Prac. test question quizlet CC
111. Jones' Auto Dealer in Jacksonville, Texas buys 50 cars from ABC Auto in Detroit, MI. They sign a contract whereby Jones' Auto assumes the risk of any damages to the cars until they are delivered. What term of sale have they agreed to? A. Cost and Freight B. Cost, Insurance, and Freight C. Free on Board, Jacksonville D. Cargo, Insurance, and Freight
A. Cost and Freight
150. Ian has started his own health insurance company online. Because of the low premiums he offers, he has been selling a lot of policies and collecting a lot of money from people who think they are getting a great deal on their insurance. However, he will not pay any claims and he will shut down the website and disappear when people start to get suspicious. Ian is committing: A. Insurer Fraud. B. Staged fraud. C. Soft Fraud. D. Health Insurance Fraud.
A. Insurer Fraud.
64. Under Jacqueline's Personal Injury Protection, all of the following would be covered for bodily injuries except: A. Jacqueline's sister who also has PIP. B. Jacqueline's husband. C. Jacqueline's cousin who lives with her. D. Jacqueline.
A. Jacqueline's sister who also has PIP.
130. Under Business Interruption Coverage, "Extra Expenses" may be covered if: A. The extra measure reduces the amount of income lost due to the covered peril. B. The extra money spent on debris removal exceeds policy limits. C. The extra measure expands the company's product mix. D. Lost income exceeds the limit of the commercial insurance policy limits.
A. The extra measure reduces the amount of income lost due to the covered peril.
The Severability of Interests condition states that: A.coverage applies to each insured separately, as if no other insured existed. B.when an insurer pays a total loss settlement, policy coverage may terminate and any unearned premiums will be refunded to the insured. C.an insurer has the right to cancel an insurance policy at any time. D.an insured has the right to cancel an insurance policy at any time.
A.coverage applies to each insured separately, as if no other insured existed. The Severability of Interests condition states that coverage applies to each insured separately, as if no other insured existed.
70. Which of the following would NOT be covered under Part A of a Personal Auto Policy? A. Lost wages B. Damage the insured causes to his own garage C. Damage the insured causes while driving his friend's car D. Legal defense costs.
B. Damage the insured causes to his own garage
137. An insurer in Alabama sends a partial payment to a claimant indicating that payment is final when the policy limit has not been reached. This act is: A. Concealment. B. Illegal. C. Good insurance practice. D. An incomplete settlement.
B. Illegal.
148. Membership in the Alabama Insurance Guaranty Association is required for all insurers selling: A. Accident insurance. B. Property and casualty insurance. C. Individual annuities. D. Life and health insurance.
B. Property and casualty insurance.
65. What are the minimum liability limits for an auto policy in Alabama? A. There are no minimum auto liability limits in Alabama B. 35/70/35 C. 25/50/25 D. 50/100/50
C. 25/50/25
76. One of the main goals of this government entity is promoting the domestic and international consumption of the state's agricultural products. A. Alabama Department of Commerce B. Alabama Crop Insurance Services C. Alabama Farm Service Agency D. Alabama Department of Agriculture and Industries
D. Alabama Department of Agriculture and Industries
98. Which endorsement to the BAP would cover a forklift? A. Individual Named Insured B. Construction equipment C. Drive Other Car coverage D. Mobile equipment
D. Mobile equipment
45. While at work, Barry suffered a spinal cord injury in a forklift accident. His employer's insurer settled the claim and paid all of Barry's initial medical bills, but it also agreed to continue paying for his weekly visits to the rehabilitation therapist. Which settlement option did Barry receive? A. Full Release B. Advance Payment C. Partial Release D. Scheduled Payment Release
D. Scheduled Payment Release
31. Darren's SUV cost him $28,500 when he bought it new five years ago. The vehicle is currently worth $12,000. How much is the annual depreciation on Darren's SUV? A. $3,300 B. $5,700 C. $2,400 D. $16,500
A. $3,300
19. Darnell is applying for auto insurance with his agent. Currently, he is only looking to get a minimal amount of coverage to keep his premium payments as low as possible, so he decides not to get uninsured motorist coverage with his policy. His agent has him sign a document giving up his right to this coverage. What is this called? A. An express waiver B. A binder C. An implied waiver D. A warranty
A. An express waiver
133. A short circuit in one of the refrigeration units in the Ice Queen ice cream shop sparked a fire that severely damaged the shop, and it had to shut down for two months while repairs were made. What type of additional coverage would indemnify the Ice Queen for the lost income during these two months? A. Business Interruption Coverage B. Extra Expenses Coverage C. Commercial Property Damage Coverage D. Income and Expenses Coverage
A. Business Interruption Coverage
21. Jim applied for a homeowners policy with his agent, who gave him immediate temporary coverage. However, after checking Jim's background information, his agent discovers that Jim has been convicted of arson, so she declines his application. Which of the following best describes what Jim did when he failed to mention his conviction during the application process? A. Concealment B. Misrepresentation C. Warranty D. Binder
A. Concealment
141. The Insurance Information & Privacy Protection Act (IIPPA) requires insurers to do all of the following, except: A. Give reasons for denial of credit. B. Inform consumers about information protection. C. Ensure that personal information is kept private. D. Give reasonable notice for policy renewal and other changes.
A. Give reasons for denial of credit.
117. Which of the following is NOT covered by the Medical Payments coverage of an Aviation Policy? A. Injuries suffered in an airport terminal before boarding B. Ambulance expenses C. Injuries suffered while boarding the aircraft D. Funeral costs
A. Injuries suffered in an airport terminal before boarding
44. As an adjuster, one of Abigail's most important responsibilities is reporting to the principal. This would include all following except: A. keeping the claimant up to date on the progress and status of the claim. B. sending the insurer a report with the final adjusted losses. C. informing the principal of the investigation results. D. letting the insurer know about any liability or expediency issues with the claim.
A. keeping the claimant up to date on the progress and status of the claim.
36. Tim is the plaintiff in a case involving an auto accident. To recover money, he feels is due him, Tim produces documents to prove he had to pay over $55,000 in medical bills. If the court were to award Tim $55,000, the damages would be classified as: A. special damages. B. general damages. C. punitive damages. D. tort damages.
A. special damages.
If an Alabama insurer wants to cancel a HO policy because the policyholder isn't paying premiums, it needs to give the policyholder ____ days advance notice. A.10 B.30 C.15 D.5
A.10
33. As Seth is driving along a country road, a deer jumps out in front of him. This causes Seth to veer off the road and crash into Cassie's wood fence and a brick mailbox. As a result of the crash, Seth suffers $3,700 damage to his sedan and causes $1,800 in damage to Cassie's property. How much of the damage will be covered by Seth's liability insurance? A. $0 B. $1,800 C. $5,500 D. $3,700
B. $1,800
50. Samantha's house is underinsured. It has a replacement cost of $200,000, but Samantha's policy only covers losses up to $80,000. During a violent hailstorm, Sam's $20,000 roof is destroyed. Assuming his insurer imposes the standard coinsurance penalty, how much will Samantha receive as a settlement for the roof (ignore the deductible)? A. $5,000 B. $10,000 C. $15,000 D. $20,000
B. $10,000
60. Jerry has a $125,000 DP-2 policy on a house he is currently renting to Stephanie for $1,700 a month. Jerry pays $200 for utilities each month out of the $1,700 he receives from Stephanie. One winter day, a heavy snowfall causes part of Jerry's roof to cave in, causing $12,000 in damage to the dwelling. During the two months it takes to repair the damage, Jerry suspends utility services to the house and Stephanie goes to stay with her sister. How much can Jerry receive under Coverage D for this loss? A. $3,400 B. $3,000 C. $8,600 D. $12,000
B. $3,000
26. 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 short-out all the computers, causing thousands of dollars in damage. The office must close for two months while repairs are made, and new computers can be purchased. The expense to rent a temporary office space while the physical damage is repaired is considered: A. An occurrence. B. An indirect loss. C. Physical loss. D. A direct loss.
B. An indirect loss.
139. Which best describes the unfair practice of low-balling? A. Requesting additional information from the insured in an attempt to deny the claim. B. An insurance company offering a settlement for less than is reasonable. C. An insurance company denying a claim without explanation. D. Policyholder negotiating to reduce their premiums.
B. An insurance company offering a settlement for less than is reasonable.
85. In which situation would Utility Service - Direct Damage coverage apply? A. After a tornado knocks out the power in her main office, Josephine the tailor has to close her doors for a week and loses 5 days of income. B. Brenda's bakery loses power during a snowstorm. When the utility company restores electricity, there is a power surge that fries Brenda's computer and cash registers. C. Eddie's Tractor Supply loses an entire warehouse to a fire when lightning strikes the roof. D. John's Car Repair loses power for two days after a hurricane. The resulting loss of business costs the company $5,000 in lost income.
B. Brenda's bakery loses power during a snowstorm. When the utility company restores electricity, there is a power surge that fries Brenda's computer and cash registers.
100. Tina owns Peachtree Savings and Loan, which has within it many different jobs with varying levels of security and risk. For the tellers and customer service representatives she uses blanket employee theft coverage, but there are certain high-security jobs that need significantly more coverage, such as Vault Controller and Branch Manager. Tina wants to buy extra theft coverage for these employees, but not have to worry about updating her policy every time she hires a new person to fill one of these roles. Which coverage would be best choice for Tina's needs? A. Employee theft: high security B. Employee theft: all employees C. Employee theft: schedule persons D. Employee theft: scheduled positions
B. Employee theft: all employees
38. Jerry is an independent adjuster and has signed a contract with ABC Insurance to adjust claims in an area recently devastated by a hurricane. Jerry receives the claims from ABC Insurance, completes the inspections, and settles claims on behalf of ABC Insurance according to his contract. What type of authority has ABC Insurance given Jerry? A. Agency authority B. Express authority C. Apparent authority D. Implied authority
B. Express authority
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 makes the insurer's losses less predictable. D. Insuring a greater number of units increases the effect of statistical outliers on loss predictions.
B. Insuring a greater number of units increases the accuracy of the insurer's loss predictions.
48. Nick's home suffered major damage during a tornado. His contractor says it will cost $85,000 to complete repairs, but the adjuster's estimate gives a total of $63,000. Nick and his insurer have tried to reach an agreement but have failed to do so. Both parties are now wanting a third party to facilitate their negotiations, but only in an advisory role. Which of the following is the best option in this case? A. Litigation B. Mediation C. Arbitration D. Declaratory Judgment Action
B. Mediation
146. In order to maintain an Alabama Certificate of Authority, an insurer must do all of the following, except: A. Be financially sound. B. Pay final judgments within 45 days. C. Provide access to any information needed for renewal. D. Comply with all insurance laws.
B. Pay final judgments within 45 days.
134. All of the following would be covered under Valuable Papers Business Insurance, except: A. Manuscripts. B. Stock Certificates. C. Legal documents. A. Blueprints.
B. Stock Certificates.
Steve has just purchased a wedding ring for his new bride. If something were to happen to the ring, he would be out a lot of money, so he purchases an insurance policy. He is able to do this because: A. The ring is a sure risk. B. The ring is a pure risk. C. The ring is a safe risk. D. The ring is a speculative risk.
B. The ring is a pure risk.
129. Which of the following BEST describes the insurance provided by residual market insurance programs? A. Designed to help low-risk consumers B. Usually a "last resort" form of insurance C. Very extensive coverage D. Low premiums
B. Usually a "last resort" form of insurance
In which section of an insurance policy might you find the following statement? "'We, us, and our' refers to ABC Insurance company." A.Exclusions B.Definitions C.Declarations D.Conditions
B.Definitions
Chandler is a photographer who is taking pictures at a reenactment of the Battle of Gettysburg, when Harper (Union Cavalry) crashes through the brush and into Chandler, breaking both his arms and his camera. In court, Chandler demands payment not only for his medical bills and broken camera, but for future lost business; now that he is unable to take pictures for the next 6 months, his clients are moving on and entering into contracts with other photographers. When Chandler speaks of this total amount of all damages that have resulted and will result from Harper's mistake, he is referring to: A.punitive damages. B.diminution of value. C.joint tortfeasors. D.reservation of rights.
B.diminution of value. Chandler is referring to diminution of value. "Diminution of value" is a legal term used when calculating compensatory damages in a legal dispute. It refers to the total amount of all damages, or lost value, resulting from an occurrence. 1-L Slide
67. Jamie's car registration is suspended because she was caught driving without auto insurance. In Alabama, what will Jamie need to pay to get her registration reinstated? A. $1,000 B. $250 C. $200 D. $400
C. $200
57. Which of the following could be covered by a Homeowners policy? A. A home used as a shelter by the local community B. A home that is used as a veterinary clinic C. A large home currently under construction D. A multi family home housing five families
C. A large home currently under construction
145. DBM Insurance is based in Texas, but it also has offices in Alabama. In Alabama, LMN Insurance is considered: A. Multi-State Insurer. B. Domestic Insurer. C. Foreign Insurer. D. Alien Insurer.
C. Foreign Insurer.
94. Which of the following is NOT one of the requirements that a "Fast Food Restaurant" business must meet in order to qualify for a Business owners Policy? A. The restaurant must maintain appropriate fire extinguishing equipment. B. The restaurant may not seat more than 150 people. C. Liquor must not account for more than 25% of total annual sales. D. The restaurant must not exceed 7,500 square feet.
C. Liquor must not account for more than 25% of total annual sales.
28. Which of the following statements is FALSE regarding the concept of insurable interest? A. When a renter leases your house, your insurable interest in the home remains. B. Insurable interest eliminates the incentive for one to intentionally cause damages to insured property. C. Maintaining property values allows your neighbor to have an insurable interest in your house. D. Purchasing an insurance policy on your home helps protect your insurable interest in a home.
C. Maintaining property values allows your neighbor to have an insurable interest in your house.
68. Which one of the following is not true of a Personal Auto Policy or PAP? A. Coverage often exceeds minimum state requirements B. Provides optional auto coverages C. Provides coverage for punitive damages D. Provides auto liability coverage
C. Provides coverage for punitive damages
131. Law and Ordinance coverage would pay for which of the following expenses? A. The legal costs to defend an insured in a professional liability lawsuit. B. The legal costs an insured may face if they violate a law or ordinance. C. The cost to upgrade repairs after a covered loss if the upgrades are required to meet new building codes. D. The increased cost to upgrade to meet new building codes during a remodeling project.
C. The cost to upgrade repairs after a covered loss if the upgrades are required to meet new building codes.
95. Which of the following would NOT fall under Coverage A of the Business owners Policy? A. The permanently installed stove in a restaurant's kitchen B. An addition to the main building that is still under construction C. The couches in a dry cleaner's waiting area D. The carpet in a hotel room
C. The couches in a dry cleaner's waiting area
He wants to ensure his family is financially protected once he is gone, so he applies for a $250,000 life insurance policy. However, the insurance company declines his application. Which of the following statements is true? A. The insurer is practicing risk transference in order to reduce the exposure to loss. B. The insurer is practicing risk reduction in order to transfer the risk of loss. C. The insurer is practicing risk avoidance because the premiums will not likely cover the claim cost. D. The insurer is practicing risk retention because of the high exposure to the chance of loss.
C. The insurer is practicing risk avoidance because the premiums will not likely cover the claim cost.
73. Rosa's barn burned down when it was struck by lightning during a storm. The barn was insured for $45,000 under Rosa's Farm policy, which included a replacement cost endorsement with an 80% coinsurance requirement. At the time of the loss, the barn's Actual Cash Value was $35,000, but it will cost $60,000 to replace it. How will Rosa's insurer respond to her claim? A. The insurer will give Rosa one check for $35,000. B. The insurer will give Rosa one check for $45,000, and another for up to $11,250 once repairs are completed. C. The insurer will give Rosa one check for $35,000, and another for up to $10,000 once repairs are completed. D. The insurer will give Rosa one check for $35,000, and another for up to $21,250 once repairs are completed.
C. The insurer will give Rosa one check for $35,000, and another for up to $10,000 once repairs are completed.
79. Which statement about Catastrophic Risk Protection Endorsement Coverage is FALSE? A. It pays on crop losses in excess of 50%. B. It is an optional coverage of MPCI. C. The premiums are paid by the insured. D. It pays 55% of the price of the commodity.
C. The premiums are paid by the insured.
120. Under workers' compensation, which of the following statements about Disability Benefits is FALSE? A. The benefit amount is typically a percentage of normal wages. B. The duration of permanent partial disability benefits is based on the severity of the injury. C. There is no waiting period for Disability Benefits. D. Temporary partial disability benefits are based on the difference between post-injury and pre-injury wages.
C. There is no waiting period for Disability Benefits.
47. When responding to a claim, the adjuster's primary motivation should be: A. find a way to deny the claim. B. negotiate effectively. C. settle quickly and fairly without litigation. D. settle for the least possible amount.
C. settle quickly and fairly without litigation.
Craig has an HO-3 policy covering his primary residence with a Coverage A limit of $250,000, Coverage B limit of $25,000, and a Coverage C limit of $150,000. Craig also has a cabin on the lake, which was burglarized. The thieves stole much of the cabin's contents, for a total loss of $18,500. Ignoring any deductibles, how much will Craig's HO-3 policy pay for this claim? A.$2,500 B.$0 C.$15,000 D.$18,500
C.$15,000 Coverage C will pay the larger of either $1,000 or 10% of the Coverage C limit for losses to property normally kept somewhere other than primary residence.
77. Half of Kevin's lettuce farm was destroyed by wildfire. Normally, he has a yield guarantee of $5,000 of lettuce per season, but due to the fire, he only made $3,500. How much will his MPCI policy pay him for his loss? A. $1,750 B. $2,500 C. $2,250 D. $1,500
D. $1,500
115. Melanie owns a set of 3 crystal vases that is worth $2,800, but during her most recent move, one of the vases was broken. The vase alone was worth $400, but it would cost $500 to buy a new one. Without the broken vase, the remainder of the set is only worth $1000. What should Melanie receive from the insurer under the Pair and Set provision of her Personal Articles Floater? A. $400 B. $2,800 C. $500 D. $1,800
D. $1,800
103. Erica's property sustained damage in a recent flood. The damages to her home and detached garage came to $80,000 and $15,000, respectively. Erica has a dwelling form flood policy with $100,000 limit. How much can Erica expect to receive in indemnification for the damaged garage? A. $0 B. $90,000 C. $15,000 D. $10,000
D. $10,000
27. James is walking down the street when Andrea, an uninsured motorist, strikes him with her car. James suffers $12,000 in damages from the accident. James has personal injury protection of $10,000 from his own automobile insurance policy, which immediately pays him the full amount. By accepting $10,000 from his own insurance company, James has waived the right to sue Andrea for more than _____ for personal injury. A. $12,000 B. $5,000 C. $10,000 D. $2,000
D. $2,000
59. Lightning strikes one of Christy's trees in her backyard and starts a fire that spreads to two other trees before firefighters are able to put it out. The fire department charges her $600 for responding to her call. Christy's DP-2 policy has a Coverage A limit of $95,000. What is the amount of indemnification that Christy can expect to receive for this loss? A. $500 B. $4,750 C. $1,500 D. $2,000
D. $2,000
32. 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 $400 per year, and a similar TV cost $1,800 today. Assuming Roxanne's homeowners policy pays ACV for personal property, how much can she expect to receive in indemnification for the damaged TV? A. $600 B. $2,400 C. $1,200 D. $200
D. $200
53. In order to be considered "fully insured," Richard must carry at least $240,000 in insurance coverage on his home. What is the value of Richard's home? A. $216,000 B. $192,000 C. $240,000 D. $300,000
D. $300,000
143. A resident adjuster in Alabama must complete continuing education requirements, which include: A. 30 classroom hours every three years (2 hours in ethics). B. 24 classroom hours every year (2 hours in ethics). C. 30 classroom hours every two years (3 hours in ethics). D. 24 classroom hours every two years (3 hours in ethics).
D. 24 classroom hours every two years (3 hours in ethics).
144. Which of the following is a requirement of the Gold-level Fortified Home Hurricane Designation, but is not a requirement for a Silver- or Bronze-level designation? A. The roofing system must be sealed, and roof decking must be attached with mechanical fasteners. B. Garage doors must be pressure rated for pressures associated with site design, wind speed, and exposure category. C. Porches and carports must have adequate connections for possible uplift pressures. D. A continuous load path must be designed and installed, providing connection from roof to wall, wall to floor, and floor to foundation.
D. A continuous load path must be designed and installed, providing connection from roof to wall, wall to floor, and floor to foundation.
1. Which of the following is a hazard? A. A skiing accident B. Vandalism C. Lightning D. A driver's tendency to text while driving
D. A driver's tendency to text while driving
136. What does the adjuster's code of ethics say about release forms? A. An adjuster must obtain a signed release form within 15 days of a claim being filed. B. An adjuster must consult the claimant's attorney before drafting a release form. C. An adjuster must draft a form of release every time she investigates a loss. D. An adjuster shall not draft any form of release, unless approved in writing in advance by the insurer.
D. An adjuster shall not draft any form of release, unless approved in writing in advance by the insurer.
107. All of the following automobile components may be covered under a mechanical breakdown insurance policy, except: A. Electronics system. B. Transmission. C. Air conditioning system. D. Body.
D. Body.
82. Nature's Best Vitamins is ready to invest in a new lab for their growing company. The company wants to make sure they have insurance coverage that will protect their interest in the new building and the building materials while construction takes place. What coverage should Nature's Best purchase for that purpose? A. Extra expense coverage B. Preservation of property C. Business income coverage D. Builder's risk coverage
D. Builder's risk coverage
132. Jill's was forced to close her convenience store and evacuate because of a strong hurricane that hit her town. Jill was not allowed to reopen her store for two weeks, thus she lost two full weeks of income. Which additional coverage would indemnify Jill for this loss? A. Business Owners Liability Insurance B. Extra Expenses Coverage C. Law and Ordinance Coverage D. Business Interruption Insurance
D. Business Interruption Insurance
49. Quincy is in court attempting to convince at least 10 of the jurors 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. Comparative negligence hearing B. Contributory negligence hearing C. Criminal trial D. Civil trial
D. Civil trial
81. Honey's Bakery is a local coffee shop run by two sisters. In a rush to leave one afternoon, their new employee forgets to turn off the gas stove. The leaking gas causes an explosion, destroying the kitchen. Which condition could help the sisters cover the cost of the damage? A. Other Insurance B. Legal Action Against the Insurer C. Non-Owner Condition D. Control of Property
D. Control of Property
124. According to Lonnie's health insurance policy, she is responsible for paying 15% of all of her medical costs. This percentage is Lonnie's: A. Capitation. B. Coinsurance Payment C. Deductible. D. Copayment.
D. Copayment.
88. DEC Construction was hired to renovate Randy's home completely. As the general contractor of the job, DEC Construction subcontracts the electrical portion of the job to Mac Electric and requires Mac to buy Owners & Contractors Protective Liability for the job. Who would be listed as the named insured(s) for this coverage? A. DEC Construction and Mac Electric B. Randy C. Mac Electric D. DEC Construction
D. DEC Construction
97. Which Business Auto Policy endorsement covers employees while using their personal cars for business purposes? A. Mobile Equipment B. Drive Other Car C. Individual Named Insured D. Employee as Additional Insured
D. Employee as Additional Insured
108. While out in the company car bringing papers to a client to sign, Jack makes a bad left turn, and gets into an accident with an SUV carrying a sports team. Five people were injured, and the injuries totaled $240,000. Jack's company's BAP only covers up to $100,000 in personal injury. Which policy might help cover the remaining liability caused by Jack's accident? A. Business Owners Policy B. Commercial General Liability Policy C. Extended Liability Policy D. Excess Liability Policy
D. Excess Liability Policy
106. Which of the following losses may be covered by mechanical breakdown insurance? A. Someone put sugar in Selma's gas tank, which ruined her engine. B. Elliot's windshield wipers cracked shortly after purchase. C. Tina's clutch failed at 131,000 miles. D. Harry's power steering system failed at 65,000 miles.
D. Harry's power steering system failed at 65,000 miles.
104. All of the following would be covered by the NFIP General Property Form, except: A. Furniture store's inventory. B. Medical office. C. Motel lobby's furnishings D. Homeowner's living room furniture.
D. Homeowner's living room furniture.
40. Stephanie is in the process of adjusting George's auto claim. Currently, she is interviewing Shana, who witnessed George's accident and stopped to help. In what stage of the adjusting process is Stephanie currently working? A. Claims Management B. Negotiation C. Evaluation D. Investigation
D. Investigation
34. All of the following are true of an insurance settlement, except: A. It can also be described as a dispute resolution. B. It must be reached in good faith. C. It is an agreement between the insurer and the insured. D. It is reached with the help of a judge in a court of law.
D. It is reached with the help of a judge in a court of law.
135. Every time Maria adjusts an auto claim, she refers the claimant to Bud's Body Shop for repairs. In turn, Bud's Body Shop pays Maria $50 dollars for every vehicle brought to their shop based on Maria's recommendation. By taking this money, Maria is accepting: A. Salary. B. Settlement padding. C. Bribes. D. Kickbacks.
D. Kickbacks.
147. Angie just got her first adjuster license in Alabama on May 11, 2015. Her birthday is March 10, 1983. When does her license expire? A. May 31, 2016 B. March 10, 2016 C. May 11, 2017 D. March 31, 2017
D. March 31, 2017
126. Nick has a comprehensive individual health insurance policy that he purchased through an HMO, and Charity has a PPO plan through her employer. Which of the following statements is true? A. Nick has a higher level of flexibility in choosing his health care than Charity, but Charity has lower medical costs than Nick. B. Nick's policy was automatically accepted by his insurer, but Charity had to prove her current health status before being accepted. C. Nick's plan allows him to go to any hospital for emergency services, but Charity is restricted to approved hospitals within the network. D. Nick was assigned a primary care physician who must coordinate his health care within a network, but Charity may choose a primary physician.
D. Nick was assigned a primary care physician who must coordinate his health care within a network, but Charity may choose a primary physician.
92. Aces International has a fidelity bond contract with XYZ Insurance, whereby XYZ Insurance will pay for any financial damages that Aces International may incur if an Aces employee commits fraud. In this contract, Aces International would be considered the: A. Indemnitor. B. Surety. C. Principal. D. Obligee.
D. Obligee.
42. As a fiduciary agent, an adjuster has the power to bind. Therefore, all of the following statements are true, except: A. The insurer grants this power to the adjuster in a written contract. B. Even if an adjuster made a mistake in determining the value of the loss, the insurer must pay that amount. C. When adjusting a claim, an adjuster's actions are legally considered those of the insurer itself. D. Only an adjuster's written statements can legally bind an insurer.
D. Only an adjuster's written statements can legally bind an insurer.
69. Which of the following is not true of Personal Injury Protection? A. PIP restricts policyholder's right to recover losses in civil court B. PIP is primary coverage C. PIP provides no-fault protection D. PIP is usually secondary coverage
D. PIP is usually secondary coverage
123. Brian has an accident at work and loses hearing in both of his ears, becoming permanently deaf. What kind of disability benefits will he most likely receive? A. Temporary partial disability benefits B. Temporary total disability benefits C. Permanent total disability benefits D. Permanent partial disability benefits
D. Permanent partial disability benefits
118. According to workers' compensation insurance, all of the following words describe an "accident" EXCEPT: A. Violent B. Unexpected C. Sudden D. Preventable
D. Preventable
99. Dwight encounters Matthew coming home from work one night and threatens to beat him up if Matthew does not hand over his wallet. Which of the following terms best describes Dwight's actions? A. Theft B. Burglary C. Larceny D. Robbery
D. Robbery
138. Which of the following, according to the NAIC, is an Unfair Settlement Practice for insurers? A. Canceling a policy due to non-payment of premiums B. Purposefully limiting exposure C. Charging higher premiums to elderly drivers D. Settling a claim using an application that was altered without insured's knowledge
D. Settling a claim using an application that was altered without insured's knowledge
149. When Emma's house was burglarized, the thieves stole several pieces of her art collection. Although the pieces were only printing, Emma claimed they were originals on her insurance claim, thus exaggerating their value. This is an example of: A. Tortfeasor. B. concealment. C. Hard Fraud. D. Soft Fraud.
D. Soft Fraud.
140. Susie, an Alabama adjuster, just moved to a new house. Which of the following is false? A. Susie has 30 days to file a change of address with the Department of Insurance. B. If Susie does not notify the Department of Insurance, she will have to pay a $50 penalty. C. Susie must notify the Department of Insurance that she has moved. D. Susie will have to pay a $10 fee to submit a change of address to the Department of Insurance.
D. Susie will have to pay a $10 fee to submit a change of address to the Department of Insurance.
91. Laura has just found out that she is being sued for malpractice because she accidently left a surgical sponge inside a patient before stitching him up 18 months ago. Four months ago, she purchased a Claims Made Medical Professional Liability insurance policy with a $2,000,000 limit and a retroactive date set at two years. Which of the following statements is true? A. Laura is not covered because she caused bodily injury to the patient. B. If she loses the case and the amount of damages awarded is less than $2,000,000, her insurer will pay the entire amount plus all legal fees, regardless of the amount. C. This claim would not be covered because the surgery took place before Laura purchased the policy. D. The insurer cannot settle the case without Laura's permission.
D. The insurer cannot settle the case without Laura's permission.
63. In a Personal Auto Policy, the term "family member" would include: A. The named insured's ex-husband, who moved out 5 months ago. B. The named insured's 18-year-old daughter, who lives with her husband in New Jersey. C. The named insured's ex-husband, who moved out 4 months ago. D. The named insured's 26-year-old son who lives at home.
D. The named insured's 26-year-old son who lives at home.
113. All of the following items may be covered by an Inland Marine policy, except: A. Radio Towers. B. Bridges. C. Property Being Transported. D. Transport Vehicles.
D. Transport Vehicles.
86. Joe decides to go surfing for three months in Hawaii. Before he leaves, he locks up his surfboard shop and rents a storage unit for most of his equipment and merchandise. When Joe returns, he finds that his shop has been broken into and vandalized. Under what policy condition would Joe's insurer refuse to make a full payment? A. Liberalization B. Concealment C. Changes in policy D. Vacancy
D. Vacancy
Tamara is fully insured by a DP-1 on her $175,000 home. When a portion of Tamara's attached garage burns in a small fire, the adjuster estimates it will take $8,000 to repair the damage. However, based on the age of the structure, the adjuster writes Tamara a check for $5,500. Once repairs are completed, Tamara submits proof and receives how much more from her insurer? A.$1,750 B.$1,500 C.$2,500 D.$0
D.$0 Under DP-1, claims for Dwelling and for Other Structures are settled at Actual Cash Value, so there is no recoverable depreciation available to Tamara.
In which section of a Standard Fire Policy would you find information on rules of conduct and obligations the policyholder must follow in order for insurance coverage to apply? A.Declarations B.Insuring Agreement C.Exclusions D.Conditions
D.Conditions
Which of the following is TRUE of the vacancy condition in a typical insurance policy? A.It states that a dwelling vacant for more than 15 days is not insurable. B.It states that the insurance policy will terminate if the insured building is vacated. C.In commercial policies, it states that a building is vacant if more than 31% of the building is unoccupied. D.It establishes the parameters for considering a building vacant for the purpose of coverage.
D.It establishes the parameters for considering a building vacant for the purpose of coverage.
How is the power to bind transferred to an adjuster? A.It is passed from one adjuster to another. B.It is implied by the position. C.It is transferred by a sworn oath. D.It is transferred through a written contract.
D.It is transferred through a written contract. When an insurer gives an adjuster written authority, via contract, to act as its fiduciary agent, the adjuster's actions are legally considered the actions of the insurer itself.
Which of the following may be covered under a DP-3? A.Earthquake B.Flood C.Water backup from sewers D.Power failure on the premises
D.Power failure on the premises A DP-3 will cover damage caused by power failure on the premises, but excludes coverage for flood, water backup from sewers, and earthquakes.
2. Which of the following is an example of a hazard? A. Sandra buys a lottery ticket every day. B. Sandra's home is destroyed when a massive earthquake occurs. C. Sandra owns an exotic car that is extremely valuable. D. Sandra's home is in an area of Los Angeles that is often hit by earthquakes.
Sandra's home is in an area of Los Angeles that is often hit by earthquakes.
