New Hampshire Adjuster Exam Prep: Series 12-75
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
A typical homeowners policy with a $25,000 limit for Coverage A - Dwelling will automatically have how much coverage for Other Structures (assuming there are no endorsements)? A. $25,000 B. $37,500 C. $15,000 D. $50,000
A. $25,000 The typical limit of liability for Coverage B - Other Structures is 10% of the Coverage A limit
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 Policy's Coverage B will provide up to 10% of the Coverage A limit
After being rear-ended by Kacy, Alicia filed a claim against Kacy's insurer, NED Insurance. NED dispatched their adjuster, Ulric, to investigate the claim. Who is the claimant in this scenario? A. Alicia B. Ulric C. Kacy D. NED Insurance
A. Alicia
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
Which of the following statements about insurable interest is FALSE? A. Dean has insurable interest in the city's power transformer that supplies power to the homes on his street because damage to the transformer would leave Dean without power. B. Mark has insurable interest in the company that he co-owns with his partner, Aaron. C. Mary has insurable interest in Barry's life because Barry's death would cause Mary economic hardship. D. The bank has insurable interest in Wilson's home, for which it holds the mortgage.
A. Dean has insurable interest in the city's power transformer that supplies power to the homes on his street because damage to the transformer would leave Dean without power.
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 telephone pole. Which part of his Auto Insurance Policy will help him pay for the repairs to his car? 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
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 anew 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
As a fiduciary agent, an adjuster has the power to bind the insurer. Which of the following statements is FALSE regarding this power? A. Only an adjuster's written statement 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 statement 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 Under the Contribution by Equal Shares provision, each policy will pay an equal share of the loss, up to the lowest policy limit. Then this process will repeat, if needed, among the remaining policies with available coverage. First, the three policies will pay $25,000 each, for a total of $75,000. Policy Z has reached its limit, leaving $50,000 to divide between the two remaining policies. This brings the amount paid under Policy X and Policy Y to $50,000 each, while Policy Z only pays $25,000.
Acme Insurance has entered into a contract to insure a small airline. This involves immense exposure, but also provides Acme with a lot of revenue. Acme wants to ensure that it will always be capable of paying any claims that might arise. What is the best way for Acme to do this? A. Purchase re-insurance B. Join a risk retention group C. Become a stock insurance company D. Establish a fraternal benefit society
A. Purchase re-insurance
It is important to use the correct units of measurement when documenting damage to a structure in an estimate. Which of the following is TRUE with regards to units of measure? A. Siding is measured in squares; trim is measured in linear feet B. Siding is measured in linear feet; trim is measure in square feet C. Both siding and trim are measured in square feet D. Both siding and trim are measured in linear feet
A. Siding is measured in squares; trim is measured in linear feet
Susan is a successful plastic surgeon and wants to purchase liability insurance. Her husband, a teacher, is part of a risk retention group and is quite happy with his insurance. Susan decides to apply to her husband's group, but her application is denied. This is because: A. Susan's business is not similar to that of her husband's B. Susan has not owned her own business for more than two years C. Surgeons cannot be members of a risk retention D. Risk retention groups do not typically provide liability insurance
A. Susan's business is not similar to that of her husband's
Which of the following is NOT true arbitration? A. The arbitrator's decision is not legally binding B. Arbitration may allow evidence that a court would not C. The arbitrator is neutral third party D. Arbitrators often have more expertise than juries
A. The arbitrator's decision is not legally binding
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
If the named insured on an insurance policy dies, what happens? A. The policy is transferred to the insured's legal representative, and lasts until the next policy renewal date B. The policy is canceled C. the policy is transferred to the insured's legal representative, and lasts for 30 days after the insured's death D. The policy is transferred to the insured's heir or beneficiary, and lasts for 30 days after the insured's death
A. The policy is transferred to the insured's legal representative, and lasts until the next policy renewal date
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
Which of the following is NOT a reason why an adjuster would collect written or recorded witness statements during a claim investigation? A. To fully comply with the conditions section of the insurance policy B. To dispute an account provided by the claimant or another witness C. To impeach a witness' credibility if he changes his story when the claim goes to court D. To expose data that may have been overlooked in the claim handling process
A. To fully comply with the conditions section of the insurance policy
Jane's shed burns to the ground during a tornado, when a tree falls on the roof and snaps a power line, which then ignites the structure. What is the proximate cause of the loss? A. Wind B. Fire C. Electrical current D. Falling objects
A. Wind
Robby carpools to school with his friends, and he enjoys racing the other cars on the road whenever he can. His Dad lectures him about the dangers of speeding, but Robby thinks his Dad is overreacting. He's been driving for two whole years, so he knows what he's doing. And besides, they have good insurance, so it wouldn't be that big of a deal even if Robby did damage his car. In insurance terms, Robby's behavior is: A. a morale hazard B. a risk C. a peril D. a moral hazard
A. a morale hazard
When an insured signs a document acknowledging that he gives up his right to a certain coverage, such as uninsured motorist coverage in an auto policy, this is called: A. an express waiver B. an implied waiver C. a warranty D. an estoppel
A. an express waiver
In a Personal Auto Policy, the term "covered person" includes: A. anyone using your car with permission B. anyone using your car C. the driver of the car you hit D. anyone occupying your car
A. anyone using your car with permission
tom purchases a new car from his local car dealer. he also decides to get insurance coverage that will pay to repair the car if he were to get into an accident. this is because tom wants to protect: A. his own financial interest in the car B. other drivers on the road C. his insurance company's profit margins D. any passengers who ride in his car
A. his own financial interest in the car
An adjuster's preliminary report would most likely not: A. include the settlement amount B. establish a claim reserve C. document the initial contact with the claimant D. list any known liability issues
A. include the settlement amount
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
In a Personal Auto Policy, the split limits under the liability section will apply to all of the following, EXCEPT: A. the total for property damage to the insured's auto caused by the accident B. the total for all property damage to others caused by the insured C. injures the insured caused to each person D. injuries the insured caused to everyone involved in the accident
A. the total for property damage to the insured's auto caused by the accident
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
Roxanne bought her 50" TV four years ago for $2,400. During a storm, her house was struck by lightning and the current fried her TV. The TV depreciates at $400 per year and a similar TV costs $1,200 today. Assuming Roxanne's homeowners policy has a replacement cost endorsement for personal property, how much can she expect to receive in indemnification for her damaged TV? Replacement Cost= Current Cost-[Original Purchase Cost-(Total Depreciation] $1,200-[$2,400-($400x4yrs)] A. $2,400 B. $200 C. $600 D. $1,200
B. $200
Darren's SUV cost him $28,500 when he bought it new five years ago, but it would cost $29,600 to replace it today. The vehicle has an annual depreciation of $1,200. Darren loses control while driving too fast around a bend in the road and flips his vehicle, totaling it. Assuming Darren's auto insurance policy pays ACV, how much can he expect to receive in indemnification for this claim? ACV= Replacement Value-Total Depreciation $29,600-($1,200x5yrs) A. $29,600 B. $23,600 C. $22,500 D. $27,300
B. $23,600
Which of the following sequences is most likely in the correct chronological order? A. Determine the cost of repairs, then investigate the claim B. Acknowledge the claim, then open a line of communication with the claimant C. Negotiate a settlement, then complete the investigation D. Determine the amount of damages, then see if the claim is covered under the policy
B. Acknowledge the claim, then open a line of communication with the claimant
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
In each of the following, the insured has filed a claim against their homeowners policy. In which of these scenarios would the insurer most likely deny the claim? A. The insurer sends David a Proof of Loss form for him to complete in conjunction with his theft claim, and it takes him 25 days to return the completed form to his insurer B. Darla files a claim when her estranged husband sets fire to her back deck, but she doesn't notify the policy for fear of getting her husband in trouble C. Stephen is unable to provide pictures of his personal items that were destroyed in his house fire, but he is able to provide a list and descriptions for the adjsuter D. Susan can't make it home from work to meet an adjuster at her house (which was damaged by a recent hailstorm), but gives the adjuster permission to inspect the property in her absence
B. Darla files a claim when her estranged husband sets fire to her back deck, but she doesn't notify the policy for fear of getting her husband in trouble
Which of the following would be covered under the Earthquake endorsement in a homeowners policy? A. Flood damage caused by an earthquake B. Earth movements that are caused by volcanic activity C. Tidal waves caused by an earthquake D. Exterior masonry veneer
B. Earth movements that are caused by volcanic activity
Peter, an insurance adjuster, is going over a claim. He's examining the deductible, the total claimed damages, the policy limits, other policies that might also cover the claim, whether the property is adequately insured, and whether or not a coinsurance penalty applies. Which function of an adjuster is Peter performing? A. Investigating a claim B. Evaluating a claim C. Reporting a claim D. Managing a claim
B. Evaluating a claim
Caitlin works as a driver for a local oil company. She picks up the field workers and drops them at the wellsite. Then, once their shift is completed she brings them home again using the company van. Which endorsement provides the best coverage for Caitlin? A. Customized Equipment B. Extended Non-Owner C. Miscellaneous Vehicle D. Non-Owner
B. Extended Non-Owner
Simon just bought his first home-a cheap fixer-upper in a town where average snowfall exceeds 80 inches per year. It may be an old house in a run-down neighborhood, but he still wants to protect his initial investment. What is the cheapest policy option that would protect Simon's financial interest in his home, even in the brutal winters? A. HO-4 B. HO-2 C. HO-3 D. HO-5
B. HO-2
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
What does a declaratory judgement action seek? A. Witnesses to an occurrence B. Legal clarification of policy coverage C. Prompt settlement of a claim D. The cause of an occurrence
B. Legal clarification of policy coverage
Which of the following perils is normally excluded from coverage in a personal auto policy? A. Missiles B. Mechanical breakdown C. Riot D. Flood
B. Mechanical breakdown
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
Skip's Convenience Store must agree to install and maintain an emergency shutoff system for its gas pumps in order to qualify for insurance coverage. Which of the following statements is true? A. This requirement is a binder found in the conditions section of the policy B. This requirement is a warranty found in the conditions section of the policy C. This requirement is a warranty found in the declarations section of the policy D. This requirement is a representation found in the declarations section of the policy
B. This requirement is a warranty found in the conditions section of the policy
A hailstorm moves over Erin's restaurant. Large hailstorms 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 restaurant's income lost because of the physical damage would be considered: A. the proximate cause of loss B. a direct loss C. an indirect loss D. the physical hazard
B. a direct loss
In a Personal Auto Policy, the definition of "Your Covered Auto" can refer to any of the following vehicles, EXCEPT: A. a can that Luke is renting while his own is being repaired B. a trailer that Tim's neighbor let him borrow C. a car that Ed just purchased two days ago D. a pickup truck listed on Bob's declaration page
B. a trailer that Tim's neighbor let him borrow
A(n)___ is an agent contracted by an insurance company to settle claims acting on behalf of the insurer. A. sales agent B. adjuster C. exclusive agent D. general agent
B. adjuster
Homeowners policies don't provide coverage for: A. liability in the case of third party injury B. flood damage C. residential home damage D. damage to outbuildings
B. flood damage
An HO-3 policy is intended for a/an: A. corporation B. individual C. small business D. government
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
An independent adjuster: A. represents the policyholder and charges a commission, usually about 10% of the settlement B. is self-employed and may be contracted by one or more companies at a time C. is solely responsible for processing claims for one insurer either locally, regionally, or nationally D. is contracted by the claimant and may work for more than one at a time
B. is self-employed and may be contracted by one or more companies at a time
In an insurance contract, the policyholder gives the insurer _____, and the insurer gives the policyholder____. A. covered property; a risk pool B. premium payments; peace of mind C. peace of mind; risk D. a surety; premium payments
B. premium payments; peace of mind
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? % x home value = coverage home value = coverage / % 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 30/60/25 $30k max per person for injuries $60k limit for all injuries $25k max for damage to another person's car or property Jeremy's SUV value - $25k max = Graham's out of pocket $30k-$25k=$5k
Which of the following is the easiest and least costly option? A. Litigation B. Mediation C. Adjuster/claimant negotiation D. Arbitration
C. Adjuster/claimant negotiation
Which of the following best defines "insured"? A. Transfer of the risk of financial loss from one party to another B. A legally binding contract in which the insurance company agrees to pay for specified losses in exchange for premiums C. An individual or organization that pays premiums in exchange for financial protection D. A company, group, or government agency offering financial protection
C. An individual or organization that pays premiums in exchange for financial protection
Which of the following Homeowners endorsements can only provide liability and medical payments coverage? A. Home Day Care B. Scheduled Personal Property C. Business Pursuits D. Limited Fungi, Wet or Dry Rot, or Bacteria Coverage
C. Business Pursuits
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
Quincy is in court attempting to convince the jury through a preponderance of evidence that his insurer is deliberately withholding his rightful indemnification for his property claim. In which type of legal proceeding are Quincy and his insurer currently involved? A. Criminal trial B. Contributory negligence hearing C. Civil trial D. Comparative negligence hearing
C. Civil trial
Greg works for XYZ Insurance. Part of his daily tasks involve visiting sites, investigating liability, and determining the time and cost of repairs. On occasion, Greg will have to negotiate with claimants as part of his job. Which type of agent is Greg? A. Secret agent B. Direct writer C. Claims adjuster D. Sales agent
C. Claims adjuster
Which Dwelling policy form provides open-peril coverage? A. None of the DP forms provide open-peril coverage B. DP-1 C. DP-3 D. DP-2
C. DP-3
What is the main difference between a Full release settlement and a No Release settlement? A. In a No Release Settlement, the claimant signs a release form to release the insurer from additional claims; in a Full Release Settlement, the claimant does not sign a release form B. A No Release Settlement can be used for any type of claim, whereas a Full Release Settlement is generally only used for property damage claims C. In a Full Release Settlement, the claimant signs a release form giving up the right to additional indemnification; in a No Release Settlement, the claimant does not sign a release form D. In a Full Release Settlement, the claimant is indemnified at replacement cost; in a No Release Settlement, the claimant receives no indemnification
C. In a Full Release Settlement, the claimant signs a release form giving up the right to additional indemnification; in a No Release Settlement, the claimant does not sign a release form
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 Normally, Ordinance or Law coverage would be able to help. This coverage is only available under the DP-2 & DP-3 policies.
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 damaged 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 HO-4 only covers a renter's personal property, not the structure
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
The homeowners policy on Daryl's $110,000 home is voided when he intentionally burns the house to the ground. Consequently, he does not receive the settlement check he was hoping to get when he committed the arson, but he still has an outstanding mortgage balance of $76,000. How does this event affect the mortgage lender? A. Because the arson voided the mortgage lender is paid nothing B. The insurer pays the mortgage lender $55,000-half the total amount of the loss C. The insurer pays the mortgage lender $76,000 D. The insurer pays the mortgage lender $110,000
C. The insurer pays the mortgage lender $76,000
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 principle? A. 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
Which of the following would NOT fall under the definition of "Residence Premises" in Shannon's homeowners policy? A. The beach house that Shannon and her family rent for a weekend getaway each month B. Shannon's detached 4-car garage C. The two-bedroom house that Shannon owns in town, which she rents out to four college students D. The vacant lot that Shannon owns, located right next to her house
C. The two-bedroom house that Shannon owns in town, which she rents out to four college students
Zach totalled 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 the $70,000 offered by the insurer during the negotiation B. Zach can reopen negotiations with his insurer C. Zach will only get $65,000 dollars because $70,000 dollar was inadmissible to court D. Zach will get $70,000, because that was the last offer given by the insurer
C. Zach will only get $65,000 dollars because $70,000 dollar was inadmissible to court
In an insurance contract, exclusions are NOT used to: A. manage moral and morale hazard B. eliminate duplication of coverages C. add coverages that need special treatment D. lower premiums
C. add coverages that need special treatment
During a heavy rainstorm, the water accumulation rose high enough to flow under Angie's front door and ruined her hardwood floors. In response to Angie's claim, an adjuster came out to her home and inspected the damage. The adjuster determined that the loss was covered, wrote Angie a check, and closed the claim. Later, the insurance company reviewed Angie's claim and discovered that the adjuster should have denied it because Angie's policy doesn't cover flood. However, Angie refuses to return the settlement because of the adjuster's: A. expert authority B. utmost good faith C. apparent authority D. misrepresentations
C. apparent authority
An adjuster's preliminary claim report should: A. update the insurer every 30 days within 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, 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 concern 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
A basic DP-1 dwelling policy offers _____ coverage and ____ valuations. A. name-peril; replacement cost B. open-peril; replacement cost C. named-peril; actual cash value D. open-peril; actual cash value
C. named-peril; actual cash value
An insurance adjuster has a duty to do all of the following regarding a claim, EXCEPT: A. determine if the claim falls under the coverage of the insurance policy B. decide whether the claim has any merit C. protect the insurer from the claim D. investigate the claim
C. protect the insurer from the claim
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
What are the four requirements of a legally binding contract? A. Agreement, consideration, character, signatures B. Authority, character, competent parties, legal purpose C. Authority, consideration, signatures, legal purpose D. Agreement, consideration, competent parties, legal purpose
D. Agreement, consideration, competent parties, legal purpose
Flora is driving in the rain when she skids off the road and slams into Cam's billboard, totalling her car and causing $2,000 in damage to the billboard. Flora has an auto policy with ABC Insurance. Cam files a third-party claim and ABC Insurance pays him $1,500 for the billboard. Which of the following is TRUE? A. Cam may file a first-party claim with ABC Insurance B. Cam has forfeited his right to collect the remaining $500 C. Flora has forfeited her right to collect $2,000 D. Cam may sue Flora for $500
D. Cam may sue Flora for $500
Daniel has had his homeowners policy with ABC Insurance Co. for six months. In a recent review Insurance Co. decided to remove one of the standard exclusions without changing the premium. How does this expansion in coverage affect Daniel? A. Daniel is not affected. The change only applies to new applicants B. Due to the Liberalization clause, Daniel will be required to complete a new application C. Due to the Liberalization clause, the expanded coverage will be offered to Daniel in writing and he has the option to accept or deny the change D. Due to the Liberalization clause, this expansion in coverage automatically applies to Daniels policy
D. Due to the Liberalization clause, this expansion in coverage automatically applies to Daniels policy
Which of the following is acting appropriately a fiduciary agent? A. Kim is trying to calm a claimant who is very upset, so she tells him the she is sure the loss is covered, even though she has not yet determined the cause of loss B. Gail investigates a claim and decides the loss is not covered, but writes up her estimate in such a way that it would appear to be covered so she could pay the claimant anyway C. Victor finds additional damage that seems to be related to the claim, but he leaves it off of his estimate because the claimant didn't notice it in the first place D. Ernest knows the claimant can't possibly afford to pay for their extensive damages, but he denies the claim anyway because the cause of loss was not covered by the policy
D. Ernest knows the claimant can't possibly afford to pay for their extensive damages, but he denies the claim anyway because the cause of loss was not covered by the policy
Which of these homeowners policy coverages does NOT usually have a deductible? A. Sewer Backup B. Debris Removal C. Personal Property D. Fire Department Service Charge
D. Fire Department Service Charge
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
As a direct writer for ABC Insurance, Grace enjoys the benefit of receiving a regular salary. What other aspect applies to her position as a direct writer? A. Grace receives a commission on every policy she sells B. Grace helps to train other insurance agents within the company C. Grace sells a variety of policies for several insurers D. Grace sells policies solely for ABC insurance
D. Grace sells policies solely for ABC insurance
What kind of adjuster is not contracted by any particular company, can work for for multiple insurers at one, 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
Which of the following adjusters is acting improperly as a fiduciary agent? A. Brenda investigates a claim and decides the losses are covered. She issues a settlement check to the claimant and closes the claim B. Tony is assigned to adjust a claim submitted by his brother. He decides to give the case to a co-worker to avoid biased decision D. Marjorie is trying to calm a claimant who is very upset, so she tells him the she is sure the loss is covered, even though she has not yet determined the cause of loss
D. Marjorie is trying to calm a claimant who is very upset, so she tells him the she is sure the loss is covered, even though she has not yet determined the cause of loss
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. Consequential Loss coverage B. Property Removal coverage C. Reasonable Repairs coverage D. Personal Property coverage
D. Personal Property coverage
What document do insurance companies give to claimants when they think something in the claim is not covered by the policy, but they are not sure yet? A. Declaratory judgment action B. Coverage clause C. Non-waiver agreement D. Reservation of Rights letter
D. Reservation of Rights letter
Sara's vehicle was stolen and her insurer paid her theft claim for the total value of the car. A week later, the police found Sara's car and returned it to her. Which of the following statements is true? A. The Abandonment provision states that Sara must surrender her rights to the vehicle to her insurer B. The Assignment provision states that because Sara was already indemnified for the loss, she must sign over the vehicle title to the insurer C. The Salvage provision states that Sara must sell the vehicle and give the proceeds to the insurer to pay back the settlement she received D. The Recovered Property provision states that Sara must notify the insurer and either return the settlement payment or surrender the vehicle to the insurer
D. The Recovered Property provision states that Sara must notify the insurer and either return the settlement payment or surrender the vehicle to the insurer
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
Whose responsibility is it to maintain an open line of communication during the settlement process? A. The insurance company B. The insurance agent C. The claimant D. The adjuster
D. The adjuster
A power surge sparks a small electrical fire in an office building. 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 damage to the carpets and computers would be considered: A. the proximate cause of loss B. a physical hazard C. an indirect loss D. a direct loss
D. a direct loss
In a personal auto policy, the Miscellaneous Vehicle Coverage endorsement: A. adds coverage for physical damage caused by the insured when driving any non-owned vehicle B. allows coverage to be suspended for brief periods on non-primary vehicles C. provides extra coverage for customized equipment added to a covered vehicle D. allows coverage to be added for motorcycles and motor homes
D. allows coverage to be added for motorcycles and motor homes
In a liability policy, the Legal Action Against the Insurer provision typically states: A. the insured is only responsible for damages below the policy limit B. the insurer must comply with all policy obligations prior to filing a lawsuit C. no one can sue the insured until the insurer's obligation is determined D. no one can join the insurer in a lawsuit against the insured
D. no one can join the insurer in a lawsuit against the insured
Scott is visiting his insurance agent's office and applying for auto insurance on his new car. The auto policy that the agent drafts will be based on Scott's ________. A. warranties B. promises C. subrogation D. representations
D. representations
A hailstorm moves over Erin's restaurant. Large hailstorms 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 loss
D. the proximate cause of loss
