Practice Exam

c. hired autos.

In a Commercial Auto Policy, Symbol #8 represents: a. owned private passenger autos. b. non-owned autos. c. hired autos. d. specifically described autos.

d. Building and Personal Property Coverage Form

Which coverage form provides the foundation for all commercial property policies? a. Legal Liability Coverage Form b. Leasehold Interest Coverage Form c. Differences in Conditions Coverage Form d. Building and Personal Property Coverage Form

c. Coverage for slander and copyright

Which of the following coverages is typically included in a BOP? a. Coverage for company owned vehicles b. Malpractice coverage c. Coverage for slander and copyright d. Professional liability coverage

b. Insurers should adopt and implement reasonable standards for prompt claims investigation and processing.

Which of the following is TRUE about claim settlement in Louisiana? a. Insurers should ask claimants to submit preliminary claim reports as well as proof of loss forms, when filing a claim. b. Insurers should adopt and implement reasonable standards for prompt claims investigation and processing. c. Insurers should send claims forms to policyholders who request them within 10 days of the request. d. Insurers should not pay partial claims, but should wait until they have settled the entirety of a claim before making payments.

d. The Commissioner of Insurance

Who is responsible for making sure that Louisiana insurers do not routinely engage in Unfair Claims Settlement practices? a. All Louisiana policyholders share this responsibility b. The Lieutenant Governor c. The Attorney General d. The Commissioner of Insurance

a. a phone number.

An adjuster's license does NOT need to contain: a. a phone number. b. a business address. c. issue and expiration dates. d. a license number.

a. Get a license for the other type of insurance

Linda is an insurance producer who sells auto insurance. If she wants to sell any other type of insurance, what must she do? a. Get a license for the other type of insurance b. Hire an adjuster with the appropriate license c. Nothing—a producer's license is universal to all types of insurance d. Request permission from the commissioner

c. misrepresentation.

Making false or misleading statements about a policy's terms or benefits is unfair and considered: a. coercion. b. defamation. c. misrepresentation. d. discrimination.

d. representations

Scott is visiting his insurance agent's office and applying for auto insurance on his new car. The auto policy that the agent drafts will be based on Scott's___________. a. warranties b. promises c. subrogation d. representations

c. 60 days Settlements for covered claims should be paid within 60 days of receiving proof of loss, unless the insurer has probable cause for failing to do so.

Settlements for covered claims should be paid within _____ of receiving proof of loss. a. 20 days b. 15 days c. 60 days d. 30 days

d. fine an adjuster $1,000 for fraudulently obtaining his license. The commissioner may only fine an adjuster up to $500 per violation, not $1,000

The commissioner is NOT allowed to: a. investigate the affairs of an insurer without good cause. b. investigate the affairs of an adjuster without good cause. c. place an adjuster on probation for having incomplete information on her license. d. fine an adjuster $1,000 for fraudulently obtaining his license.

b. the coverage trigger.

The primary difference between a Claims-Made CGL form and an Occurrence CGL form involves: a. the insuring agreement. b. the coverage trigger. c. the deductible. d. the limits of insurance.

d. It requires that Company Q have an operational sprinkler system in order for coverage to apply. The Protective Safeguards endorsement requires that certain protective devices must be operating in order for the coverage to apply. In return, the insured receives a premium discount. In this case, the endorsement requires that Company Q have an operational sprinkler system in order for coverage to apply.

Company Q has a BOP with a Protective Safeguards endorsement that lists a sprinkler system. What does this endorsement do? a. It adds coverage for indirect losses that Company Q sustains because of the activation of their sprinkler system. b. It schedules the sprinkler system with its own coverage limit. c. It adds coverage for water damage caused by a leaking sprinkler system. d. It requires that Company Q have an operational sprinkler system in order for coverage to apply.

b. alert a claimant when his claim is suspected of being fraudulent. The insurer must do all of these except alert a claimant when his claim is suspected of being fraudulent.

According to Louisiana law, an insurer must do all of the following, EXCEPT: a. inform the policyholder about which coverage a payment is being made under. b. alert a claimant when his claim is suspected of being fraudulent. c. provide written notice to the claimant if denying a claim. d. send any necessary claims forms to a claimant within 15 days of a claimant's request.

a. the settlement amount.

Appraisal is used to decide: a. the settlement amount. b. whether the guilty party's insurance can cover the loss. c. whether the loss is covered. d. who is responsible for a loss.

d. DEC Construction

DEC Construction is completely remodeling Randall's department store. DEC Construction is in charge of the project, but hires Mac Electric (an independent contractor) to complete the electrical work, and requires Mac to have Owners & Contractors Protective Liability for the job. Who retains ultimate control over this policy? a. Randall's and Mac Electric b. Mac Electric c. Randall's d. DEC Construction

d. $10,000 Under Jewelry coverage in the PAF, newly acquired property is covered automatically for 30 days at 25% of the coverage limit, up to $10,000. Eddie's insurer would pay him up to $10,000 for the flask.

Eddie has a Personal Articles Floater with a $60,000 limit for jewelry. On a weekend trip to London, he buys a new diamond-studded flask for $20,000, but his luggage gets stolen on the way home, before he has had a chance to report the new item to his insurer. How much will Eddie's PAF pay for the lost flask? a. $20,000 b. $0 c. $15,000 d. $10,000

a. Mobile Equipment In order to include his front-loader as an "auto" under his BAP, Frank would need a Mobile Equipment endorsement.

Frank owns a front-loader that he uses in his construction business. Which endorsement would he need to purchase in order to include this vehicle as an "auto" under his BAP? a. Mobile Equipment b. Drive Other Car c. Scheduled Vehicle -- Business Equipment d. Scheduled Service Vehicle

b. Medical Payments coverage in Acme Hardware's CGL will pay for both Gary's medical and dental expenses.

Gary accidentally tripped over his own feet while shopping at Acme Hardware, breaking his arm and knocking out two teeth in the process. Which of the following statements is TRUE? a. Acme Hardware's CGL will not cover Gary's expenses because Gary's injuries were his own fault, not that of Acme Hardware. b. Medical Payments coverage in Acme Hardware's CGL will pay for both Gary's medical and dental expenses. c. Medical Payments coverage in Acme Hardware's CGL will pay for Gary's medical expenses, but not his dental expenses. d. Operations liability coverage in Acme Hardware's CGL will pay for Gary's medical expenses, but not his dental expenses.

d. His insurer may suspend or deny coverage if Hank fails to notify the insurer of any known problems with the system. The Protective Safeguard Endorsement adds a condition to the policy requiring that the insured have certain safety devices in place in order for the coverage to apply. In return, the insured receives a premium discount. If the insured fails to notify the insurer of any known impairments or problems with the required safety systems, the insurer will suspend and possibly deny coverage at that location.

Hank has a commercial property policy on his electronics store. Since he has invested in a sophisticated video surveillance system, he chooses to add a Protective Safeguards Endorsement to his policy to save money on his premiums. Which of the following is now TRUE? a. His insurer must reimburse Hank for the cost of the surveillance system, since it reduces the insurer's risk exposure. b. This endorsement qualifies Hank for a higher limit on his Legal Liability coverage in his commercial property policy. c. His insurer must lower his premiums every year that he goes without filing a theft claim. d. His insurer may suspend or deny coverage if Hank fails to notify the insurer of any known problems with the system.

b. Henri only adjusts uncontested claims involving the policies that he issued.

Henri is a producer for Lifelong Insurance Co. In which of the following circumstances is it acceptable for him to adjust losses without a license? a. Henri files a notice of adjustment with the Department of Insurance for each claim he handles. b. Henri only adjusts uncontested claims involving the policies that he issued. c. Henri held an adjuster license in good standing within the past 12 months. d. Henri holds an "extended authority" producer's license

a. 15

If a policyholder requests claims forms, the insurer must send them (as well as instructions for how to use them) within ____ days of the request. a. 15 b. 6 c. 7 d. 10

c. is an elected position.

In Louisiana, the Commissioner of Insurance: a. serves a 5-year term. b. must be selected from a list of top insurance professionals published by the NAIC. c. is an elected position. d. is appointed by the governor.

c. be registered with an insurer in Louisiana.

In order to receive an emergency license in the event of a catastrophe, an adjuster must: a. pay a $15 fee. b. formally request the emergency license in writing from the commissioner. c. be registered with an insurer in Louisiana. d. take the Louisiana Adjuster Exam within three weeks of getting the license.

a. False pretense coverage

Jocelyn visits her local car dealership to test drive a sports car, but once she gets on the road, she skips town with the car and doesn't come back. Which Garage policy coverage could pay for the theft of the sports car? a. False pretense coverage b. Test drive liability coverage c. Customer dishonesty endorsement d. There is no coverage for the dealership's loss in this situation

c. Wrongful Eviction This is an example of wrongful eviction. Wrongful eviction is when an owner or landlord evicts a person from public space without cause

Julie owns the local shopping mall. One day, Julie sees Greg walking through the mall and doesn't like the way he looks, so she forces him to leave the premises. Greg then sues Julie for her actions. This is an example of what type of personal injury covered under Julie's Commercial General Liability policy? a. Advertising Injury b. Libel and Slander c. Wrongful Eviction d. Malicious Prosecution

a. 3 hours of Ethics CE and 1 hour of general CE

Mark's Louisiana adjuster license is going to expire in 3 months. He has completed 20 hours of general continuing education. What does Mark still need before he can renew his license? a. 3 hours of Ethics CE and 1 hour of general CE b. 3 hours of Flood CE and 1 hour of general CE c. 4 hours of Earthquake CE d. 2 hours of Ethics CE and 2 hours of general CE

d. Product Liability - Breach of Warranty Consumers can file this type of claim when a product doesn't live up to statements that were made in advertisements.

Martha, the owner of UltraGreen Lawn Service, bought 12 new Super Mower lawnmowers for her employees because, in their TV commercial, the manufacturer claimed that a Super Mower is so great it will be the "last riding mower you ever buy." However, within six months, her employees started complaining that the mowers wouldn't stay running long enough to complete the job, or wouldn't even start at all. Super Mower refused to return the $19,000 that Martha had spent on the mowers, so she sued the company for failing to live up to the claims made in their advertisement. Under which of the following categories would Martha's claim fall? a. Product Liability - Strict Liability b. Product Liability - Insured Contracts c. Product Liability - Negligence d. Product Liability - Breach of Warranty

a. The claim will not be covered because the accident did not occur during the current policy period. This claim won't be covered under XYZ Consulting's occurrence policy, because the occurrence took place before the policy period. And, it won't be covered under their previous claims made policy, because the claim was not filed during that policy period.

Mindy filed a claim against XYZ Consulting on March 5, 2016 for an accident that happened on September 15, 2015. XYZ Consulting was previously covered by a claims-made CGL policy, but changed to an occurrence policy in January 2016, when the policy came up for annual renewal. How will XYZ Consulting's insurer respond to Mindy's claim? a. The claim will not be covered because the accident did not occur during the current policy period. b. The claim will not be covered because the current policy is triggered when a claim is filed, not when the accident occurred. c. The claim will be covered because both the claim and the accident occurred while XYZ Consulting was insured by the same insurer. d. The claim will be covered as long as the current policy has a retroactive date of September 15, 2015 or earlier.

a. An occurrence policy from Jan 31 2006-Jan 31 2009 An occurrence policy will cover any occurrence that takes place during the policy period, even if the claim is filed after the policy period is over. In Ryan's case, since the occurrence took place on Jan 27, 2008, the occurrence policy that started in January of 2006 and ended in January of 2009 would cover his claim.

On January 27, 2008, Ryan is using an exercise bike purchased from NusquamCycle when the chain breaks, causing him to fall and severely bruise his knee. It seems to heal just fine, but three years later, on January 29, 2011, Ryan's knee gives out while jogging. His doctor informs him that he'll need surgery and that this deterioration was most likely caused by his earlier accident with the exercise bike. Assuming NusquamCycle is no longer in business, which Commercial General Liability policy would cover Ryan's claim filed January 29, 2011? a. An occurrence policy from Jan 31 2006-Jan 31 2009 b. A claims-made policy from Jan 31 2006-Jan 31 2009 c. A claims-made policy with a basic extended tail from Jan 31 2008-Jan 31 2009 d. An occurrence policy from Jan 31 2008-Jan 31 2010

b. misrepresentation.

Oscar is applying for health insurance, and writes on the application that he does not smoke, even though he does have a few cigarettes each day. This is an example of: a. defamation. b. misrepresentation. c. intimidation. d. coercion.

b. an insured from making a profit.

The Principle of Indemnity is designed to prevent: a. having multiple payees on a policy. b. an insured from making a profit. c. insurers from making a profit. d. subrogation.

d. coverages

The primary purpose of the Insuring Agreement is to specify the ____________ of an insurance policy. a. policy period b. damages c. location d. coverages

c. Report the denial to the Louisiana insurance commissioner A Louisiana adjuster must report to the commissioner any license denial in another jurisdiction.

Tobias just received notice that his application for a Mississippi non-resident adjuster license was denied. What must he do to stay in compliance in Louisiana? a. Re-submit the Mississippi application with a $1,000 surety bond b. Submit to a new background check through the Louisiana insurance department c. Report the denial to the Louisiana insurance commissioner d. Return his Louisiana license to the commissioner for 30 days

c. Direct Excess Direct excess coverage applies without regard to liability, in excess of the vehicle owner's coverage.

Under a garagekeepers policy, which coverage would pay for a covered loss after the vehicle owner's personal insurance has paid up to its policy limits? a. Direct Primary b. Comprehensive c. Direct Excess d. False Pretence

b. Homeowners 6

Which ISO form is known as the "Condominium Form"? a. Homeowners 5 b. Homeowners 6 c. Homeowners 8 d. Homeowners 4

a. Vehicle mechanical breakdown insurance claims A person who handles claims arising under only vehicle mechanical breakdown insurance policies does not need an adjuster license.

Which of the following insurance claims can be handled by someone without an adjuster license in the state of Louisiana? a. Vehicle mechanical breakdown insurance claims b. Automobile insurance claims c. Workers' compensation insurance claims d. Crop insurance claims

b. Garnish the adjuster's wages

Which of the following is NOT a disciplinary action taken by the Commissioner to punish an adjuster who violates state insurance law? a. Place the adjuster on probation b. Garnish the adjuster's wages c. Revoke the adjuster's license d. Impose a fine

b. Have at least 1 year of experience working under a licensed adjuster

Which of the following is NOT necessary for an individual to qualify for a resident license in Louisiana? a. Pay a $55 fee b. Have at least 1 year of experience working under a licensed adjuster c. Be at least 18 years old d. Get fingerprinted

a. Inventory

Which of the following would be covered under Coverage B of a typical Business Owners Policy? a. Inventory b. Stock certificates c. An outdoor antenna d. Permanently installed fixtures

d. Comprehensive Adjuster A comprehensive adjuster can adjust all types of property and casualty claims in Louisiana

Which type of claims adjuster has the authority to adjust any kind of property and casualty claim in Louisiana? a. General Lines Adjuster b. Commercial Lines Adjuster c. Personal Lines Adjuster d. Comprehensive Adjuster

c. Completed Operations Liability Completed Operations Liability would cover this claim. "Completed Operations Liability" applies to claims involving work that has already been completed off of the insured premises.

William owns a construction business and is insured with a Commercial General Liability policy. After three weeks of work, William finally completes the porch he has been building for a client. A week later, the stairs to the porch collapse and the client is injured. Which hazard coverage would help William with the porch liability claim? a. Product Liability b. Operations Liability c. Completed Operations Liability d. Premises Liability

a. Outdoor Property

A gas line explodes outside of Sarah's Sewing Shop, ruining her new landscaping. Which coverage extension on her commercial property policy can help Sarah cover the cost of replacing her damaged trees and shrubs? a. Outdoor Property b. Property Off-Premise c. Newly Acquired Property d. Property On-Premise

c. common carrier.

A motor carrier that offers transportation services to the public on a regular basis (rather than only for hire) is known as a: a. private carrier. b. limousine. c. common carrier. d. trucker.

d. fail to get fingerprinted.

A producer may NOT: a. fail to report any misdemeanors on his record. b. be under 21 years of age. c. work for an insurer without securing a surety bond. d. fail to get fingerprinted.

a. receive the basic extended tail coverage. Phil's policy will receive the basic extended tail coverage. This coverage automatically applies to every canceled or expiring claims-made CGL policy when the insured does not plan to renew. In the standard ISO policy form, this coverage pays for any occurrence that happens within 60 days after the claims-made policy expires, provided the third party files a claim within 5 years of the occurrence.

After thirty years of operating his business, Phil is finally ready to retire. At the end of next month he will shut his doors and cancel his claims-made Commercial General Liability policy. Assuming Phil does nothing else with his policy, it will: a. receive the basic extended tail coverage. b. receive the supplemental extended tail coverage. c. transform into an occurrence policy. d. offer no further coverage for any claims made against Phil's products.

c. He is fined $2,500 by the Louisiana Commissioner of Insurance James will not be fined $2,500 by the Louisiana Commissioner for having his license revoked in Florida; he could, however, be fined $500.

James was a licensed adjuster in Louisiana and Florida. His license is revoked in Florida. Which of the following is not a possible result of this revocation? a. His adjuster license is suspended in Louisiana b. His adjuster license is revoked in Louisiana c. He is fined $2,500 by the Louisiana Commissioner of Insurance d. He is placed on probation by the Louisiana Commissioner of Insurance

c. Jeffrey must complete 10 hours of CE, including 1 hour in Ethics, before June 30, 2019.

Jeffrey's birthday is June 15 and he first got his Louisiana adjuster license on September 1, 2017. His license number is 5787. So far, he has completed 14 hours of CE, including 2 hours in Ethics. Which of these statements is true? a. Jeffrey must complete 6 hours of CE, including 1 hour in Ethics, before June 30, 2019. b. Jeffrey must complete 10 hours of CE before September 30, 2018. c. Jeffrey must complete 10 hours of CE, including 1 hour in Ethics, before June 30, 2019. d. Jeffrey must complete 6 hours of CE, including 1 hour in Ethics, before June 15, 2019.

a. jewelry that is sold but not yet delivered.

Jewelers Block coverage excludes all of the following, EXCEPT: a. jewelry that is sold but not yet delivered. b. jewelry that has undergone water damage at the insured's premises. c. jewelry shortage discovered while doing inventory. d. jewelry that is sold on a payment plan after it leaves the premises.

d. The insurer will give Rosa one check for $35,000, and another for up to $10,000 once repairs are completed. Rosa's policy will pay the actual cash value of her barn first ($35,000). Then, once Rosa has finished rebuilding it and submits the receipts to her insurer, the insurer will pay the remaining expenses, up to her policy limit of $45,000. This means it can pay up to $10,000 more after she completes repairs.

Rosa's barn burned down when it was struck by lightning during a storm. The barn was insured for $45,000 under Rosa's Farm policy, which included a replacement cost endorsement with an 80% coinsurance requirement. At the time of the loss, the barn's Actual Cash Value was $35,000, but it will cost $60,000 to replace it. How will Rosa's insurer respond to her claim? a. The insurer will give Rosa one check for $35,000, and another for up to $21,250 once repairs are completed. b. The insurer will give Rosa one check for $35,000. c. The insurer will give Rosa one check for $45,000, and another for up to $11,250 once repairs are completed. d. The insurer will give Rosa one check for $35,000, and another for up to $10,000 once repairs are completed.

a. 7 (1) Failing to acknowledge and act reasonably promptly upon receiving communications about claims from insureds, (2) Failing to adopt and implement reasonable standards for prompt claims investigation and processing, (3) Failing to settle or deny claims within a reasonable time after receiving proof of loss forms, (4) Failing to try in good faith to settle a claim promptly once liability has become reasonably clear, (5) Offering unreasonably small settlement amounts so that insureds have to bring lawsuits in order to get the insurance payments they deserve, (6) Trying to settle a claim for less than the amount to which a reasonable man would have believed he was entitled, based on advertisements accompanying an application, and (7) Trying to compel claimants to accept settlements or compromises by telling them about the insurer's policy of appealing arbitration awards that favor the claimant.

Sandy calls her insurer asking for proof of loss forms after a tree falls over onto her van. 10 days later, she receives the forms in the mail. She files a claim with her insurer, and 2 months later calls to check the status. The insurance company offers her a very low settlement amount, rather than abiding by the policy (Sandy has comprehensive coverage on her van). Unable to come to an agreement, Sandy finally states that she'd like to bring the dispute to arbitration. The insurer warns Sandy that it has a policy of appealing arbitration awards that favor the insured. Sandy decides to file a lawsuit against the insurance company. How many Unfair Claims Settlement Practices has Sandy's insurer committed? a. 7 b. 10 c. 3 d. 12

b. 6

Tara filed a preliminary claim report after her home was partially damaged by fire. Her insurer responded five business days later, and asked her to send formal proof of loss forms. After Tara sent in the formal proof of loss forms, the insurer agreed to pay according to the policy provisions under Coverage D (loss of use) but they offered her an unreasonably low settlement under Coverage B, for the damage to her detached garage. They told Tara that she'll need to accept the settlement under Coverage B before they can pay her for her loss under Coverage D. Tara tells the insurer that she plans to file a lawsuit, and subsequently receives a check from the insurer for $13,000, without any indication of which coverage the payment is being made under. How many Unfair Claims Settlement Practices has Tara's insurer committed? a. 4 b. 6 c. 3 d. 9

C. Federal Violent Crime Control and Law Enforcement Act of 1994.

The law that requires written consent by the commissioner for any person convicted of a felony involving dishonesty or breach of trust to engage again in the business of insurance is: a. The Criminal Conviction Act of 2004. b. The Federal Breach of Trust Act of 2004. c. The Federal Violent Crime Control and Law Enforcement Act of 1994. d. The Written Consent Law of 1994.

c. A public adjuster may not recommend a lawyer to an insured in exchange for a fee.

What do the Standards of Conduct for Public Adjusters say about lawyers? a. A public adjuster may never engage in the practice of law. b. A public adjuster may under no circumstances employ a lawyer. c. A public adjuster may not recommend a lawyer to an insured in exchange for a fee. d. A public adjuster may under no circumstances recommend a lawyer to an insured.

c. $0 Unfortunately for Peter, since he rents the garage out to Jim, who uses it as a residence, it cannot be covered under Coverage A of his NFIP policy.

When a flood inundates Peter's property, it causes $150,000 in damage to his home and $20,000 in damage to his detached garage, which includes an apartment that he rents to his friend Jim. Peter has a Dwelling Form flood policy with a $200,000 limit. If he decides to apply the maximum amount of coverage possible to his garage, how much of the repairs will be covered? a. $2,000 b. $20,000 c. $0 d. $15,000

c. Law & Ordinance Coverage Law & Ordinance Coverage can help pay for the additional costs associated with bringing a building or structure up to code while being repaired.

When a tornado rips through town, it partially destroys Mark's home, forcing him to rebuild half of the structure. Originally, his home was built only of wood, but now there are new building codes in place that require ThermaSteel panels to increase the structural integrity of the building. This makes homes better able to withstand wind, but comes at an additional cost. Which additional coverage could help Mark with this added expense? a. Business Interruption Coverage b. Wind Fortification Coverage c. Law & Ordinance Coverage d. Time Element Coverage

a. self-insured retention. A "self-insured retention" is that portion of a risk or potential loss assumed by an insured. It may be in the form of a deductible, self-insurance or no insurance. It's also called a "retained limit" in some policies.

When an Umbrella Policy covers a loss that the base policy does not, there is a "deductible" called a(n): a. self-insured retention. b. follow-form retention. c. excess-liability retention. d. stand-alone retention.

c. Patrick, who passed an exam for the adjuster license he holds in his resident state, which is reciprocal with Louisiana

Which of the following individuals would qualify for a Louisiana non-resident license without taking the Louisiana examination? a. Gabriella, an adjuster whose home state does not license adjusters, so she has not taken an adjuster licensing exam b. Ben, a 17 year-old who has had 3 years of adjuster experience assisting his father, who is a licensed adjuster c. Patrick, who passed an exam for the adjuster license he holds in his resident state, which is reciprocal with Louisiana d. Mary, an adjuster who is licensed in her home state of New York, a non-reciprocal state

d. XYZ Insurance Company cannot reach a settlement with a claimant, so they decide to bring the dispute to arbitration.

Which of the following insurers is NOT engaging in an Unfair Claims Settlement Practice? a. ABC Insurance Company routinely offers policyholders substantially smaller settlement amounts than what is due to them. 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. XYZ Insurance Company cannot reach a settlement with a claimant, so they decide to bring the dispute to arbitration.

b. Being convicted of a misdemeanor Not all misdemeanor convictions are grounds for immediate license suspension or revocation in Louisiana. Only misdemeanors involving moral turpitude, public corruption, or insurance claims adjusting fall into this category.

Which of the following is NOT a prohibited act and thus grounds for license refusal, suspension, or revocation in Louisiana? a. Knowingly accepting insurance business from someone who is not licensed b. Being convicted of a misdemeanor c. Employing a convicted felon in the insurance industry d. Refusing to submit fingerprints

c. Prosecute insurers that violate state insurance laws. The Insurance Commissioner is not responsible for prosecuting people or companies that violate insurance laws.

Which of the following is NOT one of the duties of the Louisiana Commissioner of Insurance? a. Evaluate all insurers in the state to ensure they comply with state insurance laws. b. Make rules and regulations to enforce the insurance code. c. Prosecute insurers that violate state insurance laws. d. Maintain the confidentiality of any confidential document from another state's insurance department or law enforcement agency.

d. Submit written recommendations from three insurance company supervisors or claim management personnel. In order to be qualified to handle small commercial NFIP claims, an adjuster does NOT need to submit written recommendations from three insurance company supervisors or claim management personnel.

Which of the following is NOT one of the requirements an adjuster must meet in order to be qualified to handle small commercial NFIP claims? a. Have at least 4 consecutive years of full-time property loss adjusting experience. b. Be able to prepare an accurate scope of damage and dollar estimate of up to $500,000. c. Attend an NFIP claims presentation every year. d. Submit written recommendations from three insurance company supervisors or claim management personnel.

d. Barb is too abrupt in her negotiation style, and several dissatisfied claimants submit formal complaints about her people skills.

Which of the following people is LEAST likely to be placed on probation by the Commissioner of Insurance? a. Walt realizes that his customer forgot to sign one of the pages of her application, so he fills in the signature for her. b. Beatrice has recently been convicted of a misdemeanor involving public corruption. c. Wilbur falls behind on his child support payments. d. Barb is too abrupt in her negotiation style, and several dissatisfied claimants submit formal complaints about her people skills.

c. Sandra negotiates settlements on inland marine claims for Elite Insurance.

Which of the following people needs to have an adjuster license in Louisiana? a. Susan investigates and settles only vehicle mechanical breakdown claims for Daily Mutual. b. Sheridan is employed by Trusty Insurance to find out if a claim is fraudulent and report her findings to the adjuster. c. Sandra negotiates settlements on inland marine claims for Elite Insurance. d. Sinead is a computer programmer who is employed by Security Insurance Company to help adjusters investigate data theft claims.

c. The policyholder's spouse, who is not named on the policy but habitually drives the company's SUV without permission.

Which of the following people would NOT qualify as an "insured" under a BAP? a. The policyholder's employee, who is unloading crates from the back of an insured company truck. b. The company manager, who drives her own car, which is covered under both the company's BAP and her own PAP. c. The policyholder's spouse, who is not named on the policy but habitually drives the company's SUV without permission. d. The policyholder's 18-year-old daughter, who is not an employee but got permission to drive a company car to a basketball game.

c. Louisiana Citizens Property Insurance Corporation

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

d. It is intended for those who store the property of others. The Trucker's policy is NOT intended for those who store the property of others; it is intended for those who transport the property of others.

Which of the following statements about the Trucker's policy is FALSE? a. It includes coverage for trailers in the care and custody of the insured. b. It has broader liability coverage than a regular BAP. c. Symbol 47 indicates coverage for specifically described autos. d. It is intended for those who store the property of others.

c. An employee is mopping the floor of a grocery store while numerous people are present.

Which of the following would NOT be considered an "occurrence" according to a CGL policy? a. A child chokes on a piece of a toy purchased from an online retail store. b. A man is injured by a shopping cart while shopping at a grocery store. c. An employee is mopping the floor of a grocery store while numerous people are present. d. A woman gets a back injury from a loose steel frame in a showroom couch.

a. The commissioner may extend an emergency adjuster license for an additional 90 days.

Which of these statements about emergency adjuster licenses in Louisiana is TRUE? a. The commissioner may extend an emergency adjuster license for an additional 90 days. b. The emergency adjuster license is good for 90 days from the date of application. c. Emergency adjusters must be Louisiana residents. d. There is no fee for the emergency adjuster license.

d. $75,000

While Andrea was grocery shopping in BB Mart, the large Dairy sign fell off the wall and landed on her. Because of her extensive injuries, Andrea sued BB Mart and was awarded $375,000 in damages. BB Mart's Commercial General Liability policy has a general aggregate limit of $1,000,000 and a per occurrence limit of $300,000. How much will BB Mart have to pay out-of-pocket in this case? a. $300,000 b. $375,000 c. $0 d. $75,000

a. 270 days.

With the commissioner's permission, a catastrophe adjuster could potentially work legally in Louisiana for up to: a. 270 days. b. 90 days. c. 180 days. d. 120 days.

d. Expert Arbor Service's CGL under Operations liability

Wyatt, an employee of Expert Arbor Service, was pruning a tree in Janelle's back yard when he incorrectly cut a large limb, sending it crashing down on her house. The limb broke a window and damaged her siding. This damage would be covered under: a. Wyatt's personal liability coverage b. Expert Arbor Service's CGL under Products and Completed Operations liability c. Janelle's homeowners liability coverage d. Expert Arbor Service's CGL under Operations liability

c. liability damages.

An unendorsed Dwelling Policy is intended to cover all of the following except: a. property damages. b. corporations not eligible for homeowners insurance. c. liability damages. d. persons not eligible for homeowners insurance.

b. An express waiver

Darnell is applying for auto insurance with his agent. Currently, he only wants to get a minimal amount of coverage to keep his premiums as low as possible, so he decides not to include uninsured motorist coverage on his policy. His agent has him sign a document giving up his right to this coverage. What is this called? a. A warranty b. An express waiver c. A binder d. An implied waiver

d. all damages are paid immediately in one lump sum.

In a full release settlement: a. the claimant does not have to sign a release. b. the insurer has 60 days to make payment. c. the insurer can make payments over 90 days. d. all damages are paid immediately in one lump sum.

b. actual economic interest in the insured risk.

Insurable interest is defined as: a. a desire to protect an insured risk, for which one is willing to pay a premium. b. actual economic interest in the insured risk. c. personal interest in the preservation of the insured risk. d. a contract agreement in which consideration is exchanged for a promise to perform.

a. The claimant

Who must fill out a proof of loss form? a. The claimant b. The insurance company c. The adjuster d. The agent

d. Tobacco use is a hazard.

Donovan is filling out an application for health insurance and he comes to a question about his use of tobacco products. Why does his insurance company want to know about Donovan's tobacco use? a. Tobacco use is an exposure. b. Tobacco use is a risk. c. Tobacco use is a peril. d. Tobacco use is a hazard.

d. The lightning striking the tree

During a storm, lightning strikes a tree in Harry's yard and starts a fire that spreads to his shed where he keeps all the equipment for his landscaping business. In addition to the shed, Harry has to purchase all new equipment to stay in business. What is the proximate cause of the damage to Harry's equipment? a. The tree catching fire b. The shed burning c. The fire burning the equipment d. The lightning striking the tree

b. Breach of product warranty Olivia can collect damages under Breach of Product Warranty. A product warranty is a guarantee that a manufacturer provides to ensure the quality of its products.

Olivia suffered third degree burns when her new espresso machine malfunctioned and sprayed her with scalding hot water and steam. She sued the manufacturer and was able to collect damages under which of the following? a. Statute of limitations b. Breach of product warranty c. Waiver of sovereign immunity d. Discovery rule

c. Guilt must be proved beyond a reasonable doubt. In civil court cases, the jury must decide whether the case is proved by a preponderance of the evidence (as opposed to beyond a reasonable doubt, as in criminal cases).

Which of the following would not be true of a typical insurance claims dispute in litigation? a. For the plaintiff to win, at least 50% of the evidence must support his case. b. The insurer is usually the defendant. c. Guilt must be proved beyond a reasonable doubt. d. The adjuster may be called as witness.

b. Nuclear Hazard

Which of these causes of loss is LEAST likely to be covered by a typical insurance policy? a. Fire b. Nuclear Hazard c. Lightning d. Explosion

c. establish a claim reserve.

An adjuster's preliminary claim report should: a. update the insurer every 30 days with any new or important information. b. list the disposition of the claim. c. establish a claim reserve. d. list all of the evidence of the claim.

c. the perils insured against.

An insurance policy's declarations page contains all of the following, EXCEPT: a. the deductible. b. the dates of the policy term. c. the perils insured against. d. the value of the insured item.

C. The settlement amount will be reduced by the percentage of the defendant's negligence.

Ed and ABC Insurance are in court because they could not agree on the settlement amount during negotiations. They are in a state that follows the doctrine of Comparative Negligence. Which of the following statements is TRUE? a. If ABC Insurance is found to be at all negligent, it must pay the settlement amount that Ed demands. b. If Ed is found to be at all negligent, he will receive no settlement. c. The settlement amount will be reduced by the percentage of the defendant's negligence. d. The settlement amount will be reduced by the percentage of Ed's negligence.

a. Fire, lightning, and internal explosion

Gary bought a foreclosed home and plans to fix it up and eventually use it as a rental property. But, for now, he's just looking for basic insurance coverage. He buys a DP-1 and opts out of the extended coverages. Which perils has Gary protected himself from? a. Fire, lightning, and internal explosion b. Fire, lightning, and hail c. Fire, hail, and internal explosion d. Fire, lightning, and windstorm

d. Concealment is deliberately withholding information, while misrepresentation is stating a falsehood.

How is concealment distinct from misrepresentation? a. Concealment is deliberately withholding information, while misrepresentation is accidentally withholding information. b. Concealment and misrepresentation are not distinct; they mean the same thing. c. Concealment is stating a falsehood, while misrepresentation is accidentally withholding information. d. Concealment is deliberately withholding information, while misrepresentation is stating a falsehood.

a. a binder.

If Brigitta applies for insurance, the insurer will probably issue her a temporary policy so she can be covered while they come to a decision about her application. This is called: a. a binder. b. an estoppel. c. a warranty. d. a guarantee.

c. decline to adjust the claim.

If an adjuster is not capable of competently adjusting a claim, the Adjuster Standards of Conduct dictate that the adjuster should: a. hire another adjuster to help work on the claim. b. take a continuing education course before adjusting the claim. c. decline to adjust the claim. d. adjust the claim to the best of his ability.

c. structures attached to the principal dwelling.

In a Dwelling policy, Coverage A provides protection for: a. land surrounding the principal dwelling. b. construction tools left outside next to the building. c. structures attached to the principal dwelling. d. a detached garage.

$8,000 - Jane's policy represents ¼ the total coverage and therefore pays ¼ of the damages Jane's policy's limit makes up one quarter of the total insurance on the dwelling (since $50,000 is 1/4 of $200,000), so her policy will pay one quarter of the covered loss. If the covered loss comes to $32,000, then divide this number by 4 to find what Jane's policy will pay: $32,000/4 = $8,000.

James holds a DP-1 policy on his house for $150,000. His wife, Jane, feels that they should really have closer to $200,000 in total coverage, so she takes out an additional $50,000 DP-1 policy on the same dwelling. Both policies pay settlements on a pro rata basis. After a fire causes $32,000 in damage to the home, how much of the damages will be covered by Jane's DP-1 policy? a. $8,000 - Jane's policy represents ¼ the total coverage and therefore pays ¼ of the damages b. $0 - James' policy covers the first $150,000 in damages c. $16,000 - Jane's policy covers ½ of the damages d. $32,000 - Jane's policy covers the first $50,000 of damages

a. HO-3

Michelle just purchased a homeowners policy for her new single-family home. Although she would have liked the best coverage money can buy, she could not afford the most expensive policy. She compromised with a policy that provides open-peril coverage for her house and detached garage, and named-peril coverage for her personal property. Which homeowners policy did Michelle purchase? a. HO-3 b. HO-8 c. HO-4 d. HO-5

a. The named insured's 23-year-old daughter who is at an out-of-state college

Of the following, who would qualify as an insured on a homeowners policy without being named on the declarations page? a. The named insured's 23-year-old daughter who is at an out-of-state college b. The named insured's nephew who lives next door c. The named insured's 26-year-old son who is a full-time graduate student d. The named insured's ex-husband who lives 2 hours away

a. Policy X pays $50,000; Policy Y pays $50,000; and Policy Z pays $25,000

Paul and his wife have three separate insurance policies covering their home: Policy X with a limit of $100,000, Policy Y with $50,000, and Policy Z with $25,000. These policies are set up to pay covered claims by contribution of equal shares. After a fire causes $125,000 in damage to their home, how much will each policy pay (ignoring any deductibles)? a. Policy X pays $50,000; Policy Y pays $50,000; and Policy Z pays $25,000 b. Policy X pays $71,250; Policy Y pays $36,250; and Policy Z pays $17,500 c. Each policy pays $41,667 d. Policy X pays $100,000; Policy Y pays $12,500; and Policy Z pays $12,500

a. a morale hazard.

Robby carpools to school with his friends, and he enjoys racing the other cars on the road whenever he can. His Dad lectures him about the dangers of speeding, but Robby thinks his Dad is overreacting. He's been driving for two whole years, so he knows what he's doing. And besides, they have good insurance, so it wouldn't be that big of a deal even if Robby did damage his car. In insurance terms, Robby's behavior is: a. a morale hazard. b. a risk. c. a peril. d. a moral hazard.

b. This requirement is a warranty found in the conditions section of the policy.

Skip's Convenience Store must agree to install and maintain an emergency shutoff system for its gas pumps in order to qualify for insurance coverage. Which of the following statements is true? a. This requirement is a binder found in the conditions section of the policy. b. This requirement is a warranty found in the conditions section of the policy. c. This requirement is a warranty found in the declarations section of the policy. d. This requirement is a representation found in the declarations section of the policy.

d. Agreement, consideration, competent parties, legal purpose

What are the four requirements of a legally binding contract? a. Agreement, consideration, character, signatures b. Authority, character, competent parties, legal purpose c. Authority, consideration, signatures, legal purpose d. Agreement, consideration, competent parties, legal purpose

d. public adjuster

A(n) _________ is not permitted to act as an independent adjuster in Louisiana. a. insurance producer b. Texas resident c. lawyer d. public adjuster

d. coverage for both bodily injury and property damage to a third party for which the insured is legally liable.

Coverage L in a Personal Liability Supplement provides: a. coverage similar to Coverage E in a homeowners policy, but it doesn't cover the insured's legal defense. b. no-fault coverage for necessary, reasonable medical expenses for a third party injured on the insured's premises. c. at least $1,000 in loss assessment coverage. d. coverage for both bodily injury and property damage to a third party for which the insured is legally liable. 7 / 87

b. a hazard. A hazard is any circumstance that increases the likelihood of a loss. Because Monica's home is in a flood zone, the location is considered a hazard.

Monica's home is located in a flood zone. In insurance terms, the location of Monica's home is considered: a. a risk. b. a hazard. c. a proximate cause. d. a peril.

a. Pat's Liability coverage

Dewayne is helping Pat restore his 1967 Mustang. While working in Pat's detached garage, Dewayne accidentally backs into a rickety storage unit, knocking it over and causing several tools and cans of paint to come crashing down on himself. Which homeowners policy coverage will pay for Dewayne's injuries? a. Pat's Liability coverage b. Pat's Other Structures coverage c. Dewayne's Dwelling coverage d. Dewayne's Liability coverage

b. Public adjuster

What kind of adjuster is hired by the claimant and is paid by commission? a. Independent adjuster b. Public adjuster c. Staff adjuster d. Emergency adjuster

c. A convenience store

Which of the following would most likely NOT be considered a "bailee"? a. A mechanic b. A clock repair shop c. A convenience store d. A dry cleaner

d. the proximate cause of the loss.

A hailstorm moves over Erin's restaurant. Large hailstones break through a skylight and water pours in, damaging the flooring in the restaurant. Additionally, the electrical system shorts out and Erin has to close for three days. The hail would be considered: a. a direct loss. b. an indirect loss. c. the physical hazard. d. the proximate cause of the loss.

d. an occurrence.

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 soaks the carpets and shorts-out all the computers, causing thousands of dollars in damage. The office must close for two months during repairs. The sprinklers soaking the office would be considered: a. the proximate cause of loss. b. a physical hazard. c. an indirect loss. d. an occurrence.

b. Damage to the carport Ben built last Fall at his own expense

Ben and his family are renting a home, and they have a Homeowners 4 policy to cover their belongings. During a strong windstorm, a tree falls on the house and causes some damage. Which of the following would be covered under the HO-4 policy? a. The cost to remove the fallen tree b. Damage to the carport Ben built last Fall at his own expense c. Damage to the roof and chimney d. Damage to the back porch and side wall

d. Arbitration Arbitration is a dispute resolution method in which a neutral third party hears both sides of the argument and provides a legally binding decision.

Cindy and her insurer cannot reach an agreement on her property claim. They have gone back and forth for weeks without coming within $10,000 of each other. Both honestly believe they are making a fair offer for indemnification, but they are at an impasse. At this point, both parties want a third party to make a legally binding decision, but they don't want to go to court. What is the best option for Cindy and her insurer? a. Litigation b. Appraisal c. Mediation d. Arbitration

a. $100,000 Since it was Dom's car in the accident, Dom's liability insurance will pay first, up to its limit. The total of all bodily injuries that Molly caused is $175,000, but Dom's limit for bodily injury to two or more people is $100,000.

Molly borrows her friend Dom's car to run to the grocery store. On the way home, she rear-ends a van, injuring the driver and 3 other passengers. Each of the passengers suffers $45,000 in injuries, while the driver suffers $40,000. Assuming Dom has a liability policy with limits of 50/100/50, while Molly has 25/50/25 coverage, how much will the primary policy cover? a. $100,000 b. $50,000 c. $150,000 d. $25,000

b. a hazard.

Monica's home is located in a flood zone. In insurance terms, the location of Monica's home is considered: a. a risk. b. a hazard. c. a proximate cause. d. a peril.

c. Motor Truck Cargo Policy Omega Transports should buy a Motor Truck Cargo policy, which protects the carrier of shipped goods while the shipment is in transit.

Omega Transports is a carrier that other companies hire to transport their goods from one location to another. What type of Inland Marine policy should Omega Transports purchase if they want protection against their liability for damages to goods in their custody during transport? a. Mail Coverage Policy b. Bailee's Customer Floater c. Motor Truck Cargo Policy d. Block Policy

b. Civil trial

Quincy is in court attempting to convince the jury through a preponderance of evidence that his insurer is deliberately withholding his rightful indemnification for his property claim. In which type of legal proceeding are Quincy and his insurer currently involved? a. Criminal trial b. Civil trial c. Contributory negligence hearing d. Comparative negligence hearing

d. Jim has already received an indemnity from his insurer.

When Shawn purposefully caused fire damage to Jim's restaurant, Jim's insurer paid the claim and then pursued Shawn for the damages, but Jim is still pretty mad about the whole deal and wants to sue Shawn as well. Why is it NOT possible for Jim to sue Shawn? a. Jim was not present at the time of the fire. b. Jim suffered only physical loss, not emotional loss. c. Shawn may not be tried for the same crime twice under the 5th amendment. d. Jim has already received an indemnity from his insurer.

c. An individual or organization that pays premiums in exchange for financial protection

Which of the following best defines "insured"? a. Transfer of the risk of financial loss from one party to another b. A legally binding contract in which the insurance company agrees to pay for specified losses in exchange for premiums c. An individual or organization that pays premiums in exchange for financial protection d. A company, group, or government agency offering financial protection

Zach will only get the $65,000, because the offer of $70,000 was inadmissible in court. If a claim goes to court, any amounts offered during the negotiation process are not admissible. This means that Zach cannot decide to accept the insurer's previous offer of $70,000 after all.

Zach totalled his car in an accident. The insurer offered him $60,000 to replace the vehicle, which Zach rejected. The insurer even went up to $70,000, but Zach stuck by his demand for $95,000. The case eventually went to trial and the jury awarded Zach $65,000. Which of the following statements is TRUE? a. Zach can appeal the decision to try to get the $70,000 offered by the insurer during negotiation. b. Zach can reopen negotiations with his insurer. c. Zach will only get the $65,000, because the offer of $70,000 was inadmissible in court. d. Zach will get $70,000, because that was the last offer given by the insurer.

a. Gaston has violated the Adjuster Standards of Conduct.

Gaston, a staff adjuster, is adjusting a homeowners claim when he notices some beautiful old woodwork that has been damaged in the occurrence. He tells the homeowner about an acquaintance of his whose expertise lies in restoring old woodwork. Which of the following is TRUE? a. Gaston has violated the Adjuster Standards of Conduct. b. Because Gaston is acting in the best interest of the claimant, his actions are acceptable. c. Gaston has committed an Unfair Claims Settlement Practice. d. Because Gaston did not receive a fee for his referral, his actions are acceptable.

b. $65,000; $500; $20,000 Heather's insurable interest in her home is $65,000, while her mortgage lender has an insurable interest in the $20,000 mortgage balance that Heather has not yet paid off. The policy will also pay up to $500 to cover Heather's Fire Department Service Charge, in addition to the Coverage A limit.

Heather's house is fully insured with a DP-3 with a limit of $85,000. One day, the house is struck by lightning, and despite the fire department's efforts, it burns to the ground. She still had a balance of $20,000 left on her mortgage at the time of the fire. What is the maximum indemnification that would go to Heather, the fire department, and her mortgage lender respectively? a. $85,000; $1,000; $85,000 b. $65,000; $500; $20,000 c. $84,500; $1,000; $20,000 d. $64,500; $500; $20,000

d. loss of rental income after damage to a rental unit has been fixed, but no new renter has been found.

In a homeowners policy, Coverage D - Loss of Use will NOT cover: a. meals out when a home is damaged and not habitable. b. loss of rental income if a renter can't stay in the apartment until damages are repaired. c. hotel expenses when damage prevents the insured from living in the home. d. loss of rental income after damage to a rental unit has been fixed, but no new renter has been found.

b. up to $500 per tree.

In a homeowners policy, the additional coverage "Tree and Shrub Replacement" will pay: a. up to $750 per tree. b. up to $500 per tree. c. up to $250 per tree. d. up to $200 per tree.

b. premium payments; peace of mind

In an insurance contract, the policyholder gives the insurer _____, and the insurer gives the policyholder ______. a. covered property; a risk pool b. premium payments; peace of mind c. peace of mind; risk d. a surety; premium payments

a. Conditions

In an insurance policy, where might one find the following statement? "The insured must make reasonable effort to protect the covered property from further damage." a. Conditions b. Exclusions c. Declarations d. Endorsements

c. $300,000

In order to be considered "fully insured" at 80% or more, Richard must carry at least $240,000 in insurance coverage on his home. What is the value of Richard's home? a. $192,000 b. $240,000 c. $300,000 d. $216,000

a. insurance policies are contracts of adhesion.

Stephan's insurance company denied his recent claim, citing that his particular cause of loss was not covered. However, according to Stephan's interpretation of the policy language, his loss could be covered, so he disputed the insurer's decision. When his case went to trial, the jury also decided the policy language was open to interpretation, so they decided in favor of Stephan. This is because: a. insurance policies are contracts of adhesion. b. insurance policies are aleatory contracts. c. insurance policies are contracts of utmost good faith. d. insurance policies are personal contracts.

d. a moral hazard. David's actions constitute a moral hazard. A moral hazard occurs when an insured person consciously and deliberately acts in a way that is more likely to result in a loss.

There is a severe hailstorm headed in David's direction. He sees this as an opportunity to get his car repainted, so he backs his car out of the garage and parks it in the driveway. After the storm passes, and David's car is covered in hail damage, he calls his insurer and files a claim. David's actions constitute: a. a morale hazard. b. a physical hazard. c. an occurrence. d. a moral hazard.

d. Brad's pool in his backyard. The pool in Brad's backyard is a physical hazard, because it is a physical condition that increases the chance of a loss.

Which of the following would be considered a physical hazard? a. Candice doesn't lock her front door when she leaves the house. b. Patrice doesn't wear her seatbelt in the car. c. Hank pushes his car into a lake and reports it stolen. d. Brad's pool in his backyard.

c. Civil unrest Civil unrest is most likely to be covered, since freezing, civil confiscation, and mechanical breakdown are all specifically excluded perils under Other than Collision coverage.

Which of the following would most likely be covered under Other Than Collision coverage in a personal auto policy? a. Mechanical breakdown b. Freezing c. Civil unrest d. Civil confiscation

a. insurance coverage may transfer to an insured's legal representative when the insured dies.

According to the Assignment condition in an insurance policy: a. insurance coverage may transfer to an insured's legal representative when the insured dies. b. an insured may transfer a policy to a spouse or dependent, but only if all terms, conditions, and declaration page remain the same. c. an insurer may reassign a policy to another insurance company, but only with the policyholder's notarized written permission. d. an insurer may reassign a policy to another policyholder, as long as it provides all named insureds with 5 days' advanced notice.

a. Negotiate a settlement amount with Gale.

After a fire destroys Gale's kitchen, she files a claim with her insurer and hires a contractor. The contractor estimates it will take $42,250 to repair the damage, but the adjuster estimates it will only take $38,340. Which of the following is the best option for the adjuster's response to Gale's claim? a. Negotiate a settlement amount with Gale. b. Reject Gale's request and deny the claim. c. Allow Gale and her insurer to settle the claim in court. d. Accept Gale's request and pay the claim.

b. Liability insurance provides indemnification for the insured.

All of the following statements are true of liability insurance, EXCEPT: a. Liability insurance only indemnifies third parties. b. Liability insurance provides indemnification for the insured. c. Legal liability does not have to be determined by a court of law before an insurer will pay. d. Liability insurance protects the policyholder against damages she causes a third party.

b. Stacy must determine how much of a limit for Coverage A would best fit John's needs in his new homeowners policy.

An adjuster must make several important decisions during the adjusting process. All of these are examples of such decisions, EXCEPT: a. Steve must determine if the water damage in Monica's bathroom is recent or pre-existing. b. Stacy must determine how much of a limit for Coverage A would best fit John's needs in his new homeowners policy. c. Becca must determine if the marks on Shellie's roof were caused by a hammer or by hail. d. Linda must determine if Lyle was intoxicated when the car he was driving was side-swiped by Jeffery.

b. is self-employed and may be contracted by one or more companies at a time.

An independent adjuster: a. represents the policyholder and charges a commission, usually about 10% of the settlement. b. is self-employed and may be contracted by one or more companies at a time. c. is solely responsible for processing claims for one insurer either locally, regionally, or nationally. d. is contracted by the claimant and may work for more than one at a time.

a. The sofa and laptop computers

Andrew's house is struck by lightning. The power surge fries two of the family's laptop computers, and starts a fire that damages his roof, two living room walls, and a leather sofa. Which of these damages would fall under Coverage C of Andrew's Homeowners 3 policy? a. The sofa and laptop computers b. The sofa only c. The sofa, living room walls, and laptop computers d. The roof, living room walls, and sofa

a. Non-Owner Coverage

Cindy doesn't have a car, but she frequently borrows her friend's car to run errands. Which type of insurance should Cindy purchase to provide her with liability coverage to protect her while driving her friend's car? a. Non-Owner Coverage b. Uninsured Motorist Coverage c. Extended Operator Coverage d. Miscellaneous Vehicle Coverage

a. Liability Coverage

D'Anton spills coffee in his lap while driving, causing him to veer off the road and smash into a lamp post. Which part of his Personal Auto Policy will help him pay for the repairs to the lamp post? a. Liability Coverage b. Coverage B: detached structures c. Comprehensive Coverage d. Collision Coverage

c. $4,576 In order to be fully insured, Kerry should have a limit of at least $140,000 (since 175,000 x 0.8 = $140,000). To calculate his coinsurance penalty, take the coverage that Kerry has (120,000) and divide it by the coverage he should have ($140,000), and the answer is 0.857. This means that the insurer will pay 85.7% of partial losses. Multiply Kerry's partial losses by .857 to calculate how much the insurer will cover ($32,000 x 0.857 = $27,424). Kerry will be responsible for the rest, so we subtract the insurer's portion from the total damages ($32,000 - $27,424) and the answer is $4,576.

Kerry accidentally set his kitchen on fire while frying a turkey for the holidays. The fire results in $32,000 in damage to his home, which is valued at $175,000. However, Kerry only has a $120,000 homeowners policy limit. Assuming Kerry's policy has the 80% coinsurance requirement, approximately how much of the damage will Kerry be responsible for paying? (Round all numbers to three decimal places.) a. $22,571 b. $3,029 c. $4,576 d. $27,424

d. Appraisal

Larry accidentally left a candle burning when he went to sleep one night, and his house caught fire. Larry disagrees with the amount of the adjuster's estimate to repair the damage, so he and his insurer have each chosen a representative, and the two representatives have also mutually decided upon an umpire. These three individuals will attempt to reach a settlement amount, and if at least two of them agree, the decision will be legally binding. What type of negotiation technique are Larry and his insurer using? a. Mediation b. Arbitration c. Litigation. d. Appraisal

d. $220,000 for the dwelling, plus up to $11,000 for Debris Removal. Debris Removal coverage can pay up to an additional 5% of the coverage limit, when needed. Since Orlando's Coverage A losses exceeded his policy limit, his policy can pay up to $11,000 (since this is 5% of $220,000) over and above that limit for the cost of removing the debris of Coverage A property

Orlando's house was fully insured when it was completely destroyed by a tornado. All that's left is a huge pile of debris and a $167,000 mortgage balance. Orlando files a claim against his DP-3 with a $220,000 limit. Normally, the cost of debris removal is subject to the policy limit, but Orlando's total costs exceed his limit. Once all cleanup and repairs are completed, what is the maximum indemnification the insurer could end up paying for the dwelling and debris removal? a. $220,000 for the dwelling, plus up to $8,350 for Debris Removal. b. $167,000 for the dwelling, plus up to $8,350 for Debris Removal c. $167,000 for the dwelling, plus up to $11,000 for Debris Removal. d. $220,000 for the dwelling, plus up to $11,000 for Debris Removal.

a. soft fraud. Soft fraud occurs when a policyholder deliberately exaggerates covered damages in the hopes of getting a larger indemnity.

Oswald can't afford to take his car to a shop, even though it is falling into disrepair. The windshield has been cracked for some time, and two of the lights are broken, not to mention the oil leak he noticed last week. While he is driving on icy roads one day, he loses control and slides into a guardrail, damaging the front bumper. He is upset by the accident, but then sees an opportunity. He files a claim for the accident, stating that the windshield, lights, and oil tank were damaged by the collision. Oswald's actions constitute: a. soft fraud. b. a physical hazard. c. hard fraud. d. a morale hazard.

c. The policyholder must complete a driving safety course.

PAP holders have several duties after a loss. Which of the following is NOT one of them? a. The policyholder must submit to examination under oath. b. The policyholder must authorize the insurer to obtain medical reports. c. The policyholder must complete a driving safety course. d. The policyholder must authorize the insurer to obtain any pertinent records.

d. Ruth may not collect any damages from the other driver. Louisiana has a law called "No Pay, No Play," which states that, if you are in an accident and don't have the minimum required liability insurance, you cannot collect the first $15,000 in bodily injury damages or $25,000 in property damage, even if the accident wasn't your fault.

Ruth has just been in an accident while driving without insurance. The other driver was at fault in the accident, which caused Ruth $13,000 in bodily injury and $21,000 in property damage. The other driver carried minimum liability coverage for Louisiana. Which of the following is TRUE? a. Ruth's damages are covered by the other driver's liability insurance, but she must pay a $500 fine before she can collect any money. b. Ruth may collect the full amount of her damages and injuries from the other driver's insurance coverage. c. Ruth may only collect 50% of her damages from the other driver's insurance company, since Louisiana follows the doctrine of shared negligence. d. Ruth may not collect any damages from the other driver.

c. an implied waiver.

When an insurer takes no action upon realizing material changes in a contract, this is called: a. a guarantee. b. a misrepresentation. c. an implied waiver. d. a warranty.

d. They are trying to determine the level of exposure to loss.

When filling out an application for homeowners insurance, Janice has to answer questions about whether or not she has certain safety systems in place like fire detectors and alarm systems. Why would the insurance company want to know this information? a. They are trying to determine the number of perils for which to provide coverage. b. They are trying to determine the amount of the loss. c. They are trying to determine the value of her home. d. They are trying to determine the level of exposure to loss.

c. keep the limits and rules of the policy to himself.

When investigating a claim, an adjuster should do all of the following EXCEPT: a. interview witnesses (when applicable). b. review police reports. c. keep the limits and rules of the policy to himself. d. inspect all damages.

a. $245,500 Her insurer will pay up to the policy limit for the damages to Brittany's home ($245,000), plus an additional $500 for the bill from the fire department, for a total of $245,500.

When lightning strikes Brittany's home during a storm, the resulting fire completely consumes the structure before firefighters manage to put it out. Brittany is fully insured by a DP-3 policy with a limit of $245,000, every bit of which is needed to rebuild her home. In addition, she receives a bill from the fire department for $650. How much is Brittany likely to receive from her insurer in response to her claim? a. $245,500 b. $245,650 c. $244,350 d. $245,000

a. it should be settled in favor of the claimant. When there is very little difference between the estimates of the insurer and the claimant, the adjuster should settle in favor of the claimant.

When the settlement difference between an insurer and a claimant is minor: a. it should be settled in favor of the claimant. b. it should be settled in favor of the insurance company. c. a third party should be brought in to help reach agreement. d. the adjuster will need to work harder to reach an agreement.

c. DP-3 The DP-3 provides open-peril coverage for the property's structures, and named-peril coverage for personal property.

Which Dwelling policy form provides open-peril coverage? a. None of the DP forms provide open-peril coverage b. DP-1 c. DP-3 d. DP-2

d. Ernest knows the claimant can't possibly afford to pay for their extensive damages, but he denies the claim anyway because the cause of loss was not covered by the policy.

Which of the following adjusters is acting appropriately as a fiduciary agent? a. Kim tries to calm an angry claimant by telling him that she's sure his claim will be covered, even though she has not yet determined the cause of loss. b. Gail investigates the claim and determines the loss is not covered, but writes up her estimate in such a way that it would appear to be covered so she could pay the claimant anyway. c. Victor finds additional damage that seems to be related to the claim, but he leaves it off of his estimate because the claimant didn't notice it in the first place. d. Ernest knows the claimant can't possibly afford to pay for their extensive damages, but he denies the claim anyway because the cause of loss was not covered by the policy.

d. Marjorie is trying to calm a claimant who is very upset, so she tells him that she is sure the loss is covered, even though she has not yet determined the cause of loss.

Which of the following adjusters is acting improperly as a fiduciary agent? a. Brenda investigates a claim and decides the losses are covered. She issues a settlement check to the claimant and closes the claim. b. Tony is assigned to adjust a claim submitted by his brother. He decides to give the case to a co-worker to avoid a biased decision. c. John calculates that the property damage he is investigating could easily bankrupt the claimant, but he denies the claim because the peril that caused the loss is excluded by the policy. d. Marjorie is trying to calm a claimant who is very upset, so she tells him that she is sure the loss is covered, even though she has not yet determined the cause of loss. 49 / 150

a. The circumstances of the injury make it obvious that the defendant is negligent; no proof is needed.

Which of the following best defines the doctrine of Res Ipsa Loquitur? a. The circumstances of the injury make it obvious that the defendant is negligent; no proof is needed. b. An employer is not held liable if a worker's injuries were caused by the action or negligence of a fellow employee. c. The plaintiff will not be awarded any damages if she is found to be 50% or more at fault. d. The claimant knowingly participated in an activity with the potential to cause injury or damage.

d. A fur coat is partially devoured by rats during transport. Damage caused by insects or vermin is typically excluded in Inland Marine policies.

Which of the following causes of damage would NOT be covered by a Personal Articles Floater? a. A saxophone is damaged during shipment when a careless employee leaves the instrument out on a loading dock during a hailstorm. b. A set of golf clubs is lost during transport when a train derails into a river. c. A camera shipped by truck is destroyed when the trailer ignites and burns to the ground. d. A fur coat is partially devoured by rats during transport.

b. Modification by operation of law An offer can be legally terminated by revocation by the offeror, counteroffer or rejection by the offeree, termination by operation of law, or by the lapsing of a stated time limit. Modification by operation of law is not a method of legally terminating an offer.

Which of the following does NOT constitute a legal termination of a contract offer? a. Counteroffer by offeree b. Modification by operation of law c. Termination by operation of law d. Revocation by offeror

c. Check if the current month's premium had been paid at the time of loss.

Which of the following is NOT a way to determine an insurer's liability in a claim? a. Check if the policy covers the type of damage being claimed. b. Check if the claimant has insurable interest. c. Check if the current month's premium had been paid at the time of loss. d. Check if the policy was active at the time of loss.

b. Annual Depreciation

Which of the following is NOT an endorsement commonly added to a Dwelling Policy? a. Dwelling Under Construction b. Annual Depreciation c. Theft d. Liability

c. During a fire, the fire department hoses down a house to extinguish the flames. The water damage that results is an indirect loss.

Which of the following is NOT an example of an "indirect loss"? a. Due to a fire, a homeowner has to move out and live in a hotel. The cost of the hotel is an indirect loss. b. Due to a fire, a business has to rent a fleet of trucks to deliver their goods to stores. The cost of the truck rentals is an indirect loss. c. During a fire, the fire department hoses down a house to extinguish the flames. The water damage that results is an indirect loss. d. Due to a fire, the homeowner has to move out and eat at restaurants instead of cooking meals at home. The cost of eating out is an indirect loss.

c. Lightning

Which of the following is NOT an exclusion commonly found in the Standard Fire Policy? a. Ordinance or law b. Earthquake c. Lightning d. Flood and water damage

d. The offeree must have no more than one stipulation. Acceptance is not legally enforceable if it is made with any stipulations. The originally offeree must unconditionally accept the terms of the offer and must communicate his intent to enter into the contract.

Which of the following is NOT one of the criteria that makes acceptance of an offer to contract legally enforceable? a. The offeree must communicate his intent to enter into the contract. b. The person to whom the offer was made must be the one to accept. c. Acceptance of the offered terms must be unconditional. d. The offeree must have no more than one stipulation.

a. How much is the insured willing to pay?

Which of the following is least likely to be one of the important questions an adjuster must answer before entering into the negotiations process? a. How much is the insured willing to pay? b. What are the damages? c. What is the insured's liability? d. Is there coverage?

b. A homeowner's interest in the local town water pipes that deliver water to his home.

Which of the following people does NOT have an insurable interest in an insured property? a. A mechanic's interest in a customer's convertible, which is sitting in his garage overnight. b. A homeowner's interest in the local town water pipes that deliver water to his home. c. A bank's interest in the new minivan they just financed for a young couple. d. A tenant's interest in the premium wood flooring that she had installed in her apartment.

b. Patrick borrows his neighbor's 45,000 pound semi truck to help his neighbor move A PAP only covers cars or trucks that weigh under 10,000 pounds, so the 45,000-pound truck that Patrick borrows could not qualify as a "covered auto."

Which of the following people is NOT occupying a vehicle that would qualify as "your covered auto" on the declarations page of his Personal Auto Policy? a. Sam is driving his BMW that he purchased 2 days ago and has not yet added to his insurance policy. b. Patrick borrows his neighbor's 45,000 pound semi truck to help his neighbor move. c. George is standing in the trailer he bought last year. d. Alex is driving a rental car while his own car is being repaired.

a. Endorsements either add or change coverage.

Which of the following statements about a Standard Fire Policy is TRUE? a. Endorsements either add or change coverage. b. In order to cover damage for lightning, an endorsement would have to be added to the Standard Fire Policy. c. Endorsements may not be added after the policy period has begun. d. Endorsements are also known as binders.

a. The endorsement provides liability and medical payments coverage. The Extended Non-Owned Coverage - Vehicles Furnished or Available for Regular Use endorsement provides liability and medical payments coverage.

Which of the following statements about the "Extended Non-Owned Coverage - Vehicles Furnished or Available for Regular Use" endorsement is TRUE? a. The endorsement provides liability and medical payments coverage. b. The endorsement does not cover non-owned autos used for business reasons. c. The endorsement will cover the insured when using a non-owned auto in his garage business. d. The endorsement provides physical damage coverage.

a. Actual cash value generally reflects the fair market value of an item.

Which of the following statements applies to actual cash value? a. Actual cash value generally reflects the fair market value of an item. b. Actual cash value does not account for the depreciation on an item. c. Actual cash value policies are generally the most expensive policies available. d. Actual cash value is equal to the current replacement cost of an item.

c. The two-bedroom house that Shannon owns in town, which she rents out to four college students

Which of the following would NOT fall under the definition of "Residence Premises" in Shannon's homeowners policy? a. The beach house that Shannon and her family rent for a weekend getaway each month b. Shannon's detached 4-car garage c. The two-bedroom house that Shannon owns in town, which she rents out to four college students d. The vacant lot that Shannon owns, located right next to her own house

d. Fire Department Service Charge

Which of these homeowners policy coverages does NOT usually have a deductible? a. Sewer Backup b. Debris Removal c. Personal Property d. Fire Department Service Charge

c. Coverage F

Which part of a homeowners policy provides coverage for the medical expenses of third parties who are injured on your property? a. Coverage D b. Coverage A c. Coverage F d. Coverage C

c. The claimant took too long to file the claim. An insurer can use a Reservation of Rights letter to let the claimant know that the adjuster will begin the claim process, but might deny coverage if it becomes clear that the policy does not apply to the losses, or if the claim was reported too late.

Why might a Reservation of Rights letter be sent? a. The insurer needs more information from the adjuster. b. The insurer needs more time to investigate the loss. c. The claimant took too long to file the claim. d. The policy doesn't cover the loss.