfied with Evangeline's suggestions and asks if he can consult with an attorney before proceeding. Evangeline knows that her offer is fair and advises the client not to spend the money on an attorney. Why are Evangeline's actions unethical? A. Evangeline's actions are not unethical B. Evangeline's fiduciary duty to her insurer dictates that she only advise a client to refrain from seeking legal advice if this would bring about a settlement outcome that is favorable to the insurer C. Evangeline cannot advise a client to refrain form seeking legal advice in any situation D. The insurer, not the adjuster, has the right to advise a claimant to refrain from seeking legal advice

C. Evangeline cannot advise a client to refrain form seeking legal advice in any situation

While hurriedly backing out of his driveway, Brayden accidently crashes into his own brick mailbox and destroys it. Brayden knows his auto liability insurance won't cover damage that he causes to his own property; but, he is hoping his excess liability policy will cover the damages to the mailbox. Brayden will be disappointed to learn that the damage is not covered, because: A. Excess liability policies only cover damages to the insured's dwelling B. Excess liability policies don't cover auto liability C. Excess liability policies only cover types of liability that are covered by the base policy D. Excess liability policies only cover damages to the insured's auto

C. Excess liability policies only cover types of liability that are covered by the base policy

Diana owns a manufacturing company. One evening, a windstorm blows a tree through the side of her building, leaving a hole in the wall and damaging one of her production machines. Diana temporarily fixes the hole with some plywood, but will have to rent a new production machine until hers is repaired. Which coverage in her commercial property policy could indemnify Diana for the cost of the machine rental? A. Profit & Loss Form B. Rental Equipment Coverage C. Extra Expense Coverage D. Operating Expense Coverage

C. Extra Expense Coverage

Which of the following is NOT covered by an MPCI policy? A. Late planting B. Locusts C. Failure to reseed D. Volcanic eruption

C. Failure to reseed

Ryan works as an adjuster for Sectanda Insurance. The company routinely pressures Ryan to withhold information from claimants in order to negotiate smaller settlements. What should Ryan do in this situation? A. Start issuing larger settlements for as much commission as he can before switching employers B. Start issuing smaller settlements in order to perform his fiduciary duty C. Find a new employer and preserve his reputation as an honest and ethical adjuster D. Bring his concerns to the press

C. Find a new employer and preserve his reputation as an honest and ethical adjuster

A stand alone excess liability policy: A. Excludes coverage for personal liability B. Can cover risks that are not covered in the base policy C. Follows a base policy, but may have different exclusions and limitations D. Can act as a primary policy

C. Follows a base policy, but may have different exclusions and limitations

Julie is a hand model. A month ago, she got into a car accident. As a result of her accident, she suffered a small, permanent scar across her hand, causing her to be unable to perform her job. Julie's damages for the loss of future employment opportunities would be classified as: A. Special damages B. Punitive damages C. General damages D. Tangible damages

C. General damages

In 1945 Congress passed the McCarran-Ferguson Act. What does that act do? A. Gives the Federal government the authority to regulate the insurance industry B. Makes insurance regulation a county responsibility C. Gives the states the authority to regulate the business of insurance D. Provides for insurance coverage for the poor

C. Gives the states the authority to regulate the business of insurance

Anton is purchasing a homeowners policy for his house in the woods. He wants to make sure he is covered for damage done to his home by wild animals. Which of the following would be his LEAST expensive option? A. HO-8 B. HO-2 C. HO-3 D. HO-5

C. HO-3

Mike is wanting to upgrade his homeowner's insurance so he will have the best coverage possible. "You get what you pay for;" says Mike, "and, I'm purchasing total peace of mind." Which policy is Mike referring to? A. HO-3 B. HO-8 C. HO-5 D. HO-2

C. HO-5

Which homeowners policy is the most basic, only providing coverage on a named-peril basis and only paying actual cash value for all covered damages? A. HO-2 B. HO-5 C. HO-8 D. HO-4

C. HO-8

In an aviation policy, which of the following is only covered through an endorsement? A. Lightning B. Explosion C. Hi-jacking D. Theft

C. Hi-jacking

Residual market insurance programs are primarily designed to meet the needs of which type of consumer? A. Consumers needing multiple policies B. Low-income consumers C. High-risk consumers D. Consumers with physical disabilities

C. High-risk consumers

Which of the following insurance packages will indemnify a policyholder for a variety of hospital-related expenses such as nursing care, supplies, and rooming charges? A. Surgical expense insurance B. Accident insurance C. Hospitalization expense insurance D. Hospital indemnity insurance

C. Hospitalization expense insurance

Which of the following statements is TRUE of a claim dispute litigated in a state that follows the doctrine of Contributory Negligence? A. The settlement amount will be reduced by the percentage of the defendant's negligence B. If the defendant is found to be at all negligent, she will receive no settlement C. If the plaintiff is found to be at all negligent, she will receive no settlement D. The settlement amount will be reduced by the percentage of the plaintiff's negligence

C. If the plaintiff is found to be at all negligent, she will receive no settlement

What do you call a self-employed adjuster who works as a contractor for insurers or claims-handling companies? A. Public adjuster B. Emergency adjuster C. Independent adjuster D. Staff adjuster

C. Independent adjuster

John purchased some business property a few years ago. In the past two years, the property value has grown 4% each year. John maintains the 80% coinsurance requirement on his business policy, but wants a more automated coverage so he doesn't have to constantly check the appraised value of his property. Which optional coverage can John purchase to help ensure that he always has the right amount of coverage? A. Value Reporting B. Agreed Value C. Inflation Guard D. Appraisal Condition

C. Inflation Guard

Which of the following best describes crop-yield insurance? A. Insurance that protects against a loss of the value of the crop due to a decline in the market price B. Insurance that indemnifies if the producer chooses the wrong crop type C. Insurance that protects against physical loss of or damage to a crop D. Insurance that guarantees the revenue of the entire farm rather than an individual crop

C. Insurance that protects against physical loss of or damage to a crop

One important characteristic of aviation insurance is the small insurance pool, combined with the enormous exposure. What is one of the results of this situation? A. Aviation insurance is only available to commercial airlines B. Terrorism and war risks are never covered in an aviation policy C. Insurers pool risk with re-insurers and underwriting groups D. Aviation insurance is so expensive that it will soon be obsolete

C. Insurers pool risk with re-insurers and underwriting groups

A few weeks ago Christopher's garage was destroyed by an out-of-control motorist. Fortunately, the motorist had sufficient liability insurance to cover the damages. However, the insurer insists that Christopher's garage is worth far less than the appraisals he has received from contractors. Christopher and the insurer have gone back and forth in negotiations for weeks, making little headway. Christopher decides it's time to: A. Issue a reservation of rights B. Issue a judgment C. Issue a complaint against the policyholder D. Issue an answer for the policyholder

C. Issue a complaint against the policyholder

Which statement is FALSE about coverage for trees, shrubs, and other plants in the DP-2 and DP-3? A. It is limited to $500 per tree or plant B. It cannot pay more than 5% of the coverage A limit of liability C. It includes the perils of windstorm and hail D. It pays in addition to the coverage A limit of liability

C. It includes the perils of windstorm and hail

Which of the following is NOT true about the National Association of Insurance Commissioners? A. It is a non-profit coalition of state insurance agencies B. It works to harmonize state insurance laws and regulations C. It provides benefits for insurance commissioners D. It drafts model legislation that is frequently adopted by most states

C. It provides benefits for insurance commissioners

Which statement about the Federal Employees Compensation Act is TRUE? A. It protects only interstate railroad workers and their families. B. It protects injured seamen by allowing them to sue for damages and to choose a jury trial. C. It provides federal government insurance for civilian employees. D. It provides benefits in the form of monthly payments and medical coverage to coal miners.

C. It provides federal government insurance for civilian employees.

Jimmy's Burger Barn has a pure claims-made policy that is about to expire, but a customer just filed a liability claim against the company. If Jimmy's wants to have insurance pay for the damages, it must do which of the following? A. Jimmy's Burger Barn may report the claim at any point for two years after the policy's expiration date. B. Jimmy's Burger Barn must report the claim before its policy expires. C. Jimmy's Burger Barn must report the claim as soon as possible, even if that means it makes the report after the policy expires. D. Jimmy's Burger Barn is ineligible for coverage unless it has already requested a renewal of its policy in writing.

C. Jimmy's Burger Barn must report the claim as soon as possible, even if that means it makes the report after the policy expires.

Julie works as an insurance adjuster for XYZ Insurance. While adjusting a claim, she determines that the claimant is covered by his insurance contract and issues him a settlement check for $5,000. The insured cashes the check and performs the repairs. Two months later, the insurer reviews the file and realizes that the claimant's damages were NOT covered by the policy. The insurer demands the settlement money back. Which of the following best explains why the claimant will most likely not have to return the money? A. Subrogation does not allow the insurer to recover payment B. The settlement payment was a warranty C. Julie had the power to bind the insurer to her decision to pay the claim D. Julie issued the settlement based on guarantees provided by the claimant

C. Julie had the power to bind the insurer to her decision to pay the claim

Which of the following is an example of a moral hazard? A. Nancy falls asleep with a lit cigarette in her hand B. Kim is jamming out to her music while driving to work and accidently runs a red light C. Ken lights a candle, sets it right next to the window draperies and leaves the house to go to work D. The road that leads to Mike's house is steep and narrow

C. Ken lights a candle, sets it right next to the window draperies and leaves the house to go to work

During a routine tooth extraction, Dr. Dentem administers too much laughing gas and causes brain damage to his client. The family sues Dr. Dentem for failing to follow procedure. Which kind of insurance would cover the cost of the lawsuit? A. Errors and omissions insurance B. Personal injury protection insurance C. Malpractice insurance D. Dental insurance

C. Malpractice insurance

Which of the following is true? A. When Kevin sold his truck to Bill, he lost his auto insurance coverage B. Kevin's auto insurance policy now covers Bill, who bought Kevin's truck C. Kevin's insurance policy covers him for losses to his new car, even though he sold his truck, which was previously covered under his policy, to Bill D. Kevin's auto insurance policy protects his car from damage

C. Kevin's insurance policy covers him for losses to his new car, even though he sold his truck, which was previously covered under his policy, to Bill

A fire caused $10,000 in damage to Karen's kitchen. During the repairs, a city inspector comes to inspect the work and notes that Karen's foundation is eight inches too low according to city codes. Now Karen has to pay an additional $20,000 to raise her house and build up the foundation. What additional coverage could help Karen pay for this? A. This expense is not covered because it did not result from a covered loss B. Time element coverage C. Law and ordinance coverage D. Personal property coverage

C. Law and ordinance coverage

Tom needs some extra hands to help him lay a concrete foundation. He contacts XYZ Labor to hire some experienced concrete workers who can help him complete the job. Tom will pay XYZ Labor directly and let them handle payroll, taxes, etc. Once they finish with the foundation, Tom won't need their services any longer and XYZ will move on to the next client. Under Tom's CGL policy, which of the following best describes the type of worker Tom is looking for? A. Employees B. Temporary Workers C. Leased Workers D. Volunteer Workers

C. Leased Workers

Mackey Manufacturing signs a five-year lease at a new location, only to have the building burn down one year into their new lease. Now they have to lease a new property, and the rental prices have increased, so the company now has to pay higher rental costs. Which commercial property coverage form might indemnify Mackey Manufacturing for the difference in lease costs? A. Property Off-Premises Coverage Form B. None C. Leasehold Interest Coverage Form D. Preservation of Property Coverage Form

C. Leasehold Interest Coverage Form

Sarah is driving carelessly through the streets of Tallahassee when she hits a puddle and loses control of her car. She crashed into a telephone pole and the car is completely wrecked. To her insurer, Sarah's car is now considered a: A. Hazard B. Risk C. Loss D. Peril

C. Loss

A crop-hail insurance policy would provide coverage for all of the following, except: A. Lucy's crop was destroyed by a wildfire started by a lightning strike B. Olivia's crop was destroyed by a hail storm C. Martin's crop was destroyed by caterpillars despite the fact that he used insecticide D. Tom's crop was destroyed when he crashed his truck while transporting his crop to the silo for storage

C. Martin's crop was destroyed by caterpillars despite the fact that he used insecticide

All of the following causes of loss are excluded from coverage in an equipment breakdown protection coverage form, EXCEPT: A. Electrical testing B. Combustion explosion C. Mechanical failure D. Hail

C. Mechanical failure

Which of the following people would NOT be eligible for a farm insurance policy? A. Danica owns a farm where she grows cotton B. Jeffery owns a farm where he grows corn and raises sheep C. Mica owns a farm where she raises racehorses D. Vernon owns a farm where he raises cattle

C. Mica owns a farm where she raises racehorses

Stan has a personal auto policy to cover his two vehicles, but he recently purchased a custom built motorcycle as well. Which type of endorsement will Stan need to cover the motorcycle? A. Two-wheeled vehicle endorsement B. Customized equipment endorsement C. Miscellaneous vehicle endorsement D. Motorcycle endorsement

C. Miscellaneous vehicle endorsement

Stu has a collection or rare comic books. He wants to purchase theft insurance for his collection, separate from his home and other property. What term most accurately describes the type of policy Stu would purchase? A. Actual cash value policy B. Valuable papers policy C. Monoline policy D. Standard fire policy

C. Monoline policy

Lucy has insurance on an expensive necklace she likes to wear to work every day. After work, she takes it off and leaves it in her car's cupholder so she can put it back on in the morning on her way to work. Lucy's behavior would be considered a: A. Moral hazard B. Physical hazard C. Morale hazard D. Hazard

C. Morale hazard

Coast-to- Coast Trucking is in the business of transporting fresh produce from farmers to markets all across the U.S. Which type of inland marine policy would best protect Coast-to-Coast Trucking's interest in the produce that it ships? A. Trip transit policy B. Instrumentalities of transportation and communication policy C. Motor truck cargo policy D. Mail coverage policy

C. Motor truck cargo policy

Jim is currently working on a liability claim, and has completed his investigation. He presents his findings to the claimant, who disagrees with the settlement offer. Into which stage of the adjusting process is Jim about to enter? A. Claim evaluation B. Determining liability C. Negotiation and resolution D. Claim reporting

C. Negotiation and resolution

A windstorm blows down trees all over town, sending one of Greg's neighbor's trees into Greg's yard. Luckily for Greg, the tree doesn't hit his house, cause any damage to his fence, or even block his driveway. It's merely an eyesore. Which coverage in Greg's DP-2 would pay to remove the tree from his yard? A. Trees, shrubs, other plants B. Reasonable repairs C. No coverage applies to this loss D. Debris removal

C. No coverage applies to this loss

Abby owns a condo and has a $200,000 HO-6 policy. One afternoon, she finds little bugs running all over her kitchen. After calling a pest control service, she learns that there is a termite infestation in the building. How much of the structural damage caused by the termites will be covered under the policy? A. Up to $20,000 B. Up to $80,000 C. None D. Up to $160,000

C. None

Greg's neighbor Sam is trimming his trees in his back yard. In the process, a big limb from one of Sam's trees crashes down onto Greg's fence. Assuming Greg has as DP-1 policy with the extended coverage endorsement, which of the following could help indemnify Greg for the repairs to his fence? A. Trees, shrubs, other pants B. Reasonable repairs C. None D. Debris removal

C. None

A plane was damaged while being towed by another vehicle. By policy definition, this damage is considered to have occurred while the aircraft was: A. In motion B. In transition C. Not in motion D. In flight

C. Not in motion

Acme Construction enters into a contract to build a shopping mall for XYZ Associates. Having never worked with Acme Construction before, XYZ Associates demands a surety bond to guarantee the work of Acme Construction. ABC Insurance Company agrees to underwrite the bond. In this example, XYZ Associates is the: A. Insurer B. Principal C. Obligee D. Surety

C. Obligee

Wilma works for a professional cleaning service. While cleaning a ceiling fan at a customer's home, she leans too far forward, upsets the step stool, and falls. In an effort to prevent her fall, Wilma grabs the ceiling fan, but just ends up pulling the fan down and leaving a gaping hole in the ceiling. The damage Wilma caused would fall under what coverage in her company's Commercial General Liability policy? A. Premises Liability B. Product Liability C. Operations Liability D. Completed Operations Liability

C. Operations Liability

When a gas line explodes close to Georgia's business, it destroys most of her landscaping, leveling trees and uprooting shrubs. Which coverage extension could help cover the cost of replacing these plants? A. Property Off-Premise B. Shrubbery Endorsement C. Outdoor Property D. Property On-Premise

C. Outdoor Property

Which of the following is NOT true of personal injury protection? A. PIP is primary coverage B. PIP restricts the policyholder's right to recover losses in civil court C. PIP is usually secondary coverage D. PIP provides no-fault protection

C. PIP is usually secondary coverage

Cassandra opens the overhead bin after a flight, and a large, heavy bag falls out, giving her a concussion. Which aviation coverage will indemnify Cassandra for her injuries? A. All risks - ground and flight B. Cargo liability C. Passenger bodily injury liability D. Admitted aircraft liability

C. Passenger bodily injury liability

What type of deductible usually applies to partial losses under an aircraft hull policy? A. Franchise deductible B. Variable deductible C. Percentage deductible D. Fixed deductible

C. Percentage deductible

Which type of CGL coverage would indemnify an insured party for damages resulting from a libel claim? A. Supplementary coverage B. Extra Expense coverage C. Personal and Advertising Injury coverage D. Medical Payments coverage

C. Personal and Advertising Injury coverage

When Stephen bundles his personal auto liability coverage with another auto insurance coverage, what can his policy be called? A. Contingent responsibility auto policy (CRAP) B. Combined auto policy (CAP) C. Personal auto policy (PAP) D. Multi-lanes auto policy (MAP)

C. Personal auto policy (PAP)

Lee was watching out his kitchen window and saw his neighbor, Sam, reach across the fence with a pole saw and cut down one of Lee's trees. When the tree fell, it landed on Lee's gazebo and damaged it. Lee is furious and sues Sam for the damages. When they go to court, Lee is considered the: A. Tortfeasor B. Tort C. Plaintiff D. Defendant

C. Plaintiff

Which of the following is NOT considered an out of pocket expense in health insurance? A. Copayment B. Coinsurance C. Policy premiums D. Deductible

C. Policy premiums

Shelly has been suffering from chronic headaches for over a year. She is sure that there is something medically wrong, despite what the doctors in her network have told her. So, she decides to visit a doctor that her friend recommended, even though he charges more and is not in Shelly's approved network. Shelly's insurer paid for the cost of the appointment up to the amount she would have reasonably been charged by an in-network physician, and Shelly was responsible for paying the remaining balance. Which type of health insurance plan does Shelly have? A. Major Medical plan B. Health Maintenance Organization C. Preferred Provider Organization D. Point of Service plan

C. Preferred Provider Organization

Which of the following conditions is frequently included in mechanical breakdown insurance policies? A. Agency authority B. Agreed valuation C. Subrogation D. Third party claims

C. Subrogation

James is expecting a very important client to arrive in an hour so he decides to sweep and wash the floor. James finishes the job in time and goes to look over his bid for the contract one more time. James comes back out to the lobby to find his potential client laid out on the floor, having slipped and fallen. Which type of commercial general liability coverage would indemnify James' client for his injuries? A. Insured Contacts Liability B. Operations Liability C. Premises Liability D. Product Liability

C. Premises Liability

Jim owns a small boutique. Jim forgot to turn off the automatic lawn sprinklers during the frigid winter weather, and when they came on last night, they created a thick layer of ice on his sidewalk. Before he could put salt on the ice, a customer came to the shop, slipped on the ice, and broke her hip. Which type of commercial general liability coverage would provide coverage in this situation? A. Completed Operations Liability B. Product Liability C. Premises Liability D. Mobile Equipment Liability

C. Premises Liability

Which of the following does NOT have a per occurrence sub-limit under the General Aggregate limit of a CGL policy? A. Medical Payments B. Damages to Premises Rented by You C. Product and Completed Operations D. Personal and Advertising Injury

C. Product and Completed Operations

After an earthquake, Jake's home is still standing, but it is a little shaken. The damage is not extensive, but Jake wants to cash in on the situation, so he takes a sledgehammer to some of his extra belongings and adds them to the claim. Jake has committed: A. Health insurance fraud B. Arson C. Property insurance fraud D. Insurer fraud

C. Property insurance fraud

An overhead projector is taken to a conference room at a local hotel for a week. Sometime during the week, the projector falls off its stand and is destroyed. Assuming it is a covered loss, what commercial property coverage might cover the projector? A. Extra Expense B. Preservation of Property C. Property off Premise D. Valuable Papers and Records

C. Property off Premise

The national flood insurance program: A. Is available to anyone living in a flood plain B. Does not provide coverage for renters C. Provides flood insurance for individuals in communities complying with NFIP standards D. Requires a 60 day waiting period before coverage begins

C. Provides flood insurance for individuals in communities complying with NFIP standards

Which of the following is not one of the employer's duties if injury occurs? A. Cooperate with the insurer in any investigation B. Report the injury within a specific time-frame C. Remain with the injured employee until emergency assistance or a family member arrives D. Responsible and ethical conduct

C. Remain with the injured employee until emergency assistance or a family member arrives

In a commercial property policy, Business Income Coverage would pay for which of the following expenses? A. Materials B. Cost of goods sold C. Rent D. Physical property damage

C. Rent

"Sue and labor" is a provision in ocean marine insurance that: A. Restricts the circumstances under which an insured may bring suit against the insurer B. Requires that the voyage must be legal, and states that involvement in contraband, smuggling, or any other illegal activity will nullify the insurance contract C. Requires the insured party to attempt to minimize or prevent further losses if damage is caused by an insured peril D. Requires the insured to sue the insurer for labor costs ensued in salvage

C. Requires the insured party to attempt to minimize or prevent further losses if damage is caused by an insured peril

Six Stars Development Company has just been offered a great deal on a bulk purchase of dishwashers from a new company called Clean Machines. They've never purchased appliances from Clean Machines, so they're hesitant to make such a large purchase. Finally, Clean Machines offers to provide 10-year warranties for each of the dishwashers. This is an example of: A. Risk avoidance B. Risk retention C. Risk transference D. Risk reduction

C. Risk transference

Preparing for voyage, ABC Shipping loads its ship to maximum recommended capacity with shipping containers. When a client shows up with an extra 300 containers of cargo, ABC Shipping decides to make some quick cash and take on the extra cargo, even though it will overload the ship. The weight proves too much for the ship, and it sinks just off the coast of England. All cargo is lost. Which implied warranty has ABC Shipping violated, potentially voiding their ocean marine policy? A. Conditions of cargo B. Legality C. Seaworthiness D. No deviation in voyage

C. Seaworthiness

A winter storm has left a lot of snow and ice on the roof of Helen's business. The weight is too much for the roof to bear and it gives way, bringing with it a torrent of melting ice and snow cascading down on the interior of Helen's warehouse. Her commercial property policy covers the damage, even though "weight of ice and snow" is not specifically listed as a covered peril. Therefore, which type of Causes of Loss form does Helen have attached to her Building and Personal Property Coverage Form? A. Basic Form B. Universal Form C. Special Form D. Broad Form

C. Special Form

Jane is a salaried employee of XYZ Insurance. Working out of a regional office, Jane is sent to deal with some of the most difficult claims in her area. What kind of adjuster is Jane? A. Emergency adjuster B. Public adjuster C. Staff adjuster D. Independent adjuster

C. Staff adjuster

Which of the following is an example of how some insurers are fighting back against insurance fraud? A. Expanding current fraud laws to include all players B. Imposing stiff fines and prison terms C. Starting fraud busting units with former detectives and police officers D. Enacting tougher penalties for insurance fraudsters

C. Starting fraud busting units with former detectives and police officers

Which of the following statements apply to subrogation? Select all that apply. A. The exact amount of subrogation will usually be determined by a court of law B. Subrogation transfers a portion of the rights of the insurer to the claimant C. Subrogation prevents injured persons from collecting twice on the same damages D. Subrogation transfers a portion of the rights of the claimant to the insurer E. A claimant forfeits his right to seek restitution to the insurer (up to the amount of indemnification)

C. Subrogation prevents injured persons from collecting twice on the same damages D. Subrogation transfers a portion of the rights of the claimant to the insurer E. A claimant forfeits his right to seek restitution to the insurer (up to the amount of indemnification)

In a business auto policy, which symbol applies to private passenger autos owned by the insured, excluding trucks, buses, and specialty vehicles? A. Symbol #9 B. Symbol #1 C. Symbol #3 D. Symbol #7

C. Symbol #3

Bob owns a garage. He routinely has customer vehicles in his shop for extended periods of time while he services and repairs them. Which coverage symbol in his garage-keepers policy pertains to the coverage that Bob is required to have to protect the vehicles left in his care? A. Symbol #27 B. Symbol #29 C. Symbol #30 D. Symbol #21

C. Symbol #30

The Royal Wedgewood Hotel is a fancy hotel located in a prime neighborhood downtown. As part of their five-star service, they own several limousines for transporting clients, as well as a custom-built luxury bus for larger parties. Obviously, comprehensive coverage is essential for such a special vehicle. Which coverage symbol would specifically describe the luxury bus and its coverage? A. Symbol 4 B. Symbol 19 C. Symbol 7 D. Symbol 1

C. Symbol 7

Jim uses his own car to deliver pizzas for his employer, Delicioso Pizza. Which coverage symbol should Delicioso use to provide liability coverage for Jim while he is on the clock and delivering pizza for them? A. Symbol 2 B. Symbol 8 C. Symbol 9 D. Symbol 3

C. Symbol 9

In the middle of the night, armed robbers break into the headquarters of Superior Industries and restrain the night guard. Then, they blow open the safe and steal the contents. Luckily, Superior Industries has a commercial crime policy. Which of the following would NOT be covered under inside the premises - robbery and safe burglary of other property coverage? A. The damage to the surrounding room from the explosion B. The damage to the door of the safe C. The bundles of cash that were stored in the safe D. The damage to the front door caused by robbers breaking the glass to access the building

C. The bundles of cash that were stored in the safe

Which of the following statements is NOT true about an insurance policy? A. Ambiguities in contracts of adhesion often favor the insured B. The insurer holds the balance of power in the creation of an insurance policy C. The concept of utmost good faith only applies to the insured D. An insurance policy actually protects the policyholder's financial interests in the insured item, not the insured item itself

C. The concept of utmost good faith only applies to the insured

Which of the following is FALSE about Workers' Compensation insurance? A. It is required by law in Florida. B. The employer's liability is limited. C. The employee pays for this insurance. D. The employer is protected by the "exclusive remedy" provisions of the law.

C. The employee pays for this insurance.

Which of the following statements applies to the concept of utmost good faith? A. Utmost good faith applies to the insured, but not the insurer B. Utmost good faith is based upon the number of misrepresentations made in an application C. The insured must divulge the exact nature and potential of the risks being transferred to the insurer D. The insurer can choose to suspend the utmost good faith requirement in an insurance contract, but only if the insured agrees

C. The insured must divulge the exact nature and potential of the risks being transferred to the insurer

Which of the following is NOT a characteristic of a full release settlement? A. The claimant signs a full release form B. The insurer pays an immediate, single lump sum to the claimant C. The insurer pays for certain future "incidentals" related to the claim D. All damages are paid at once

C. The insurer pays for certain future "incidentals" related to the claim

A terrible storm blew through Wyatt's farm last night, causing extensive damage. Which of the following would NOT be covered under Wyatt's farm policy? A. Wyatt's satellite dish B. The pig pen C. The pier on Wyatt's 10 acre pond D. A destroyed grain silo

C. The pier on Wyatt's 10 acre pond

A power surge sparks a small electrical fire in an office building. The electrical fire triggers the automatic sprinkler system. The water from the sprinklers soak the carpets and short-out all the computers, causing thousands of dollars in damage. What is the proximate cause of the loss? A. The electrical fire B. The water from the sprinklers C. The power surge D. The automatic sprinkler system

C. The power surge

Which of the following does not apply to the adjuster's responsibility of reporting to the principal? A. The reports should include any pertinent information about investigations the adjuster has performed B. The reports should be frequent and detailed C. The reports should include advice on how to get out of paying covered claims D. The reports should include information that would benefit the principal

C. The reports should include advice on how to get out of paying covered claims

In the Dp-2 and DP-3, what is the time-based limit for coverage D - fair rental value? A. 180 days, or the amount of time needed to repair or replace damaged property, whichever is shorter B. 60 days C. The shortest time required to make repairs or replacements needed to return the property to rentable condition D. The amount of time that it takes for the insured to start receiving rental income again after a loss

C. The shortest time required to make repairs or replacements needed to return the property to rentable condition

In order for a statement to qualify as libel or slander, which of the following conditions must be met? A. The untruths must be printed or announced in an advertisement. B. A third party must prove a financial loss. C. The statement must be made about a third party. D. There must be intent to defraud.

C. The statement must be made about a third party.

In a commercial property policy, Builders Risk coverage is sold based on which of the following values? A. The value of the land underneath the new construction B. The highest value of a building currently insured by the policyholder C. The value of the completed building D. The value of labor and materials used in construction

C. The value of the completed building

Jane's husband was killed when an improperly pressurized gas container exploded as he was transporting it. Jane can collect damages under: A. Sovereign immunity B. A statute of limitations C. The wrongful death act D. The breach of product warranty

C. The wrongful death act

Losses caused by _____ are always excluded in garage-keepers policies. A. Vandalism B. Malicious mischief C. Theft by employees D. Explosions

C. Theft by employees

Medical payments pays for covered medical expenses for up to _____ after an accident. A. Six months B. Three months C. Three years D. Six years

C. Three years

The purpose of the principle of indemnity is: A. To transfer the risk of financial loss from one party to another B. To prevent an insurer from making a profit on a loss C. To prevent an insured from making a profit on a loss D. To transfer the right to collect a debt from one party to another

C. To prevent an insured from making a profit on a loss

The primary purpose behind garage-keepers insurance is: A. To provide insurance protection against damages to the garage in which other people's autos are stored B. To provide personal injury insurance to the owners and operators of garage businesses C. To provide insurance protection against damages to customers' autos while in the care and custody of the insured party D. To provide insurance protection against the theft of customers' vehicles and their contents by the insured's employees

C. To provide insurance protection against damages to customers' autos while in the care and custody of the insured party

Ginger under the mistaken impression that Jackie made a lewd gesture at her, attacks and injuries Jackie after a soccer game. When Jackie takes Ginger to court, Ginger is the: A. Accuser B. Plaintiff C. Tortfeasor D. Felon

C. Tortfeasor

In tort law, a person or entity that commits an act of wrongdoing or negligence that leads to damages to a third party is known as a(n): A. Tort B. Sacher torte C. Tortfeasor D. Intentional tort

C. Tortfeasor

Jim is out turkey hunting on a private ranch when he hears some movement in the brush. Assuming it's a turkey, Jim raises his shotgun and fires. Unfortunately for Jim, he has not taken a turkey, but instead severely injured one of the landowner's calves. The landowner decides to sue Jim for the cost of the calf. In the civil lawsuit that follows, Jim would be the: A. Victim B. Plaintiff C. Tortfeasor D. Joint tortfeasor

C. Tortfeasor

Jada has to leave her car in the shop after crashing it into a telephone pole, but she still needs to get to work and back every day. She does some research and, three days after the crash, she buys a bus pass for $85 / month. Assuming her car is in the shop for three months and she had previously purchased the additional coverage, which policy provision in Jada's personal auto policy could help cover her bus fare? A. Medical transportation B. Workers' compensation C. Transportation expenses D. Public transit endorsement

C. Transportation expenses

Generally speaking, which of the following has the broadest coverage? A. Stand alone umbrella liability B. Follow form excess liability C. Umbrella coverage D. Stand alone excess liability

C. Umbrella coverage

In a farm policy, which form provides blanket coverage to all farm personal property? A. Mobile agricultural machinery and equipment B. Barns, outbuildings, and other farm structures C. Unscheduled farm personal property D. Scheduled farm personal property

C. Unscheduled farm personal property

Which of the following BEST describes the insurance provided by residual market insurance programs? A. Low premiums B. Designed to help low-risk consumers C. Usually a "last resort" form of insurance D. Very extensive coverage

C. Usually a "last resort" form of insurance

Greg owns a construction business and has been really swamped lately. His friend Chuck is looking to become a claims adjuster, but doesn't have very much construction experience, so Chuck offers to help Greg on the weekends for free. This way Chuck gains his experience, while Greg catches up on work without the additional cost of hiring someone. According to the definitions in Greg's CGL policy, which of the following best describes Chuck? A. Leased Worker B. Part-time Worker C. Volunteer Worker D. Temporary Worker

C. Volunteer Worker

Which of these scenarios is NOT an example of indemnification? A. XYZ insurance pays $300 to rent a car for Hugh while Hugh waits for his own car to be repaired B. Alice's insurer pays to rebuild her house after it burns down C. When trying to renew her dog's license, Ellen has to pay a penalty to the city for letting its rabies vaccination lapse D. Joe-Bob forces his son Ted to pay their neighbor $500 after Ted breaks the neighbor's $500 TV

C. When trying to renew her dog's license, Ellen has to pay a penalty to the city for letting its rabies vaccination lapse

When a company acquires a new vehicle under symbol #7, specifically described autos, when must the company report the new vehicle to the insurer? A. Within 14 days B. Within 45 days C. Within 30 days D. Within 4 days

C. Within 30 days

Which of these is NOT an essential detail for an adjuster to include in a loss report? A. The policy limit B. The policy deductible C. The policy number D. The policy premium

D. The policy premium

The Insurance Guaranty Association is a mechanism that covers claims in the event of: A. an insured's bankruptcy. B. government intervention. C. an insurer's insolvency. D. catastrophic disaster.

C. an insurer's insolvency.

The Liberalization clause in a homeowners policy: A. states that the insurer is obligated to pay out only up to the limit set by the policy, but must do so within 60 days of receiving proof of loss. B. states that only losses occurring during the policy period will be paid. C. applies not only to changes made during the policy period, but also to any changes made up to 60 days before the policy went into effect. D. voids the policy if the insured deliberately conceals or misstates pertinent info.

C. applies not only to changes made during the policy period, but also to any changes made up to 60 days before the policy went into effect.

A CGL can protect businesses from claims arising out of all of the following, EXCEPT: A. personal injury. B. damage to a rented premise. C. auto accidents. D. damages caused by contractors.

C. auto accidents.

States that allow private insurers to offer workers' comp coverage as an alternative to the state workers' comp fund are called: A. compulsory. B. monopolistic. C. competitive. D. elective.

C. competitive.

While going over his CGL policy, Bill pauses on the Declarations page. He finds the usual items: named insured, address, policy period, premiums, and the limits of insurance. But he also finds a retroactive date listed. This tells Bill his policy: A. is a policy from the 1970s. B. is an occurrence policy. C. is a claims-made policy. D. will only pay claims retroactively, meaning the policy must have expired before claims will be paid.

C. is a claims-made policy.

In a homeowner's policy, Coverage D provides coverage for: A. other structures. B. dwelling. C. loss of use. D. personal property.

C. loss of use.

Workers' compensation insurance can provide compensation for all of the following, EXCEPT: A. lost income. B. death. C. lost vacation time. D. medical expenses.

C. lost vacation time.

When an insurer decides to not renew an existing commercial property policy, it is obliged to follow the Cancellation and Nonrenewal condition of supplying notice to the policyholder 45 days in advance. If the insurer fails to meet this deadline, it must: A. offer the same premium rates and policy coverage as before for an additional 3 months. B. offer an additional 30 days of coverage without charging any premium. C. offer the same premium rates and policy coverage as before for an additional 30 days. D. pay a fine of up to $5,000.

C. offer the same premium rates and policy coverage as before for an additional 30 days.

Harold has owned his condo for five months, and he is insured with an HO-6 policy. One night, lightning strikes a tree next to the building, causing it to fall on the roof of his condo. Harold files a claim with his insurer for the cost of repairs; however, the claim comes back denied because: A. Harold did not take reasonable measures to prevent the damage. B. Harold has only had the policy for less than 6 months. C. the HO-6 form only covers the owner's belongings and finished surfaces, not the unit's structure. D. HO-6 forms cover fallen trees, but only if felled by the insured.

C. the HO-6 form only covers the owner's belongings and finished surfaces, not the unit's structure.

In a CGL policy, the Premises Liability hazard applies to claims arising from an occurrence on: A. the premises rented by the insured. B. the premises owned by the insured. C. the premises owned or rented by the insured. D. a third party's premises.

C. the premises owned or rented by the insured.

An insurance adjuster in Florida must complete CE every ____ years. . A. three B. four C. two D. ten

C. two

Schedules farm personal property, unscheduled farm personal property, and barns, outbuildings, and other farm structures are examples of what?

Commercial coverage forms

Define: Concealment, misrepresentation, and fraud policy provisions

Can invalidate coverage and lead to policy rescission

Define: Exclusive agent (captive agent)

Commissioned; offers products from only one insurer

Define: Civil trial

Citizen accuses another citizen of wrongdoing proof by a preponderance of the evidence

What is the HO-5 form?

Comprehensive form All peril coverage for both structure and contents

If the plaintiff was at all negligent in the loss, what are the two types of negligence?

Contributory negligence Comparative negligence

Define: Coverage F (medical payments)

Coverage for medical expenses of third parties that are injured on your property

What does coverage B (appurtenant physical structures) provide?

Covers detached structures up to 10% of the coverage A limit

Define: Part A - liability

Covers insured's financial liability for damages he causes

What does coverage A (dwelling) provide?

Covers main dwelling, attached structures, and service machinary

What does coverage C (personal property) provide?

Covers personal property at the described location

If Farmer Brown sustains a 10% loss to his crop, and he has crop-hail insurance with a $10,000 limit and a 5% minimum loss percentage, how much will his policy pay him? A. $500 B. $10,000 C. $1,500 D. $1,000

D. $1,000

Roxanne's house is struck by lightning during a thunderstorm, which results in $10,000 in covered damage to the structure and $2,800 in covered damage to her personal property. Roxanne's homeowners policy has a fixed deductible of $1,200. How much can she expect to receive in her settlement form her insurer for this claim? A. $1,200 B. $12,800 C. $8,800 D. $11,600

D. $11,600

Jake's house is covered under a DP-2 policy with a $100,000 coverage A limit of liability. A fire destroys the dwelling and a $30,000 detached guest house. Assuming he has not endorsed or otherwise modified the coverage amounts of the policy, how much can Jake expect to receive from his insurer? A. $130,000 B. $100,000 C. Nothing - fire is not a covered peril under a DP-2 policy D. $110,000

D. $110,000

Jacob is severely injured at work and receives $600 per week in Temporary Total Disability benefits under his Workers' Compensation insurance for 8 weeks. After 8 weeks, Jacob dies from his injury. What is the highest total amount that his dependents could receive in Death benefits? A. $100,000 B. $143,600 C. $150,000 D. $145,200

D. $145,200

Smith Shipping Co. owns two cargo ships. The first ship is covered by a hull policy with a $50,000 average deductible. The second ship is covered by a hull policy with a $75,000 franchise deductible. One very unlucky month, both ships catch fire, each ship sustaining $100,000 in damages. Smith Shipping Co. will be indemnified _____ (total) or their losses. A. $100,000 B. $200,000 C. $50,000 D. $150,000

D. $150,000

James owns a masonry business and has a commercial liability policy with the following liability limits: $150,000 per occurrence / $500,000 per policy term. While at a job site, his cement truck's chute cannot reach the pour site, so the operator adds two extra chutes, extending its length. The chute collapses under the weight of the concrete, causing $35,000 in injury to one of the workers. The loss is covered by the policy, and James' insurer pays the claim. What will the new limits be for the remainder of the policy term? A. $115,000 / $500,000 B. $115,000 / $465,000 C. $150,000 / $500,000 D. $150,000 / $465,000

D. $150,000 / $465,000

Jacob's home burns to the ground, despite the fire department's attempts to save it. His home was fully insured under his DP-3 policy for $150,000. How much can Jacob expect to receive from his insurer to cover the loss and any bills he may receive from the fire department? A. $120,000 B. $150,000 C. $100,000 D. $150,500

D. $150,500

Mr. Dewitt's homeowners policy has a $200,000 limit of liability for Coverage A - Dwelling. How much coverage will his policy automatically provide for Other Structures (assuming he has a typical policy with no endorsements)? A. $100,000 B. $50,000 C. $10,000 D. $20,000

D. $20,000

Rodney has a typical farm policy with a limit of $200,000 for the main house. During a storm, lightning strikes a $2,500 satellite dish, which sparks a fire that destroys a little guest house worth $25,000. How much can Rodney receive from his insurer in response to his claim? A. $27,500 B. $25,000 C. $26,000 D. $20,000

D. $20,000

Jeff's commercial property policy includes coverage for Fire Department Service Charge, with a limit of $500. When one of Jeff's business premises catches fire, he calls 911. The fire department arrives and puts out the fire, saving the majority of Jeff's business. Later that week, Jeff has to call the fire department again when another fire breaks out, this time at his second business location. When the bill arrives for the fire department's services, it shows a $600 fee for each call, totaling $1,200. Jeff files a claim with his insurer for the charges. How much of the bill will Jeff have to pay? A. $0 B. $700 C. $1,200 D. $200

D. $200

Scott lived in a mobile home before it was completely destroyed in a recent flood. The mobile home is large enough to qualify for a special loss settlement under his flood policy, which has a limit of $28,000. Before the flood, the mobile home was worth $15,000, but it would cost $25,700 to but a new one today. How much indemnification will Scoot receive for this loss? A. $15,000 B. $25,700 C. $28,000 D. $22,500

D. $22,500

A processing and servicing company would qualify for a BOP only if they have less than _____ in annual revenues. A. $5 million B. $2 million C. $1 million D. $3 million

D. $3 million

After a heavy rain, the river running through Randy's farm rose so high that it flooded part of his barley crop. The flood caused $3,000 in damage to his $20,000 crop. Randy's crop insurance policy has a 5% threshold. Based on this information, how much will Randy's insurer pay him for this loss? A. $1,000 B. $2,000 C. $2,850 D. $3,000

D. $3,000

Frank found a "favorable lease" for his business two years ago at $10/sq.ft. per year. He ended up leasing a 20,000 sq.ft. space for 6 years to lock in that yearly lease of $200,000. Yesterday, Frank's business was struck by lightning and burned to the ground, forcing him to lease a new building. Unfortunately the going rate now is $15/sq.ft. and Frank still needs 20,000 sq.ft. of space. How much could Frank's Leasehold Interest Coverage pay for the additional costs of leasing a new space for the remaining 4 years? A. $1,200,000 B. $100,000 C. $300,000 D. $400,000

D. $400,000

Jerry is using an expensive video recorder near the family pool when he slips and falls in, destroying the camera. Jerry bought the camera three years ago for $4,000, and it depreciates at $500 per year. A new, similar camera costs $5,000 today. Assuming the loss is covered, if Jerry had a replacement cost policy, how much would Jerry's insurer indemnify Jerry for the destroyed camera? A. $3,500 B. $4,000 C. $2,500 D. $5,000

D. $5,000

Jerrod owns two places and has liability insurance with the following limits: Bodily injury excluding passengers: - $250,000 / person - $500,000 / occurrence Passenger bodily injury: - $250,000 / person - $750,000 / occurrence Property damage: - $500,000 / occurrence When Jerrod crashes into a car while landing his plane, he injures the two people in the car and completely wrecks the car. The first person in the car suffers $200,000 in injuries, the second person suffers $300,000 in injuries. Replacing the car costs $45,000. Without taking deductibles into account, how much will Jerrod have to pay out of his own pocket? A. $95,000 B. $0 C. $100,000 D. $50,000

D. $50,000

Jackson County has a government crime loss sustained form with employee theft coverage of $30,000 per employee. Three months after the policy expires, a Jackson County finance analyst realizes that two other county employees collaborated to steal $40,000 each from the county while the policy was still in effect. How much will Jackson County's insurer pay for this theft? A. $80,000 B. $0 C. $30,000 D. $60,000

D. $60,000

In order to be considered fully insured, Nikki must have at least $480,000 limit on her homeowners policy. Assuming her insurer imposes the standard coinsurance requirement, what is the value of Nikki's home? A. $384,000 B. $480,000 C. $520,000 D. $600,000

D. $600,000

What is the current minimum amount of liability coverage required by the state of Florida for a driver who is found to be at fault in an accident? A. 25/50/10 B. 25/10/50 C. It depends on the value of the car. D. 10/20/10

D. 10/20/10

Luke has been a resident Florida insurance adjuster for the past seven years. In order to keep his appointment, he must complete ________ hours of continuing education every _____ years. A. 24; 1 B. 24; 2 C. 10; 1 D. 20; 2

D. 20; 2

The insured carries a BOP policy with protective systems such as a sprinkler system. If the system becomes inoperative, the insured must advise the insurance company of the problem within _____ if the system cannot be restored to working order. A. 60 days B. 30 hours C. 30 days D. 48 hours

D. 48 hours

In a standard farm policy, the limit for coverage C - Household personal property coverage is: A. 10% of the coverage B limit B. 10% of the coverage A limit C. 50% of the coverage B limit D. 50% of the coverage A limit

D. 50% of the coverage A limit

When it comes to insuring office buildings, most BOP policies require a building to be _____ or fewer stories in height. A. 10 B. 2 C. 4 D. 6

D. 6

In a CGL policy, the basic extended reporting period provides extended coverage for an "occurrence" transpiring within _____ days of the end of the policy period. A. 360 B. 30 C. 120 D. 60

D. 60

Which building would fall under a general property form flood insurance policy? A. A single family home B. An individual's condominium in a condo complex C. A residential townhouse D. A 15-room motel

D. A 15-room motel

Which of the following people would be ineligible for coverage under the Florida Automobile Joint Underwriting Association? A. A Georgia resident who caused 4 wrecks in the past 18 months, who drives to Florida almost every day for work. B. A Florida resident who can't get coverage through the voluntary market. C. An air force pilot from California who is temporarily stationed in Florida. D. A college student from Alabama with two DUIs on his record who is staying with his grandmother in Florida for 2 months over the summer.

D. A college student from Alabama with two DUIs on his record who is staying with his grandmother in Florida for 2 months over the summer.

Which of the following best defines "insurer"? A. Transfer of the risk of financial loss from one party to another B. An individual or organization that pays premiums in exchange for protection C. A legally binding contract in which the insurance company agrees to pay for specified losses in exchange for premiums D. A company, group, or government agency offering financial protection

D. A company, group, or government agency offering financial protection

The Commercial General Liability (CGL) could classify all of the following as an "occurrence" except: A. A set of aftermarket brakes fail, leading to a serious automobile accident. B. A baseball bat cracks in half and injures a Little League player. C. A cell phone battery explodes, causing 3rd degree burns to the owner. D. A customer returns a defective bicycle.

D. A customer returns a defective bicycle.

SureTrust Insurance was founded and operates in Texas. In Texas, SureTrust is considered: A. An alien insurer B. A foreign insurer C. A state insurer D. A domestic insurer

D. A domestic insurer

Last month, an elderly man slipped and fell on a cracked, uneven icy sidewalk on Mulberry Street. He sued the homeowner and was awarded $60,000. The insurers of other properties on Mulberry Street would consider this award to be: A. A moral hazard B. A morale hazard C. A physical hazard D. A legal hazard

D. A legal hazard

Which of the following incidents would a liability insurance policy cover? A. A man crashes his car into his own fence B. A fire damages the back bedroom of your house C. The company van is stolen from your warehouse D. A man slips inside a grocery store and injures himself

D. A man slips inside a grocery store and injures himself

Which of the following is NOT considered a covered theft in a commercial crime policy? A. A customer dashes out of the store with a bag full of goods B. The delivery man secretly withholds a package of goods for his own use after having them signed for C. Three employees are discovered siphoning cash from the register at regular intervals D. A periodic assessment of inventory reveals that 4% of a store's inventory is inexplicably missing

D. A periodic assessment of inventory reveals that 4% of a store's inventory is inexplicably missing

After a storm demolished Greg's house, his insurance company sent an adjuster out to adjust his claim. After investigating Greg's claim, the adjuster offered him a settlement which Greg felt was too low. Not knowing much about property insurance, Greg wans a second opinion to make sure he is receiving what he deserves. Who might Greg hire to help him with negotiating a fair settlement? A. An independent adjuster B. An insurance adjuster C. A staff adjuster D. A public adjuster

D. A public adjuster

Xavier owns a small insurance company. Recently the company won a bid to insure a new housing development in Omaha, NE. His company can handle any claims that arise, but if a series of tornados were to tear through the area and destroy the entire development, Xavier's company would suffer financially. Which type of insurer could help Xavier's company protect itself the most from this potential loss? A. A fraternal benefits society B. A stock insurer C. A reciprocal insurance group D. A re-insurer

D. A re-insurer

Sam's neighbor, Lee is suing him for intentionally cutting down Lee's tree and damaging his gazebo when the tree fell on it. When Sam notifies his insurer of the lawsuit, the insurer issues Sam _____, which gives him fair warning that he may need to prepare his own defense if the insurer finds this case is not covered. A. An answer B. A complaint C. A notice of rights D. A reservation of rights

D. A reservation of rights

Which of the following is NOT an insurable risk? A. A collection of jewelry B. An airplane C. A forklift D. A small town

D. A small town

Which of the following statements about a speculative risk is TRUE? A. A speculative risk can only result in a loss B. A speculative risk always results in a personal gain C. Insurance companies only insure speculative risks D. A speculative risk involves a conscious choice

D. A speculative risk involves a conscious choice

Sue suffered some property damage to her home. She makes a claim with her insurer based on a damage estimate of $12,000 she received from a contractor. The adjuster inspects the damages as well and comes up with an estimate of $11,957. What is the best solution to resolve this claim? A. Negotiate the claim until the claimant and the adjuster come up with closer settlement amounts B. Reject the claim, since the claimant's offer is higher than the adjuster's estimate C. Allow a court to decide a proper settlement amount, since the two estimates are different D. Accept the claim, since the damage has been proven and the total is very close

D. Accept the claim, since the damage has been proven and the total is very close

Which of the following losses to livestock would be covered by the causes of loss - broad form, but NOT by the causes of loss - basic form? A. Earthquake loss of livestock B. Livestock struck by lightning C. Flood loss of livestock D. Accidental shooting of livestock

D. Accidental shooting of livestock

The claim evaluation process includes all of the following EXCEPT: A. Calculation of lender interest B. Verification of the value of the loss C. Consideration of policy limits D. Acknowledgement of the claim

D. Acknowledgement of the claim

Acme Construction is in charge of building a new subdivision in the city, and hires Jim's Masonry to lay the foundations. As part of the deal, Jim's Masonry is required to purchase Owners & Contractors Protective Liability to protect Acme Construction in the event Jim makes a mistake that results in a liability claim. Who retains ultimate control over the policy? A. Jim's Masonry B. The city C. The insurance agent D. Acme Construction

D. Acme Construction

Rodney has been unable to go back to work since he was struck by a vehicle while crossing the street. He is still going through treatment for his injuries and his medical bills are starting to pile up. The insurer has issued him two partial payments to aid his financial situation until the settlement is reached. Once the settlement is final, the amount of these payments will be subtracted from Rodney' final check. Which settlement option applies to Rodney's situation? A. Full release B. Partial release C. Scheduled release D. Advanced payment

D. Advanced payment

Grace owns a high-end tea shop and, to improve the ambiance, has purchased some old antique furniture and statues. While these items have intrinsic value, it's difficult to assign them an actual cash value. Which type of coverage in her commercial property policy could help assign value to these items in the event of a loss? A. Value Reporting B. Inflation Guard C. Replacement Cost D. Agreed Value

D. Agreed Value

Thoroughfare Shipping is about to undergo another long voyage across the Pacific and wants to insure their cargo in case anything goes wrong with the trip. Included in the cargo is a collection of rare impressionist paintings and Roman artifacts. A cargo policy written on a / an _____ basis would best fit the needs of Thoroughfare Shipping. A. Actual cash value B. Unvalued C. Replacement D. Agreed value

D. Agreed value

George has an HO-2 policy on his home. One day, a plane flying overhead loses a tire which smashes through George's roof, causing extensive damage to his home and its contents. George files a claim with his insurer for the damages to his property. Under which named peril will George's policy cover the claim? A. Vehicle B. Falling objects C. Sudden collapse D. Aircraft

D. Aircraft

Which of the following statements is FALSE? A. Condominium associations can purchase flood insurance B. Flood insurance is always backed by the National Flood Insurance Program C. Flood insurance can be purchased through private commercial companies D. All flood insurance policies are settled on an ACBV basis

D. All flood insurance policies are settled on an ACBV basis

Jared runs a red light and crashes into a car, injuring the four people inside. All five people involved in the wreck have Personal Injury Protection. Emma gets severe whiplash; Amy suffers permanent scarring on her face; Alexandra has a broken leg, and Adam is paralyzed from the waist down. Florida's no-fault law allows which of these people to sue Jared? A. Alexandra & Adam B. Adam C. Amy & Alexandra D. Amy & Adam

D. Amy & Adam

Which of the following statement about arbitration is TRUE? A. An arbitrator plays no role in the outcome of negotiations B. An arbitrator costs significantly more than a civil trial C. An arbitrator tries to get both sides to come together in agreement D. An arbitrator makes a legally binding decision upon the evidence

D. An arbitrator makes a legally binding decision upon the evidence

Which of the following best describes insurance? A. A legally enforceable agreement between parties B. Transfer of right to collect a debt from one entity to another C. Restoration to the previous financial condition, no more, no less D. An economic device used to protect against the risk of unforeseen and extraordinary financial loss

D. An economic device used to protect against the risk of unforeseen and extraordinary financial loss

Driving home after a 14-hour shift, Sam falls asleep at the wheel and plows into Sandra's home, causing extensive damage to the East wall and roof. As a result, Sandra and her family must move into a hotel until the repairs are completed. The cost of staying in a hotel is: A. A direct loss B. A physical hazard C. The proximate cause D. An indirect loss

D. An indirect loss

A fidelity bond covers: A. The public from a public official's lack of performance B. A self-insured business for workers' compensation claims filed by its employees when the business cannot meet its obligations C. Principal and interest payable under the terms of a contract or promissory note D. An insured business for loss resulting from any dishonest acts committed by its bonded employees

D. An insured business for loss resulting from any dishonest acts committed by its bonded employees

Which of the following highlights a major difference between an insurance contract and a surety bond? A. An insurance company may check the background of a policyholder; a surety has no need to check the background of a principal B. An insurance contract always provides the insurer with legal recourse to collect monies paid as damages to a policyholder; a surety has no legal recourse against a principal C. An insurance contract involves one person; a surety bond involves two parties D. An insurer may cancel an insurance contract; a surety cannot cancel a surety bond

D. An insurer may cancel an insurance contract; a surety cannot cancel a surety bond

Nick is watching a high-stakes football game at his local sports bar. After the referees make a disputable call, a fight breaks out amid the fans at the bar. Nick eagerly joins the fray and smashed a beer stein over the head of a rival fan, who suffers severe cuts and a concussion as a result. Nick's action might be described as: A. A tortfeasor B. An assumption of risk C. A negligent tort D. An intentional tort

D. An intentional tort

Joan files a lawsuit against Andy because his dog escaped and caused her to fall on an icy sidewalk. Which of the following statements is FALSE? A. Andy must submit an answer to avoid a default judgment B. Andy's insurer is obligated to defend him in court until it proves that there is no coverage under the policy in question, or until the suit is settled C. Andy must notify his insurer that he is being taken to court D. Andy's insurer will send Joan a reservation of rights

D. Andy's insurer will send Joan a reservation of rights

Bob has been in the construction business a long time and is ready to retire. He sells the company to his friend Scott and then lets the insurer know that any claims against his policy should be paid to Scott from now on. The insurer informs Bob that they cannot do this due to which condition? A. Premium audit B. Control of property C. Liberalization D. Assignment

D. Assignment

At what point in the claims process might a Reservation of Rights letter be sent? A. At the end of the claims settlement process B. When a witness statement contradicts the adjuster's evaluation C. When the investigation is complete D. At the beginning of the investigation

D. At the beginning of the investigation

Why is it important to define terms in an insurance policy? A. Because any ambiguity in the language of the policy means that the insured must file a lawsuit when a claim arises. B. Because any ambiguity in the language of the policy will favor the insurer. C. Because any ambiguity in the language of the policy will void the contract. D. Because any ambiguity in the language of the policy will favor the insured.

D. Because any ambiguity in the language of the policy will favor the insured.

A fire breaks out in Anton's manufacturing plant, causing extensive damage which will take at least three months to repair. In the meantime, Anton has rent and employees who still need to be paid, and many other expenses that can't wait until the business is up and running again. Which coverage form of his commercial property policy can help Anton with his cash flow? A. Builder's Risk Coverage B. Manufacturer's Risk Coverage C. Rent, Salary, and Repair Coverage D. Business Income Coverage

D. Business Income Coverage

A windstorm cuts the power supply of a wholesale butcher. To keep his inventory from spoiling, the butcher immediately runs to the store and rents generators to keep his freezers working. Which of the following statements is TRUE? A. Business interruption coverage will indemnify the butcher for the cost of the rentals, but only if he had to close the store for more than 15 minutes while picking them up B. Business interruption coverage will indemnify the butcher for the extra expense, even if renting the generators fails to keep the meat from spoiling C. Business interruption coverage does not cover extra expenses, such as equipment rental D. Business interruption coverage will indemnify the butcher for the cost of the rentals, but only if he succeeds in preserving his inventory

D. Business interruption coverage will indemnify the butcher for the cost of the rentals, but only if he succeeds in preserving his inventory

According to the Unfair Settlement Practices Act, an insurer must respond to a claim reasonably promptly after receiving it. Which of the following is NOT an acceptable way of responding to a claim? A. Mailing the claimant a letter. B. Calling the claimant and documenting the conversation. C. Speaking to the claimant in person and documenting the conversation. D. Calling the claimant and leaving a voicemail message.

D. Calling the claimant and leaving a voicemail message.

Which of the following endorsements is mandatory for all Florida residential property policies? A. Sinkhole B. Sewer backup C. Earthquake D. Catastrophic ground cover collapse

D. Catastrophic ground cover collapse

Chuck's field of corn usually produces $20,000 per year. After a wildfire wipes out half of his field, the other half's yield does exceptionally well and brings in twice as much revenue. If Chuck files a claim against his crop-hail policy, which of the following statements would most likely be true? A. Chuck would receive an amount equal to half of the damaged portion of the corn field B. Chuck would not receive anything, because the yield from the undamaged half made up for the loss C. Chuck's claim would be denied because crop-hail insurance does not protect against wildfire D. Chuck would receive full indemnification for the damaged half of the corn field

D. Chuck would receive full indemnification for the damaged half of the corn field

Which of the following is NOT true about Citizens Insurance? A. A homeowner who has been approved for coverage in the voluntary market can be eligible if the quote from the private insurer is at least 15% higher than that offered by Citizens. B. Vacant properties are ineligible for coverage. C. Citizens offers wind-only policies for certain areas. D. Citizens does not insure any type of commercial property.

D. Citizens does not insure any type of commercial property.

Jim and his insurer are in court over a claim dispute. Jim, the plaintiff, has accused his insurer of not indemnifying him enough for his loss. Jim needs to convince the jury of his case through a preponderance of evidence. In which type of trial are Jim and his insurer involved? A. Comparative negligence trial B. Contributory negligence trial C. Criminal trial D. Civil trial

D. Civil trial

The Smiths have decided to hold a New Year's Eve party. Over 80 people attend, 40 of which end up on the balcony for some fresh air. Under the weight of so many people, the wooden frame of the balcony gives way. Which type of coverage in their HO-2 policy would help pay to rebuild the Smiths' balcony? A. Product Liability B. Negligent Construction C. Coverage A - Dwelling D. Collapse

D. Collapse

Most states' courts today follow the doctrine of: A. Conductive negligence B. Contributory negligence C. Strict negligence D. Comparative negligence

D. Comparative negligence

After a fire burns through XYZ Condominiums, they have to replace most of the interior. Which of the following WILL be covered under the Condominium Coverage Form of the condo association's commercial property policy? A. Computers used by one of the commercial units B. Upgrades within individual condos C. Personal property of a commercial unit D. Computers used by the condo as a whole

D. Computers used by the condo as a whole

Cyril recently purchased a small machining shop. When asked on his commercial property insurance application about how the property will be heated in the winter, he replies "central heat," when in fact it will be heated by a wood stove. Under which condition could the insurer deny coverage? A. No Benefit to Bailee B. Changes to the Policy C. Control of Property D. Concealment, Misrepresentation, and Fraud

D. Concealment, Misrepresentation, and Fraud

When a fire destroys a car parts manufacturer in China, USA Motors finds itself without the necessary parts to build its vehicles. Which commercial property insurance coverage option could indemnify USA Motors from lost business due to the damages sustained by its Chinese supplier? A. Inflation Guard B. Order of Civil Authority C. Extra Expense Coverage D. Contingent Business Interruption

D. Contingent Business Interruption

Jay's Chip Factory makes potato chips, and it gets chip bags from Bags, Inc. One day, the bag-making machine at Bags, Inc. broke down, and thus, Jay's Chip Factory couldn't get the bags it needed to bag its potato chips. Jay's Chip Factory had to shut down production temporarily while waiting on Bags, Inc. to fix their machine. Jay's lost business income may be covered under what coverage in its equipment breakdown protection coverage form? A. Brands and labels B. None C. Business income and extra expense D. Contingent business income and extra expense

D. Contingent business income and extra expense

This type of inland marine policy covers expensive construction machinery while being transported, on-site, or in storage A. Boiler and machinery policy B. Mechanical breakdown coverage C. Construction block policy D. Contractor's equipment floater

D. Contractor's equipment floater

William owns a paint store and employs Brent. One day, while Brent is decorating the window display, he gets carried away dancing to the music in his headphones, falls off his ladder, and smashes through the glass. What policy condition allows William to collect for the loss on his insurance contract? A. Subrogation B. Other insurance C. Liberalization D. Control of property

D. Control of property

Jones' Auto in Dallas, Texas buys 50 cars from ABC Auto in Tokyo, Japan. They sign a contract whereby Jones' Auto assumes the risk of any damages to the cars until they are delivered. What term of sale have they agreed to? A. Cargo, Insurance, and Freight B. Cost, Insurance, and Freight C. Free on Board, Dallas D. Cost and Freight

D. Cost and Freight

James rents a home to Jill and maintains a DP-3 policy on the dwelling. One day, Jill accidently leaves the oven on all day while she is out, and James' house burns to the ground, along with all the contents. Which coverage in James' DP-3 might pay for the items he left in the home for Jill's use? A. Coverage B B. Coverage A C. Coverage D D. Coverage C

D. Coverage C

While attending a free-sample tasting of Craig's Famous Rock Candy, Claire bites into a sample containing an actual rock and breaks a tooth. Which coverage section of Craig's CGL would cover Claire's tooth? A. Coverage B B. Coverage D C. None—there is no provision for Dental Coverage D. Coverage C

D. Coverage C

Mark has to move out of his farmhouse for a few months while repairs are made after a kitchen fire renders the dwelling uninhabitable. Which coverage in Mark's farm policy will pay for the additional living expenses that he will incur because of this loss? A. Coverage B B. Coverage C C. Coverage A D. Coverage D

D. Coverage D

Ron works from home. After a kitchen fire renders his home uninhabitable, he is forced to rent an apartment in town while the repairs are made. Which type of coverage could help Ron pay the cost of renting the apartment? A. Coverage B - Other Structures B. Coverage A - Dwelling C. None D. Coverage D - Loss of Use

D. Coverage D - Loss of Use

In Florida, what are the basic limits of liability for Coverage E and Coverage F in a homeowners policy? A. Coverage E: $50,000 per occurrence; Coverage F: $5,000 per person B. Coverage E: $300,000 per occurrence; Coverage F: $1,000 per person C. Coverage E: $100,000 per occurrence; Coverage F: $10,000 per person D. Coverage E: $100,000 per occurrence; Coverage F: $1,000 per person

D. Coverage E: $100,000 per occurrence; Coverage F: $1,000 per person

Which fidelity bond from provides coverage against public employee dishonesty? A. Standard from 25 B. Standard form 15 C. Standard from 28 D. Coverage form O

D. Coverage form O

Which of the following will NOT appear on the Declarations page of a commercial property policy? A. Address of the insured business B. Coverage limits C. Coverage deductibles D. Covered perils

D. Covered perils

Who is NOT covered for their legal liability under a CGL? A. Employees B. Managers C. Executives D. Customers

D. Customers

Which of the following is NOT covered by Coverage A of a Commercial General Liability policy without an endorsement? A. Bodily injury to a third party on the insured premises B. Contractual liability for insured contracts C. Damage to property of others caused by employees working outside the insured premises D. Damage caused by pollutants

D. Damage caused by pollutants

Ben is an adjuster with XYZ Insurance and is currently working on a claim. He has already called the claimant and has just finished preparing all the paperwork needed to move forward with the claim. What is the next step for Ben? A. Open a line of communication with the claimant B. Begin negotiations C. Investigate the claim D. Determine whether the claimant has an insurable interest in the damaged property

D. Determine whether the claimant has an insurable interest in the damaged property

A garage-keepers policy can provide direct excess coverage or: A. Liability coverage B. Indirect excess coverage C. Direct liability coverage D. Direct primary coverage

D. Direct primary coverage

Acme University buys liability insurance for each of its board members, to protect them against lawsuits that might be brought against them specifically in their capacity as board members. What kind of liability insurance is this? A. Fiduciary B. Cyber C. Employment practices D. Directors and officers (D & O)

D. Directors and officers (D & O)

Grace purchased 40 acres of land a couple miles outside of town. To save time and money, she put up a basic mobile home and installed it permanently to the ground. Not planning on farming any of the land, Grace is now looking for a way to insure this second home and property. Which policy could best fit her needs? A. Farm and ranch policy B. Commercial policy C. Homeowner's policy D. Dwelling policy

D. Dwelling policy

Which of the following perils is NOT covered under the HO-2 Broad Form? A. Fire B. Theft C. Windstorm D. Earthquake

D. Earthquake

A fire in the break room kitchen of Helen's small business spreads into the utility room, damaging the computer server. Her server is physically destroyed, along with a lot of vital information: client information, pending shipments, etc. Which coverage can help Helen with the costs associated with losing this information? A. Business Income B. Reasonable Repairs C. Records Recovery D. Electronic Data

D. Electronic Data

After Jerry pulled the fire alarm, the indoor sprinkler system came on and flooded the offices at Elliot Designs, causing thousands of dollars in damage. Elliot Designs filed a claim with KLM Insurance, who dispatched Chrystal to investigate and process the claim. Who is the claimant in this scenario? A. KLM Insurance B. Jerry C. Chrystal D. Elliot Designs

D. Elliot Designs

Thomas works for an insurance underwriting service, and he often drives his own car when he goes to meet potential clients in their homes. Which BAP endorsement can Thomas' employer use to add coverage for Thomas' personal auto, so that he will be covered by the company's policy if he gets into an accident on company time? A. Individual named insured B. Drive other car endorsement C. Comprehensive coverage D. Employee as additional insured

D. Employee as additional insured

ABC Credit Union has an employment opening for a "vault controller," who would be responsible for a large amount of cash in the vault. They want to acquire an insurance coverage protecting them from theft by the vault controller only. What insuring agreement in their commercial crime policy would provide this coverage? A. Employee theft - all employees B. Employee theft - scheduled persons C. Employee theft - forgery or alteration D. Employee theft - scheduled positions

D. Employee theft - scheduled positions

Susan owns a convenience store and wants to protect her business from employee dishonesty or theft. She trusts all of her employees equally, and doesn't want to single any one of them out. She also would rather not insure them by job description. Which type of insuring agreement in her commercial crime policy would best suit Susan's business needs? A. Employee theft: scheduled positions B. Employee theft: subordinates coverage C. Employee theft: scheduled persons D. Employee theft: all employees

D. Employee theft: all employees

Which of the following coverages, when added to a BOP, would cause the premium to increase? A. Inflation guard B. Pollution cleanup C. Business income, extra expense D. Equipment breakdown

D. Equipment breakdown

Which of the following may be covered under an equipment breakdown protection coverage form? A. Self-propelled equipment B. Equipment used solely for therapeutic or surgical purposes C. Dragline, excavation, and construction equipment D. Equipment built to operate under internal pressure or vacuum

D. Equipment built to operate under internal pressure or vacuum

Which of the following is NOT considered "covered equipment" under an equipment breakdown protection coverage form? A. Mechanical equipment that generates energy B. Equipment that operates under internal pressure or vacuum C. Computer equipment D. Equipment that is buried in the ground

D. Equipment that is buried in the ground

Cliff receives a letter from the IRS, informing him that he has severely underestimated his adjusted gross income for the past year. Cliff was oblivious to this fact because XYZ Accounting has filed his taxes for him for the past 15 years. Now, Cliff owes $15,00 in back taxes. He sues XYZ Accounting for this mistake. Which of the following would cover the cost of the lawsuit for XYZ Accounting? A. Accounting insurance B. Malpractice insurance C. Commercial liability insurance D. Errors and omissions insurance

D. Errors and omissions insurance

An insurance adjuster is obligated to inform claimants of their rights under the insurance contract in which of the following stations? A. Claims involving traumatized claimants B. Claims involving elderly claimants C. Third party claims D. Every claim the adjuster handles

D. Every claim the adjuster handles

Which statement BEST describes umbrella coverage? A. Excess liability insurance that "follows" the base insurance policy to the letter B. Insurance coverage that doesn't have deductibles C. Excess liability insurance that "follows" the base policy, but includes its own set of limitations and exclusions D. Excess liability insurance that can also provide additional coverages not provided by the base policy

D. Excess liability insurance that can also provide additional coverages not provided by the base policy

Which of the following statements is TRUE? A. Exclusive remedy means that workers' compensation is only for full-time employees. B. Exclusive remedy means that any person at fault for an accident will have increased premiums. C. Exclusive remedy means an employer takes total responsibility for any accidents. D. Exclusive remedy means an injured employee cannot sue his employer.

D. Exclusive remedy means an injured employee cannot sue his employer.

After a heavy hailstorm cut the power to Julia's bakery, she had to rent generators to keep her business going for a few days. Which of the following coverages in her commercial property policy would protect Julia the MOST in this situation? A. Business Income B. Contingent Business Interruption C. ACV valuation D. Extra Expense coverage

D. Extra Expense coverage

Jane's Bakery has equipment breakdown protection coverage on a large industrial oven used in producing several hundred loaves of bread a day. One day, the oven malfunctions and catches fire, rendering her business inoperable for four days. In order to fill bread orders, Jane must ship her dough to a warehouse where she found another oven to rent while her oven is repaired. Under which coverage would Jane be indemnified for the shipping and oven rental costs? A. Supplementary payments coverage B. Valued business interruption coverage C. Automatic coverage D. Extra expense coverage

D. Extra expense coverage

When a company collects a consumer's personal and financial information, the methods for that collection, as well as the ways in which the information is used and shared, are all regulated by the: A. Equal Credit Opportunity Act (ECOA). B. Health Insurance Portability and Accountability Act (HIPAA). C. Insurance Information and Privacy Protection Act (IIPPA). D. Fair Credit Reporting Act (FCRA).

D. Fair Credit Reporting Act (FCRA).

Which endorsement to a garage-keepers policy would cover the theft of a vehicle by someone who was pretending to take it for a test-drive? A. Drive other car coverage B. Collision coverage C. Theft coverage D. False pretense coverage

D. False pretense coverage

Farm insurance policies can include all of the following EXCEPT: A. Property insurance for the main dwelling B. Mobile agricultural machinery and livestock C. Farm liability insurance D. Farm insurance for raising show animals

D. Farm insurance for raising show animals

Roy's crop of spinach goes to market, but after several confirmed cases of E. coli, the produce is pulled from the shelves. What type of insurance coverage does Roy need to cover the claims submitted by the people infected by his tainted spinach? A. Medical payments B. Personal and advertising injury C. Bodily injury and property damage D. Farm product lability

D. Farm product lability

All of the following are examples of court bonds, EXCEPT: A. Injunction bond B. Attachment bond C. Replevin bond D. Financial guarantee bond

D. Financial guarantee bond

An unendorsed DP-1 basic form covers what three perils? A. Windstorm, fire, lightning B. Fire, lightning, external explosion C. Vandalism, malicious mischief, windstorm D. Fire, lightning, internal explosion

D. Fire, lightning, internal explosion

Which of the following is NOT one of the advantages of being flexible during the negotiation process? A. Flexibility shows the claimant that the adjuster is willing to change his position, within reason B. Flexibility builds trust between the adjuster and the claimant C. Flexibility can speed up the negotiation process D. Flexibility shows the claimant that the adjuster has more authority than the insurer

D. Flexibility shows the claimant that the adjuster has more authority than the insurer

Typical crop-hail insurance provides coverage for all of the following perils, EXCEPT: A. Wildfire B. Transit to storage after harvest C. Hail D. Flood

D. Flood

Jill wants to start an insurance agency selling property insurance. As such, she must belong to a Guaranty Association, of which there are a few different types. Which of these groups would best fit Jill's needs? A. Florida Property Insurance Guaranty Association B. Florida Workers' Compensation Insurance Guaranty Association C. Florida Life & Health Insurance Guaranty Association D. Florida Insurance Guaranty Association

D. Florida Insurance Guaranty Association

Which Florida Residual Market program provides high risk Workers' Compensation coverage for employers who cannot obtain it in the voluntary market? A. Citizens Insurance Corporation B. Florida FAIR plan C. Florida Workers Compensation Subsidy Fund D. Florida Workers' Compensation Joint Underwriting Association

D. Florida Workers' Compensation Joint Underwriting Association

Deceiving an insurer or insurance agent to collect money to which you aren't entitled is: A. Slander B. Staging C. Misrepresentation D. Fraud

D. Fraud

In a commercial property policy, the Business Income Coverage Form provides indemnification to the policyholder for the loss of income during which of the following time frames? A. From 72 hours after the initial damage until 72 hours before the business is up and running again B. From the point of initial damage until the moment the business is up and running again C. From the point of initial damage until 72 hours before the business is up and running again The Business Income form covers a company's loss of income due to a covered loss for a period beginning 72 hours after the loss until the business is running again. D. From 72 hours after the initial damage until the business is up and running again

D. From 72 hours after the initial damage until the business is up and running again

Ricky was watching a baseball game at XYZ Stadium, when the railing on which he was leaving gave way and he fell two stories. As a result of his fall, Ricky broke his back and is now paralyzed from the waist down. Ricky sued the owners of XYZ Stadium and was awarded $150,000 to cover his medical bills and $2.5 million in _____ because of the permanent nature of his injury. A. Special damages B. Tort damages C. Punitive damages D. General damages

D. General damages

Which NFIP flood insurance form can insure residential buildings that do not meet the requirements specified by the dwelling form? A. NFIP form B. Residential condominium building association policy C. Alternative dwelling form D. General form

D. General form

Which of the following is true for crop-hail insurance? A. It does not cover fire B. It is subsidized by the government C. It cannot be added during the growing season D. Generally it is available from private insurers

D. Generally it is available from private insurers

A reclamation bond: A. Guarantees that principal and interest will be paid per the terms of the contract or promissory note B. Guarantees that an issuer of a copy of a lost financial instrument will not suffer an economic loss if the owner of the instrument later finds and negotiates the original C. Guarantees a principal will faithfully perform his duties as prescribed by law or the bylaws of the obligee D. Guarantees the health, safety, and welfare of the public during and after mining operations, and guarantees land will be restored to its original condition

D. Guarantees the health, safety, and welfare of the public during and after mining operations, and guarantees land will be restored to its original condition

Bill is going to switch employers, and therefore switch healthcare providers. Which federal law ensures that he won't be denied coverage when he switches health plans? A. FICA B. IIPPA C. FCRA D. HIPAA

D. HIPAA

The set of patient privacy rules that all health care providers, insurance companies, physicians offices, hospitals, and pharmacies must follow is called the _____________. A. IIPPA - Insurance Information and Privacy Protection Act B. FIGA - Florida Insurance Guaranty Act C. FCRA - Fair Credit Reporting Act D. HIPAA - Health Insurance Portability and Accountability Act

D. HIPAA - Health Insurance Portability and Accountability Act

Lewis has a guest house on his property which he rents to a tenant. As part of the rental agreement, Lewis requires the tenant to purchase "renter's insurance." Which policy would best fulfill this requirement? A. HO-2 B. HO-6 C. HO-8 D. HO-4

D. HO-4

Deliberately causing or faking a loss in order to file an insurance claim is called _____, while exaggerating or inflating a legitimate loss in order to increase the indemnification is called _____. A. Misrepresentation; hard fraud B. Concealment; misrepresentation C. Soft fraud; hard fraud D. Hard fraud; soft fraud

D. Hard fraud; soft fraud

Which of the following claims may be covered under an equipment breakdown protection coverage form? A. A self-propelled machine used to transport heavy objects within the factory experienced a malfunction in its computer program, causing it to run into a wall, which damaged it to the point of needing repair B. A severe hail storm damaged a company's air conditioning units C. While adjusting a pressurized boiler, an employee accidentally set the calibrations to incorrect levels, which damaged the boiler to the point of needing repair D. Hazardous material remediation was needed after a mechanical breakdown of the exhaust system's turbine caused ammonia to be released into the factory, contaminating the entire area

D. Hazardous material remediation was needed after a mechanical breakdown of the exhaust system's turbine caused ammonia to be released into the factory, contaminating the entire area

Antonia lives in a 560 square foot mobile home that is only 20 feet wide. She also has a detached garage. When Antonia's house is damaged by a flood, she hopes that she might be able to receive a special loss settlement. Why isn't Antonia eligible for a special loss settlement? A. Her home is less than 25 feet wide B. Special loss settlements only apply to condominiums C. Her principal residence is a mobile home D. Her home was fewer than 600 square feet

D. Her home was fewer than 600 square feet

Maria was in the hospital for five days, recovering from a stroke. The bill she received for her hospital stay broke down the charges for room, lab fees, meals, and nursing care. However, her insurer paid a flat daily rate and she was left responsible for paying the remaining charges. What type of insurance does Maria have? A. Surgical expense insurance B. Accident insurance C. Hospital expense insurance D. Hospital indemnity insurance

D. Hospital indemnity insurance

A few weeks ago, Frank ran a red light and caused an accident. He didn't worry too much about it since he had liability insurance. But yesterday, Frank received a notice that he is named as the defendant in a lawsuit involving the accident. Frank's next course of action is to: A. Call his lawyer B. Settle the claim C. Contact the claimant D. Immediately notify his insurer

D. Immediately notify his insurer

_____ authority is what the public reasonably believes the agent has, based on the agent's representations. A. Contract B. Apparent C. Express D. Impied

D. Implied

William is wearing an ABC Insurance jacket and has an ABC Insurance sign over his rented office. The walk-in customer could reasonably believe that he has the authority to write an insurance contract because of his: A. Apparent authority B. Express authority C. Agent authority D. Implied authority

D. Implied authority

After a tornado completely destroys the roof and windows of Calah's business building, she finds that there are new codes in place requiring thicker shingles and reinforced window frames. Calah insured her business using a replacement cost policy. Which commercial property coverage can help Calah with the added costs of bringing her building up to code? A. Debris Removal B. Business Interruption C. Preservation of Property D. Increased Construction Costs

D. Increased Construction Costs

Susan calls herself an insurance broker. She sells multiple lines of insurance from a variety of insurance companies. What type of agent is Susan? A. Direct writer B. General agent C. Captive agent D. Independent sales agent

D. Independent sales agent

Which of the following would NOT be covered under medical payments / PIP coverage in a BAP? A. Injuries to the named insured's relatives B. Injuries to the named insured's roommate C. Injuries to the named insured D. Injuries to the named insured's employees

D. Injuries to the named insured's employees

Which of the following is NOT true of the Replacement Cost endorsement to the Buildings & Structures Form of a commercial property policy? A. The policy still pays ACV up front, and then the remainder of the actual cost to repair or replace after the repair/replacement has been completed. B. It changes the loss settlement terms of the policy from ACV to RCV. C. It always requires the policyholder to meet at least an 80% level of coinsurance. D. It applies to both the insured property and any property of others on the insured premises.

D. It applies to both the insured property and any property of others on the insured premises.

Which of the following is TRUE of the vacancy condition in a typical insurance policy? A. It states that the insurance policy will terminate if the insured building is vacated B. It states that a dwelling vacant for more than 15 days is not insurable C. In commercial policies, it states that a building is vacant if more than 31% of the building is unoccupied D. It establishes the parameters for considering a building vacant for the purpose of coverage

D. It establishes the parameters for considering a building vacant for the purpose of coverage

All of the following are excluded from coverage under Coverages A and B in a BOP, except: D. It is added by endorsement and increases the premium B. Watercraft while in the water C. Vehicles and aircraft that must be registered D. Land, lawns, or crops

D. It is added by endorsement and increases the premium

Which of the following is not true about business income coverage, an additional coverage in a business owners policy? A. It provides up to 12 months of coverage B. It protects from loss of income caused by property damage C. It starts 72 hours after the damage occurred D. It is added by endorsement and increases the premium

D. It is added by endorsement and increases the premium

Which of the following statements about a moral hazard is FALSE? A. It is reckless behavior because of security offered by insurance B. It is a hazard caused by human behavior C. A moral hazard increases risk D. It is the result of an unconscious behavior

D. It is the result of an unconscious behavior

Which of the following is NOT a requirement for a legally binding contract? A. Both parties must bring something of value B. There must be a legal purpose C. There must be mutual consent D. It must be a notarized document

D. It must be a notarized document

Which of the following statements about the accounts receivable coverage extension in a BOP is TRUE? A. It only provides coverage if the loss occurred on the insured premises B. It provides coverage for lost income resulting from having to write off accounts receivable due to non-payment by the insured's customers C. It provides coverage for the insured's lost business income resulting from a covered loss suffered by a major customer D. It provides coverage for money the insured expects to collect, but cannot because of damage to accounting records caused by a covered peril

D. It provides coverage for money the insured expects to collect, but cannot because of damage to accounting records caused by a covered peril

At what point does a helicopter start to be "in flight," according to aviation policy definitions? A. When the engine is turned on B. When the pilot takes a seat in the cockpit C. When the landing skids leave the ground D. When the rotors begin to revolve

D. When the rotors begin to revolve

Which of the following is NOT true of the Company's Options provision in the standard fire policy? A. It mandates that the insurer notify the claimant of its choices within 30 days of receiving required proof of loss B. It allows the insurer the choice of whether to repair, rebuild, or replace damaged property C. It states that the insurer may choose whether to take all, or part, of the damaged property at the agreed or appraised value D. It requires the insurer to settle the claim, in whichever manner it chooses, within 30 days of receiving notice of the claim

D. It requires the insurer to settle the claim, in whichever manner it chooses, within 30 days of receiving notice of the claim

Which of the following is true about the partial release settlement option? A. It's also called a "rehabilitation settlement" B. Once the property damage settlement is made, the claim is closed C. It's also called an "open-ended release" D. It's also called "payment of property damage; bodily injury pending"

D. It's also called "payment of property damage; bodily injury pending"

Jack and Gregg are both adjusters working claims in the same area after a large hailstorm. One day, Gregg tells Jack that he should inflate the settlements on his claims so he can make some extra money in commissions. Gregg says that he does it all the time, since things are so hectic after a storm that no one will notice if a little extra is added to each of the claims. What should Jack do in this situation? A. Jack should take Gregg's advice and pad his own claim settlements B. Jack has a duty to uphold the bond between adjusters and should keep this news to himself C. Jack should investigate Gregg's past claims and look for ethical violations D. Jack has a duty to report Gregg's ethical violations

D. Jack has a duty to report Gregg's ethical violations

While driving to the movies, Jayden is sideswiped, and the offending driver speeds off into the night. Not wanting to miss the movie, and because his car is still drivable, Jayden continues on his way to the theater. The next day, he files a claim with his insurer for the damages. Which "duty of the insured" did Jayden fail to address? A. Jayden did not prove probable cause for the accident B. Jayden waited too long to file the claim C. Jayden did not make a reasonable attempt to catch the hit and run driver D. Jayden did not notify the police

D. Jayden did not notify the police

Caroline was involved in a car accident in which her husband was killed. Jillian is adjusting the insurance claim. Which of the following is TRUE? A. Jillian should recognize that Caroline's emotional state offers her an advantage in the negotiation process, and she should take advantage of this for the sake of her employer B. As an adjuster who wishes to act with speed and diligence, Jillian should pressure Caroline to accept a settlement as soon as possible C. Jillian should try to help Caroline by offering her a larger settlement for her damaged car D. Jillian should wait until Caroline seems emotionally stable before negotiating a settlement

D. Jillian should wait until Caroline seems emotionally stable before negotiating a settlement

Jim receives a letter in the mail from his insurer notifying him that his commercial policy will not be renewed thirty days from now. Jim protests, saying he needs at least two months time to find a new policy. Jim ends up receiving an additional 30 days' coverage at the same premium as before, because: A. Jim prepays his insurance two months at a time. B. Jim's insurer did not notify him by phone. C. Jim is an exceptional negotiator. D. Jim's insurer did not provide him with 45 days' notice.

D. Jim's insurer did not provide him with 45 days' notice.

ANC Renovations has negotiated a deal with Tim: if he is involved in settling a claim needing interior or exterior renovations, Tim will steer business towards ABC Renovations. ABC Renovations will pay Tim $50 per referral. In participating in this deal, Tim is accepting: A. Settlement padding B. Double dipping C. Inducements D. Kickbacks

D. Kickbacks

Lacey owns a vacation home on the beach in North Carolina. It is 2,600 square feet and includes a finished basement. She'd like to buy flood insurance through the NFIP with replacement cost coverage. Why won't Lacey be able to purchase a replacement cost policy? A. Lacey's home has a finished basement B. The NFIP does not offer replacement cost policies C. Lacey's home is more than 2,500 square feet D. Lacey's beach house is not her principal residence

D. Lacey's beach house is not her principal residence

Peggy is visiting her friend Laura at Laura's home. During the visit, Peggy trips over Laura's dog and takes a nasty fall down the stairs. Which homeowners coverage would pay for Peggy's injuries? A. Peggy's liability coverage B. Dwelling coverage C. Personal property coverage D. Laura's liability coverage

D. Laura's liability coverage

Under a business auto policy, symbol 1 for "any auto" usually applies to what type of insurance coverage? A. Collision B. Comprehensive C. Uninsured motorist D. Liability

D. Liability

Under a business auto policy, symbol 1 for "any auto" usually applies to what type of insurance coverage? A. Collision B. Uninsured motorist C. Comprehensive D. Liability

D. Liability

Which of the following is NOT a universal commercial property policy exclusion? A. Warfare B. Floods C. Earthquakes and land movements D. Lightning

D. Lightning

Sally's home in Roswell burns to the ground after a lightning strike. Sally has a homeowners policy that covers lightning damage. The insurance company now views Sally's house as a: A. Peril B. Risk C. Hazard D. Loss

D. Loss

Jane owns stock in Company B, but she lost her stock certificate. When she asked for a duplicate, Company B said she must purchase a bond guaranteeing that if Jane finds the original certificate, she will return it for proper disposal and that Company B will not suffer an economic loss. What type of bond does Jane need? A. Financial guarantee bond B. Attachment bond C. Reclamation bond D. Lost instrument bond

D. Lost instrument bond

Bill is preparing to meet with a claimant to negotiate a settlement. He combs his hair, polishes his shoes, and irons his business casual clothes. Bill is hoping this will help with the negotiation process by: A. Showing he is part of a large and powerful corporation B. Showing he is humble and flexible C. Being a pleasant surprise D. Making a good first impression

D. Making a good first impression

Which is the LEAST important duty of an insurance adjuster? A. Fulfilling one's fiduciary duty to the employer B. Executing a thorough investigation of the claim C. Providing a fair and equitable settlement for the policyholder D. Making sure the claimant is happy with the settlement amount

D. Making sure the claimant is happy with the settlement amount

When Zach intentionally burned down Matt's restaurant, Matt's insurer paid the claim and then pursued subrogation. Matt is furious about the incident and wants to sue Zach. Why is it NOT possible for Matt to sue Zach? A. Zach may not be tried for the same thing twice B. Matt was not present at the time of the fire C. Zach is protected by the Statute of Limitations D. Matt has already received indemnification from his insurer

D. Matt has already received indemnification from his insurer

A / an _____ plays an advisory role in the negotiation process, working from a neutral position to assist the opposing parties to come to an equitable resolution. A. Arbitrator B. Adjuster C. Judge D. Mediator

D. Mediator

After a covered accident, your PIP will provide coverage for all of the following, EXCEPT: A. Medical costs for your passenger with no PIP B. Your medical costs C. Medical costs for your friend who was driving your car with permission D. Medical costs for the driver you struck

D. Medical costs for the driver you struck

PAP insurance coverage only applies in the "policy territory." Which of the following is NOT part of the policy territory? A. Hawaii B. San Juan, Puerto Rico C. Ontario, Canada D. Mexico City

D. Mexico City

Michelle is at Betty's house, adjusting her water damage claim. While walking through the house, Michelle notices an intricate quilt laying on the back of Betty's sofa and makes a comment about how pretty it is. After completing her inspection, Michelle comes back to Betty to review her findings with her, but before she gets the chance, Betty tells Michelle that she would like her to have the quilt as a gift. What should Michelle do? A. Michelle should accept the gift because she doesn't want to offend Betty B. Michelle should wait until after reviewing the claim with Betty, and accept the quilt only if Betty agrees to the settlement C. Michelle should politely refuse because the quilt could be considered salvaged misappropriation D. Michelle should politely refuse because the quilt could be considered an inducement

D. Michelle should politely refuse because the quilt could be considered an inducement

Which endorsement to the BAP would cover a forklift? A. Drive other car coverage B. Individual named insured C. Construction equipment D. Mobile equipment

D. Mobile equipment

John owes a lot more on his car than it is worth. He figures he would be better off if he burned the car and collected an insurance settlement. He has someone set fire to his garage to destroy the car. John's behavior would be considered a: A. Morale hazard B. Physical hazard C. Hazard D. Moral hazard

D. Moral hazard

Lewis owns a computer store, and he spends many hours a day on the sales floor demonstrating his products to customers. He often gets very animated when showing the electronics and, although he does not intend for anything bad to happen, he doesn't worry too much about handling them carefully, since he knows that his insurance policy will cover any damages. This behavior would be called a: A. Physical hazard B. Fraud C. Moral hazard D. Morale hazard

D. Morale hazard

A non-waiver agreement: A. Violates the doctrine of estoppel B. Informs the policyholder that the insurer has denied coverage C. Is another term for a "reservation of rights" letter D. Needs to be signed by the policyholder in order to be valid

D. Needs to be signed by the policyholder in order to be valid

Celina's business is growing and she needs more space for her inventory. A week ago, a crew started work on constructing a new building on Celina's business premises. Last night, a bolt of lightning set fire to the still-unfinished new building and burned it to the ground. Celina's property is fully insured under a commercial property policy. Which coverage extension in her policy would cover this loss? A. Personal Effects B. Property On-Premise C. Outdoor Property D. Newly Acquired Property

D. Newly Acquired Property

Helen's business is growing rapidly, so she decided to add an annex onto her office and hire another worker. A storm blows down most of the annex structure while it is under construction, forcing Helen to restart from scratch. Assuming she maintains the 80% coinsurance requirement on her commercial policy, which coverage extension could help Helen rebuild? A. Outdoor Property B. Reasonable Repairs C. Property Off-Premise D. Newly Acquired Property

D. Newly Acquired Property

Nick has a comprehensive individual health insurance policy that he purchased through an HMO, and Charity has a PPO plan through her employer. Which of the following statements is TRUE? A. Nick has a higher level of flexibility in choosing his health care than Charity, but Charity has lower medical costs than Nick. B. Nick's plan allows him to go to any hospital for emergency services, but Charity is restricted to approved hospitals within the network. C. Nick's policy was automatically accepted by his insurer, but Charity had to prove her current health status before being accepted. D. Nick was assigned a primary care physician who must coordinate his health care within a network, but Charity may choose a primary physician outside the network.

D. Nick was assigned a primary care physician who must coordinate his health care within a network, but Charity may choose a primary physician outside the network.

ABC Sawmill has a Commercial General Liability policy which includes a $2,000,000 General Aggregate Limit, and a $150,000 Per Occurrence Limit. A covered accident occurs, and the injured party is awarded $150,000. After this unfortunate situation, what are the limits remaining in ABC Sawmill's policy? A. Per Occurrence Limit: $0; General Aggregate Limit: $2,000,000 B. Per Occurrence Limit: $150,000; General Aggregate Limit: $2,000,000 C. Per Occurrence Limit: $0; General Aggregate Limit: $1,850,000 D. Per Occurrence Limit: $150,000; General Aggregate Limit: $1,850,000

D. Per Occurrence Limit: $150,000; General Aggregate Limit: $1,850,000

Nina is deep in debt and files bankruptcy after crashing her car into Ben's luxury sedan and can't afford to pay the portion of the damage that exceeds her policy limit. Which of the following statements is true? A. The apportionment clause allows Nina's insurer to share the loss with Ben's insurer, splitting it equally between the two policies B. Nina's insurer is relieved of its duty to pay the claim because she filed for bankruptcy and can write off all of her debts C. The assignment clause allows Nina's insurer to assign the claim to Ben's insurer because of Nina's bankruptcy D. Nina's insurer will still pay the claim, up to the limit of her liability coverage

D. Nina's insurer will still pay the claim, up to the limit of her liability coverage

To make some extra money, Denise turns her storage shed into a small dwelling and rents it out to a tenant. Shortly after the tenant moves in, a drunk driver crashes into the storage shed apartment, demolishing it. Would Coverage B - Other Structures of Denise's homeowners policy cover the repairs to the shed-apartment? Why or why not? A. No, because it was wired to the home and therefore an attached structure. B. Yes, up to 10% of Denise's homeowner's policy. C. Yes, because Coverage B insures unattached structures. D. No, because the shed-apartment was wholly rented out.

D. No, because the shed-apartment was wholly rented out.

Leonard has a dwelling insured under DP-1 with a limit of liability of $100,000 and no endorsements. An automobile swerves off the road and crashes through Leonard's dwelling. The cost to repair the damage to the wall is $10,000. However, when Leonard attempts to get the permits to do the repair, he finds out that current codes require that he perform a $1,000 upgrade to the plumbing in the wall. How much will the policy pay (ignore the deductible)? A. $1,000 B. $10,000 C. $11,000 D. Nothing. Damage from vehicles is not a covered peril under a DP-1 without an endorsement.

D. Nothing. Damage from vehicles is not a covered peril under a DP-1 without an endorsement.

Which of the following statements about protection and indemnity (P & I) insurance is TRUE? A. P & I insurance protects the vessel owner in the even the freight costs are not paid B. P & I insurance provides protection for the goods and property in transport C. P & I insurance protects the owner of the shipped cargo in the event that the freight costs are not paid D. P & I insurance provides liability coverage against damages or injuries caused by the ship

D. P & I insurance provides liability coverage against damages or injuries caused by the ship

ABC Construction recently won a bid to reconstruct the town park. After a few months of work, ABC Construction realizes they won't make any money on the project and walk away, leaving the park half-finished. Luckily, the town had required ABC Construction to hold a surety bond from Parker Sureties, who can now step in to finance the completion of the job. Which of the following statements is TRUE? A. Parker Sureties will have to pay half the remaining costs for completing the park B. Parker Sureties will not be able to seek recompense from ABC Construction C. Parker Sureties will have to pay 75% the remaining costs for completing the park D. Parker Sureties can seek recompense from ABC Construction

D. Parker Sureties can seek recompense from ABC Construction

When a flood inundates Paul's property, it causes $190,000 in damage to his home and $18,000 in damage to his detached garage. Paul has a dwelling form flood policy with a $200,000 limit. How much coverage should Paul use for his garage if he wants to have enough coverage to repair his home completely? A. Paul MUST apply 10% to the garage if he chooses this option under coverage A B. Paul's garage is not covered under coverage A since it is a detached structure C. Paul should apply 9% to his garage and the remainder to his home D. Paul should apply 5% to his garage and the remainder to the home

D. Paul should apply 5% to his garage and the remainder to the home

In Florida, the employers of which of the following employees do not need to purchase Workers' Compensation insurance for them? A. Librarians B. Construction workers C. Teachers D. Professional athletes

D. Professional athletes

Charles made a big mistake by using copyrighted material for an advertising campaign. He now has three separate lawsuits pending from using trademarked logos and characters in his advertisements. Where in Charles' CGL will he find the limits of his coverage for Advertising Injury? A. General Aggregate B. Conditions section C. Products—Completed Operations Aggregate D. Per Occurrence Sub-Limits

D. Per Occurrence Sub-Limits

Jim is out turkey hunting on a private ranch when he hears some movement in the brush. Assuming it's a turkey, Jim raises his shotgun and fires. Unfortunately for Jim, he has not taken a turkey, but instead severely injured one of the landowner's calves. The landowner decides to sue Jim for the cost of the calf. In the civil lawsuit that follows, the landowner would be the: A. Joint tortfeasor B. Tortfeasor C. Defendant D. Plaintiff

D. Plaintiff

After a loss, the insured farmer will typically have to do all of the following, EXCEPT: A. Notify the insurer immediately B. Protect the crop from further damage C. Leave samples of the damaged crop for the adjuster to inspect D. Plant a replacement crop within 72 hours

D. Plant a replacement crop within 72 hours

Tina has two policies (Policy X and Policy Y) that cover the same risk on a pro rata basis. Policy X has a limit of $100,000 and Policy Y has a limit of $25,000. When Tina suffers a loss totaling $75,000, how will the two policies respond? A. Policy X will pay $50,000 and Policy Y will pay $25,000 B. Policy X will pay $37,500 and Policy Y will pay $25,000 C. Policy X will pay $75,000 and Policy Y will pay nothing D. Policy X will pay $60,000 and Policy Y will pay $15,000

D. Policy X will pay $60,000 and Policy Y will pay $15,000

When Sandra files a claim with XYZ Insurance after a hailstorm, an adjuster comes out to inspect the damages. He tells Sandra that he will evaluate her claim and get back to her promptly. Which of the following items will the adjuster NOT take into account while evaluating Sandra's claim? A. Policy deductible B. Valuation of Sandra's property C. Coverage limits D. Policy premium

D. Policy premium

Which of the following statements regarding primary care physicians is FALSE? A. Point of service plans allow a policyholder to select his own primary care physician B. A primary care physician must approve all medical procedures for policyholders in a health maintenance organization C. Major medical plan policyholders can choose any primary care physician they'd like D. Preferred provider organizations do not allow policyholders to choose a primary care physician

D. Preferred provider organizations do not allow policyholders to choose a primary care physician

In a civil trial, the jury makes their decision based upon which of the following? A. Proof beyond a reasonable doubt B. Recommendation of the presiding judge C. Conference decision D. Preponderance of the evidence

D. Preponderance of the evidence

Insurance adjusters face many situations in the course of their employment that may cause them to deviate from their ethical standards. Which of the following situations most likely might cause such a deviation? A. Analyzing a claim B. Meeting a claimant C. Reporting on a claim back to the insurer D. Pressure to please an employer

D. Pressure to please an employer

ABC Motors produces luxury cars, but lately some of their automobiles have been shipped out with faulty accelerators that stick. One such car was sold to an elderly man who was pulling into a parking space when his car engine suddenly revved to 4,000 RPMs, crashing into a parked car. The resulting damage would fall under what coverage in ABC Motors' Commercial General Liability policy? A. Completed Operations Liability B. Operations Liability C. Premises Liability D. Product Liability

D. Product Liability

Acme Kitchen loses a lawsuit brought by a claimant who suffered injuries resulting from a design flaw in a kitchen knife she purchased. When Acme Kitchen's CGL insurer pays out on the claim, the amount they pay will be subtracted from Acme Kitchen's: A. Per Occurrence aggregate limit. B. Personal Injury and Advertising aggregate limit. C. General aggregate limit. D. Products-Completed Operations aggregate limit.

D. Products-Completed Operations aggregate limit.

An insurance adjuster will do all of the following regarding a claim EXCEPT: A. Investigate the claim B. Determine if the claim falls under the coverage of the insurance policy C. Decide whether the claim has any merit D. Protect the insurer from the claim

D. Protect the insurer from the claim

A risk that carries no possibility of gain is called a _____ risk. A. Slight B. Monetary C. Speculative D. Pure

D. Pure

Which of the following would be most likely to purchase an errors and omissions policy? A. Logger B. Professor C. Actor D. Real estate agent

D. Real estate agent

Which of the following is NOT a risk management technique? A. Risk avoidance B. Risk retention C. Risk reduction D. Risk equality

D. Risk equality

Jared hopes to purchase a new insurance policy for his car, but he has an extremely poor driving record. The insurance company decides to issue Jared an insurance policy, but charges him a premium much higher than the average driver. The insurance company is practicing: A. Risk avoidance B. Risk retention C. Risk transference D. Risk reduction

D. Risk reduction

While at work, Barry suffered a spinal cord injury in a forklift accident. His employer's insurer settled the claim and paid all of Barry's initial medical bills, but it also agreed to continue to pay for his weekly visits to the rehabilitation therapist. Which settlement option did Barry receive? A. Partial release B. Full release C. Advanced payment D. Scheduled payment release

D. Scheduled payment release

In which case would the insured be indemnified by her liability coverage? A. She gets into an accident that leaves her car totaled B. None; liability coverage never indemnifies the insured C. She causes property damage to her neighbor D. She has to pay a fee to retrieve relevant court documents

D. She has to pay a fee to retrieve relevant court documents

Greg has two limits listed on his homeowners policy for liability coverage: one for bodily injury and one for property damage. Each limit applied on a per occurrence basis. What type of limits are these? A. Situational limits B. Split limits C. Aggregate limits D. Single limits

D. Single limits

Jerrod is awarded $4,000 in a court case after Ollie accidently starts a fire and burns down his detached garage. This award is an example of: A. Statutory damages B. General damages C. Punitive damages D. Special damages

D. Special damages

Which commercial property Causes of Loss form offers open-peril (also called "all-risks") coverage? A. Basic form B. Broad Form C. All commercial insurance coverage is open peril D. Special form

D. Special form

Which valuation method is most common among aviation hull policies? A, Replacement cost B. Fair market value C. Actual cash value D. Stated value

D. Stated value

The city of Hillsdale passed a law dictating that all dogs must wear collars with tags. This is an example of what kind of law? A. Unfair B. Tort C. Common D. Statutory

D. Statutory

A _____ is a law set forth by a governing body such as a state or city. A. Liability law B. Common law C. Complaint law D. Statutory law

D. Statutory law

Jim has a small business and wants to buy comprehensive coverage for all of the vehicles that he owns in order to protect his investments. Which coverage symbol will insure that ALL his owned automobiles are covered under comprehensive coverage? A. Symbol 4 B. Symbol 1 C. Symbol 3 D. Symbol 2

D. Symbol 2

Frank owns a catering business and uses three vans for transporting food products; four passenger vehicles for his employees; and one large box truck to haul around tables and chairs, etc. Which set of coverage symbols could Frank use to cover all of his company's vehicles? A. Symbols 4 & 9 B. Symbols 3 & 8 C. Symbols 4 & 19 D. Symbols 3 & 4

D. Symbols 3 & 4

Which of the following does not belong in an adjuster's claim file? A. A detailed account of the claimant's testimony B. The adjuster's estimate of the value of the damage C. Documented statements provided by witnesses D. The adjuster's opinions about the claimant

D. The adjuster's opinions about the claimant

Jean operates a home-based business. She also leases her basement out to a friend, Rita, who also works from home. When a kitchen fire causes extensive smoke damage to her home, she and her tenant must find another place to live and work while repairs are being made. Which of the following expenses might Coverage D - Loss of Use help pay for? A. Only Jean's lost income. B. The cost of lodging for both Jean and Rita. C. The cost of lodging and lost income for both Jean and Rita. D. The cost of lodging for Jean, and the lost rental income from Rita.

D. The cost of lodging for Jean, and the lost rental income from Rita.

Molly leaves town for a one week vacation. When she returns, she finds that the back door to her house has been kicked in and damaged. Her laptop is gone, and - to her surprise - she finds that the copper piping in the basement has been torn out and stolen as well! She has a DP-3 with coverage for contents but no additional endorsements. What, if anything, is covered? A. The copper piping only B. The damage to the door, the laptop, and the copper piping C. Nothing; all theft is excluded under the DP-3 D. The damage to the door and the copper piping

D. The damage to the door and the copper piping

Rick and his wife were evacuated due to rising flood waters in their neighborhood. They brought along a small trailer with their belongings in order to save them from the flood, but the trailer was unsteady and several items fell off, causing $1,500 in damage when they hit the ground. Assuming Rick has a SFIP, which of the following statements is true? A. The damaged property is covered under the SFIP, and the couple will receive $1,500 for this claim B. The damaged property is covered under the SFIP, but the couple will only receive $1,000 for this claim C. The damaged property is covered under the SFIP, and the couple will receive $1,250 after their $250 deductible D. The damaged property is not covered, because the damage was not caused by the flood

D. The damaged property is not covered, because the damage was not caused by the flood

Cliff wants to build a cabin in a heavily wooded area. He would like to buy insurance for this cabin, but the underwriter of his insurance company first wants to research the history of forest fires in the area in which Cliff wants to build. The underwriter is trying to determine: A. The perils B. The hazards C. The risks D. The exposure

D. The exposure

Stanley lives in a rough neighborhood with a high crime rate. When he inherits a very valuable original painting by Picasso, he tries to buy an insurance policy on the painting, but has trouble finding an insurance company that will sell him a policy. Why might this be? A. Since Stanley did not buy the painting, it does not have a quantifiable value B. The peril is higher than the insurer is willing to take on by issuing a policy C. The painting is not an insurable risk D. The exposure to loss is too great, based on where Stanley lives

D. The exposure to loss is too great, based on where Stanley lives

Which of the following is NOT a nearly universal condition of a PAP policy? A. The insured must cooperate with the insurer during the investigation process B. The insured must allow the insurer to inspect a vehicle during a claims process C. The insured must file a report for hit and run accidents with the police D. The insured must actively avoid parking in high crime areas

D. The insured must actively avoid parking in high crime areas

The insuring agreement for part A - liability in a personal auto policy states that: A. The insurer will pay for "bodily injury" or "property damage" to any "insured" because of an auto accident B. The insurer will cover the costs to defend the insured in court in subsequent lawsuits related to the same occurrence, even after the policy limit is reached C. The insurer will cover the cost to defend the insured in court, up to the policy limit D. The insurer has the right to settle liability cases out of court

D. The insurer has the right to settle liability cases out of court

Rosa's barn burned down when it was struck by lightning during a storm. The barn was fully insured at replacement cost under Rosa's Farm policy. At the time of the loss, the barn was valued at $45,000, but it will cost $60,000 to replace it. How will Rosa's insurer respond to her claim? A. The insurer will pay Rosa $30,000 first, and then up to another $30,000 once repairs are complete B. The insurer will give Rosa one check for $45,000 C. The insurer will give Rosa one check for $60,000 D. The insurer will pay Rosa $45,000 first, and then up to another $15,000 once repairs are completed

D. The insurer will pay Rosa $45,000 first, and then up to another $15,000 once repairs are completed

Jason's auto policy states that the insurer may cancel coverage if a premium is more than 30 days late. However, Jason is currently more than 30 days late, and has been so five times in the last year, and his insurer has done nothing about it. When Jason gets into an accident and files a claim, which of the following is most likely to happen? A. The insurer will deny the claim and cancel Jason's policy because he is more than 30 days late with his payment B. The insurer will deny the claim and cancel Jason's policy because of the implied waiver they have made by not canceling his policy the previous times he was late with his payments C. The insurer will pay the claim because of the express waiver they have made by not cancelling Jason's policy the previous times he was late with his payments D. The insurer will pay the claim because of the implied waiver they have made by not canceling Jason's policy the previous times he was late with his payments

D. The insurer will pay the claim because of the implied waiver they have made by not canceling Jason's policy the previous times he was late with his payments

The declarations page will always provide a list of the coverages provided within the policy. What will be listed next to each type of coverage on the declarations page? A. The expiration date of the coverage B. The name of the policyholder C. The policyholder's obligations regarding that coverage D. The insurer's limit of liability for that coverage

D. The insurer's limit of liability for that coverage

Barbara is preparing to negotiate an auto claim on behalf of XYZ Insurance. She knows the circumstances of the loss and has completed the investigation and evaluation. What other piece of information must Barbara know before entering into negotiations with the claimant? A. The amount of the claimant's monthly premium B. The maximum punitive damages the claimant will likely have to pay C. A good auto body to whom she can refer the claimant D. The maximum amount XYZ Insurance will pay for the claim

D. The maximum amount XYZ Insurance will pay for the claim

An extended power failure in Tom's neighborhood causes his freezer to thaw, along with all the meat inside, resulting in an $800 loss. He files a claim with hid DP-3 insurer for the loss, which comes back denied. For what reason would the insurer deny the claim? A. There is no such thing as meat coverage in a dwelling policy B. Tom should have rented a generator to prevent the thawing C. Tom should have relocated the meat to another location D. The power outage occurred off-premises

D. The power outage occurred off-premises

Which statement about the catastrophic risk protection endorsement is FALSE? A. It pays 55% of the price of the commodity B. It pays on crop losses in excess of 50% C. It is an optional coverage of MPCI D. The premiums are paid by the insured

D. The premiums are paid by the insured

Mark incurred $8K damage to his car in an accident. He receives $8K from his insurance company and $4K from the other driver. By receiving a profit from the loss, Mark could be in violation of: A. The principle of financial restoration B. The principle of profit and loss C. The principle of financial status D. The principle of indemnity

D. The principle of indemnity

What might disqualify a restaurant from purchasing a BOP? A. The use of microwave ovens B. The restaurant occupies over 5,000 square feet C. The restaurant serves beer D. The restaurant serves liquor

D. The restaurant serves liquor

When a fire burns through The Chronicle newspaper company, it takes out two permanently installed printing presses, three employees' personal laptops, five rolls of newspaper stock, and in a twist of irony, two fire extinguishers. Which of these would be covered by the Building & Personal Property Form under Coverage B -Business Personal Property? A. The printing presses and newspaper stock B. The printing presses and fire extinguishers C. The employees' personal laptops D. The rolls of newspaper stock

D. The rolls of newspaper stock

Dan has a DP-3 policy on his home. During a storm, a tree falls onto his attached garage. The tree crashes through the garage roof and lands on Dan's water softener tank, destroying it completely. Which of these damages would be covered under coverage A? A. None B. The roof only C. The water softener only D. The roof AND the water softener

D. The roof AND the water softener

XYZ Productions has just signed a contract to perform the show "Cats" in 45 cities over the next 200 days. XYZ Productions needs insurance to protect the stage props and costumes throughout the nationwide tour. What type of commercial property floater might XYZ Productions purchase to protect their equipment? A. Contractors equipment floater B. Bailee's customer floater C. Block policy D. Theatrical property floater

D. Theatrical property floater

All of the following statements are true of the named peril endorsement in a BOP, except: A. The endorsement reduces policy coverage B. The endorsement reduces the premium C. Volcanic action is a covered peril D. Theft is a covered peril

D. Theft is a covered peril

Which of the following statements regarding health insurance is TRUE? A. As opposed to joining a group insurance plan, purchasing health insurance on an individual basis can save a consumer thousands of dollars a year. B. An HMO is usually the most expensive group insurance provider C. Major medical plans tend to be very restrictive regarding the selection of physicians D. To be covered, members of an HMO must receive treatment for their medical conditions within the established network of healthcare providers

D. To be covered, members of an HMO must receive treatment for their medical conditions within the established network of healthcare providers

Which of the following is NOT a purpose of insurance regulation? A. To promote reasonable insurance rates B. To promote insurance availability C. To prohibit price-fixing D. To prohibit insurance-rating

D. To prohibit insurance-rating

Fred lives near a business that is currently the object of a protest. As police try to break up the protesters, a riot ensues and spills onto Fred's property, where protesters set fire to four of his trees. How much can Fred be indemnified for the loss of all four trees (ignoring any deductible)? A. Up to $400 B. Up to $500 C. Up to $1,000 D. Up to $2,000

D. Up to $2,000

When a faulty electrode in a children's toy is recalled by ABC Toymakers Inc., it is a costly endeavor. Especially since ABC Toymakers Inc.'s base insurance policy doesn't cover product recalls. Which excess liability coverage could help pay for losses associated with the recall? A. Follow form policy B. Stand alone policy C. Product recall policy D. Umbrella policy

D. Umbrella policy

Jim adjusts auto damage claims. He supplements his paycheck with kickbacks from a local body shop that he recommends to claimants involved in these accidents. In accepting monetary gifts for business referrals, Jim is acting: A. Harmlessly B. Fairly C. Prudently D. Unethically

D. Unethically

Which of the following describes a contract in which only one party makes a promise to perform? A. Utmost good faith contract B. Aleatory contract C. Personal contract D. Unilateral contract

D. Unilateral contract

After a fire burns through XYZ Condominiums, they have to replace most of the interior. Which of the following will NOT be covered under the Condominium Coverage Form of the condo association's commercial property policy? A. Computers used by the condo B. The common areas of the condo building C. Piping, ductwork, or wire units D. Upgrades within individual condos

D. Upgrades within individual condos

Sam's Dry Cleaners' power shuts off due to a lightning strike at the supplying power station just down the street. For three days the business cannot operate due to the damage incurred at the power station. Which endorsement would cover Sam's Dry Cleaners for the loss of business? A. Equipment breakdown B. Protective safeguards C. Ordinance or law D. Utility services - time element

D. Utility services - time element

During a strong storm, Missy's grain drill was picked up and dropped by a tornado, which mangled the machine and rendered it useless. Before the damage, the grain drill was worth $25,000, but it would cost $45,000 to buy a new one today. Missy's farm policy has a replacement cost endorsement. When will Missy receive full indemnification for this loss? A. After her insurer applies the coinsurance requirement B. After she submits a proof of loss form to her insurer C. Within 180 days of filing her claim D. When she either repairs or replaces the machine and submits receipts to her insurer

D. When she either repairs or replaces the machine and submits receipts to her insurer

When would a farmer receive an indemnity payment under an area yield protection policy? A. Only after the governor declares a state of emergency for the county in which the farm is located B. Any time the farmer has damage to his crops C. Only after the actual county revenue decreases by at least 50% because of a disastrous loss D. When the farmer suffers loss of yield and production is low for the entire county

D. When the farmer suffers loss of yield and production is low for the entire county

Under which circumstance would it be legal for an insurer to charge one insured more than another insured for the same coverage? A. When the insurer is running a narrow profit margin B. Never, under any circumstances C. When the insured is in the statistical minority D. When the insured is statistically more likely to experience a loss

D. When the insured is statistically more likely to experience a loss

Just two days before a hurricane hits New Orleans, Jim brings most of his valuable items (TV, stereo, jewelry, firearms, etc.) to his parents' house in Hammond, to keep them safe from the storm. Two weeks later, Jim's valuables are destroyed when a flood sweeps through Hammond, severely damaging his parents' house. Under which peril are the valuables covered? A. Flood B. Water C. Accidental Discharge or Overflow of Water D. Windstorm

D. Windstorm

XYZ Auto sells 20 cars to a buyer across the country. As part of the deal, XYZ Auto ships the cars "FOB Tallahassee." Which of the following statements accurately explains what this phrase means? A. Once the cars reach Tallahassee, XYZ Autos will be responsible for any further transportation costs B. The buyer of the cars is responsible for all transportation costs of the autos until they reach Tallahassee C. The buyer and XYZ Autos agree to split the cost of the auto delivery to Tallahassee D. XYZ Autos assumes responsibility for the autos until they reach Tallahassee

D. XYZ Autos assumes responsibility for the autos until they reach Tallahassee

Jake is selling insurance policies for XYZ Insurance. Olivia buys a homeowners policy from Jake and asks him to write down on a separate piece of paper all the perils the policy covers so she can show her husband. Jake writes "hail," but when Olivia's house is damaged by hail, the adjuster says "hail isn't covered in your policy." Olivia produces the piece of paper and threatens to sue XYZ Insurance if they don't pay. Does she have grounds for a lawsuit? Why or why not? A. No; Jake was unaware of the policy's hail coverage exclusion B. Yes; hail coverage is standard in property policies, and the insurer should have included it in the first place C. No; Jake had no authority to promise coverage that was not listed in Olivia's policy D. Yes; Jake exercised implied authority when he wrote that Olivia had hail coverage

D. Yes; Jake exercised implied authority when he wrote that Olivia had hail coverage

Josh is driving through town in the company truck when he misses his turn. He decides just to make a U-turn and double back. Unfortunately, he doesn't see the car coming up alongside of him and the two collide. Josh files a claim with the company's CGL, but the claim is denied because: A. Josh was at fault in the accident. B. a CGL does not cover U-turns. C. Josh was driving a commercial pickup truck. D. a CGL does not cover auto accidents.

D. a CGL does not cover auto accidents.

Rachel is starting an insurance company in Naples, Florida. She has a great business model and has begun recruiting some fantastic sales people. In addition to submitting to occasional financial audits in the future, Rachel's company must also: A. operate in at least one other state. B. have a physical office with a minimum of 2,500 square feet. C. become a Lloyd's plan insurer. D. become a member of a Guaranty Association.

D. become a member of a Guaranty Association.

Thomas runs a computer repair shop. One morning he arrives to find the front glass window broken and a number of his customers' computers stolen. Thomas' Legal Liability Coverage Form would pay for: A. the cost of replacing the front window. B. Thomas' own personal computer. C. cash taken from the register. D. his clients' computers.

D. his clients' computers.

The retroactive date in the claims-made version of the CGL policy is: A. the latest date an injury can occur for coverage to apply. B. the latest date a claim can be made for coverage to apply. C. the earliest date a claim can be made for coverage to apply. D. the earliest date an injury can occur for coverage to apply.

D. the earliest date an injury can occur for coverage to apply.

An insurer may not: A. charge higher premiums to elderly drivers. B. expand coverage without requiring the insured to sign a new, revised policy. C. distribute pamphlets or advertisements. D. try to settle a claim using an application that was altered without the knowledge of the insured.

D. try to settle a claim using an application that was altered without the knowledge of the insured.

Mark has an ocean marine insurance policy with cargo coverage. The type and value of his cargo varies from one shipment to the next, so rather than having a set value for this coverage, the amount of his settlement is only determined after a covered loss. Mark's cargo coverage is written on a/an ________ basis. A. actual cash value B. replacement cost C. valued D. unvalued

D. unvalued

John's home is totally destroyed by a fire, and along with it most of his personal property. A few of the items were scheduled in his homeowners policy, such as his Rolex watch and a few antiques, but everything else was left as "unscheduled property." These "unscheduled" items, A. will not be covered. B. will have to be scheduled before they can be covered. C. will take twice as long for indemnification since their times weren't scheduled. D. will be covered under the normal policy limits.

D. will be covered under the normal policy limits.

What are the 4 essential (and 2 very common) sections of an insurance contract?

Declarations page Definitions Insuring agreement Conditions Exclusions Endorsements

Define: Restoration of limits policy provision

Defines how limits are affected after a loss

Define: Apportionment policy provision

Defines how policy will respond when more than one policy covers the same risk

Define: Moral hazard

Deliberate, reckless behavior because of insurance coverage

Define: Concealment

Deliberately withholding pertinent information

What is the fourth step in the claims process?

Determining insurer's liability in the claim

What is the sixth step in the claims process?

Determining the time and cost of repairs

Define: Insurable interest

Direct financial interest in protecting a unit

Describe coverage A:

Dwelling, attached structures, materials located near it

Define: Indirect loss

Economic loss resulting from a direct loss

Suspension of insurance, towing and labor, and customized equipment are all examples of what?

Endorsements

What is the second step in the claims process?

Establishing lines of communication

Intentional acts, wear and tear, war, and nuclear events are common _____.

Exclusions

Define: Negligence

Failure to use a reasonable degree of care that results in injury or damage to another party

Define: Misrepresentation

False statement

Bodily injury and property damage, personal and advertising injury, medical payments, farm product liability, farm pollution liability, custom farming liability, and farm employees liability are all forms of what?

Farm liability isnurance

Define: Reciprocal Insurer

Group of people or organization that insure each other

What does the DP-2 broad form cover?

Fire Lightening Explosion Vandalism and malicious mischief Damage by burglars Glass breakage in occupied dwellings Falling objects that damage the exterior Weight of precipitation Sudden tearing apart, cracking, burning, bulging Accidental discharge Collapse Freezing

Define: First named insured

First person or entity listed on the dec page

How many options are there to dispute a resolution?

Five

What does the DP-3 special form cover?

For structures: Open peril coverage For personal property: Fire, lightning, explosion, vandalism and malicious mischief, damage by burglars, falling objects that damage the exterior, weight of precipitation, sudden tearing apart / cracking / burning / bulging, accidental discharge, collapse, freezing

How many options are there for responding to a claim?

Four

What is included in a final report?

Full details of claim investigation, evidence, loss totals, and final claim resolution

Define: Express authority

Given in writing within the agent's contract

Define: MPCI

Government subsidized and regulated ,offering wide coverage for many perils

Define: Public adjuster

Hired by the insured, usually paid commission

List the eight negotiation techniques

Humor Questions Demonstration Pleasant Surprise Diversion Silence Back-up Offer Flexibility

Define: Out of state provision

If an insured meets her home state's liability requirements, but gets into an accident out of state, it is assumed that she meets the minimum requirements of that state as well

Define: Severability of insurance policy provision

If more than one person is insured under the same policy, each is covered separately

Define: Co-insurance

Imposes a penalty if the homeowner does not insure the home for at least 80% of its worth

Define: Legal hazard

Increased chance of loss because of legal action

Define: Farm insurance

Insurance that combines homeowner's and commercial coverages

Define: Cancellation and non-renewal policy provisions

Insured may cancel at any time, but insurer is much more restricted

Define: Stated amount

Insured states value of insured items up from, and after a loss, the policy pays the lesser of ACV or the stated amount

Define: Liberalization policy provision

Insureds benefits automatically, at no extra cost, when an insurer expands coverage

Define: Assignment policy provison

Insureds cannot transfer policy coverage to someone else without insurer's approval

Define: No release form

Insurer cuts a check for the amount of the damages, but the claimant is not required to sign a release form

Define: Advanced payment

Insurer makes multiple partial payments until the final settlement is agreed upon

Define: Franchise deductible

Insurer pays 100% of damages if losses exceed a certain set amount

Define: Scheduled payment release

Insurer pays all compensatory damages and agrees to pay certain future "incidentals"

Define: Full release

Insurer writes one check to cover all damages; claimant signs a full release form

What is a reservation of rights or a non-waiver agreement?

Issues when the case may not fall under the terms of the insurance policy

Define: Workers' compensation law

Keeps employees from suing their employers for injuries

Define: Auto no-fault laws

Keeps people from suing drivers for damages due to motorized vehicles

What are the 3 main points of Government Insurers?

Mandatory Run by government Suited to needs of general public

What are the three different split limits?

Maximum paid for bodily injury of one person Maximum paid for bodily injury of multiple persons Maximum paid for property damage

What are the two different aggregate limts?

Maximum payout per occurrence Maximum payout per policy period

Coverage E includes:

Medical bills Lost wages Pain and suffering Inconvenience Property damage

What is the HO-8 form?

Modified coverage form Limited named perils

Define: Special damages

Money awarded for exact value of tangible damages

Define: General damages

Money awarded for intangible, emotional damages decided by court

What is the eighth step in the claims process?

Negotiating a settlement

Herman leaves a window open while he is away at work, allowing rain from a sudden thunderstorm to enter the living room and damage a sofa. Is this loss covered?

No

Define: Contributory negligence

No settlement (only allowed in some states)

What are the 2 main points of Mutual Insurers?

No stockholders Policyholders participate in dividends (participating)

Define: PIP coverage

No-fault coverage for the insured's own injuries caused by car accidents; primary coverage, meaning it pays before part B kicks in

What is the main point of Private Insurers?

Offer insurance products based on customer preferences

Define: Comparative negligence

Partial settlement

What is risk transference?

Paying someone else to take on a risk

What does coverage E (additional living expenses) provide?

Pays added living expenses after a covered loss

Define: Part D - coverage for damage to your auto

Pays for damages to insured's vehicle. Available as collision or other than collision coverage

What does coverage D (fair rental value) provide?

Pays lost rental income after a covered loss

Define: Actual cash value (ACV)

Pays the depreciated value of the item right before the loss occurred

Define: Replacement cost (RC)

Pays to replace damage item at current market prices, no depreciation

Define: Adjuster

Person who investigates, evaluates, and negotiates claims arising under insurance contracts

What are the 6 unique characteristics of insurance contracts?

Personal contract Contract of adhesion Utmost good faith contract Aleatory contractUnilateral contract Conditional contract

Describe coverage C:

Personal property (contents)

Define: Intentional tort

Planned wrongful act

A risk is insurable IF: (6 points)

Policy premiums will cover both claims and expenses The insurer can define the exact condition under which the item is covered by the policy; if the item is definable; and if the item, person, or organization has clearly defined value The loss is unforeseeable, unexpected, and reasonably unpreventable The loss causes substantial economic hardship The insurer can exclude coverage for significant disasters and catastrophic events A large number of similar types of risk are insured

Define: Answer

Policyholder's response to complaint

What are the 2 meanings of "Risk"?

Potential for loss The insured item

Define: Estoppel

Principle holding that if insurer accepts a practice for a time, it cannot later refuse coverage because of their practice

Insureds are prohibited from abandoning _____ to the insurer.

Property

Define: Farm

Property where a farmer or rancher both lives and conducts business

Define: Lender interest provisions

Protects lender interest by allowing the lender certain rights in the policy

Define: Wrongful death act

Protects parties associated with a death caused by negligence

Define: Liability insurance

Protects policyholders when they cause damage or injuries to another party

What is the HO-4 form?

Renter's insurance Named peril

Define: Coverage E (personal liability)

Provides compensation to a third party who is injured or whose property is damaged by a policyholder

Define: Crop-yield insurance

Provides coverage for physical loss to the crops

What are 2 main points of Stock Insurers?

Publicly traded Stockholders participate in dividends (non-participating)

Define: Implied authority

Reasonable for public to believe, not expressly granted in writing

What are the 3 main points of the term "loss"?

Reduction in value Expense caused by a covered peril The amount an insurer pays to settle a claim

What is the formula for ACV?

Replacement cost - accumulated depreciation = ACV

Define: Morale hazard

Risky behavior because of the comfort of insurance protection

Define: Staff adjuster

Salaried employee of an adjuster

Define: Direct writer

Salaried employee; works for one company

Define: Independent adjuster

Self-employed, contracts with insurers or bureaus, paid by schedule, or time + expense

What are the limits for coverage D and coverage E?

Shortest time required to repair or replace the property OR settle elsewhere

What are the 2 types of fraud?

Soft fraud Hard fraud

Define: Criminal trial

State accuses defendant of violating the law 12 out of 12 jurors Proof beyond a reasonable doubt

Define: Emergency adjuster

Temporarily licensed to service the many claims arising from catastrophes

What are the four elements of negligence?

The negligent party had a legal duty to act (or not act) in a prescribed manner Negligent party failed to act accordingly The claimant suffered actual loss or injury due to this action or inaction The loss or injury to the claimant was a direct result of the negligent party's breach of duty

Define: No liability

The policyholder has 0% or, no liability in the damages to a third party

Define: Full liability

The policyholder is 100% at fault for damages to a third party

Define: The power to bind

The principal may have to honor the adjuster's decisions, even when made in error

Define: Adjusting

The process of comparing a claimant's losses to the promises made in an insurance policy

Define: Valuation

The process of estimating what an item is worth

Define: Partial liability

The third party is responsible for a percentage of his own damages

Define: Subrogation

The transfer of rights that allows the insurer to recover its losses after it has indemnified the policyholder

Define: Constructive total loss

When damage would cost more to repair than the insured item is worth

Define: Vicarious liability

When negligence is transferred from one party to another

What are the extended coverages?

Windstorm Civil commotion Smoke Hail Aircraft Vehicles Volcanic eruptions External explosion Riot

Herman leaves a window open while he is away at work, allowing rain from a sudden thunderstorm to enter the living room and damage the hardwood flooring. Is this loss covered?

Yes

Herman leaves a window open while he is away at work, allowing wind from a sudden thunderstorm to enter the living room and shatter a lamp by blowing it off a table. Is this loss covered?

Yes