AdjusterPro - Practice Exam
Which of the following is a requirement of an insurer if it does not intend to renew a Homeowners policy? A. Notify the insured 45 days before the policy will expire B. Offer to continue coverage until the insured has secured a new policy for the property C. Give the insured 10 days to submit a new application in order to keep the policy active D. Submit an application on behalf of the insured to the New Hampshire Reinsurance Facility
A .Notify the insured 45 days before the policy will expire
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 .The sofa and laptop computers
Jared is fishing from his 22-foot sailboat when he is caught in a sudden hailstorm. His boat suffers extensive hail damage. When he files a claim against his homeowners policy, he is upset to learn that his claim is denied because: A. the boat was not fully enclosed inside a building during the hailstorm. B. damage to sail boats is not covered by a homeowners policy. C. a homeowners policy will only cover watercraft smaller than 20 feet. D. damage to sail boats is only covered by endorsement.
A .the boat was not fully enclosed inside a building during the hailstorm.
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
A. $100,000
Adjuster Andy is trying to determine a final settlement amount for Bob's claim. Bob's house was destroyed in a fire and it will cost $220,000 to rebuild it. Bob's homeowners policy has a limit of $210,000 and a $1,500 deductible. How much should Adjuster Andy's final settlement calculation be? A. $210,000 B. $220,000 C. $208,500 D. $218,500
A. $210,000
A tornado completely destroys Cheyenne's property. Her losses include her $95,000 home, $4,700 privacy fence, $5,000 detached garage, and $1,600 in patio furniture. Cheyenne has a $90,000 homeowners policy. How much of Cheyenne's losses will be covered under Coverage B - Other Structures? A. $9,000 B. $90,000 C. $11,300 D. $9,700
A. $9,000
After wrecking her car on an icy road, Lilly filed a claim with her insurer, ABM Insurance, who dispatched Richard to investigate her claim. Who is the principal in this scenario? A. ABM Insurance B. This information is not provided in the scenario. C. Lilly D. Richard
A. ABM Insurance
Jake and his neighbor Bill are working to repair Jake's roof. Jake sets up two ladders side-by-side for each of them to use while working on the gutters. While at the top of the ladder, Jake falls into Bill's ladder, sending both of them tumbling to the ground. Whose injuries will be covered by Jake's homeowners policy under Coverage E - Personal Liability? A. Bill's injuries B. Jake's injuries C. Neither under Coverage E D. Both Jake and Bill's injuries
A. Bill's injuries
Who makes a claim for payment after a loss occurs? A. Claimant B. Liable party C. Adjuster D. Tortfeasor
A. Claimant
Due to an E-coli contamination in its production facility, Company F is facing multiple lawsuits from customers who became sick after eating its product. The resulting negative press, lost revenue, and added expenses have proven too much for the small company to handle, so it has filed for bankruptcy. Which of the following is true? A. Company F's insurer will still pay the claims, up to the policy limit. B. The Assignment clause allows Company F's insurer to assign all of the claims to each claimant's respective insurer because of Company F's bankruptcy. C. Company F's insurer is relieved of its duty to pay any claims because Company F filed for bankruptcy and can write off all of its debts. D. The Apportionment clause allows Company F's insurer to share the loss with each claimant's insurer equally.
A. Company F's insurer will still pay the claims, up to the policy limit.
Lee, the owner of Antonia's Bakery, wants to expand operations and start catering. He hires Geoffrey to manage the new catering department and quickly realizes that he might have made a mistake. Geoffrey makes inappropriate comments to other employees, seems to be dishonest in his dealings with money, and is a reckless driver. How would Lee effectively practice risk avoidance in this case? A. Fire Geoffrey B. Have a company-wide meeting about appropriate language in the workplace C. Purchase employee theft coverage D. Hire another new employee to be Geoffrey's supervisor
A. Fire Geoffrey
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
A. Fire, lightning, and internal explosion
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. HO-3
When a claimant submits a claim to an insurer, the insurer has several options for responding. Which option does the insurer want to avoid? A. Having a court of law dictate the proper settlement B. Accepting the claim and paying what the claimant requests C. Rejecting the claim and refusing to pay D. Letting the claim go to arbitration
A. Having a court of law dictate the proper settlement
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
A. Liability Coverage
Carol is adjusting a liability claim. After thoroughly examining the case, Carol comes up with what she believes is a fair and equitable amount of indemnification for the claimant. However, the claimant may reject her offer, so she prepares a second offer, just in case. Which function of an insurance adjuster might Carol be preparing for? A. Negotiating a claim B. Reporting a claim C. Evaluating a claim D. Investigating a claim
A. Negotiating a claim
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. Non-Owner Coverage
As a fiduciary agent, an adjuster has the power to bind the insurer. Therefore, which of the following statements is FALSE? A. Only an adjuster's written statements can legally bind an insurer. B. When adjusting a claim, an adjuster's actions are legally considered those of the insurer itself. C. The insurer grants this power to the adjuster in a written contract. D. Even if an adjuster made a mistake in determining the value of the loss, the insurer must pay that amount.
A. Only an adjuster's written statements can legally bind an insurer.
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. Policy X pays $50,000; Policy Y pays $50,000; and Policy Z pays $25,000
Gary has UM/UIM coverage on his Personal Auto Policy. Which of the following losses would be covered under this coverage? A. Sam, Gary's neighbor who has liability limits high enough to cover the damages, intentionally runs into Gary's car with his own during an argument. B. Gary borrowed Sam's car without his permission, and was struck by Tom, who doesn't have auto insurance. C. Gary's wife hits Gary's car while backing out of the garage. D. Gary's car, which he uses during his part time job as an Uber driver, is damaged by a hit-and-run driver.
A. Sam, Gary's neighbor who has liability limits high enough to cover the damages, intentionally runs into Gary's car with his own during an argument.
What kind of adjuster is employed by only one insurance company and is paid by salary? A. Staff adjuster B. Independent adjuster C. Emergency adjuster D. Public adjuster
A. Staff adjuster
Who must fill out a proof of loss form? A. The claimant B. The insurance company C. The adjuster D. The agent
A. The claimant
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. The named insured's 23-year-old daughter who is at an out-of-state college
A public adjuster is: A. a fiduciary agent on behalf of the claimant. B. an individual hired by the insurer to aid in the negotiations process. C. contracted by the insurer to represent the policyholder. D. a salaried employee processing claims for a government entity.
A. a fiduciary agent on behalf of the claimant.
Stephen's insurer denied his claim because the peril was not covered. But, according to Stephen's understanding of the policy, his loss should be covered, so he filed a dispute. During the trial, the jury agreed that the policy language was open to interpretation, so they decided in favor of Stephen. This is because: A. insurance policies are contracts of adhesion. B. insurance policies are conditional contracts. C. insurance policies are contracts of utmost good faith. D. insurance policies are personal contracts.
A. insurance policies are contracts of adhesion.
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.
A. it should be settled in favor of the claimant.
A reservation of rights: A. lets the insurer begin to investigate a claim, without later being forced to pay it if it turns out not to be covered. B. is a letter that needs to be signed by the policyholder. C. informs the policyholder that his claim has been denied. D. means that the insurer does not need to defend a policyholder in court.
A. lets the insurer begin to investigate a claim, without later being forced to pay it if it turns out not to be covered.
In a personal auto policy, Collision coverage: A. pays for physical damage to the vehicle caused by a rollover. B. excludes coverage for damage caused by the insured. C. excludes coverage for damage to any non-owned vehicle the insured may be driving. D. is a mandatory coverage.
A. pays for physical damage to the vehicle caused by a rollover.
While reviewing a homeowners policy, you may find all of the following listed as an insured's duty after a loss, EXCEPT: A. provide the insurer with a loss estimate from an appraiser. B. promptly notify the insurer of the loss. C. cooperate with the adjuster's investigation. D. protect the property from further losses.
A. provide the insurer with a loss estimate from an appraiser.
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.
A. the settlement amount.
Deductibles for Personal Auto Insurance typically apply: A. to Collision and Comprehensive coverages. B. only to Collision coverage. C. only to Liability coverage. D. on an aggregate basis.
A. to Collision and Comprehensive coverages.
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
B. An express waiver
Which of the following Homeowners endorsements can provide both property and liability coverage? A. Business Pursuits B. Home Day Care C. Permitted Incidental Occupancies D. Scheduled Personal Property
B. Home Day Care
Which ISO form is known as the "Condominium Form"? A. Homeowners 5 B. Homeowners 6 C. Homeowners 8 D. Homeowners 4
B. Homeowners 6
Nichole's car was damaged while it was being serviced at Don's Auto Shop. Nichole's auto insurance policy covers physical damage to her vehicle, but it will not cover the damage that occurred while the vehicle was under the control of Don's Auto Shop. Which provision in her policy states this? A. Control of Property B. No Benefit to Bailee C. Assignment D. Severability of Interests
B. No Benefit to Bailee
Which of the following does NOT constitute a legal termination of a contract offer? A. Rejection by offeree B. Request for more information C. Termination by operation of law D. Revocation by offeror
B. Request for more information
A lion at a zoo escaped when a zoo employee failed to follow protocol. The lion injured a zoo patron. In court, the injured patron's lawyer could invoke the doctrine of: A. Contributory negligence. B. Res Ipsa Loquitur. C. Comparative negligence. D. Assumption of Risk.
B. Res Ipsa Loquitur.
All HO policies issued in the state of New Hampshire must include the ________ endorsement. A. Personal Injury (HO 24 79) B. Special Provisions New Hampshire — HO 01 28 C. Ordinance or Law (HO 04 77) D. Permitted Incidental Occupancies — Residence Premises (HO 04 42)
B. Special Provisions New Hampshire — HO 01 28
Which of the following is NOT a valid reason for an insurance company to reject a claim? A. The claimant did not have applicable insurance coverage. B. The claimant lists damages that exceed the limits of his insurance policy. C. The claimant submitted a fraudulent claim. D. The claimant cannot prove any damages.
B. The claimant lists damages that exceed the limits of his insurance policy.
As a fiduciary agent, an adjuster must report to the principal on a regular basis. Which of the following pieces of information would be the LEAST important to report? A. The adjuster's progress on a claim B. The insured's estimated future premiums C. The deadlines for each step of the claims process D. The final settlement amount
B. The insured's estimated future premiums
What does it mean when we say that an adjuster has the "power to bind"? A. Adjusters should never profit without permission. B. The principal is bound to the decisions the adjuster makes. C. If a conflict of interest exists, the adjuster should not act. D. The adjuster never acts with self-interest.
B. The principal is bound to the decisions the adjuster makes.
Which of the following is NOT typically associated with strict liability? A. Housing exotic or wild animals B. Working with electronics C. Using firearms D. Handling explosives
B. Working with electronics
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 cost of renting a temporary office space while the physical damage is repaired is considered: A. a direct loss. B. an indirect loss. C. a physical loss. D. an occurrence.
B. an indirect loss.
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.
B. an insured from making a profit.
An HO-3 policy is intended for a/an: A. corporation. B. individual. C. small business. D. government entity.
B. individual.
An economic device used to protect against the risk of realizing unforeseen and extraordinary financial loss is called: A. risk avoidance. B. insurance. C. indemnification. D. subrogation.
B. insurance.
The law of large numbers states that: A. insuring a greater number of units increases the likelihood of loss for the insurer. B. insuring a greater number of units increases the accuracy of the insurer's loss predictions. C. insuring a greater number of units increases the effect of statistical outliers on loss predictions. D. insuring a greater number of units makes the insurer's losses less predictable.
B. insuring a greater number of units increases the accuracy of the insurer's loss predictions.
Steve is an agent for XYZ Insurance. As a fiduciary agent, Steve's primary role is to: A. investigate the financial health of XYZ Insurance. B. protect the financial interests of XYZ Insurance. C. ensure XYZ Insurance increases its annual revenues. D. analyze his conflicts of interest with XYZ Insurance.
B. protect the financial interests of XYZ Insurance.
Cindy falls down the stairs at Jane's house and breaks her arm, resulting in $2,500 in medical expenses. Jane's homeowner's insurance will cover the liability, but Cindy is particularly mad at Jane for not keeping her house in order and is seeking punitive damages. Jane's insurance adjuster informs the two of them that they will likely have to go to court to settle the dispute because: A. falling down stairs is not covered under punitive damages in Jane's policy. B. punitive damages can only be determined by a court of law. C. the adjuster does not hold a "punitive damages" certification. D. only the insurer himself can negotiate punitive damages, not an adjuster.
B. punitive damages can only be determined by a court of law.
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. up to $500 per tree.
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
C. $300,000
Graham has an auto liability policy with limits of 30/60/25. While heading to the grocery store, Graham turns onto 2nd street and slams into a stopped vehicle. The driver of the car, Jeremy, is not hurt, but Graham has totaled Jeremy's $30,000 SUV. How much, if any, of the damages will Graham have to pay out of pocket? A. $1,000 B. $30,000 C. $5,000 D. $0
C. $5,000
As an adjuster for ABC Insurance, what should be Bob's ultimate goal when he's adjusting a claim? A. Closing the claim as quickly as possible B. A settlement that favors ABC Insurance C. A fair and just settlement D. A settlement that favors the claimant
C. A fair and just settlement
Which of the following could be covered by a homeowners policy? A. A home used as a shelter by the local community B. A multi-family townhome housing five families C. A large home currently under construction D. A home that has been converted into a veterinary clinic
C. A large home currently under construction
Julio has filed a claim for fire damage to his home, but he is worried that his insurer may not cover the loss. When the insurance adjuster has finished investigating and evaluating the damage, she tells Julio that his loss is covered. However, he remains skeptical and wonders aloud whether the insurer will feel the same way as she does. The adjuster quickly assures Julio that he does not need to worry about that. Why might she be so sure of herself? A. She is wrong to speak with confidence, because the claim should be reviewed by the insurer before deciding if loss is covered. B. As the adjuster, she is responsible for making the claimant happy, regardless of the outcome. C. As the insurer's fiduciary agent, she has the authority to make decisions on behalf of the insurer. D. As a fiduciary agent, she is only responsible for reporting the outcome of the claim once an executive has made a final decision about it.
C. As the insurer's fiduciary agent, she has the authority to make decisions on behalf of the insurer.
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.
C. Check if the current month's premium had been paid at the time of loss.
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
C. Civil unrest
A third party is injured on your property. Which part of a homeowners policy provides coverage for their medical expenses? A. Coverage D B. Coverage A C. Coverage F D. Coverage C
C. Coverage F
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.
C. Guilt must be proved beyond a reasonable doubt.
"We will provide the insurance described in this policy in return for the premium and compliance with all applicable provisions of this policy." In which section of the insurance policy would this statement be found? A. Definitions B. Declarations C. Insuring Agreement D. Endorsements
C. Insuring Agreement
Shanice has a DP-1 policy insuring her house. After a storm causes damage to the roof, Shanice learns that changes to the construction code regarding roofing materials will increase the cost of repairs. Which additional coverage can help Shanice with the increased costs due to the new building codes? A. Ordinance or Law B. Additions and Alterations C. None D. Reasonable Repairs
C. None
Clark lost power to his home when a windstorm blew the roof off of his house. As a result, he lost several hundred dollars worth of meat that he was keeping in a freezer in his basement. Which homeowners coverage might indemnify Clark for the loss of his meat? A. Reasonable Repairs coverage B. Consequential Loss coverage C. Personal Property coverage D. Property Removal coverage
C. Personal Property coverage
Terry is renting half of a duplex. During a severe storm, lightning strikes a tree in the front yard and causes a large portion of the tree to fall on Terry's side of the duplex. Which of the following losses will be covered by Terry's Homeowners 4 policy? A. Removal of the tree and debris will cost hundreds of dollars. B. Terry's roof and front wall were damaged when the tree fell on the house. C. Terry's TV and entertainment system were damaged when the tree fell through the roof. D. Terry's attached carport was damage when the tree ripped it from the side of the house.
C. Terry's TV and entertainment system were damaged when the tree fell through the roof.
What is the best reference for reconstructing the details of a claim? A. The claimant B. An eyewitness C. The claim file D. The insured who was present
C. The claim file
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.
C. The policyholder must complete a driving safety course.
Jason's auto policy states that the insurer may cancel coverage if Jason pays a premium more than 30 days late. However, Jason is currently more than 30 days late, and has been so five times in the last year, and his insurer has done nothing about it. When Jason gets into an accident and files a claim, which of the following would be true? A. The principle of utmost good faith prevents the insurer from denying coverage in this case. B. The principle of utmost good faith allows the insurer to deny coverage in this case. C. The principle of estoppel prevents the insurer from denying coverage in this case. D. The principle of estoppel allows the insurer to deny coverage in this case.
C. The principle of estoppel prevents the insurer from denying coverage in this case.
Sandra rear-ended Randy's car when he stopped quickly for a yellow light that she was sure they were both going to make. The damage was minor, but Sandra was worried her premiums would increase if the accident was reported, so she gave Randy $500 in an effort to keep it just between the two of them. However, Randy filed the claim with his insurance company and received a settlement check for $750. What has Randy violated? A. The principle of insurable interest B. The principle of subrogation C. The principle of indemnity D. The principle of loss minimization
C. The principle of indemnity
In the context of insurance adjusting, who is the principal? A. The claimant B. The insurance broker C. The source of the adjuster's authority D. The Director of Insurance
C. The source of the adjuster's authority
Will has a Personal Auto Policy. Which of the following cars would qualify for coverage as a "temporary substitute" under Will's policy? A. Will borrows his neighbor's car for a week. B. Will buys a new pickup to replace his old car. C. Will rents a car while his car is in the shop. D. Will rents a car for a road trip up to Maine.
C. Will rents a car while his car is in the shop.
Zach totaled 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.
C. Zach will only get the $65,000, because the offer of $70,000 was inadmissible in court.
In an insurance contract, exclusions can be used for all of the following reasons, EXCEPT: A. manage moral and morale hazards. B. eliminate duplication of coverages. C. add coverages that need special treatment. D. lower premiums.
C. add coverages that need special treatment.
A hailstorm moves over Erin's restaurant. Large hailstones break through a cracked skylight, and water pours in and damages the flooring in the restaurant. Additionally, the electrical system in the building shorts out, and Erin has to close the restaurant for three days. The restaurant's income lost because of the physical damages would be considered: A. the proximate cause. B. a direct loss. C. an indirect loss. D. a physical hazard.
C. an indirect loss.
In a third-party claim, the injured person has a duty to: A. accept any settlement offered by the insurer. B. join the insurer in a lawsuit against the insured. C. authorize the insurer to examine her medical records. D. rectify the situation which directly caused the injury.
C. authorize the insurer to examine her medical records.
When Nancy was pulling into her driveway, she accidentally hit the gas and plowed through the front wall of her house and into her living room, causing $22,000 in damages to her home. Unfortunately for Nancy, the adjuster denies her claim because the cause of loss is excluded from coverage. Nancy tries to negotiate with the adjuster, but she is unsuccessful. This is because: A. adjusters do not have the authority to negotiate with claimants. B. the difference in dollar amounts is too great. C. coverage is not negotiable. D. the adjuster is trying to save the insurer from paying any claims.
C. coverage is not negotiable.
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. establish a claim reserve.
Part D of the Personal Auto Policy does NOT cover: A. earthquake. B. wind. C. freezing. D. explosion.
C. freezing.
Stephanie is in the process of adjusting George's auto claim. Currently, she is trying to close the claim, but George is being uncooperative. He disagrees with the settlement amount that Stephanie has offered and is demanding much more. At this point, Stephanie should do all of the following, EXCEPT: A. acknowledge and address George's concerns. B. provide a step-by-step justification for her decision. C. give George her supervisor's phone number so he can escalate his complaint. D. explain in clear terms how she arrived at this amount.
C. give George her supervisor's phone number so he can escalate his complaint.
Natalie's brakes have been squealing for several months. Every time she drives her car, she's reminded that she needs to have them replaced, but she forgets all about it as soon as she gets out of the car. Natalie's actions can be considered a: A. physical hazard. B. peril. C. morale hazard. D. risk.
C. morale hazard.
A retail store institutes a training program for all cashiers, to help them identify and deter shoplifters. This is an example of: A. risk avoidance. B. risk transference. C. risk reduction. D. risk retention.
C. risk reduction.
A few weeks ago, Grace's garage was destroyed by an out-of-control motorist named Zach. Fortunately, Zach had sufficient liability insurance to cover the damages, but Zach's insurer is giving Grace the runaround negotiating the claim. Grace finally files a complaint, forcing Zach to: A. issue a judgement. B. pay Grace more than her garage is worth. C. submit an answer. D. pay the claim in full.
C. submit an answer.
A hail storm damaged Jim's roof and windows. The adjuster finds the total in covered damages to be $13,000, but Jim is convinced that he should be covered up to $25,000. Direct adjuster/claimant negotiation will probably not be possible in this situation because: A. there is no way to prove that hail damaged the roof. B. Jim has a 3% percentage deductible. C. the difference between the two dollar amounts is too great. D. Jim is seeking punitive damages.
C. the difference between the two dollar amounts is too great.
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 coverage limit.
C. the perils insured against.
Melinda's home sustained $6,500 in damage when Jared ran into it with his truck. Melinda received $6,500 from her insurance company, and Jared also paid her $5,000. Melinda has now profited from this loss and is in violation of: A. the principle of subrogation. B. federal law. C. the principle of indemnity. D. state law.
C. the principle of indemnity.
Jacob accidently veered off the road and ran into the boat his neighbor Eric has parked in front of his house, causing Eric $3,000 in damage. Jacob's auto policy has a $500 collision deductible. How much will Jacob's auto policy pay Eric? A. $3,000 under physical damage coverage B. $2,500 under UM/UIM coverage C. $2,500 under collision coverage D. $3,000 under liability coverage
D. $3,000 under liability coverage
A tree falls onto Melissa's house, damaging the roof and front porch. This peril is covered by her policy, and the damages fall well within the policy limits. Melissa has proven the damages, and the adjuster's investigation came within $100 of Melissa's claim. Of the following options, which course of action best describes how the adjuster should respond to the claim? A. Let a court of law settle the claim. B. Negotiate a settlement with Melissa. C. Reject Melissa's request and deny the claim. D. Accept Melissa's request and pay the claim.
D. Accept Melissa's request and pay the claim.
After a hail storm passed through his neighborhood, Perry had his roof inspected by a local contractor. The contractor gave Perry an estimate of $9,850 to replace his roof, so he filed a claim with his insurer. The adjuster came up with her own estimate of $9,645 to replace Perry's roof. How will the adjuster likely respond to Perry's request? A. Negotiate the claim in attempt to get Perry to agree to the lesser amount. B. Let the claim go to court because it is non-negotiable. C. Reject the claim because the amount of the adjuster's estimate is the limit that the insurer will pay. D. Accept his request, since the difference between the two amounts is small enough to settle in Perry's favor.
D. Accept his request, since the difference between the two amounts is small enough to settle in Perry's favor.
Larry disagrees with the adjuster's estimate to repair his damaged property. So, he and his insurer have each chosen a representative, and the representatives have mutually decided upon an umpire. If at least two of these three individuals agree upon a settlement amount, 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. Appraisal
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
D. Arbitration
Joanne sells her house to her sister, Dianne. To save Dianne the trouble of finding her own homeowners policy, Joanne calls up her insurance company and tells them that Dianne bought her house and any future claim settlements should be paid to Dianne. Joanne's insurer tells her that they can't do that because of which condition? A. Additional Insured B. Control of Property C. Liberalization D. Assignment
D. Assignment
Tom is an experienced insurance agent looking for a new job where he works for one insurer and has the responsibility of training and supervising other agents. Which of the following would best fit the type of job Tom is looking for? A. Captive Agent B. Independent Agent C. Direct Writer D. General Agent
D. General Agent
Jim is completely "upside down" financially on his car. He owes the finance company $8,000. If he sells the car, he knows he'll only get about $4,000 for it. But Jim knows that if the car was somehow stolen, his insurance company would pay him somewhere in the neighborhood of $7,000. Jim decides to have a friend steal the car and "make it disappear." Jim then files a claim with his insurance company to report his car stolen. Which best represents Jim's actions? A. Concealment B. Factual misrepresentation C. Soft fraud D. Hard fraud
D. Hard fraud
What kind of adjuster is not contracted by any particular company, can work for multiple insurers at once, and is paid by fee schedule, daily rate, time and expense, or commission? A. Public adjuster B. Staff adjuster C. Emergency adjuster D. Independent adjuster
D. Independent adjuster
Coverage E refers to which part of a HO policy? A. Other Detached Structures B. Dwelling C. Conditions D. Personal Liability
D. Personal Liability
Rebecca has Collision coverage in her Personal Auto Policy. After a collision, the adjuster determines that Rebecca's car is totaled. How much is Rebecca likely to receive from her insurer (ignoring the deductible)? A. An amount equal to the price of a current year's model of her vehicle B. An amount equal to the total cost of repairs plus the salvage value of her vehicle C. The value of a current vehicle that is functionally equivalent to her vehicle D. The actual cash value of her vehicle
D. The actual cash value of her vehicle
What does it mean when we say an insured dwelling in New Hampshire is unoccupied? A. The insured is occupying less than 31% of the available square footage. B. Neither the insured nor his possessions are in the dwelling. C. The insured is in the dwelling, but his possessions are not. D. The insured is not in the dwelling, but his possessions are.
D. The insured is not in the dwelling, but his possessions are.
Sine Nomine insurance exists in order to generate a profit. Based on this information, we can conclude that Sine Nomine is: A. a reciprocal insurer. B. a captive insurer. C. a social insurance program. D. a private insurer.
D. a private insurer.
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.
D. coverage for both bodily injury and property damage to a third party for which the insured is legally liable.
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.
D. loss of rental income after damage to a rental unit has been fixed, but no new renter has been found.
Liability limits in a Personal Auto Policy are applied: A. per insured and per accident. B. per person and per vehicle. C. per claim and per insured. D. per person and per accident.
D. per person and per accident.
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. the proximate cause of the loss.
