Test 3

Dan insures a home for adequate limits under a DP-2. If a flood causes $1,000 in damage, what is the maximum the insurer will pay, disregarding deductibles?

$0 Explanation: Flood is an excluded peril under all the dwelling forms unless fire ensues and then only the loss caused by fire is covered.

A boat damaged out of the water and at a lake would be covered under the Homeowners Policy for:

$1,500. Explanation: The policy limits physical damage to only $1,500. Also, theft that occurs off the insured's premises is not covered. Watercraft is covered for the perils of wind and hail only while in a fully enclosed building.

Under the BOP, how much is paid for pollution clean-up and removal in case of a covered loss?

$10,000 Explanation: The policy pays up to $10,000 for pollution clean-up and removal. Do not confuse this with debris removal.

The insured is covered under a Businessowners Policy. He has several computers and the electronic data is corrupted as a result of lightning. The loss is $20,000. How much will the policy pay for the damaged data?

$10,000 Explanation: ISO introduced the electronic data additional coverage in the 2006 BP 00 03 01 06. The coverage provides up to an annual aggregate of $10,000. The cost to replace or restore electronic data is covered if the data is corrupted or destroyed by a covered cause of loss. The same covered causes of loss apply to this additional coverage as apply to business personal property.

If the insured carries a DP-2 dwelling form and insures the dwelling for 80% of its replacement cost value, what will he be paid if his 30 year old roof sustains $10,000 in damages(disregarding any deductible)?

$10,000 is correct. Explanation: If the insured carries 80% to value he would be entitled to full replacement cost coverage for his damaged roof.

Under a dwelling policy (DP-2 or DP-3), what is the maximum that would be paid for additional living expenses if coverage A was $60,000?

$12,000. Explanation: The form provides 20% for additional living expenses and fair rental value. Therefore the policy would pay up to $12,000. Note: In North Carolina the percentage is 10%.

A building valued at $500,000 is insured at $300,000 on a policy containing an 80% coinsurance clause. How much would be paid on a covered $200,000 loss?

$150,000. Explanation: The answer is $150,000. Per the coinsurance clause, the required amount of insurance is 80% of $500,000, which equals $400,000. However, the insured's limit of $300,000 is only ¾ of the insurance required. That same fraction, ¾, is applied to the loss amount. ¾ of $200,000 is $150,000. Thus there is a "coinsurance penalty" of ¼ of the loss, or $50,000.

Under an HO-3 policy, what coverage is provided for watercraft lost due to theft?

$1500 maximum, under Special Limits . Explanation: Under personal property coverage, HO policies have several categories of property with "special limits." Among them is "watercraft of all types, including their trailers" For this property, the special limit is $1500. Theft of watercraft and their accessories are covered on the insured's residence premises only and not off the premises. A watercraft policy is needed for the broader coverage.

Commercial contents valued at $100,000 are insured for $60,000. Disregarding deductibles and using an 80% coinsurance clause, what is the maximum amount the insured can collect on a $40,000 loss?

$30,000. Explanation: The insured should carry at least $80,000. The coinsurance formula states that the insurance carried over the amount required, times the loss, should be paid. In this case, the insured is underinsured and can only be paid 3/4 (75%) of the loss or $30,000.

The court awards a judgment against the insured for $300,000 plus $10,000 of accrued interest and the legal fees amount to an additional $35,000. Our insured has a $300,000 liability limit on the policy. How much will be paid by the policy?

$345,000. Explanation: The $10,000 of accrued pre judgment interest and the $35,000 cost of the defense are all payable as additional coverage on the policy. These amounts have no affect on the limit of liability available in a judgment against the insured. So the entire amount of $345,000 is payable in this case.

Under a personal articles floater, a pair of antique salt and pepper shakers are insured for $1,000. When one of the shakers is broken, the remaining shaker is worth only $200. How much will the insured receive for the loss?

$800. Explanation: Under the "pair and set clause" the insured will not receive the value of the entire set in case one is lost or destroyed. Payment is made by deducting the value of the remaining portion of the set from the limit of insurance and paying the difference.

When an insured shown on a Commercial Building and Personal Property Policy fails to pay the premium, the insurer is required to give advance written notice of cancellation to the insured and the mortgagee of at least:

10 days prior to cancellation. Explanation: There are two cancellation provisions. One requires a 10-day notice for non-payment of premium and the other requires a 30-day notice for all other reasons. This may vary by state.

If an insured carries Coverage C (contents) under a dwelling (not homeowners) form, how much coverage applies on a worldwide basis?

10% of the coverage C limit . Explanation: The DP Forms have a 10% limitation of the coverage C amount when personal property is OFF the premises. The homeowners forms provide the full limit of coverage C anywhere in the world for personal property.

If a named insured acquires additional property after the watercraft policy period begins, that property is covered for a maximum of ____ days after the date it came into the insured's possession.

14. Explanation: The coverage applies for 14-days.

As a licensed California Independent Adjuster, how many days do you have in which to notify the Department of Insurance of your intent to open a branch office?

30 days. Explanation: The Department of Insurance must be notified within 30-days.

All of the following bonds guarantee the payment of certain taxes, except:

: Contract surety bonds is correct. Explanation: Contract surety bonds are required by the owner for performance of a task as per the contracted agreement. The other bonds listed fall into the area of miscellaneous bonds and are required for the payment of various taxes, usually sales taxes to the state government.

If an adjusting firm intends to add a new branch office, what action must be taken?

: Must first obtain a branch office certificate Explanation: Adjusters cannot conduct business from any location other than that shown on the records of the commissioner as his or her place of business unless he or she has received a branch location certificate for that location. A licensee shall notify the commissioner in writing within 10 days after the closing or changing the location of a branch office.

Which of the following statements is true about Additional Coverages?

: They are included at no extra cost. . Explanation: An example would be the Collapse Hazard included in both the Broad and Special cause of loss forms at no extra charge.

The insured is insured under a DP-3 dwelling form and is remodeling the dwelling. He does not have a place to store the materials. His next door neighbor permits the insured to store the materials in his garage. The garage is destroyed by fire and the materials are also destroyed. Which of the following applies?

: This is included under the building coverage and coverage applies since the materials are next to the insured's premises. Explanation: The policy would respond to pay the loss because the policy covers building materials located on or next to the insured's premises.

Which of the following would require bailee coverage?

A TV repair shop Explanation: A TV repair shop is acting as a bailee when they have property of others in their care, custody, and control. They could be held legally liable should the property be damaged while in their custody.

In California, which of the following is an untrue statement regarding the adjustment of a "total" auto physical damage loss?

A cash settlement does not include sales taxes. Explanation: The cash settlement does include applicable sales taxes and applies whether or not a replacement automobile is purchased.

A fire in an insured's restaurant burns the kitchen walls and causes smoke damage to the entire interior. Water used to extinguish the fire causes extensive damage to floors and furnishings. The water damage is BEST described as:

A direct loss. . Explanation: The water damage is considered a direct loss to the property as well as other damage the fire fighters may cause to the premises.

In a Homeowners Policy, "persons insured" would include all of the following, EXCEPT:

A non-related tenant living in the insured residence. is correct. Explanation: A tenant would have to purchase their own personal property coverage as well as personal liability coverage. They may qualify for a Tenants Homeowners Policy.

The statement by an applicant on a personal automobile application that she has had no accidents within 3 years, but which she later corrects to include one claim 2 1/2 years ago is an example of:

A representation. . Explanation: A representation is a statement that is believed to be true when made, which might prove to be false. A warranty is a statement that is guaranteed to be correct. In this case, the applicant made no apparent attempt to conceal or misrepresent a time distortion.

How are losses settled under a typical inland marine policy?

Actual Cash Value. Explanation: Most inland marine policies pay on an actual cash value basis.

Which of the following relieves the financial burden on the claimant by making certain payments to the claimant even before the claim can be negotiated?

Advanced Payment Explanation: Most adjusters are given the authority to make advance payments when liability is clear. This relieves the financial burden on the claimant when funds are needed immediately. The remainder of the claim is settled at a later date.

In situations where the insured and the insurer may disagree on the value of an item, it would be best to insure that item as:

Agreed Value. Explanation: An item insured with an agreed value eliminates the disagreements between the parties as to the value of an item at the time of the loss.

An insured covered under a Homeowner Policy is in the process of declaring bankruptcy. What are the insurer's obligations if the insured has a covered claim?

All covered claims must be honored.. Explanation: The fact that the insured has declared bankruptcy does not affect it's obligation to honor a covered claim

A drug store has an ice cream counter and someone drops some of the ice cream on the floor. Both the employee and the store manager are aware of the situation. The store can be held legally liable because of?

All of the Responses are Correct. Explanation: All of the responses are correct. The store has a legal duty to protect invitees from sustaining injuries if possible.

Which of the following is true in a policy without a subrogation clause?

All of the responses are correct Explanation: Where the subrogation rights of insured and insurer are not addressed by the terms of the policy, then the rules of equitable subrogation apply. In any event, an insurer can only take the rights of its insured and no more. In situations where recovery from a wrongdoer is insufficient to make the injured insured whole, equitable principles of subrogation apply. For example, an insured is a victim in an auto accident. The recovery amount from the wrongdoer is insufficient to make the injured insured whole. This prevents the insurer from asserting its rights to subrogation until the insured has been made whole, even though contractual language exists that is more favorable to the insurer than what would apply under the principles of equitable subrogation.

The homeowner program allows for the attachment of the "personal injury" coverage endorsement. What coverages will this add for the insured's liability protection?

All of the responses are correct. Explanation: The attachment of this endorsement adds coverages such as wrongful entry or eviction, defamation of character, libel and slander. Therefore all of the responses are correct.

Negligence is what type of civil wrong?

An Unintentional Tort Explanation: A tort is a civil wrong (as opposed to a criminal wrong) other than a breach of contract. Negligence is an unintentional tort defined generally as "the failure to use the care that a reasonable and prudent person would have in order to protect others from harm."

In crime insurance, a custodian is described as which one of the following?

An authorized person inside the premises. . Explanation: Custodian means the named insured, any of the insured's partners, or any employee, while having care and custody of the insured property inside the premises. It does not include a watchperson or a janitor.

Which of the following causes of damage is not covered under the HO policy?

An earthquake Explanation: Earthquake coverage must be separately purchased and is not covered under the HO policy

In which of the following situations should a non-waiver agreement be used?

An insured's house shows rot damage, and it appears there is a long-term plumbing leak Explanation: Non-waivers should be executed when there are unresolved questions regarding coverage, limits, or both. The adjuster would be wise to present such a waiver to the claimant/insured during the initial site visit.

Which of the following is a true statement regarding subrogation?

An insurer must conduct a full investigation before they pursue subrogation Explanation: The California regulations state: "No insurer shall pursue a claim for subrogation without having conducted a thorough, fair and objective investigation as to whether subrogation is appropriate.

Risk is best defined as:

An uncertainty of loss. . Explanation: Insurance companies want to insure against uncertainty of loss. Undesirable insureds or hazardous exposures are items examined by insurance company underwriters prior to the acceptance of a risk. The cause of loss is self-explanatory.

In the event of a dispute between the insurer and insured concerning the value of a property settlement, which of the following homeowner conditions would apply?

Appraisal is correct. Explanation: In case of a dispute regarding the value of the insured property in case of a loss the problem can often be resolved by the appraisal clause. Each party gets an appraiser. If they can't agree then an umpire is selected to make the decision. Each party pays their share of the umpire's fee.

A valid contract must contain all of the following, EXCEPT:

Be a written instrument. . Explanation: Contracts do not have to be written or documented to be valid and enforceable; oral contracts are perfectly acceptable if they are between competent parties, have a legal purpose, represent an offer and acceptance, and some valuable consideration.

The body of law that is composed of closed civil lawsuits is known as what?

Case law Explanation: Case law is the record of closed civil actions. They can be used as a guide to the handling or possible outcome of new and pending cases.

Which of the following types of carriers must assume the broadest liability under common law?

Common carriers Explanation: Common carriers must assume the broadest liability under common law. They are not responsible for acts of God such as floods, hurricanes or for the negligence of the shipper (poor packing).

Replacement cost coverage is closest to:

Current cost of replacement without a deduction for depreciation. Explanation: Replacement cost is the cost to replace or repair damaged property with new property or materials, without a deduction for depreciation.

Sprinkler Leakage Insurance does not provide coverage for:

Damage to growing crops from malfunctioning sprinklers Explanation: The coverage does not apply to growing crops. Crop insurance is a separate line of insurance

A person purchasing the Dwelling Form DP-2 causes damage to the fence on his property amounting to $200 while driving his own auto. The policy will:

Deny the claim is correct. Explanation: The DP-2 dwelling form does not provide coverage to the insured's fence damaged by his vehicle.

All of the following are excluded under the theft, disappearance and destruction coverage form, except:

Dishonest acts of customers. . Explanation: Fire, vandalism, and accounting errors are specifically excluded in this form. Criminal activities of customers and others is what property and casualty insurance is designed to cover.

Under the Commercial Property Policy, the Pro-rata Liability Clause means:

Each insurer pays in accordance to the percentage of its coverage bears to the total amount of insurance. Explanation: The insurer will not be liable for a greater proportion of a loss than the amount insured will bear to the whole insurance covering the property against the peril involved, whether collectible or not. This is often referred to as the "Other Insurance" clause.

Fidelity bonds are used to cover:

Employee dishonesty.. Explanation: As the name implies fidelity bonds provide coverage for theft by an employee in a job related situation.

One of the purposes of coinsurance is to:

Encourage the insured to insure property for most if not all of its value Explanation: If the insured carries at least 80% to value, an extra credit in the rate is applied. This serves as an extra incentive for the insured to carry more coverage.

Coverage for all reasonable expenses incurred by an insured in order to continue as nearly as practicable the normal operation of his/her business after a loss is:

Extra Expense Coverage. Explanation: Extra expenses include those incurred as a result of a covered loss that is required in order to continue the normal operation of the business. Example: Temporary re-location expenses, overtime expenses etc.

The insured owns a two family dwelling and rents out one of the dwelling units. If a fire occurs what coverage could the insured look to for his loss of rental income under the dwelling policy DP-3?

Fair Rental Value Explanation: The dwelling policy provides coverage for loss of rental income. The policy will pay 20% of coverage A for this coverage. Note: In North Carolina the percentage is 10%.

The following losses would be covered under the HO-2 and the HO-3 Homeowners Forms, EXCEPT:

Flood damage to a home. Explanation: Flood is not covered under any of the homeowners forms.

Choose from the following situations the example of assumption of risk.

Fred was in a hurry to get to work. He took a shortcut over a bridge marked "condemned," which collapsed under his weight. Explanation: When Fred took the shortcut across a condemned bridge he assumed the risk.

All of the following are excluded under the Commercial Building and Personal Property Form, EXCEPT:

Furniture and fixtures. Explanation: Furniture and fixtures are covered property. Animals (except those held for sale), autos and money are excluded types of property.

Under California law, the degree of care owed to a trespasser by a property owner is not which of the following?

Guarantee safe passage on and off the premises Explanation: Guaranteeing safe passage is not required.

Under the BOP, which of the following is not automatic coverage?

Hired and Non-owned Automobile Coverage Explanation: Hired and non-owned automobile coverage is an elective coverage.

What are the automatic perils covered under every dwelling policy form?

I, II, and III only .

When is it appropriate for an adjuster to secure a non-waiver agreement with the insured?

If there is a question of coverage . Explanation: A properly executed non-waiver agreement allows the insurance company to complete a thorough investigation without implying that coverage is available for the loss.

Which term is the closest to "incidental authority" under the law of agency?

Implied authority Explanation: Implied Authority, also known as incidental authority, is the authority that the agent reasonably believes he or she has, based upon the actions (or inaction) of the principal.

The liability coverage on the BOP would provide coverage for which of the following?

Injury or damage caused by the operation of mobile equipment. Explanation: Injury or property damage to others caused by the operation of mobile equipment on the insured's premises such as a forklift would be covered by the BOP policy. The other three answers are all specifically excluded.

A non-waiver agreement would allow the insurance company to do which of the following?

Investigate the loss without verifying that the loss is covered . Explanation: Insurers can use a non-waiver agreement when there are unresolved questions about coverage or limits. In such a signed agreement, the claimant/policyholder stipulates and acknowledges that the insurer's continued investigation into and adjustment of a loss is not to be construed as an admission of coverage by the insurer.

Pollutant cleanup under the commercial building and personal property form:

Is an additional coverage. Explanation: The building and personal property coverage form contains several additional coverages (which provide extra limits for added coverage) and a separate set of coverage extensions, which broaden the policy's existing limits to certain specific situations. Pollutant cleanup is an additional coverage providing an extra $10,000 for the cleanup of pollutants on the insured's premises when the discharge is a result of a covered loss.

Under an HO 3 the limit for coverage C (personal property) for a one or two family dwelling is:

Is set at 50% of coverage A, unless a higher limit is requested. Explanation: Under an HO 2, 3, and 5, coverage for C-Personal Property is set at 50% of Coverage A-Dwelling, unless a higher limit is requested. This applies to a one or two family dwelling. The percentages are different for a three or four family dwelling.

Which of the following statements is NOT correct regarding Proof of Loss?

It is the insureds option to complete. Explanation: Providing a proof of loss is NOT the option of the insured. Sometimes the insurer provides the forms but a Proof of Loss is a sworn statement signed and presented by the insured for payment of a claim. Concealment or fraud in this statement can void claim payment. Accurate statements as to the time, cause of loss or other details in addition to items claimed are mandatory.

The insured carries a yacht policy and is pulling a water skier. The skier is a family member and is injured. What coverage might apply to this accident?

Medical payments coverage Explanation: Medical payments coverage under the yacht policy would cover this loss up to its specified limit.

In California an insurance binder:

Must be made in writing . Explanation: The binder can only be in writing and is effective until the policy is issued. The binders are issued for a period not to exceed 90-days.

In commercial property what is the effect of exercising the "agreed value" option?

Negates coinsurance. Explanation: Agreed value is an option on the Building and Personal Property Coverage form. If selected and indicated on the Declaration page, the coinsurance condition does not apply.

Which of the following buildings is vacant?

No furnishings . Explanation: In insurance terms, vacant means devoid of furnishings and occupants. A vacant building is empty. A building that has no occupants but contains furnishings is merely unoccupied.

The Additional Coverage for Electronic Data provides $2,500 for the cost of replacing and restoring lost information contained on electronic media. Which of the following Electronic Data is not included in this additional coverage?

None of these items are subject to this limit. Explanation: None of these items are subject to the $2500 annual aggregate limitation and therefore covered up to the full cost to restore these items up to the building limit.

The Additional Coverage for Electronic Data provides $2,500 for the cost of replacing and restoring lost information contained on electronic media. Which of the following Electronic Data is not included in this additional coverage?

None of these items are subject to this limit.. Explanation: None of these items are subject to the $2500 annual aggregate limitation and therefore covered up to the full cost to restore these items up to the building limit.

After a fire loss, which of the following is the duty of the adjuster?

Obtain salvage of the damaged property. Explanation: After the loss has been adjusted the adjuster should take possession of the salvage.

Which of the following terms best describes an accident including continuous and repeated exposure to similar harmful conditions?

Occurrence. Explanation: Occurrence is the most widely used definition of the cause of bodily injury or property damage liability. It includes the term, in most cases, accident, which is the sudden and accidental cause of loss.

Under an HO-3 Policy materials and supplies to be used in construction, alteration or repair of the structure and kept next to the residence premises are covered:

Only if they are lost due to an insured peril. Explanation: The items would be covered if destroyed by an insured peril. Note that the items must either be on the insured's residence premises or next to the residence premises such as in a neighbor's garage.

An HO-5 form provides which of the following coverages for dwellings and their contents?

Open peril coverage for buildings and personal property. . Explanation: The HO-5 form is the broadest HO form and provides open peril coverage on both covered buildings and the insured's personal property.

The insured has her fur coat specifically covered under a Personal Articles policy. It has been stored in a plastic garment bag in her closet during the good weather months. She decides to take the coat out and hang it outside to freshen up. The next door neighbor's dog sees the coat and attacks it and ruins the garment. The insurer will:

Pay the claim because the loss is not excluded Explanation: The form is an "open peril form" and would cover this type of loss whether caused by a domestic pet or a wild animal.

Which of the following is a coverage difference between an HO-3 and an HO-5?

Personal property under an HO-3 is covered on a named peril basis, while personal property under an HO-5 is covered on an open peril basis.. Explanation: The HO-3 and the HO-5 are the same in terms of dwelling exclusions, valuation on dwelling losses, and the type of personal property insured. They are different in terms of perils insured against for personal property losses.

The purpose of the declarations section of an insurance policy is to list the:

Persons or property covered. . Explanation: The declarations page, usually the first page of the policy includes the name of the insured(s), insurance company, subject of insurance, premium, endorsements and policy period. In most of the newer policies, the perils are stated elsewhere in the document.

If there were other existing insurance, coverage under crime insurance would be:

Pro rated. Explanation: Crime insurance has the "other insurance clause" which states that the coverage would be pro-rated between the other insurance coverage if the other insurance is subject to the same terms and conditions. The insurer will only pay its share of the loss.

Homeowner policies provide liability coverage for which of the following?

Property Damage and Bodily Injury is correct. Explanation: The Personal Liability Coverage under the policy is a "single limit" in which both bodily injury and property damage coverage are provided.

Which type of damages is not intended to indemnify the plaintiff?

Punitive damages . Explanation: Punitive damages are awarded in cases of gross negligence, for the purpose of punishing the defendant. Special and general damages are types of compensatory damages, which are intended to indemnify the plaintiff.

When a lawsuit is filed and served, the defendant generally has 30 days to file a:

Responsive pleading. Explanation: A responsive pleading is, in essence, a written answer by the defendant to the allegations set forth in the plaintiff's lawsuit.

All of the following are basic types of construction, except:

Retro Sided Explanation: Retro sided is a non sense term, the other three are all types of construction types and affect the insurance rates charged for property insurance.

Roger has his golf clubs stolen out of the trunk of Sam's car. Which policy will pay?

Roger's Homeowners policy Explanation: The claim would be paid under Roger's homeowner policy. The homeowner policy provides worldwide coverage on personal property including the peril of theft. Certain classes of personal property provide for a theft limit of coverage.

If an insured fail to report a claim in a timely fashion the adjuster will usually:

Send the insured a reservation of rights letter Explanation: Failure to report a claim in a timely fashion denies the insurer of the opportunity to promptly investigate the circumstances of the claim. Valuable information from witness could be lost as well as other physical evidence. When this occurs, the insurer will normally send the insured a reservation letter to protect the rights of the insurer.

Under the commercial property condominium association form, coverage is based on:

The association agreement and bylaws. Explanation: The coverage provided by the form will be based on the condominium association agreement and by laws.

Which of the following dwelling forms may provide replacement cost coverage for buildings?

The broad and special forms only Explanation: The broad and special forms provide replacement cost coverage on the structures if the insured carries at least 80% of replacement cost value on the structures. The basic form provides actual cash value coverage only.

Under the dwelling basic form (DP-1), what is the maximum that would be paid for Fair Rental Value if Coverage A was $60,000 and the rent is $500.00 per month?

The fair rental value Explanation: Payment under fair rental value will be for the time required to repair or replace the damage, whichever occurs first. Any payment is based on a fair rental value which is a reasonable amount for similar rental property in a comparable or local rental market. Naturally, any payment is net of discontinued expenses.

The insured is covered under an HO-3 form. If the insured hits his own house and also damages the garage and the attached fence with his vehicle, what coverage would apply?

The house, garage and the fence is correct. Explanation: All of the items are covered under the HO-3 if the insured damages his own property with his vehicle. This is also true of the HO-5 form. These two forms provide open peril coverage and do not exclude this kind of loss.

Under the appraisal clause in a commercial inland form, which of the following is true?

The insurer still retains its right to deny the claim entirely Explanation: The insurer is bound by the outcome of the appraisal. They still reserve, however, the right to deny the claim if there is a coverage, rather than a valuation question.

Each of the following is true about commercial property floaters filed by the Insurance Service Office (ISO), EXCEPT:

The rates for these coverages are unregulated. . Explanation: Rates for Commercial Property Floaters filed with ISO are regulated. Each type of form requires a rating formula. These are audited by ISO. There are many forms, not filed with ISO, where the rates are not regulated. These are called "non-controlled" lines of insurance.

In the Commercial Property Cause of Loss Forms, which of the following perils is covered by broad form but is not covered by the basic form?

Weight of ice and snow. Explanation: The basic form does not include loss coverage for the weight of ice and snow.

As a general rule, husbands and wives are not permitted to bring suit against one another for personal injury. The best description of an exception to this rule is:

When the injury is the result of an intentional tort. Explanation: The exception is when either is injured as a result of an intentional tort.

You are an adjuster and have just been assigned a new claim. What is your first task?

Your answer: Verify coverage. Explanation: A claim adjuster's first task when assigned a claim is to verify coverage.