Adjuster Test 2
The broad evidence rule is used when:
answer is: The actual cash value of property is being determined.. Explanation: The broad evidence rule is used when determining the ACV of property.
Maggie Mae is a cleaning professional who works for Maid My Day household cleaning services. Maggie Mae is traveling in her own vehicle, to a client's home when she strikes and hits a pedestrian. Maggie Mae is liable as the owner and operator of the vehicle, but Maid My Day could be held _______ liable, because Maggie Mae was acting on their behalf.
answer is: Vicariously. Explanation: Maid My Day could be held vicariously liable, because Maggie Mae was acting on their behalf.
Rhonda is a resident licensee in Rhode Island and holds a non-resident license in Connecticut. Rhonda has an administrative action levied against her by the Connecticut Department for an act she committed. How long does Rhonda have to report this action to the Rhode Island Department?
answer is: Within 30 days of the final disposition of the matter.. Explanation: Rhonda must report the administrative action to the Rhode Island Department within 30 days of the final disposition of the matter.
Under a Business Auto policy, which coverage symbol indicates that a car is subject to mandatory no-fault insurance as required by state law?
answer is: 5. Explanation: Symbol #5 of the Business Auto policy covers vehicles subject to their state no-fault insurance laws.
The insured has filed a claim under the "Business Income Dependent Properties -- Broad Form" because the primary buyer of products and services from the business has filed for bankruptcy. Under this form, the primary buyer's business would be known as:
answer is: A recipient location.. Explanation: The primary buyer's business would be known as a "recipient location".
The type of auto body frame that is most often used in today's automobile and is a single molded unit, is known as:
answer is: A unibody frame.. Explanation: A unibody frame is a single molded unit to which the other structures of the automobile are welded.
All of the following statements regarding the Commercial Package Policy are correct, EXCEPT:
answer is: Commercial Package Policies can include Ocean Marine and Aviation Insurance coverage. . Explanation: Ocean Marine and/or Aviation insurance are "specialty" policies that cannot be packages together with other commercial risks into a package policy.
Paul had his roof inspected by a local contractor, after a strong storm with high winds and hail, passed through his neighborhood. The contractor found damage to the roof and gave Paul an estimate of $9,850 to replace it. Paul filed a claim with his insurance company, and the company promptly sent an adjuster to inspect the roof. The adjuster's estimate to repair the roof came to $9,650. How will the adjuster likely attempt to settle this claim?
answer is: Negotiate the claim in an attempt to persuade Paul to agree to the lesser amount.. Explanation: Even though the difference in the two amounts is small, it is the responsibility of an adjuster to negotiate the settlement, keeping in mind their fiduciary responsibilities to the insurer
The perils most frequently covered by a Difference in Conditions policy are:
answer is: Earthquake and flood.. Explanation: Earthquake and flood coverage is almost always excluded under property policies, therefore these two coverages are the most frequently written DIC policies or endorsements.
A road construction contractor has mobile equipment that is used in his business. The state has changed the law and now requires some of the equipment to carry liability insurance to comply with the financial responsibility laws of the state. What symbol will the insurance company use to add these items to the insured's commercial auto policy?
answer is: Symbol 19.. Explanation: The insurance company will use Symbol 19, "mobile equipment subject to compulsory auto financial responsibility."
Which of the following statements is TRUE regarding the DP-3 special form?
answer is: It provides open peril coverage on the structure and named peril coverage on the personal property.. Explanation: The DP-3 special form provides open peril coverage on the structure and named peril coverage on the personal property.
Which of the following offers the broadest physical damage coverage under a Commercial Auto policy?
answer is: Comprehensive.. Explanation: Comprehensive coverage would be the broadest because it covers anything that is not defined as "collision". The specified cause of loss is a named peril form and thus, is more limited.
In Rhode Island, the Department of Insurance may deny an application for an adjuster's license if the applicant has: I. Demonstrated incompetence or untrustworthiness. II. Forged another persons name to a document. III. Failed to pay child support or state income tax.
answer is: I, II and III. Explanation: Any of these actions is grounds for denial of an application for a license or the suspension or revocation of an existing license.
An insured has her business automobiles covered under a Business Auto policy with Symbol 7 specified on her Declarations page. She has purchased a trailer with a load capacity of 2,500 pounds and hitched it to a covered van. While she is driving the van, the trailer breaks free and crashes into another vehicle, causing bodily injury. Which of the following statements is true regarding this insured's situation?
answer is: Liability coverage is not extended under Symbol 7 for a trailer with a load capacity of more than 2,000 pounds, therefore coverage will not apply.. Explanation: Liability coverage is not extended under Symbol 7 for a trailer with a load capacity of more than 2,000 pounds, therefore coverage will not apply because the load capacity of the trailer in the question is listed at a load capacity of 2,500 pounds.
Which of the following is NOT covered by the Extra Expense coverage of the standardized Commercial Property insurance policy?
answer is: Loss of income.. Explanation: Extra Expense Coverage is a form of Business Interruption Coverage. It covers all reasonable extra expenses incurred by the insured in order to continue as nearly as practical the normal operation of a business that has been damaged by an insured peril. It does not cover the loss of income a business may suffer. Other forms like the "loss of income" forms would cover the loss of income.
If an insured fails to report a claim in a timely fashion, the adjuster will immediately:
answer is: 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.
The common conditions of a Commercial Package policy:
answer is: States that to properly rate the policy, the insurer has the right to examine the books and records of the insured company.. Explanation: The common conditions of a Commercial Package policy states that to property rate the policy, the insurer has the right to examine the books and records of the insured company. The information listed in all of the answer choices are found in other sections of the policy.
Under Ben Green's personal auto policy, each of the following would qualify as a "family member" EXCEPT
answer is: Susan Green, Ben's wife. Susan maintains a separate residence although she and Ben are not divorced.. Explanation: The question is asking which person is NOT a family member. Susan Green is no longer a member of the insured's residence and would not be covered. A spouse is considered to be a family member of the insured IF they live with the insured in the same household.
Which Garage Coverage form symbol is used to indicate that the covered automobile(s) is/are subject to a compulsory "no-fault" law?
answer is: Symbol 25..Symbol 25 is used to designate covered autos that are subject to compulsory state "no-fault" laws.
All of the following statements regarding the Motor Carrier Act of 1980 are correct, EXCEPT:
answer is: The Act requires truckers to certify that they are able to meet financial obligations arising from physical damage to nonowned trailers being used under a written Trailer Interchange agreement. . Explanation: The Motor Carrier Act applies to liability only, it does not require certification that physical damage coverage is carried.
Manny is purchasing a Commercial Property policy with a Business Income form included. Manny can select from any of the following as a method to provide coverage, while avoiding the coinsurance requirement, EXCEPT:
answer is: The maximum monthly limit of indemnity optional coverage.. Explanation: The maximum monthly limit of indemnity optional coverage does not exist. The other three answer choices are all methods of coverage under a Business Income form that permits an insured to avoid the coinsurance requirement.
All of the following statements are true regarding Public Law 15 (The McCarren-Ferguson Act), EXCEPT:
answer is: Under the law, the federal government retains the right to approve insurance forms.. Explanation: The federal government does not approve insurance forms, this is left to the state insurance departments.
