Florida Claims Adjuster Exam
Compare/contrast different types of adjusters.
1. Independent Adjuster - self-employed and not affiliated with either insurers or bureaus 2. Company/Staff Adjuster - salaried employee under supervision of home, branch, regional claims department of insurers 3. Public Adjuster - represents the financial interests of the insured named in the policy 4. Claims Adjuster - one who is involved in the investigation, adjustment, negotiation and/or trial preparations of claims arising under insurance policies 5. Bureau Adjuster - agent of adjustment bureau which serves multiple company clients *Independent and Bureau are both "Fee Adjusters"
What are the basic PIP benefits?
1. Medical; 80% of reasonable expenses are paid for necessary medical, surgical, x-ray, dental, and rehab services 2. Work Loss; 60% of any loss of gross income and loss of earning capacity is reimbursed 3. Replacement Services; 100% for cost of having household services performed by others which the injured person would have normally performed 4. Death; $5,000 IN ADDITION to the $10,000 in medical/disability benefits afforded by PIP
What are the penalties for not complying with the *No-Fault Law*? (3) (Hint: I L S)
1. Owner is *denied immunities* from legal liabilities that are granted to those who comply 2. Owner is *personally liable* for payment of PIP benefits to those entitled 3. Owner's driver's license and vehicle registration are subject to *suspension*
Under Mechanical Breakdown Coverage, *new cars are eligible for service up to:*
36 Months/36,000 Miles Used vehicles: 12 Months/12,000 Miles
The Department may issue a nonrenewable temporary license authorizing the appointment of a general lines insurance agent, life agent, or an industrial fire or burglary agent, for a period not to exceed:
6 Months
What is the coinsurance clause and how might it apply to a given scenario?
A coinsurance clause on a property policy requires the policyholder to carry, at minimum, a specified percent of the dwelling's replacement cost. Failure results in monetary penalty. Almost without exception, the percentage is 80% in coinsurance clauses of homeowner policies - this means the insured should carry 80% of replacement cost if they don't want to be penalized at the time of loss.
What are the requirements for continuing education for a 6-20 license?
A licensed General Lines Claims Adjuster is required to complete 24 hours of education every 2 years.
What is the time frame for a Non-Renewable Temporary License?
A period not to exceed 6 months
Warranty
A policy condition, either based on information in the insured's application or inserted by the insurer
Negotiation
A quality settlement based on facts discovered during the evaluation process
Fiduciary
A relationship that requires maintenance of a high degree of fidelity and loyalty to the interests of the principal, whether or not the adjuster is a direct employee
Under a Commercial General Liability Policy, a basic limit of __________ per person applies to Medical Payments:
$5,000
What are the thresholds of the No-Fault Law?
(1) Significant and permanent loss of a bodily function, or (2) Permanent injury other than scarring and disfigurement, or (3) Significant and permanent scarring or disfigurement, or (4) Death.
HMO (pre-paid fixed fee)
(Health Maintenance Organization) Provides comprehensive health services to its members for a prepaid fixed fee equivalent to an insurance premium
PPO
(Preferred Provider Organization) Selected group of hospitals and medical practitioners in given area who have joined together in an effort to reduce medical costs
What types of insurance licenses are offered by the Department and how do they differ?
1. General Lines Agent 2-20: licensed to write property/casualty, surety or health insurance. 2. Customer Representative 4-40: must be licensed, appointed by a General Lines Agent and may assist in transactions in the OFFICE ONLY 3. Limited Customer Representative 4-42: must be licensed, appointed by a General Lines Agent and transact AUTO insurance in the OFFICE ONLY. 4. All Lines Claims Adjuster 6-20: investigates, Evaluates and Negotiates Claims
Under Employer's Liability, the minimum limits of liability are:
A. 100/100/500 $100,000 for all claims in each accident $100,000 per employee for disease $500,000 for all disease claims
Defaming a competitor company or agent is not only unprofessional, it can also result in a license suspension. A. True B. False
A. True
The process of disposing of an insurance claim is defined as:
Adjusting Also "the negotiation period that results in an agreement"
Relieving the financial burden on the claimant by making certain payments to the claimant even before the claim can be negotiated is defined as:
Advanced Payment
Which of the following is not one of the rating factors for a Homeowner's Policy?
Age & Gender of Insured
Under Workers Compensation, Employers Liability includes: A. Claims by others for the liabilities to insureds employees B. Claims by relatives of injured employees for consequential damages C. Claims made by employees that are not subject to Workers Comp Laws D. All of the Above
All of the Above
Which of the following are reasons for refusal, suspension or revocation of a license or appointment? A. Lack of Qualifications B. Failure to Pass State Examinations C. Fraudulent or Dishonest Practices D. All of the Above
All of the Above
Under Workers Compensation, Part Four Your Duties if Injuries Occur, an employer is required to: A. Provide the names/addresses of injured persons and witnesses B. Promptly provide any legal papers C. Cooperate and assist as insurer requests D. All of the Above
All of the Above Also included: immediate contact with insurer, providing immediate medical or other services, do nothing to interfere with insured's right of recovery, make no voluntary payments or assume any obligation except at employer's own cost.
This form of bond is required to accompany a bid for a contract which will require that the successful bidder furnish further bond if awarded the job:
Bid
Protects against *loss of business income* that results from damage to covered property from a covered cause of loss. (BIIC)
Business Income Insurance Coverage Period of restoration begins 72 hours after date of direct damage. In effect, coverage has a 72 hour deductible. Coverage ends on either 1. date when damaged property could be repaired, rebuilt, or replaced 2. date business resumes operations at new, permanent location (whichever comes first)
Estoppel
An equitable principle to the effect that if one intentionally or unintentionally creates the impression that a certain fact exists, an innocent party relies on that impression and is damaged as a result, the guilty party may be legally prohibited (estopped) from asserting that the fact does not exist.
Junk
Any material which is or may have been a motor vehicle or mobile home, with or without all component parts, which is inoperable and which material is in such condition that its highest or primary value is either in its sale or transfer as scrap metal
Who might have an insurable interest in a property?
Anyone who would suffer an economic loss from an adverse happening to the property
The authority given by an insurer or employer to a licensee to transact insurance or adjust claims on behalf of an insurer or employer is defined as:
Appointment Licensees are given authority through the appointment process
Appointment
Authority given by an insurer or employer to a licensee to transact insurance or adjust claims on their behalf
One who is duly authorized by a subsisting certificate of authority issued by the department to transact insurance in this state. This is defined as a(n):
Authorized
The measure to determine disability benefits is the __________ of the employee at the time of injury:
Average Weekly Wage Disability - incapacity due to injury to earn same or any other employment wages that employee was receiving at time of injury.
A policy may contain a provision which states a period of time between issuance and acceptance before sickness benefits begin. This is defined as: A. Waiting Period B. Elimination Period C. Both A & B D. None of the Above
C. Both A & B This helps keep premiums reasonable by eliminating chance of persons buying coverage only when they are sick
Under the Florida Unfair Insurance Trade Practices Act, penalties are provided for misrepresentation of business practices, which include all of the following except: A. Failing to act promptly B. Failure to explain claim denials in writing C. Denying claims with reasonable investigation D. Failure to maintain complaint handling procedures
C. Denying claims with reasonable investigation
A General Lines Claim Adjuster is required to obtain the same number of Continuing Education hours as a licensed Customer Service Representative. A. True B. False
B. False
Once a Customer Representative 4-40 has been licensed and appointed for at least 3 years, he or she may transact insurance in the home of an existing customer. A. True B. False
B. False
What is the PIP Death Benefit amount?
Effective 1/1/13, the death benefit will be $5,000 IN ADDITION to the $10,000 in medical and disability benefits afforded by PIP. Example: Joe is seriously injured in an accident and incurs $50,000 in medical bills. He passes away a few days later. PIP would pay its maximum amount of $10,000 and, in addition, pay an extra $5,000 for death benefit.
Evaluation
Establishing a dollar value on a claim. Determines the fair payment in accordance with the contract and applicable law
Establishing a dollar value on a claim is defined as:
Evaluation For bodily injury and uninsured motorist claims, a settlement range will be set rather than a single dollar amount
Covers for all types of property, when surrendered away from the premises as a result of a threat to do bodily harm to the insured or an employee, or to a relative or invitee of either, who is (or allegedly is) being held captive. This is defined as:
Extortion Also triggered by threats to damage the premises or property within the premises.
Established in 1973, this association was created for applicants who are unable to obtain insurance in the private market:
FAJUA
Passed during a legislative session in 1993, this association was created for employers who cannot obtain workers compensation insurance in the private market:
FWCJUA
A relationship that requires maintenance of a high degree of fidelity and loyalty to the interests of the principal, whether or not the adjuster is a direct employee is defined as:
Fiduciary Should always be maintained whether or not the adjuster is a direct employee
The assertion of an alleged legal right against an insurer, which carries with it a demand for appropriate relief, is defined as:
Claim
One who is involved in the investigation, adjustment, negotiation and/or trial preparations of claims arising under insurance policies is defined as:
Claims Adjuster
An adjuster who is a salaried employee under the supervision of the home, branch, or regional claims department of insurers is defined as a(n):
Company or Staff Adjuster
What perils are covered by Comprehensive Coverage? Does the deductible apply to them all?
Comprehensive Coverage applies to damage not caused by collision (an animal runs into your vehicle, hail damages your hood, glass claims, etc.) In Florida, windshields are replaced for free and you ARE NOT responsible for paying a deductible.
Identify examples of peril.
Fire, windstorm, flood after hurricane, etc. (something that causes a loss)
What associations make up Citizens Property and Insurance?
Florida Residential Property and Casualty Joint Underwriting Association (FRPCJUA) and Florida Windstorm Joint Underwriting Association (FWUA)
Bid
Form of bond required to accompany a bid for a contract which will require that successful bidder furnish further bond if awarded job. Agreement to fulfill a contractual obligation used frequently in construction and supplying goods
May act as part of the bonding party and agrees to reimburse the surety for any loss it may suffer from having bonded the principal:
Indemnitor
An adjuster who is self employed and not affiliated with either insurers or bureaus is defined as a(n):
Independent Adjuster
What are the components that make up the investigation process?
Inquiry, verification, comparison
Severability
Insurance applies separately to each insured as if other insureds did not exist.
What is an Insurance Contract?
Insurance is a contract whereby one undertakes to indemnify another or pay or allow a specified amount or a determinable benefit upon determinable contingencies
Foreign
Insurer formed under laws of another state, district territory, or commonwealth of U.S.
Domestic
Insurer formed under laws of this state
Alien
Insurer other than domestic or foreign (outside U.S.)
What are the characteristics of a Personal Automobile Policy Declaration page?
Liability (bodily injury), property damage, uninsured motorist, medical payments, PIP, collision deductible, comprehensive deductible, towing coverage, and rental coverage
An individual representing an insurer as to life insurance and annuity contracts, including agents appointed to transact life insurance, fixed-dollar annuities, or variable contracts by the same insurer is defined as:
Life Agent
Value Reporting
Limit of coverage set at an amount higher than expected peak values
Must be licensed, appointed by a General Lines Agent and can transact AUTO insurance only in the Office Only.
Limited Customer Representative 4-42
A customer representative appointed by a general lines agent or agency in transacting only the business of private passenger motor vehicle insurance from the office of that agent or agency is defined as:
Limited Customer Service Representative
A written statement given by the insured to the insurer acknowledging that money received in the settlement of damages is received, not as a final payment, but as an advance pending an outcome of a claim against the person responsible for the damage. This is defined as a(n):
Loan Receipt Enables insurer to bring an action for recovery against a third party
What are the features of Major Medical Insurance?
Major Medical Insurance is intended to afford protection against catastrophic losses. Some forms are designated to supplement basic hospital/surgical policies; others intend to provide both basic and catastrophic coverage These policies are characterized by a deductible, high maximum limit, and percentage participation or coinsurance. It may contain internal limits for hospital daily room charge and surgical services.
When investigating liability insurance claims, which of the following three major elements are determined: (CLD)
Coverage Liability Damages
Umbrella Policy
Covers much higher limit and goes above/beyond claims directly relating to home and auto; protects assets from unforeseen events
Mechanical Breakdown Coverage
Covers repairs to mechanical parts of your vehicle that break; even covers in events not related to an accident
An individual appointed by a general lines or agency to assist that agent or agency in transacting the business of insurance from the office of that agent or agency is defined as:
Customer Representative (4-40 license)
The principle of utmost good faith on which an insurance contract is based places serious responsibilities on the claims adjuster in regards to: A. Conduct B. Work Habits C. Claim Handling Activites D. All of the Above
D. All of the Above
Which of the following are characteristics of a License Bond? A. To guarantee the licensee will act according to laws B. Protect public from unfair business practice C. Proper collection and payment of taxes D. All of the Above
D. All of the Above
Which of the following are considered unfair methods of competition and unfair or deceptive acts or practices: A. False Statements B. Unfair Discrimination C. Unlawful Rebates D. All of the Above
D. All of the Above
An applicant for a license as an adjuster may qualify as an adjuster in the following fields (but not limited to): A. All lines of insurance except life and annuities B. Property and Casualty C. Workers Compensation Insurance D. All of the Above
D. All of the Above Also: motor vehicle physical damage and health insurance
The adjusters basic activities in claims handling are: A. Investigation B. Evaluation C. Negotiation D. All of the Above
D. All of the Above Investigation - establish coverage, determine liability, verify damages qualify Evaluation - determine fair payment in accordance with contract and law Negotiation - settlement based on facts discovered during evaluation
Which of the following are not considered to be an adjuster: A. Employee or Staff Adjuster B. Independent Adjuster C. Public Adjuster D. General Lines Adjuster
D. General Lines Adjuster Bureau Adjusters are also considered adjusters.
Express Waiver
Occurs when insurer or its representative knowingly gives up a known right under insurance contract
Known Loss
Prevents insured from coverage if insured knew the loss was probable at time of contract
One who undertakes to perform, to fulfill a contract or to meet an obligation is known as:
Principal Obligee - needs guarantee principal will perform Surety - guarantees performance between principal and obligee
Mortgagee Clause
Protects a lender who has an insurable interest in a home Grants special protection for the interest of a mortgage named in the policy; setting up a separate content between insurer and mortgagee
Employee Theft
Provides coverage for loss or damage to money, securities, and other property resulting from theft committed by an employee
Loss Payee Clause
Provides, in event of payment being made under the policy in relation to insured risk, that payment will be made to a third party rather than the beneficiary
An adjuster who represents the financial interests of the insured named in the policy is defined as a(n):
Public Adjuster
Which of the following forms is "all-risk" on the dwelling policy?
DP-3, or the Special Form
Salvage
Damaged property that may be retrieved, reconditioned and sold to reduce an insured loss. Motor vehicle or mobile home is a total loss
The Commercial General Liability __________ identifies the named insured and address, states the policy period and premium and miscellaneous information about the insured, and specifies the limits of coverage that apply.
Declarations
Any material which is or may have been a motor vehicle or mobile home, which is inoperable and which material is in such condition that its highest or primary value is either in its sale or transfer as scrap metal or for its component parts, or a combination of the two. This is defined as:
Derelict
Waiver
Voluntary relinquishment or surrender of some right or privilege
The voluntary or intentional relinquishment of a known right is defined as a(n):
Waiver The law recognizes two types: express and implied.
This optional provision states that if the insured becomes totally disabled, premiums are waived but the coverage remains in force
Waiver of Premium
Damaged property that may be retrieved, reconditioned and sold to reduce an insured loss is defined as:
Salvage Efficient disposal of salvage reduces amount of loss to either insured or insurer
A motor vehicle or mobile home which is a total loss is defined as:
Salvage It cannot be restored to prior condition
Sliding
Selling an item and stating that it is required by law
Charging an applicant for a specific ancillary coverage or product, in addition to the cost of the insurance coverage provided for, without the informed consent of the applicant is a practice of:
Sliding
Commercial Property Insurance
Sometimes referred to as Commercial Fire and Allied Lines; Covers direct and indirect losses related to properties other than 1-4 family dwelling and farm properties
The following are classes of disability, except:
Temporary Full Also included: Temporary Partial
Who administers the Financial Responsibility Law?
The Department of Highway Safety and Motor Vehicles
Under Crime Insurance, losses must be discovered within 1 year. This is defined as:
The Discovery Period
Actual Cash Value
The Loss Settlement Valuation that subtracts an allowance for depreciation
The Business Automobile Policy includes all of the following coverage forms except:
The Trailer Interchange Coverage Form
What do the Declarations of a policy outline?
The declarations identifies the named insured and address, states the policy period and premium and miscellaneous information about the insured, and specifies the limits of coverage that apply
Duties and functions of the Department of Financial Services include all of the following except: A. Approve the issuance of licenses B. Rating and underwriting rules C. Claims Supervision D. Investigate charges of unethical behavior
Rating and underwriting rules
Actual Cash Value
Replacement cost minus depreciation
Characteristics of an *HMO plan* usually include: (HINT: S F P B C)
S - Small of non-existent Deductibles F- Fewer Exclusions P - Insurance services to members through employed physicians B - Broad coverage C - Coinsurance provisions
What is the Florida Unfair Insurance Trade Practices Act?
Under this Act, penalties are provided for misrepresentation of business practices including: -Failing to act promptly -Failure to affirm or deny a claim when an insured is entitled thereto -Failure to explain claim denials in writing -Failure to maintain complaint-handling procedures, such as keeping accurate records of complaints
Subrogation
When an insured has a right to collect damages from another party but elects to claim damages under his/her insurance policy; rights transfer to the insurer
When can Other-Than-Collision (Comprehensive Coverage) be used?
When there is damage to your vehicle not caused by a collision (hail storm damages hood, animal runs into car, windshield replacement)
What is the website for the Florida Department of Financial Services?
www.myfloridacfo.com
Frank has a not-at-fault accident, he has basic PIP, no deductible and Med pay of $5,000. How much will his Med Pay contribute to medical bills of $15,000?
$5,000 Medical Payment limits apply per person; Frank will receive full amount towards medical bills.
Personal Injury Protection, or PIP, has a __________ per person, per accident limit.
10,000
A licensed General Lines Claim Adjuster is required to complete how many hours of continuing education every two years?
24
As to required proof for future accidents by purchase of auto liability insurance, the insurer must make a filing (Form SR-22) certifying that coverage is in effect, and this certification must remain on file for __________ years
3
Liberalization states, "The insured gets the benefit of any broadened coverage if the company, within __________ days of inception, adopts a form revision that is broader and without increase in premium."
45 days
Provides coverage for expenses, including loss of income, arising from an accident. This is defined as?
Accident Insurance Typical exclusions would be: hernia, war, disease and bacterial infections, suicide attempts, air travel injuries, accidents while committing felony, accidents while under the influence
Used only for Commercial Condominiums, it covers the unit-owners business personal property and the personal property of others in the insured's care, custody or control:
Condominium Unit Owners Form
All of the following are eligible for a Homeowner's Policy, except? A. An apartment tenant B. A condominium owner C. Four-family dwelling owner-occupant D. A business condo owned by a local insurance company
D. A business condo owned by a local insurance company Commercial property is not eligible for a Homeowner's policy.
Employee Theft Coverage may be written in the following ways: A. Scheduled Persons Coverage B. Scheduled Position Coverage C. Blanket Coverage D. All May Apply
D. All May Apply Employee Theft may be written in three ways.
Which of the following can be found in a Commercial General Liability Contract? A. Declarations B. Common Policy Conditions C. Occurrence and Claims-Made Forms D. All of the Above
D. All of the Above Also included: Nuclear Energy Liability Exclusion endorsement (other endorsements may be attached)
Which of the following are characteristics of Homeowner's Insurance? A. Protects against economic loss to residences and household property and legal liabilities B. Owner-occupants of 1-4 family dwellings C. Renters who maintain residential occupancy in any type of building D. All of the Above
D. All of the Above Also included: personal, non-business risk, no more than 2 roomers/boarders, condominium unit owners and cooperative apartment occupants
Which of the following are parties to a Bond? A. Principal B. Obligee C. Surety D. All of the Above
D. All of the Above Principal - undertakes to perform/fulfill Obligee - guaranteed principal will perform Surety - guarantees performance *Indemnitor - may act as additional party; agrees to reimburse surety for any loss
Under Crime Insurance, the insured is covered for loss by: A. Theft B. Burglary C. Robbery D. All of the Above
D. All of the Above Unless the loss is specifically excluded or limited
Any loss discovered during the policy period or within 60 days after its expiration (one year after expiration for losses connected with employee benefit plans) is covered regardless of when it occurred. This is defined as:
Discovery If XYZ restaurant discovers stolen goods taken over a year ago, this is within 2 years of inception date and found within policy period so it's covered.
After pleading guilty or no contest to a felony, a licensed individual has _________ days to inform the Department?
30
Every licensee shall notify the department, in writing, after a change of name, residence address, principal business street address and/or mailing address within how many days?
30
What are the benefits under the Workers Compensation Law?
-Medical Expenses: needed medical treatment with no dollar limit -Disability Benefits: compensation for wage loss -Death Benefits: if death results within one year of accident or, if it follow continuous disability, within five years after the accident
Which parties are associated with a bond?
-Principal: one who undertakes to perform, fulfill a contract, or meet an obligation -Obligee: one who is guaranteed that the principal will perform -Surety (Bonding Company): guarantees performance -Indemnitor: may act as additional party at times; agrees to reimburse the surety for any loss it may suffer from having bonded the principal
What are the characteristics of a Homeowner's policy?
-protects against economic loss to residence and household property and legal liabilities -owner/occupants of 1-4 family dwellings -renters who maintain residential occupancy in any type of building -other structures (not permanently attached)
There is __________ coverage for injury, damage or clean-up costs caused by pollutants, subject to minor exceptions.
0%
An applicant for a temporary license must be:
1. A natural person at least 18 years of age 2. A US citizen or legal alien
How long does one have to notify the Department of Financial Services for a name and/or address change?
30 days
What are some reasons for suspension, revocation, or termination of a license?
1. Transacting insurance outside of scope of one's license ►For example, an individual cannot sell life insurance if he or she has a Customer Service license but has not obtained a life license. 2. Misrepresentation or Fraud. 3. Participating in unfair methods of competition. ►Using discriminatory practices, making false entries on an insurance application or defaming others. 4. Sliding: Selling an item and stating that it is required by law (when it is not). 5. Demonstration of unworthiness or lack of fitness. 6. Misappropriation of funds. 7. Failure to inform Department of Financial Services, within 30 days, after pleading guilty or no contest to a felony.
What are the minimum requirements for the Financial Responsibility Law? (there are two)
1. legal valid claims of others must be satisfied up to the 10/20/10 requirements 2. owner/operator must provide certification of financial responsibility for future accidents
What are some examples of transacting insurance?
1. solicitation and inducement 2. preliminary negotiations 3. effectuation of a contract of insurance 4. transaction of matters subsequent to effectuation of contract of insurance 5. mailing or otherwise delivering written solicitation to any person in this state by an insurer or any person acting on their behalf for fee or compensation
How many continuing education hours must an insurance adjuster complete every 2 years?
24
All of the following are requirements for the "Code of Ethics," except: A. Adjusters should not give legal advice B. Adjusters may negotiate with a claimant who is represented by an attorney C. A witness who requests a copy of a statement given must be provided with one D. Adjusters will keep an unprejudiced and open mind
B. Adjusters may negotiate with a claimant who is represented by an attorney Adjusters MAY NOT. Bad, adjuster, bad!
What are the Code of Ethics for adjusters?
Formal rules which impact on adjuster practices 1. Adjusters may not directly negotiate with a claimant who is represented by an attorney. 2. In interviewing witnesses, adjusters must avoid any actions tending to induce a suppression or deviation from the truth. A witness who requests a copy of a statement given must be provided with a copy. 3. Adjusters shall not give legal advice. 4. Adjusters shall not draft special releases; they are permitted only to fill in blanks of forms provided by the insurer. 5. Adjusters will not take advantage of an incapacitated claimant which would be to the detriment of the claimant. 6. Adjusters will not knowingly fail to advise claimants of their rights under contracts and laws of the state. 7. Adjusters will approach all aspects of the process with an unprejudiced and open mind, make truthful and unbiased reports, handle all processes with integrity and accept no remuneration other than that to which there is legal entitlement, and act with diligence and due dispatch in achieving proper disposition of claims. 8. The adjuster must put the duty for fair and honest treatment of the claimant above the adjuster's own interests, in every instance.
An agent who transacts any one or more of the following types of insurance: Property, Casualty, Surety, Marine, and Health is defined as a(n):
General Lines Agent
An agent representing a health maintenance organization, or as to health insurance only, an insurer transacting health insurance is defined as a(n):
Health Agent
The District of Columbia and any state or territory of the United States in which an insurance agent maintains his or her principal place of residence or principal place of business and is licensed to act as an insurance agent. This is defined as:
Home State
Other Structures
Homeowner's Policy, covers items not permanently attached to main dwelling (shed, fence, etc.)
Commercial Inland Marine
Identifies risks which are eligible for either ocean or inland marine insurance Developed as extension to Ocean Marine coverage to provide coverage for cargo traveling over land instead of by sea
Derelict
Material which is or may have been a motor vehicle or mobile home, with or without all component parts, which is inoperable and which material is in such condition that its highest or primary value is either in its sale or transfer as scrap metal or component parts or both
Implied Waiver
May result from some act of neglect on part of the adjuster
A lender has an insurable interest in a home and finds protection in the:
Mortgagee Clause Mortgagee - Homeowner's policy Loss Payee - Automobile policy
Liability
Negligence of the insured
Insurable Interest
One wherein economic loss would be suffered from an adverse happening to the subject.
How does PIP apply to pedestrians (in and out of state)?
PIP applies to Florida residents if struck by insured's motor vehicle while not occupying a self-propelled vehicle (a pedestrian). In situations wherein PIP does not apply, named insured and relatives occupying or struck by others vehicles out-of-state; nonresident passengers out-of-state; and nonresidents as pedestrians in Florida - The No-Fault Law has no applicability and usual legal remedies and other insurance coverage's are to be relied upon.
What is the difference between PIP and Workers Compensation? Which one is excess?
PIP is primary against all other forms of medical and disability insurance coverage. Florida courts have held PIP is excess over Workers Comp. To eliminate duplicate recoveries, the law prohibits persons who have received PIP from recovering same amounts from others in legal liability actions.
What is PIP and how may it apply to a given scenario?
Personal Injury Protection with limit of $10,000 per person, per accident If Jeremy has a not-at-fault accident and he has PIP with a $1000 deductible, he can expect PIP to pay $1,600 of his $3,000 medical bill. (3,000 - 1,000 = 2,000 x .80 = 1,600)
The adjuster's investigation may include all of the following except: A. Verification of Bills and Estimates B. Photographs C. Witness Canvasses D. Policy Cancellation
Policy Cancellation
When making any payment for damage to an automobile for a partial loss, the insurer shall have printed on the loss settlement, "Failure to use the insurance proceeds in accordance with the security agreement, if any, could be a violation of s.812.014, Florida Statutes." This is payment for a(n):
Third Party Claim
Under Inside The Premises - Robbery or Safe Burglary of Personal Property, a special limit of __________ per occurrence applies to articles whose principal value is precious metals, precious or semiprecious stones, pearls or furs, and to the physical or intrinsic value of manuscripts, drawings or records:
$5,000
Jeremy has a not at fault accident. If he has PIP with a $1,000 deductible, how much can he expect his PIP coverage to pay toward his medical bills that total $3,000?
$1,600 3000 (bills) - 1000 (deductible) = 2000 x .80 (eighty percent)
Under workers compensations, a rate is charged for every __________ of payroll to employees.
$100 The National Council on Compensation Insurance enforces this rating.
Which of the following are NOT a type of bond?
Apprentice Contract - fulfill obligation Fiduciary - make good to court for any deficiencies found in performance Court - protect opposing party from loss
Which of the following is not covered under Coverage C, Personal Property? A. A fire breaks out in the residence and an overnight guest loses his clothes in the fire B. A fish dies because he has been left alone for a week without food C. The insureds daughters tennis racket is stolen from her locker D. The insureds suitcase and clothing, valued at $1,500, are stolen from his hotel
B. A fish dies because he has been left alone for a week without food Animals are listed as an "exclusion" under a Homeowner's policy.
Unlike a Customer Representative, a General Lines Claim Adjuster need not be appointed with the Department of Financial Services. A. True B. False
B. False
When the basic liability limits provided by the policy are insufficient for an insureds needs, two coverage forms are used to provide the additional amounts of coverage: A. Excess Liability B. Umbrella C. Both A & B D. None of the Above
Both A & B
Used to cover buildings in the course of construction
Builders Risk Policy Includes: structure being built (including foundations), fixtures and machinery, equipment to service building, owned materials and supplies used for construction. Temporary structures built or assembled on site are also included if not covered by insurance.
Under Commercial Property Policies, Florida law requires an insurer to give the insured at least __________days advance written notice of non-renewal. A. 25 B. 90 C. 45 D. None of the Above
C. 45 Also, notice must state reasons the policy is not to be renewed.
Jeremy owns a home that is recently damaged due to a hurricane. The repair estimate is averaged at $25,000 and Jeremy decides to stay in a hotel because most of the damage is to his bedroom and kitchen. Under a Homeowner's Policy, what coverage will pay for the hotel room bill? A. Fair Rental Value B. Value Obligation C. Loss of Use D. Insurers Duties
C. Loss of Use The insurer will pay any necessary and reasonable expenses associated with a daily living routine.
A General Lines Agent instructs a licensed Customer Representative 4-40 to thoroughly cover the details of a new life insurance product with every Homeowner customer who calls or visits the office. The agent provides training on the new product. Although the Customer Representative does not have a Life License, he or she feels comfortable with the training and does as requested. Which of the following is true? A. This practice is acceptable if done in the office under supervision of General Lines Agent B. This practice is acceptable because adequate training and product knowledge was provided C. This practice is unacceptable and may result in the suspension or revocation of the Customer Representative's license D. This practice is only acceptable if the product training was certified by the Life Insurance Company
C. This practice is unacceptable and may result in the suspension or revocation of the Customer Representative's license
In 2002, the Florida Residential Property and Casualty Joint Underwriting Association (FRPCJUA) and the Florida Windstorm Joint Underwriting Association (FWUA), were combined to create:
Citizens
Applies only to a BI or PD which occurs on or after the retroactive date, and for which the claim is received or recorded by an insured or the company during the policy period:
Claims-Made Retroactive date is stated in Declarations and will normally be same date as issuing company's first claims-made effective date for insured.
First developed as an extension of Ocean Marine coverage, to provide coverage for cargo traveling over land, instead of by sea.
Commercial Inland Marine Coverage Definition: to help identify kinds of risks which are eligible for either Ocean or Inland Marine insurance.
The Commercial Property Contract includes all of the following, except: A. Common Policy Conditions B. Commercial Property Conditions C. Coverage Form D. Commercial Loss Schedule
Commercial Loss Schedule Also included: Declarations, Causes of Loss Form, Endorsements
Sometimes referred to as commercial fire and allied lines, this is the form of insurance that covers direct and indirect losses related to properties other than one-to-four family dwellings and farm properties:
Commercial Property Insurance (the question is the definition for this term)
This type of provision states the insurer can refuse to renew the policy only under certain conditions. The policy must state the conditions under which the policy will not be renewed. This is defined as?
Conditionally Renewable vs. Optionally: company may not cancel during term but reserves right to non-renew upon expiration vs. Guaranteed: insurer required to renew policy at stated age (typically 65); company reserves right to increase premium
Insures a condominium association against direct physical loss or damage to buildings, business personal property and personal property of others in the care, custody or control of the association and located at the premises:
Condominium Association Form This, along with Condo Unit Owners Form, is located under Condo Coverage.
Crime Insurance is _________ over any other Insurance coverage.
Excess A situation may arise where another form of insurance will pay claim - that insurance would be primary.
The Nuclear Energy Liability Exclusion endorsement, in general, __________ all hazards related to nuclear energy.
Excludes Firms involved in Nuclear activities receive protection from special insurer pools organized for that purpose.
An Insurance Company which is formed under the laws of the State of Illinois, and has its Home Office there, is considered a:
Foreign Company Domestic: this state (FL) Foreign: other state (still in US) Alien: elsewhere
Used to insure businesses engaged in selling, servicing, repairing, parking or storing automobiles:
Garage Coverage Form
A(n) __________ provides comprehensive health services to its members for a prepaid fixed fee, equivalent to an insurance premium.
HMO Referred to as an emerging and increasingly important non-insurance alternative to dealing with risk of health care costs
Define the coverage that pays a flat amount per day for hospitalization, regardless of expenses or other insurance:
Hospital Indemnity
Provides indemnification to the insured for basic hospitalization of room and board in the hospital, nursing care, laboratory fees, operating room, medical supplies, etc. This is defined as?
Hospitalization Expense Associated with a daily limit, not to exceed specified maximum
Toxic wastes escaped from a gas station disposal tank. The insured operator discovers the leak and cleans up the spill. Unfortunately, the waste quickly seeped into the ground and has caused illness among the residents of a neighboring community This is an example of?
Known Loss Insurer should have been notified and further investigation of the spill and effective clean-up would have been observed.
Cover only losses that both occurred and were discovered during the policy period, or within one year of its expiration. This is defined as:
Loss Sustained One exception to the rule is that Loss Sustained forms will also cover losses that occurred under previous (expired) crime policies and that were discovered during current policy year, as long as crime coverage had continued w/o interruption
When a person has *lost* stock certificates, bonds or similar instruments, a bond is generally required by the issuing company to reissue the document. This is known as a:
Lost Instrument Bond Also guarantees to save issuer from any loss growing out of lost instrument
The coverage that is intended to afford protection against catastrophic losses is defined as?
Major Medical Some forms designed to supplement basic policies; others provide both basic and catastrophic coverage
Samantha eats uncooked chicken at a local barbecue joint and becomes violently ill. Which of the following workers compensation benefits would pay for this occurrence? A. A products and completed operations form B. A premises and operations form C. An owners and contractors protective liability form D. None of the Above
None of the Above Samantha is not an employee of the barbecue joint; Workers Comp does not apply.
Applies to BI or PD which occurs during the policy period, regardless of any later time at which a claim is made:
Occurrence Form vs. Claims-Made: applies only to BI or PD occurring on or after retroactive date for which claim is received/recorded during policy period
On a Homeowner's Policy, covers items that are not permanently attached to the dwelling. This is defined as:
Other Structures Examples include sheds, fences, pool houses, detached car ports, etc.
Provides for loss of money and securities outside the premises in the care, custody and control of a messenger or armored car service resulting from theft, disappearance or destruction. This is defined as:
Outside the Premises Also covers robbery of other property under the circumstances.
A __________ is a selected group of hospitals and medical practitioners in a given area who have joined together in an effort to reduce medical costs.
PPO Most plans provide that emergency treatment will be paid even if treated party does not go to service provider on approved list.
This bond guarantees indemnification to the obligee for any losses resulting from the principal's failure to complete the contract work in accord with specifications:
Performance Considered a contract bond
An insured who wishes to purchase flood insurance, but is located in a moderate or low risk flood zone may do so by purchasing a:
Preferred Risk Flood Policy Although Flood Insurance is provided by the Federal Government, those who are not in a "flood zone" may purchase a preferred risk policy to cover them for a flood claim.
Abandonment
Property insurance policies usually contain a(n) __________ clause, *stating the insured cannot dump damaged property on the insurer and demand its full value.*
An optional alternative providing for adjustment of premium after expiration, based on a guaranteed basic premium to the insurer to which is added the actual losses incurred by the insured. This is defined as:
Retrospective Rating Plan
Taking or attempted taking of property from within a locked safe or vault, by unlawful entry, with visible marks of forcible entry, or taking of the safe or vault from inside the premises. This is defined as:
Safe Burglary Exclusions: accounting errors, giving/surrendering property, voluntarily parting, fire (except damage to safe/vault), vandalism, transferring property to someone based on unauthorized instructions or from threat to harm
While selling an Automobile policy to a customer, an agent tells them that they are also required to purchase an Emergency Road Service Plan, even though that is not true. This is an example of:
Sliding
The following examples are referred to as __________ liability limits: 25/50/25 or 10/20/10.
Split 10/20/10 = 10,000 per person injured 20,000 all injuries combined 10,000 property damage Example of straight liability limit = $30,000
Liberalization
States that if the insurer adopts a revision which would broaden coverage without additional premium within some period of time prior to the policy period or during the policy period, the insured receives the benefit of such broadened coverage..
Doctrine of Proximate Cause
States that when there is an unbroken connection between an occurrence and damage that grows out of the occurrence, then the resultant damage is all a part of the occurrence.
This type of bond covers streets, sidealks, sewers, etc.:
Subdivision Falls under Maintenance Bond
What payment covers several areas of costs related to claims, and are payable in addition to the policy limits?
Supplementary Generally, all costs of litigation are covered (court costs, prejudgment interest, judgement interest, cost of bonds to release attachments)
Guarantees the performance between the principle and the obligee:
Surety aka Bonding Company; Surety is a "guarantee"
Mandatory for risks exceeding certain annual premiums, recognizes the prior loss experience of the risk and applies either a debit for unfavorable experience or a credit for better-than-expected loss results. This is defined as:
The Experience Rating Plan This, along with Retrospective Rating Plan, is a manual rating process until premiums reach a certain level.
Three full-time employees from a local furniture company are horsing around and one is pushed into a machine that cut his foot. How will the company's General Liability respond?
The GL policy will not pay Coverage excludes liabilities under Workers Comp or similar law or arising from injuries to employees of the insured. The employees would have to file through Workers Comp.
Conditional Contract
The Insurer's responsibility to pay for a property loss may be conditioned on the insured having used reasonable means to avoid the loss, to protect the property against further loss, and to give the insurer proof of the loss is defined as?
If financial responsibility doesn't exist at the time of an accident, what happens?
The legally valid claims of others must be satisfied (10/20/10) The owner and operator must provide certification of future responsibility for future accidents
All of the following are components of Workers Compensation, except: A. Up to $750,000 in Death Benefits B. Reimbursement for Medical Expenses incurred C. Reimbursement for lost wages on percentage basis D. Funeral costs up to $7,500
Up to $750,000 in Death Benefits Compensation for death is payable if death results within one year of an accident or if it follows disability within five years of accident.
When a business's personal property values fluctuate, a single, fixed amount of insurance could produce either over- or under-insurance at any given time. With this option, the limit of coverage is set at an amount somewhat higher than expected peak values.
Value Reporting Replacement Cost is incorrect b/c it calculates monetary value of one's personal property
