Texas All Lines Adjuster Laws & Regulation Review Quiz

A contract that provides insurance coverage for up to 30 days, pending the issuance of the permanent policy, is called a: A. binder; B. endorsement; C. lender; D. remedy

A. A binder is a contract that provides temporary insurance coverage for up to 30 days, pending the issuance of the permanent policy. Lenders must accept binders issued by properly appointed and licensed agents.

A state fund that provides lifetime income benefits to a worker who has received a second work-related injury that entitles the worker to those benefits is referred to as... A a second injury fund; B. the Americans with Disabilities Act; C. a permanent disability fund; D. a prior illness fund.

A. A second injury fund encourages employers to hire employees who have suffered an earlier, serious injury by only requiring that the second employer be responsible for the disability that results from their employment, rather than a total disability.

Operating a motor vehicle without the required insurance is a misdemeanor punishable by a fine of between.... A. $175 and $350 for the first offense; B. $175 and $350 for subsequent offenses; C. $350 and $1000 for the first offense; D. $1000 and $3000 for subsequent offenses.

A. Operating a motor vehicle without the required insurance is a misdemeanor punishable by a fine of between $175 and $350 for the first offense. Subsequent offenses may result in a fine of between $350 and $1000 and suspension of a driver's license or vehicle registration.

All of the following are qualifications of applicants for an adjuster license in Texas except: A. is at least 25 yrs. of age; B. resides in this state or a state that permits a resident of this state to act as an adjuster in that state; C. is trustworthy; D. has passed the required examination or presents evidence that the applicant has been exempted from the examination.

A. Applicants must be at least 18 yrs. of age.

Applicants to the Texas Automobile Insurance Plan Association must certify that they have been rejected for insurance by what number of insurers? A. One; B. Two; C. Three; D. Four

B. At least two insurers must decline to provide coverage.

An insurer may cancel a personal automobile policy on its 12-month anniversary by providing how many days advance notice of its intent? A. 5; B. 10; C. 20; d. 30

D. An insurer may cancel or refuse to renew a personal automobile insurance policy on its 12-month anniversary by providing advance notice of at least 30 days.

The monetary penalty for acting as an adjuster without holding the appropriate license to do so is a fine up to: A $5,000; B. $2,500; C. $1,000; D. $500.

D. An offense under this section is a misdemeanor punishable by a fine of not more than $500; confinement in the county jail for not more than six months or both the fine and the confinement.

An insurer may refuse to renew a commercial auto liability policy if the insurer gives written notice to the insured at least how many days before the policy expires? A. 7; B. 10; C. 30; D. 60

D. Commercial automobile policies may be nonrenewed by giving 60 days advance notice to the policyholder.

Lifetime income benefits are paid until the covered employee's death for all of the following except: A. total and permanent loss of sight in both eyes; B. loss of both feet at or above the ankle; C. loss one one finger; D. loss of both hands at or above the wrist.

C. Lifetime income benefits are paid for extremely serious injuries including loss of sight or loss of both feet or hands. Loss of one finger is not considered a serious enough injury to provide lifetime benefits becasue the disablement may not result in any job restriction or permanent disability.

All licensees must complete ________ hours of continuing education within each reporting period. A. 15; B. 20; C. 24; D. 30

D. All licensees must complete 30 hours of continuing education within each reporting period. However, limited lines licensees, those selling life insurance not exceeding $15,000 and county mutual agents are required to comlete 10 hours of continuing education during each reporting period.

An employer who is notified of an injury to an employee must file a wage statement showing the amount of all wages paid to the employee within what period of time? A. 5 days after receipt of notice; B. 10 days after receipt of notice; C. 15 days after receipt of notice; D. 30 days after receipt of notice

D. An employer is required to file a wage statement showing the amount of total wages paid to the employee no later than 30 days following notification of an injury to an employee.

All of the following are acceptable forms of proof of financial responsibility except: A. a copy of a liability policy; C. a copy of a binder in the required amounts; C. a Texas Liability Insurance Card; D. a valid driver's license

D. Proof of financial responsibility for automobile accidents may be demonstrated by a copy of a policy or binder of insurance or by possession of a Texas Liability Insurance Card that identifies the insured, insurer and other pertinent policy information.

What is the minimum weekly income benefit payable under the Texas workers' compensation law? A. 15 percent of the average weekly wage; B. 25 percent of the average weekly wage; C. 15 percent of the employee's pretax earnings; D. 25 percent of the employee's pretax earnings

A. The minimum amount an employee may be compensated for loss of income is 15-percent of the average weekly wage.

Which one of the following is legally responsible for maintaining a record of each employee-reported injury? A. Commission; B. Employer; C. Insurer; D. Employee

B. An employer must maintain a record of each employee injury as reported by an employee or otherwise made known to the employer. The record must be available to the commission at reasonable times but is not maintained by them.

Generally, to receive compensation for a work-related injury, a claim for compensation must be filed with the workers' compensation commission within: A. one week of the date of injury; B. one year of the date of the injury; C. one year of the date the disability ends; D. two years of the date the disability ends.

B. Notice to the commission is required within one year of the date of injury or manifestation of occupational disease.

Under workers' compensation in Texas, income benefits may not be paid for an injury unless the injury results in disability that lasts longer than: A. 48 hours; B. 1-week; C. 1-month; D. 1-year

B. Texas law imposes a mandatory waiting period of one week for income benefits as a result of a work-related disability.

Which one of the following statements regarding automobile liability insurance is correct? A. All insurers must offer policyowners the option of buying insurance for losses resulting from accidents involving both uninsured and underinsured motorists; B. Not all insurers offer personal injury protection with automobile liability coverage; C. Only owners of automobiles that are between one and five years old are required to carry automobile insurance; D. The financial responsibility law protects automobile owners from drivers who obtain insurance from foreign insurers.

A. All automobile policies issued in the state must contain uninsured and underinsured motorists coverage unless it has been rejected by the applicant in writing.

When a disability continues for longer than four weeks, disability income benefits are paid... A. weekly from the first day of the disability; B. from the eighth day of the disability; C. monthly until the sixth month; D. from the time of the original injury.

A. When a disability continues for more than four weeks, disability income compensation is computed from the date the disabilty began.

An insurer that provides personal automobile, homeowners or farm and ranch owners' policies may cancel a policy for each of the following reasons except: A. nonpayment of premium; B. the age of the insured; C. the insured submits a fraudulent claim; D. the continuance of the policy would violate the law.

B. It is unlawful to decline to renew a personal automobile, homeowners or farm and ranch owner's policy based solely on the age of the covered person.

An insurer may contest the compensability of a workers' compensation claim within.. A. 10 days of notification; B. 30 days of notification; C. 60 days of notification; D. 1-year of notification

C. An insurer has 60 days to contest a workers' compensation claim. if it does not contest the claim, it waives its right to do so. Even though payments are made during this 60-day period, the carrier still has the right to contest the claim.

An employee who suffers an injury covered by workers' compensation is entitled to all of the following health care services except... A. cosmetic surgery for aesthetic reasons; B. rehabilitation therapy; C. emergency treatment; D. vocational training

A. Medical benefits include health care that cures or relieves the effects resulting from an injury, promotes recovery or enhances the ability of the employee to return to work. Elective surgery performed for aesthetic, as opposed to medically necessary, reasons is not covered.

When can an insurer refuse to pay a claim under a homeowner's policy because the policyowner misrepresented information on the insurance application? A. when the insurer can prove that the misrepresentation led to an event that caused the policy to pay; B. When the insured refuses to submit a new application; C. When the claim was submitted within the first six months that the policy was in effect; D. When the insured can prove that the misrepresentation was made with the knowledge of the insurer's agent.

A. No insurer may use the fact that a policyholder has given false or untrue information on an insurance application as a reason to cancel the policy or to deny a claim unless it can be proved that the misrepresentation led to an event that caused the policy to pay a claim that would not otherwise have been paid.

While personal injury protection (PIP) benefits under an auto policy are paid without regard to fault, an insurer may not pay benefits for any injury: A. caused to the insured by the insured; B. caused by a public vehicle; C. caused by an underinsured driver; D. under $1500.

A. Personal Injury Protection (PIP) is required under all auto policies issued in Texas unless rejected by the insured in writing. Coverage does not apply, however, if the insured caused the injury to him or herself or if the injury occurred while committng a felony or while trying to evade a lawful arrest.

Which one of the following statements regarding workers' compensation insurance is not correct? A. All employers domiciled in Texas are required to obtain workers' compensation insurance coverage for their employees; B. Workers' compensation's primary advantage for the injured employee is that it provides a quick and certain means of compensation; C. Workers' compensation protects the employer from tort liability; D. Workers' compensation provides compensation to employees who are injured on the job, without regard to fault or negligence on the part of either the employer or employee.

A. Texas is an elective state with respect to workers' compensation coverage. Employers may elect to provide workers' compensation insurance but are not requried to do so. If they do not, they may be sued by employees for work-related injuries and occupational diseases.

To obtain insurance through the Texas Automobile Insurance Plan Association, an applicant and his or her agent must certify that the applicant: A. has been rejected for insurance by at least two licensed insurers actually writing auto insurance; B. has not been involved in an at-fault accident within the last 12 months; C. has lived in the state for less than three months; D. is of good character and sound financial condition.

A. To secure coverage through the Texas Automobile Insurance Plan, an applicant must have been refused by at least two licensed auto insurers.

All of the following are exempted from the requirement of an adjuster's license examination except: A. Those persons holding CPCU designation; B. those persons adjusting workers compensation claims; C. Those persons who have received the Associate in Claims (AIC) designation; D. Those persons who have a certificate of completion showing that within the past 12 months the applicant has completed a certified adjuster prelicensing education program and passed the state examination.

B. A person adjusting workers compensation claims is not exempt.

When an insurer assesses a surcharge on a fire or homeowners policy due to adverse loss experience, the surcharge may not exceed what amount of the total premium? A. 5 percent; B. 10 percent; C. 15 percent; D. There is no maximum on the amount

B. A surcharge of up to 10 percent may be added to any homeowners, fire or farm and ranch owner's policy if the insured has filed two or more claims in the preceding year. The claims may not be for losses caused by natural causes or for claims that are filed but not paid by the insurer.

An insurer may add a surcharge to a homeowners policy that is being renewed if the: A. insurer suspects that its reserve is below minimum required limits; B. insured has filed two or more claims in the preceding policy year; C. insured is planning to alter the structure of the residence; D. insured informs the insurer that the policy will be replaced.

B. A surcharge of up to 10 percent may be added to any homeowners, fire or farm and ranch owners' policy if the insured has filed two or more claims in the preceding policy year.

Workers' compensation insurance in the state of Texas is regulated primarily by the A. Industrial Relations Board; B. Labor Code; C. Insurance Code of 1951; D. Labor Relations Code

B. Although the Insurance Code pertains to the actions of agents and insurers who sell workers' compensation insurance, mosst of the provisions that govern workers' compensation law are contained in the state's Labor Code.

Employees are entitled to receive income benfits equal to what percentage of their average weekly wage following an injury: A. 50; B. 70; C. 75; D. 100

B. An employee is entitled to impairment income benefits beginning the day after he or she reaches maximum medical improvement. The amount of the benefit is 70 percent of the employee's average weekly wage and continues for a length of time based on the employee's impairment rating.

An insurer may cancel a commercial auto policy for any of the following reasons except: A. fraud in obtaining the policy; B. failure to pay parking fines when due; C. an increase in the hazard insured against; D. inability of the insurer to renew a reinsurance agreement.

B. An insurer may cancel a commercial auto policy at any time for the following reasons: fraud in obtaining the policy, failure to pay premiums when due, increase in hazard insured against, loss of a reinsurance agreement or insolvencyof the insurer.

An insurer who cancels a personal auto policy for nonpayment of premium must give how many days notice to the insured? A. 7; B. 10; C. 30; D. 60

B. Cancellation of any policy for nonpayment of premium requires that the insurer give 10 days' advance notice to the policyholder.

Anyone who knowingly or intentionally commits which one of the following is guilty of a violation in connection with a workers' compensation claim? A. Fails to obtain a second medical opinon; B. Makes a false or misleading statement; C. Refuses rehablitation benefits when offered; D. Obtains medical services from a doctor of his or her choice.

B. Employees are prohibited from making false, misleading or fraudulent statements in connection with a workers' compensation claim. They are not requried to seek a second opinon and may refuse rehabilitation benefits (although they risk losing supplemental income benefits). The choice of health care provider is that of the employer but it is subject to approval by the commission.

When an insurer pays a claim under an automobile policy for which their insured is not legally responsible, the insurer must.... A. notify the insured that there is no way to recover the deductibles; B. bring action against a third party to recover the insured's deductible; C. notify the claimant that they must pay the insured's body shop directly; D. bring suit against the body shop to prevent them from charging the insured a deductible

B. In cases where an insured must pay a deductible on a claim covered by his or her auto insurer, but there is a third party that may be liable to the insurer or insured for the amount of the deductible, the insurer has certain obligations. Within six months after the date the claim is made, the insurer must either bring an action against the third party to recover the deductible (or pay the deductible to the insured) or notify the insured in writing that the insurer will nto bring an action against the third party and authorize the insured to bring the action.

An insurer will consider an injured worker to have reached maximum medical improvement when: A. the occupational disease is cured; B. two years have passed since the date income benefits were first due; C. the condition can only be remedied by surgery; D. three years after the time the employee notifies the insured of his or her injury

B. The date of maximum medical improvement is considered to be the earlier of the date, based on medical probability, that further medical improvement, to an injury can no longer reasonably be anticipated or 104 weeks (2-years) from the date that income benefits begin to accrue.

Under Texas law, an insured may do which one of the following with regard to the provision of uninsured motorists property damage? A. Double the amount of the coverage upon written request to the insurer; B. Elect coverage for the same amount as the policy's liability limit; C. Reject the coverage by notifying the insurer of their intention to do so; D. Reduce the coverage below the liability limit of the policy.

B. The requirement under law is that coverage for uninsured motorists property damage be provided at a limit at least equal to the state financial responsibility limit. Insurers may provide higher limits, but only up to the liability limit contained in the policy.

Which one of the following persons would be considered an employee under the laws of the state of Texas? A. An employee of an independent contractor engaged in construction work; B. A temporary employee; C. A person employed by a residential property owner; D. A person with no other health insurance

B. The term employee includes a temporary employee, a person other than an independent contractor or the employee of an independent contractor who performs services to the insured and a trainee under the Texans Work program. The law applies to business risks, not residential employers.

What happens when a married couple who jointly owns residential property divorces during the term of their homeowners insurance policy? A. Both insureds must reapply for separate insurance on the property; B. The owner's must decide who will become the named insured and transfer ownership of the insurance policy to that person; C. The insurance remains in effect, and the interests of both owners are covered as long as the policy exists or as long as the policy is not cancelled; D. The insurer has the option to continue the policy that is in force or require the insureds to apply for new and separate policies.

C. A homeowners or fire insurance policy issued in Texas must contain a provision that the policy, if issued to cover community property, will remain in full force and effect as to the interest of each spouse irrespective of divorce or change of ownership between the spouses. The spouses or former spouses may apply for separate insurance, but the law does not require them to do so.

What is the time limit for a person to file a claim for death benefits after an employee's death? A. 7-days after the death of the employee; B. 30 days after the death of the employee; C. No later than the first anniversary of the death of the employee; D. No later than the second anniversary of the death of the employee

C. A person must file a claim for death benefits with the commission not later than the first anniversary of the date of the employee's death.

An emergency adjuster license is effective for a period not to exceed: A. 180 days B. 120 days; C. 90 days; D. 60 days.

C. An emergency license is effective for a period not to exceed 90 days. The commissioner may extend the term of the emergency license for an additional period of 90 days.

To receive compensation for a work-related injury, an employee (or someone acting for the employee) must notify his or her employer within how long after an injury? A. 24 hours; B. 7 days; C. 30 days; D. 1-year

C. An employee or a person acting on the employee's behalf must notify the employer of the injured employee no later than 30 days after the date on which the injury occurred or if the injury is an occupational disease and the employee knew or should have known that the injury may be related to the employment. Notice may be given to the employer or a supervisor or manager.

An insurer may notify an insured that filing on a third claim within what period of time may result in the nonrenewal of the policy? A. 1-yr.; B. 2-yrs; C. 3-yrs.; D. 5 yrs.

C. An insurer may decline to renew a policy if the insured has filed three or more claims under the policy in any three-year period. The insurer may notify an insured who has filed two claims that the filing of a third in the three-year period may result in nonrenewal. If the insurer does not so notify the insured, the policy may not be nonrenewed because of losses.

Under Texas workers' compensation law, lifetime income benefits are paid at what percentage of the employee's average weekly wage? A. 25 percent; B. 50 percent; C. 75 percent; D. 100 percent

C. Lifetime income benefits are paid to individuals who suffer serious and permanent injury in the course of their employment. The benefits are paid at 75 percent of the employee's average weekly wage.

Each of the following is a prohibited act when committed intentionally by an attorney or other legal representative of an injured worker except... A. failing to attend an arbitration proceeding; B. engaging in frivolous litigation; C. failing to notify a claimant of his or her rights under a workers' compensation policy; D. entering into a settlement agreement without the knowledge and consent of the injured party.

C. Notification to an employee of benefits provided under workers' compensation is requried of employers and insurance carriers, not attorneys or the injured worker's representatives.

All of the following statements regarding arbitration agreements are correct except: A. the agreement must be in writing to be enforced; B. one party may revoke the agreement by providing the fair value for the disputed loss; C. arbitration agreement clauses must be included in all property and casualty policies in Texas; d. the agreement must exist before the dispute arises for arbitration to take place.

C. Property insurance contracts may contain a clause that allows the insurer and insured to arbitrate a disagreement about the amount to be paid for a claim if the agreement is in writing, if the controversy exists at the time the agreement is made and if the controversy arises between the parties after the date of the agreement. The agreement may be revoked by either party for a lawful reason by providing the fair value of the contract.

When a workers compensation injury results in death of the employee, the employee's beneficiaries are entitled to... A. a lump sum of $100,000; B. a lifetime income equal to 70 percent of the employee's wages; C. 75 percent of the employee's average weekly wage; D. nothing because the employee is the only person entitled to benefits.

C. The death benefit provided under law is 75 percent of the employee's average weekly wage payable to the employee's beneficiary.

All of the following vehicles are exempt from the compulsory insurance law except: A. vehicles that are self-insured; B. vehicles for which a bond has been filed with the Department of Insurance; C. vehicles that are used exclusively on public highways; D. vehicles for which a cash deposit has been made with the state treasurer

C. The only vehicles that are exempt from the compliance with the State's compulsory automobile insurance law are those that are self-insured, those for which a bond has been filed with the Dept. of Insurance and those for which a cash deposit of $55,000 has been made to the state treasurer.

Which one of the following is not an example of an unfair claim settlement practice? A. Knowingly misrepresenting pertinent facts to claimants; B. Failing to acknowledge communication within a reasonably prompt period; C. Failing to examine a claimant under oath; D. Not attempting in good faith to promptly settle a claim when liability is clear.

C. The right to examine policyholders under oath, in the case of questionable claims or potential fraud, is a right of an insurer during a claim investigation and is part of the contractural agreement between the insurer and the insured. Failing to do so does not constitute a violation of the state's unfair claims settlement practices.

In order to nonrenew a personal auto policy, an insurer must provide how many days advance notice to the policyholder? A. 10; B. 20; C. 30; D. 45

C. The same rule for providing notice of cancellation applies to nonrenewal. A notice must be sent to the insured no less than 30 days in advance of the nonrenewal date.

When canceling a homeowners policy, the insurer must do which one of the following: A. Give the insured a 90-day notice in order to find new insurance; B. Inform the Texas Automobile Insurance Plan Association that it is canceling a policy; C. Provide a written notice explaining the reasons for the cancellation; D. Inform the agent who sold the policy that his or her commission must be returned

C. Whenever insurance policies are cancelled in accordance with the law, the written notice must include the precise reason the policy is being cancelled, including the source of any information relied on by the insurer to make its decision.

A licensed adjuster must notify the commissioner if the adjuster changes the location of the adjuster's place of business: A. Within 10 days; B. Within 20 days; C. Within 30 days; D. Notification must be made promptly

D. A licensed adjuster shall promptly notify the commissioner if the adjuster changes the location of the adjuster's place of business.

Which one of the following is not an injury that would be covered by workers' compensation? A. An accident occurs while an employee is driving a forklift from a truck to the warehouse; B. The injury occurs when an employee slips on a wet floor while changing clothes in the employee locker room; C. Several workers are injured when the hydraulic lift that moves automobile parts collapses; D. An employee who returns from lunch intoxicated cuts his hand with an electric saw.

D. An insurance carrier is not liable for compensation if the employee's injury ws caused while the employee was intoxicated.

An injury that occurs to an employee who is traveling to and from work is not covered if... A. transportation is paid by the employer; B. transportation is provided in the employer's vehicles; C. employee is directed to proceed from one place to another as a condition of employment; D. employee is traveling on personal errands.

D. Employees are generally not covered for workers' compensation while traveling except under certain limited circumstances as outlined in answers A, B and C. When an employee is traveling on personal or private affairs, he or she is not coverd for workers' compensation.

An employer is relieved of its responsibility to provide benefits to an employee if the employee does not notify him or her of the injury unless... A. there is good cause for the employee's failure; B. the employer or employer's insurance; C. company does not contest the claim; D. a supervisor for the employer has knowledge of the injury; E. the employee did not realize that notification was required.

D. Employees are required to report injuries to employers and any occupational disease that they now or could reasonably know was the result of an employment exposure. If there is just cause for the late notice or the carrier accepts the claim or a manager or supervisor was aware of the injury, the employer is not relieved of responsibility to pay benefits.

The minimum limits under the Texas Motor Vehicle Safety Responsibility Law are: A. $15,000 per person, $30,000 per accident for Bodily Injury and $5,000 for Property damage; B. $20,000 per person; $30,000 per accident for Bodily Injury and $5,000 for Property Damage; C. $20,000 per person, $40,000 per accident for Bodily Inury and $10,000 for Property Damage; D. $25,000 per person, $50,000 per accident for Bodily Injury and $25,000 for Property Damage.

D. The Texas Motor Vehicle Safety Responsibilty Law requires automobile insurance limits at least equal to $25,000 per person and $50,000 per accident for Bodily Injury and $25,000 per accident for Property Damage.