Exam Study Questions
Which of the following describes a "peril"? Lightning that stikes a house and destroys electronic equipment inside. A wet floor in a grocery store after an employee mops. Leaving a first floor window open when all residents leave the house. Driving a car with worn out tires.
Lightning that stikes a house and destroys electronic equipment inside
All of the following are EXCLUDED under an Owners & Contractors Protective Liability policy, EXCEPT: Completed operations. Liquor liability. Property damage. Bodily injury occurring at a location not specified on the policy.
Liquor liability.
Which of the following is NOT a responsibility of the Insurance Commissioner in any given state? Issuing insurance licenses and certificates of authority. Enforcing insurance laws and regulations. Setting insurance rates. Ensuring the availability of necessary insurance in the state.
Setting insurance rates
Which of the following coverage symbols would be designated on the Declarations of a Commercial Auto policy to cover a customer's auto left with the insured to be serviced? Symbol 30. Symbol 31. Symbol 32. Symbol 33.
Symbol 30.
All of the following are characteristics of an aleatory contract, EXCEPT: The contract is contingent upon uncertain events. The contract allows the insurer to receive from an individual insured, much more money in premiums than is paid out in claims. The contract allows the insured to receive a return in claims payments that is nearly equal to the amount paid in premium. The contract allows an individual insured to receive much more in claims payments than was paid in premiums.
The contract allows the insured to receive a return in claims payments that is nearly equal to the amount paid in premium.
Which of the following statements regarding Commercial Auto coverage is NOT TRUE? A tractor-trailer combination is included in the definition of "auto" on the Business Automobile form. Owned private passenger autos are covered under the Motor Carrier form but are not covered under the Truckers form. The definition of "trucker" and "motor carrier" are the same in both the Truckers form and the Motor Carrier form. A motor carrier is engaged in transporting property or passengers.
The definition of "trucker" and "motor carrier" are the same in both the Truckers form and the Motor Carrier form.
The Personal & Advertising Injury limit set on a Commercial Umbrella policy is: The most that will be paid for a single offense to a specific person or organization. The most that will be paid for all offenses to all persons or organizations. The most that will be paid for all offenses to a specific person or organization. The most that will be paid for all offenses during the policy period.
The most that will be paid for a single offense to a specific person or organization.
19. A personal articles floater covers all open perils. True False
True
The standardized Building and Personal Property Coverage form requires the insured to submit a signed, sworn proof of loss statement: Within 30 days of the loss Within 30 days of the insurance company's request. Within 60 days of the insurance company's request. Within 45 days of the loss.
Within 60 days of the insurance company's request.
An insured is covered under an HO-2 form with a Coverage A limit of $125,000 and a Coverage C limit of $65,000. What amount will automatically be provided for Coverage D? $37,500 $19,500. $32,500. $12,500.
$37,500
The Homeowners "additional coverages" includes coverage up to __________ for grave markers including mausoleums on or away from the residence premises by a peril insured against. $5,000. $1,000. $2,500 $1,500.
$5,000.
Under the "additional coverages" contained in Section II of the Homeowners forms, damage to "property of others" will not be covered if that damage was caused intentionally by an insured who is at least: 13 years of age. 15 years of age. 16 years of age. 18 years of age.
13 years of age.
A Personal Liability Supplement contains _____ conditions. 10 15 5 3
5
Russ is a licensed in adjuster in New York but has been deployed to Rhode Island to work during a declared catastrophe. Russ obtains an emergency adjuster license from the Rhode Island Department and is informed that it will remain in force for a period of: 30 days 60 days 90 days 120 days
90 days
A standardized Personal Automobile policy contains all of the following sections/parts, EXCEPT: Four separate insuring agreements with their own separate exclusions. A common Declarations page applying to all coverage parts. A common Conditions section applying to all coverage parts. Four separate insuring agreements with separate coverages provided under each of them.
A common Conditions section applying to all coverage parts.
Sam the shopkeeper mops the floor of his store and forgets to set the "Caution: Wet Floor" sign in the area to warn his customers. Sarah walks through the store a few moments later, slips on the floor and injures her arm and leg. This is an example of: An intentional tort. Vicarious liability. Absolute liability. A negligent tort.
A negligent tort
Which of the following statements best describes the term "fiduciary". A person who submits a claim to their insurance company. A person who has been bonded as honest and trustworthy. A person who is entrusted with the assets of another. A person who holds a fiduciary's license.
A person who is entrusted with the assets of another
After a standard Personal Automobile policy has been in effect for more than 60 days, the insurer may cancel the policy for all of the following reasons, EXCEPT: Non-payment of premium. Material misrepresentation in obtaining the policy. A regular operator of the vehicle has had his driver's license suspended or revoked. A regular operator of the vehicle has received a citation for speeding.
A regular operator of the vehicle has received a citation for speeding.
59. Mr. J has a jewelry limit of $1,000 and a $250 deductible. He just purchased a scheduled personal property policy for a diamond ring at $2,500. If the ring is stolen, how much would his policy pay for the claim? A) $2,500 B) $0 C) $750 D) $1,000
A) $2,500
40. Policy states that the deductible will be applied toward the total loss amount. There is a $500 deductible and a limit of liability of $24,000. A loss is claimed in the amount of $25,000. How much will be paid on the claim? A) $24,000 B) $23,500 C) $0 D) $25,000
A) $24,000
2. At what time is the policy effective? A) 12:01 a.m. B) 12:01 p.m. C) 12 a.m. D) 12 p.m.
A) 12:01 a.m.
1. How many days after being notified of a loss does the insurer have to send out forms and acknowledge the claim in writing? A) 15 days B) 21 days C) 30 days D) 10 days
A) 15 days
31. The insurer shall affirm or deny liability within a reasonable time and shall tender payment of all claims in which damages are not in disputed within days of affirmation of liability. A) 21 B) 15 C) 30 D) 120
A) 21
28. Lost wages are an example of A) Special B) General
A) Special
3. What is the minimum liability coverage limit in the state of Rhode Island? A) $30,000/$15,000/$30,000 B) $25,000/$50,000/$25,000 C) $50,000/$100,000/$50,000 D) $15,000/$25,000/$5,000
B) $25,000/$50,000/$25,000
46. Original equipment manufacturer (OEM) parts are allowable under the Unfair Claim Practice Act only on vehicles less than: A) 10 months old B) 48 months old C) 30 days old D) 12 months old
B) 48 months old
17. What is a civil wrong? A) A crime B) A tort C) A moral hazard
B) A tort
5. When the involved insurance companies are unable to agree on liability, they may proceed to _________, in which they will each present their evidence and a third party will determine liability. A) Subrogation B) Arbitration C) Suit D)Appraisal
B) Arbitration
56. Where is the deductible found in the insurance contract? A) Coverage B) Declarations C)Exclusions D)Endorsement
B) Declarations
30. Your vehicle is struck in the rear by an uninsured driver, and you have uninsured motorist property damage (UMPD) coverage with a $200 deductible. Does your deductible apply to this loss? A) Yes B) No
B) No
38. What written document states that the insurance company will not change the policy during its effective dates? A) Declarations B) Warrantee C) Letter of representation D) Liberation
B) Warrantee
50. You have comprehensive (OTC) coverage only. You drive your vehicle into a tree and cause $1,150 in damage to your vehicle. You have $300 in damage to the windshield, $600 in damage to the bumper, $150 in damage to the fender, and $100 in damage to the grill. How much would your coverage pay? A) $750 B) $1.150 C) $300 D) $850
C) $300
24. Which is an example of a comprehensive (OTC) loss? A) Car rusting B) Running over a pothole C) Bird flying into a car windshield
C) Bird flying into a car windshield
48. Who does not need to be licensed? A) A corporation B) A partnership C) The CEO
C) The CEO
14. The FBI breaks down the insured's front door and arrests and charges him for drug distribution. The insured files a claim for the damage to his front door. What would his homeowner's policy pay for? A) Coverage C - Contents B) Coverage A - Dwelling C)Nothing D)Section II - Liability
C)Nothing
Which of the following losses would NOT be covered by an unendorsed Commercial Property policy with the special cause of loss form attached? Carolyn's Fine Gifts must shut down for a month to repair flood damage. When a riot breaks out in the town square, Bonnie's Boutique is looted and vandalized in the commotion. A tornado whips through town, leveling a warehouse belonging to Johnson's Industries. Allen's Appliances loses an entire warehouse in a fire caused by a lightning strike at a nearby power plant.
Carolyn's Fine Gifts must shut down for a month to repair flood damage.
The "aggregate limit" of a Commercial Umbrella policy does not apply to: Personal & Advertising Injury losses. Commercial Automobile losses. Products and Completed Operations losses. Employers' Liability losses.
Commercial Automobile losses.
Samantha is renting an apartment and has just purchased a Homeowners policy using the HO-4 form. Which of the following insuring agreements is NOT included on Samantha's policy? Coverage D. Coverage C Coverage E. Coverage A.
Coverage A
7. Adam has a personal auto policy with $50,000 in liability coverage. He sees a neighbor he dislikes and runs the neighbor's foot over. How much would Adam's insurance company pay for the neighbor's injuries? A) $300 B) $300 for medical bills, plus $100 for pain and suffering C)$50,000 - policy limit D) $0
D) $0
32. The insured is walking up the steps of his newly purchased home, and he falls and breaks his arm. Which part of his homeowner's policy would provide coverage for his medical bills? A) Section I B) Section lI C) Umbrella coverage D) None of the above
D) None of the above
36. Which is an example of direct evidence? A) Insured admits skidding B) Snow tracks C)Skid marks D) Radar
D) Radar
4. By virtue of payment, the insurance company assumes the rights of the insured to pursue the responsible party for damages only to the extent of the insurance company's payment, and as a service, the insurance company will attempt to recover the insured's deductible. What process does this describe? A) Arbitration B) Appraisal C) Suit D) Subrogation
D) Subrogation
One of the purposes of the coinsurance clause is to: Encourage insureds to insure property for most, if not all of its value. Require the insurance company to pay all losses in full. Allow the insured to choose any amount of coverage. Permit other insurance on the same property.
Encourage insureds to insure property for most, if not all of its value.
The Main Street Gazette is interested in protecting against the additional costs of continuing to print the newspaper, at a temporary location in the event its building was destroyed. Which of the following coverages should the Main Street Gazette purchase for this purpose? Extra expense coverage. Open perils coverage. Loss of rents coverage. Contingent gross earnings coverage.
Extra expense coverage.
Claims filed with the insurance company by the insured are known as: First-party claims. Third-party claims. Self-insured claims. Subrogation claims.
First-party claims.
Hannah was working as an employee of Indemnify Insurance, Inc. as an adjuster. She had her adjuster license revoked by the state because she was found to have engaged in the unauthorized practice of law. Which of the following is the activity most likely to have resulted in Hannah having her license revoked? Hannah advised the company that they should settle a claim for a specific dollar amount that was lower than the policy limit because she felt the insured would take the lower amount. Hannah transmitted settlement offers to a claimant on behalf of the company. Hannah worked closely with the company attorney in negotiating a claim settlement. Hannah added factual data to the settlement papers drafted by the company attorney.
Hannah advised the company that they should settle a claim for a specific dollar amount that was lower than the policy limit because she felt the insured would take the lower amount.
The type of "agent authority" that allows an adjuster to exercise his/her express authority is: Evident authority. Implied authority. Apparent authority. Actual authority
Implied authority.
Which of the following statements is TRUE regarding the HO-6 form? It does not cover the insured for liability. It excludes coverage for loss of use. It covers the walls, floors, and ceilings of dwelling unit. It covers the siding on the outside of the condominium unit.
It covers the walls, floors, and ceilings of dwelling unit.
47. If, after receipt of a proof of loss, an insurer needs additional time to investigate, within how many days must the insurer inform the claimant? A) 21 days B) 14 days C) 30 days D) 45 days
A) 21 days
25. What are the four parts of an insurance contract? A) Declarations, conditions, exclusions and insuring agreement B) Declarations, personal articles floater, conditions and insuring agreement C)Binder, endorsements, conditions and insurance amounts
A) Declarations, conditions, exclusions and insuring agreement
16. What best describes a provision added to an insurance contract that alters its scope or application? A) Endorsement B) Arbitration C)Declaration D)Binder
A) Endorsement
26. Which type of motor vehicle is not excluded under an HO3 policy? A) Golf cart pertaining to the service of the premises or for use by the handicapped B) Motor home with an insurance policy with XYZ Insurance C)A registered car that is parked and unattended in the yard of the insured property
A) Golf cart pertaining to the service of the premises or for use by the handicapped
15. If snow and ice cause a roof collapse, which policy would have the least coverage, but still be adequate? A) HO2 B) H04 C)HO5 D)HO6
A) HO2
6. _______ is defined as an insurance company bringing you back to the condition you were in prior to the loss. A) Indemnification B) Arbitration C) Compensatory D) Reward
A) Indemnification
12. Who will promulgate rules and regulations mandating the term of the licensure for any claim adjuster license? A) Insurance commissioner B) Governor of Rhode Island C)President of Amica Mutual Insurance Company D) Rhode Island General Assembly
A) Insurance commissioner
21. Who signs a non-waiver agreement? A) Insured and insurer B) Insured and the insurance commissioner C)Insured and public adjuster
A) Insured and insurer
18. Which is not a defense to negligence? A) Intentional act B) Lack of duty owed C)Failure to breach duty D) Comparative negligence
A) Intentional act
20. Adam is a single man who lives in a high-crime neighborhood. Adam keeps his garage door wide open while not at home. He figures his homeowners policy will cover anything that may be stolen as a result of him leaving the garage door open. This is an example of a _____. A) Moral hazard B) Morale hazard C) Both a and b
A) Moral hazard
29. What are perils listed on a policy called? A) Named perils B) Open perils
A) Named perils
34. Define family member under the personal auto policy. A) Person related by blood, marriage or adoption, or a foster child B) Person related by marriage C) Anyone in the family group
A) Person related by blood, marriage or adoption, or a foster child
37. Stated value cannot exceed the ______. A) Policy limits B) Fair rental value C) Replacement cost value (RCV) D) Actual cash value (ACV)
A) Policy limits
23. What is actual cash value (ACV)? A) Replacement cost minus sales tax B) Replacement cost minus depreciation C) None of the above
A) Replacement cost minus sales tax
44. What type of liability does not depend on actual negligence or intent to harm? A) Strict liability B) Vicarious liability C) Emergency D) Assumption of risk
A) Strict liability
41. Who does not need to be licensed? A) The CEO B) Auto body shops in Rhode Island
A) The CEO
39. In Rhode Island, requiring a claimant to use a specific auto repair shop is considered: A) Unacceptable, and known as "steering" B) Acceptable, and known as "recommending"
A) Unacceptable, and known as "steering"
43. The previous question is an example of which type of negligence? A) Vicarious liability B) Absolute liability C)Strict liability D) Zero liability
A) Vicarious liability
27. The insured is using his vehicle as a public/livery conveyance and is in an accident. His passengers are injured and there is damage to his car. Is there any coverage for the injuries or property damage under his personal auto policy? A) Yes B) No
B) No
13. The insured goes to Florida on vacation, rents a car and is involved in an accident. How would the damage to the insured's rental car be paid under their Rhode Island personal auto policy? A) Collision with a deductible B) PD with deductible C) Collision with no deductible D) PD with no deductible
B) PD with deductible
35. What is split coverage? A) A single combined limit that can be split however you want B) Per person/per accident
B) Per person/per accident
52. A sworn statement that has the amount of loss, date of loss and a description of the loss is called a(n) ________. A) Loss claim B) Proof of loss C)Appraisal D)Auto claim
B) Proof of loss
53. A combined single limit of liability includes coverage for _______. A) Bodily injury only (BI) B) Property damage and bodily injury (PD+BI) C)Property damage only (PD) D)Medical payments (MP)
B) Property damage and bodily injury (PD+BI)
33. The insured's best friend comes over to watch the football game. While at the home, the insured's friend trips over a power cord that the insured knowingly forgot to pick up. Which section of the insured's homeowner's policy would provide coverage for his friend's medical bills? A) Section I B) Section II C)Umbrella coverage D) None of the above
B) Section II
8. Insured's Honda Accord is in the body shop for repairs, so he borrows a friend's Toyota Corolla. While driving the Toyota Corolla, the insured gets into an accident. Both the insured and the friend have full coverage under their personal auto policies. Which company would pay for the damages caused in the accident? A) Honda's insurer B) Toyota's insurer C)Both companies will split D)Neither company
B) Toyota's insurer
45. Which act states that it is a violation not to openly disclose all of the coverages available under an insured's policy, so frequently as to constitute a regular business practice? A) Insurance Regulation Reform Act B) Unfair Claims Practice Act C) Common Insurance Commissioner's Reform Act
B) Unfair Claims Practice Act
10. Under the HO3 policy, which peril is covered after a hurricane? A) Flood B) Wind C)Both a and b
B) Wind
42. X works for Y. While working on plumbing at Z's residence, X accidentally starts a fire, burning himself and causing damage to Z's home. Which coverage will not apply? A) Y's liability coverage B) X's liability coverage C) Z's homeowners' coverage D) Workers' compensation
B) X's liability coverage
Rayna is a licensed Rhode Island adjuster. She may have her license placed on probation, suspended, or revoked for any of the following, EXCEPT: Being found to have committed insurance fraud. Violating a cease-and-desist order. Improperly withholding money received in the course of doing business. Being found guilty of a misdemeanor.
Being found guilty of a misdemeanor.
49. Per the personal auto policy agreement, the insurer agrees to insure you in return for payment of the ______ and ________ to all the terms of the policy. A) Deductible, subject B) Premium, accordance C) Premium, subject D) Deductible, accordance
C) Premium, subject
57. What is a non-waiver agreement? A) An agreement to waive policy provisions B) A separate agreement to settle the claim C)An agreement between the insured and the insurer acknowledging that the insurer has the right to investigate and possibly deny coverage
C)An agreement between the insured and the insurer acknowledging that the insurer has the right to investigate and possibly deny coverage
60. How is an umbrella policy different from a standard insurance policy? A) It protects you from the rain. B) It offers coverage for damage to your umbrella. C)It offers liability coverage above a standard insurance policy. D)It pays the difference owed on an auto loan after an accident
C)It offers liability coverage above a standard insurance policy.
51. Liability coverage is considered a _______. A) First-party claim B) Second-party claim C)Third-party claim D)Fourth-party claim
C)Third-party claim
62. When is a reservation of rights necessary? A) If the insured refuses a non-waiver B) When it is required by the Department of Regulations C)When coverage is not clear, and an investigation is needed D)When the insurer is certain we will pay the loss
C)When coverage is not clear, and an investigation is needed
63. What is the best type of coverage for a 60-foot sailboat with an outboard motor? A) Homeowners B) Boat owners C)Yacht D)None of the above
C)Yacht
Which of the following is NOT TRUE of coverage for Business Personal Property and Personal Property of Others in a Commercial Property policy? Coverage is provided while the property is located in an open field as long as it is within 100 feet of the insured premises. Coverage is provided while the property is located in the insured premises Coverage is provided while the property is located within a covered vehicle at any location as long as the vehicle is owned by the insured business Coverage is provided while the property is in any vehicle as long as it was located within 100 feet of the insured premises when the loss occurred.
Coverage is provided while the property is located within a covered vehicle at any location as long as the vehicle is owned by the insured business.
54. If someone steals $450 in cash, $3,000 in personal property and a pig worth $50 from you, and you have a $250 deductible, how much would your homeowner's policy pay? A) $3,000 B) $3,250 C) $3,800 D) $3,200
D) $3,200
58. Your house was robbed and they took $550 in cash, a $50 pet turtle named Franklin, and a $100 TV. You have an HO3 policy with a $250 deductible. How much would your policy pay for this claim? A) $850 B) $350 C) $700 D) $300
D) $300
22. What does an HO3 policy cover that an HO4 policy does not cover? A) Coverage A - Dwelling B) Coverage B - Other Structures C) Coverage C - Contents D) Both a and b
D) Both a and b
9. Which of the following is not a comprehensive (OTC) peril? A) Fire B) Glass breakage C) Impact with an animal D) Hit while parked
D) Hit while parked
11. What serves as temporary evidence that coverage is in effect until the policy is issued? A) Endorsement B) Appraisal C)Policy form D)Binder
D)Binder
61. ________ is the failure of one to act as an ordinarily prudent person would. A) Immunity B) Waiver C)Un-foreseeability D)Negligence
D)Negligence
55. Which of the following does not constitute an unfair claims practice? A) Failure to explain coverages B) Failure to get back to someone in a timely manner C)Failure to investigate before denying coverage D)Not talking to the adjuster's supervisor
D)Not talking to the adjuster's supervisor
A business auto policy has a $100,000 limit of insurance for liability coverage. As a result of an automobile accident involving a covered auto, two people are injured. The first injured party sues the named insured and wins a $150,000 judgment. The insurer pays its limit of insurance. If the other injured party later sues the insured, the insurer will: Either defend or settle the suit. Pay up to $100,000 of the damages the injured party is awarded. Pay a negotiated amount. Deny further obligations to the insured as a result of the other injured party.
Deny further obligations to the insured as a result of the other injured party.
An insured has her business automobiles covered under a Business Auto policy with Symbol 7 specified on her Declarations page. She has purchased a trailer with a load capacity of 2,500 pounds and hitched it to a covered van. While she is driving the van, the trailer breaks free and crashes into another vehicle, causing bodily injury. Which of the following statements is true regarding this insured's situation? Liability coverage is extended under Symbol 7 for a trailer with a load capacity of less than 5,000 pounds, therefore coverage will apply. Liability coverage is not extended under Symbol 7 for a trailer with a load capacity of more than 2,000 pounds, therefore coverage will not apply. Liability coverage is excluded for all trailers under the Business Auto Coverage form. Liability coverage will not apply for the trailer, but coverage for the van will pay the damages awarded under the lawsuit.
Liability coverage is not extended under Symbol 7 for a trailer with a load capacity of more than 2,000 pounds, therefore coverage will not apply.
All of the following are included under the HO-3 "additional coverages" section of a Homeowners policy, EXCEPT: Debris removal. Fire Department Service Charge. oss from specified perils to trees, shrubs and plants. Loss of a good renter or a favorable lease arrangement.
Loss of a good renter or a favorable lease arrangement
Under Part C - Uninsured Motorist Coverage of the Personal Automobile Policy, the definition of an "uninsured vehicle" is one that is driven by a hit-and-run driver in all of the following situations, EXCEPT: The hit-and-run driver struck the named insured as a pedestrian. The hit-and-run driver strikes the insured's covered vehicle and damages it. The hit-and-run driver strikes the insured's home and damages it. The hit-and-run driver strikes a vehicle that is not owned by the insured but the insured is riding in that vehicle and is injured.
The hit-and-run driver strikes the insured's home and damages it.
Which of the following would NOT be included in an adjuster's initial / field / preliminary report? The results of mediation. A suggestion of an amount for an initial reserve. A request for assistance from an expert. Informs the insurer of any questions of coverage.
The results of mediation.
All of the following would be covered under Coverage B of a Homeowners policy, EXCEPT: A 4-car garage located on the insured location, away from the covered dwelling. A gazebo located several yards away from the insured dwelling, beside a pond on the insured location. A shed containing the insured's work tools, located near an unattached garage and not attached to the insured dwelling. The roof of the covered dwelling.
The roof of the covered dwelling
A requirement that a plaintiff file a lawsuit within a specific period of time after the cause of the lawsuit has occurred, which is oftentimes when the injury occurred or was discovered is known as: The burden of proof. The statute of limitations. The subrogation clause. The time limit on certain defense.
The statute of limitations.
The giving up of a known right is called: Waiver Estoppel. Violation of policy conditions. Rebating.
Waiver.
Which of the following statements regarding the "Pollution Liability Coverage Form" endorsement to a CGL policy is NOT TRUE? It provides coverage for bodily injury due to a "pollution incident" that occurred after the retroactive date. It can be attached to either an occurrence or claims-made CGL policy. It provides coverage for the clean-up costs resulting from a pollution incident that causes environmental damage. It provides coverage for property damage to others due to a "pollution incident" that occurred after the retroactive date.
t can be attached to either an occurrence or claims-made CGL policy.
