Practice Test 4
The purpose of licensing surplus lines broker in a given state is: a. to allow them to place business with nonadmitted insurers b. to allow them to place business with admitted insurers c. to allow them to place business with domestic insurers d. to allow them to place business with foreign insurers
a. to allow them to place business with nonadmitted insurers
A public adjusters fiduciary responsibility is to: a. the attorney handling the claim on behalf of the principal b. the insured c. the state department of insurance d. the insurer
b. the insured
Which of the following individuals was NOT required to be in concurrence with certifying an act of terrorism under the Terrorism Risk Insurance Act of 2002? a. The secretary of state b. the secretary of homeland security c. the secretary of the treasury d. the united states attorney general
b. the secretary of homeland security
If a bond is called upon for payment, which party pays out the face amount of the bond? a. the principal b. the surety c. the obligee d. the insured
b. the surety
Isabelle is covered under a standard HO-6 form and must vacate her condominium because an adjacent unit has suffered extensive fire damage. Isabelle will need to collect additional living expenses from Coverage D of her HO-6 form. how will this amount be calculated? a. Isabelle will receive 50% of the Coverage C limit she selected when she purchased the policy b. Isabelle will receive 30% of the Coverage C limit she selected when she purchased the policy c. The HO-6 specifies a Coverage D limit of $5,000 d. The HO-6 specifies a Coverage D limit of $3,000
a. Isabelle will receive 50% of the Coverage C limit she selected when she purchased the policy
Which of the following would be excluded under Part A of the Personal Auto policy? a. a person transports people from the airport to nearby hotels for a fee b. a person uses his car to transport his workmates once per week in a car pool c. a person borrows a friends vehicle to travel to the airport d. a person gets a speeding ticket in addition to being cited for an accident
a. a person transports people from the airport to nearby hotels for a fee
Subrogation may follow which of the following events? a. an insured collects from her insurance company for damages caused by a third party b. firefighters damage the insureds property while fighting a fire c. nature damages the insureds property d. an insured causes damage to her own property
a. an insured collects from her insurance company for damages caused by a third party
Other private structures on a farm policy are defined as: a. another private structure on the property separated from the dwelling by a clear space b. any other structure on the farm property c. barns, sheds, silos etc. d. none of the above are correct
a. another private structure on the property separated from the dwelling by a clear space
Which of the following statements BEST describes the reason it was necessary to create a federal flood insurance program in 1968? a. because other property policies routinely exclude flood from coverage b. because people were building their homes closer and closer to large bodies of water than ever before c. because the US was experiencing more flooding than ever d. because the flood insurance policies that were being issued at the time, did not provide adequate coverage for contents
a. because other property policies routinely exclude flood from coverage
All of the following statements are true regarding the South Carolina workers Compensation Secondary Fund, EXCEPT: a. covers uninsured employees for their work related injuries b. pays all or part of the additional compensation required when an employee who is already disabled suffers a subsequent injury c. provides some benefits for a preexisting injury d. the secondary injury fund does not provide unlimited benefits
a. covers uninsured employees for their work related injuries
The insured awoke and found that a water line on his side of the water meter has broken. Several thousand gallons of water have escaped. The water company bills the insured for the loss of the water, because the breakage in the waterline occurred on his side of the water meter. The insurance company will: a. deny the claim because water is excluded under Coverage C b. pay for the loss of the water under Coverage C c. pay for the loss of the water under Coverage B d. deny the claim because flood is never covered under a Homeowners form
a. deny the claim because water is excluded under Coverage C
Which of the following endorsements can be attached to the Business Auto policy to extend coverage to individuals such as the owner of the business who does not carry personal auto insurance? a. drive other car endorsement b. named non-owned endorsement c. broad form named non-owned auto endorsement d. drive away liability endorsement
a. drive other car endorsement
In the event of a catastrophe, the Director may permit nonresident adjusters to handle claims in South Carolina if the nonresident adjuster exhibits: a. evidence of an adjusters license in his/her home state b. a surety bond in the amount of $25,000 c. an ability to handle catastrophic losses d. all of the answer choices are correct
a. evidence of an adjusters license in his/her home state
Under Coveage E- Scheduled Farm Property, how is the property covered? a. for the limit scheduled in the Declarations b. value basis c. blanket coverage d. replacement cost basis
a. for the limit scheduled in the Declarations
A print shop is insured under a Businessowners Policy with a separate policy covering the press. If a loss occurs that is covered under both policies, how will the Businessowners Policy respond? a. in this situation, the BOP is considered "excess" coverage b. the BOP would not respond to this claim at all because other coverage was in effect c. the BOP will pay a share of the loss in proportion to the other policy d. the abandonment clause under the BOP policy will allow the insured to abandon the property to the other insurer
a. in this situation, the BOP is considered "excess" coverage
Horatio is a business owner who is part of a business owners group that are buying old commercial buildings in their small city and refurbishing them. Horatio has bought a beautiful historical building made mostly of wood. He installs a sprinkler system right away to prevent a fire. What risk management strategy strategy is Horatio using? a. risk reduction b. assumption of risk c. risk avoidance d. sharing the risk
a. risk reduction
An agent with a surplus/excess lines license, will place insurance business with an unauthorized insurer when: a. the coverage cannot be obtained from insurers authorized within the state b. the coverage can be obtained from an unauthorized insurer at a lower premium c. the coverage can be obtained from an unauthorized insurer with fewer coverage exclusions d. the unauthorized insurer has a better reputation than authorized insurers offering the same coverage
a. the coverage cannot be obtained from insurers authorized within the state
What type of contract is binding on only one party? a. unilateral b. bilateral c. adhesion d. indemnity
a. unilateral
If an insured intentionally conceals a material fact on an application for insurance, the coverage may be: a. voided b. suspended c. reduced d. restricted
a. voided
Under a directors and officers policy, when can the insurance company reimburse the corporation for reimbursement to directors and officers for defense and damages paid in legal proceedings? a. when allowed by its bylaws b. when approved by the board of directors c. never, because these expenses are excluded d. anytime there is a claim
a. when allowed by its bylaws
Under a liability policy the insurance company will pay damages on behalf of an insured when: a. when it is established that the insured is legally liable b. a relative is injured on the premises c. the local police department issues a safety citation d. any time a third party is injured on the insureds premises
a. when it is established that the insured is legally liable
Under a Crime insurance discovery form, a loss is discovered: a. when the insured first becomes aware that a loss has occurred or gives notice of an actual claim of a covered loss b. when the person who committed the crime is discovered and arrested c. when the insured becomes aware of the exact details of the occurrence d. when the stolen property is discovered and returned to the insured by the authorities
a. when the insured first becomes aware that a loss has occurred or gives notice of an actual claim of a covered loss
Under what circumstances does an insurer allow the transfer of an insureds rights and duties under a Commercial Package Policy without the permission of the insurer? a. when the named insured dies b. when the named insured is in the hospital c. when the named Insured is out the US d. when the named insured is informed of a terminal illness
a. when the named insured dies
The insured has suffered a severe storm and some of his trees, shrubs and plants are heavily damaged by the wind. How much coverage could the insured expect to receive for his claim under his DP-3 Dwelling policy? a. $500 for each plant, subject to 5% of the Coverage A limit b. $0 c. 5% of the Dwelling limit d. A total of $500
b. $0
The National Flood Insurance Program will pay which of the following amounts to assist with moving of property to safety when there is imminent flood danger? a. $500 b. $1,000 c. $1,500 d. $2,000
b. $1,000
An insured has a $2 million limit of insurance under a Personal Umbrella policy with a $2,000 self-insured retention limit. The insured is sued for $1 million in person injury damages and $1.5 million in property damages arising from the same occurrence. The insureds underlying liability policies exclude coverage in this case, but the claim is covered under the Umbrella policy. In this case, the umbrella policy will pay: a. $1 million b. $1,998,000 million c. $2 million d. $2,500,000
b. $1,998,000 million
Under the standardized Homeowners forms, how much additional coverage is provided under Section II- Liability for loss of earnings by the insured to assist in the investigation or defense of a claim? a. $200 per day b. $250 per day c. $300 per day d. $175 per day
b. $250 per day
Which of the following coverages is included as "no-fault" coverage on the standardized Personal Auto policy? a. uninsured motorists coverage b. medical payments and physical damage c. a state mandated no fault coverage plan d. liability coverage
b. medical payments and physical damage
All of the following statements are TRUE regarding Section II- Liability of the Garage Coverage form, EXCEPT: a. excludes coverage for the property of others in the insureds care, custody, and control b. provides coverage when an employee causes damage to a customers vehicle c. includes coverage for losses arising out of the ownership, maintenance, or use of a covered auto d. provides coverage for a customer who is injured on the garage premises
b. provides coverage when an employee causes damage to a customers vehicle
Which of the following statements is NOT TRUE of a fidelity bond written on a "scheduled basis"? a. schedules the covered employees by name b. schedules a single amount to cover all employees c. schedules the employees for different limits of coverage d. schedules an amount for each named employee depending on their specific positions in the company
b. schedules a single amount to cover all employees
The "control of property" condition of the Commercial Property policy: a. states that the insured must have control over the insured property when a loss occurs, otherwise coverage will not apply b. states that a negligent act of someone beyond the insureds direction or control will not affect the coverage c. states that if the insured violates a condition of the insurance at one location, it is considered to be violated at all insured locations d. states that a negligent act of someone beyond the insureds direction or control will void the coverage
b. states that a negligent act of someone beyond the insureds direction or control will not affect the coverage
A claim reserve is set statistically by using which of the following reserving techniques? a. a roundtable method b. the formula method c. the individual case method d. the claim committee method
b. the formula method
Which of the following statements is correct concerning the premiums for workers compensation policy? a. the premium shown on the information page is the final premium b. the insurer has three years after the policy expiration to audit the insureds payroll records in order to determine the final premium c. the insurer has 12 months from policy expiration to determine actual payroll and work classifications and bill the insured accordingly d. the insured has the option of having its payroll audited and premium adjustment made
b. the insurer has three years after the policy expiration to audit the insureds payroll records in order to determine the final premium
A requirement that a plaintiff file a lawsuit within a specific period of time after the cause of lawsuit has occurred, which is oftentimes when the injury occurred or was discovered is known as: a. the burden of proof b. the statute of limitations c. the subrogation clause d. the time limit on certain defense
b. the statute of limitations
Emily owns a home that she has covered under Homeowner policy. Because Emily lives alone, she has to leave her home and stay with her parents for the past six months while she recovers from major surgery. Except for the day to day items that Emily needs while she stays at her parents home, all of her belongings are still located in her home. Which of the following best describes the condition of Emily's home? a. desserted b. unoccupied c. vacant d. empty
b. unoccupied
The liability section of the Business Auto policy excludes coverage for pollution damage except in certain circumstances. Which of the following statements describes a circumstance where pollution would NOT be covered by the Business Auto policy? a. when there is bodily injury caused in the same accident that caused the pollution loss b. when a covered truck leaks contaminating anti-freeze from its radiator because the radiator cap was accidentally left off c. when a covered truck leaks contaminating anti-freeze from its radiator as a result of an accident d. when there is property damage caused in the same accident that caused the pollution loss
b. when a covered truck leaks contaminating anti-freeze from its radiator because the radiator cap was accidentally left off
Which of the following are considered unfair claim settlement practices in South Carolina? a. Provisioning misleading information with respect to the coverages b. Failing to acknowledge with reasonable promptness pertinent communications with respect to a claim c. Attempting in good faith to make prompt, fair and equitable settlements of claims on which liability has become reasonably clear d. Compelling policyholders or claimants to initiate suits to recover amounts due under a policy a. I,II and III b. II, III, and IV c. I, II and IV d. I and II
c. I, II and IV
The purpose of a status/interim report submitted by an adjuster is to indicate that the adjuster is continuing to work on the claim and: a. to provide preliminary estimates of the value of the loss b. to inform the insurer of large losses that may not have been expected c. that the claims adjustment is progressing in a timely manner d. to reassure the insurer that the adjuster is complying to state statutes regarding the Unfair Claim Settlement Practices
c. that the claims adjustment is progressing in a timely manner
Which of the following statements is correct regarding the differences in coverage between an HO-3 and an HO-5? a. the HO-3 pays market value for dwelling losses, while the HO-5 pays replacement cost b. the HO-3 only covers personal property owned by the insured while the HO-5 can cover personal property owned or used by the insured c. the HO-3 covers personal property on a named peril basis, while personal property under an HO-5 is covered on an open peril basis d. the HO-3 has more exclusions pertaining tot he insured dwelling than the HO-5
c. the HO-3 covers personal property on a named peril basis, while personal property under an HO-5 is covered on an open peril basis
A property insurance policy provision that protects the interests of an entity that has extended credit to, or leased chattel property to the insured is known as: a. the standard mortgage clause b. the credit insurance clause c. the loss payable clause d. the no benefit to bailee clause
c. the loss payable clause
All of the following are "open peril" exclusions of the HO-3 and HO-5 form, EXCEPT: a. flood b. neglect, deterioration and general wear and tear c. theft d. mold, fungus and wet rot
c. theft
To qualify as an adjuster, the applicant must comply with all of the following, EXCEPT: a. have sufficient knowledge of the business of insurance b. be of good moral character c. has not violated any insurance laws of South Carolina d. be a resident of South Carolina
d. be a resident of South Carolina
With a claims made CGL policy, if a loss occurred after the retroactive date but was not reported during the policy period, what else needs to be in place in order for the insurer to respond to the notice of claim? a. extended policy term of 60 days b. extended supplemental retroactive date c. extended coverage endorsement d. extended reporting period
d. extended reporting period
Which of the following is NOT a claim settlement option in a property loss? a. replace the property with like kind and quality b. replace the property with new c. repair the property d. pay market value only
d. pay market value only
Whose responsibility is it to complete a proof of loss? a. the insurers adjuster b. the agent or producer c. the insurer d. the claimant
d. the claimant
When the Employee Theft insuring agreement is selected as part of a Crime insurance policy and coverage is provided on a named scheduled basis, this means: a. all employees within the company are covered for theft or forgery b. the employee positions within the company are listed by name c. the coverages provided are listed by name d. the employees covered are listed by name
d. the employees covered are listed by name
On the basic dwelling policy all of the following perils are excluded EXCEPT: a. war b. landslide c. earthquake d. volcanic eruption
d. volcanic eruption
Jerusha has her business automobiles covered under a Business Auto policy. She has purchased a new business automobile recently but was not required under her policy provisions to report her newly acquired auto. Based on this information, which BAP symbol is listed on the Declarations page of Jerusha's policy? a. Symbol 1 b. Symbol 7 c. Symbol 5 d. Symbol 3
a. Symbol 1
Jim and Mary are celebrating their 50th wedding anniversary and are on a worldwide cruise. They carry a DP-3 policy with a person property limit of $50,000. While off the coast of Africa the ship catches fire and their property is completely destroyed. How much, if anything, will they collect? a. nothing b. $5000 c. Up to the personal property limit d. $1000 on a replacement cost basis
b. $5000
Under which of the following scenarios would damage to a watercraft be covered under a Homeowners Policy? a. the insureds covered watercraft is located in a storage facility with three walls surrounding it, and excessive wind enters the facility and causes damage to the boat b. the insureds covered watercraft is located in an enclosed building, but the wind blows off the roof and rain enters the boat and ruins the dashboard c. the insureds covered watercraft is stored in the insureds garage, the insured leaves the garage door up and a large thunderstorm comes through the area, causing water and wind damaged to the boat d. the insureds covered watercraft was damaged while tied to the insureds dock when large waves bring water into the boat and ruin the dashboard.
b. the insureds covered watercraft is located in an enclosed building, but the wind blows off the roof and rain enters the boat and ruins the dashboard
An insured has taken an inventory of his merchandise and discovers a substantial shortage of valuable stock. He submits a claim to his insurance carrier that provides his coverage under a Business owners Policy. What coverage is provided by the BOP for the missing inventory? a. full replacement cost coverage b. full actual cash value coverage c. the loss is paid on an agreed amount basis d. no coverage would apply
d. no coverage would apply
Which of the following endorsements must be attached to a standard Businessowners policy for coverage to apply to a business freezer that was damaged by the interruption of a power source? a. business personal property endorsement b. protective safeguards endorsement c. utility services- time element endorsement d. utility services- direct damage endorsement
d. utility services- direct damage endorsement
An insured who had a $500,000 primary liability policy purchased a $1 million Umbrella liability policy with a $2,000 self-insured retention limit. Later, the insured allowed the required underlying primary policy with a limit of $500,000 to expire. A week after that, the insured become liable for a $100,000 loss that is not excluded by the provisions of either primary underlying liability policy or the Umbrella policy. a. The insured will be liable for the full $100,000 loss b. the umbrella policy will pay the full $100,000 loss c. the underlying policy will pay the full $100,000 loss d. The insured will pay $2,000 and the umbrella policy will pay the remainder of the loss
a. The insured will be liable for the full $100,000 loss
Chaz takes his girlfriend to an expensive restaurant for Valentines Day. Its raining, so he decided to have the valet park his car, saving his girlfriend from getting wet. The valet is driving the car into the restaurants parking garage, when he clips the side of the garage entrance with the front fender of chaz's car. The garage wall needs to be repaired as well as the fender and headlight of Chaz's car. How would Part D of Chaz's Personal Automobile respond to this loss? a. it would cover both the loss to Chaz's car, and the damage to the garage under the Collision coverage of Part D b. it would not cover either the damage to Chaz's car or the damage to the garage, because Chaz permitted someone other than an insured to drive his car c. it would not cover the damage to Chaz's car because he allowed someone other than an insured to drive it. But It would cover the damage to the garage because the insured automobile caused the loss d. it would cover the loss to Chaz's car because it is the insured automobile, but would not cover the damage to the garage
d. it would cover the loss to Chaz's car because it is the insured automobile, but would not cover the damage to the garage
Coverage D- Loss of use on the Homeowners forms provide coverage for "Civil Authority Prohibits Use" for: a. for as long as it takes to find another location for the insured to temporarily reside. b. no more than 4 weeks c. for as long as it takes for the civil authority to declare the area fit for habitation d. no more than two weeks
d. no more than two weeks
Which of the following professional liability policies would cover a dishonest, fraudulent or criminal act of the manager of a LLC? a. fiduciary liability b. malpractice liability c. errors and omissions d. none of the policies cover these acts
d. none of the policies cover these acts
The Terrorism Risk Insurance Program Reauthorization Act of 2015 excludes all acts of terrorism if the act if committed as part of the course of a war declared by Congress with the exception of one line of insurance. Which of the following lines of insurance is the only one that would still be covered for loss or damage due to acts of war? a. commercial property b. excess lines coverage c. directors and officers liability d. workers compensation
d. workers compensation
Under an Ocean Marine policy, which of the following is considered to be the most important implied warranty? I. seaworthiness II. condition of the cargo III. legality a. I b. II c. I and II d. III
a. I
Mr.Kessler has an auto policy with bodily injury limits of $15,000/$30,000. He injures two people in one accident. Mr. Brown receives injuries of $19,000. Mr. Jones receives injuries of $15,000. Legal expenses to defend Mr.Kessler total $10,000. How much is Mr.Kessler liable for after his insurance company makes its payment? a. $4,000 b. $15,000 c. $14,000 d. $19,000
a. $4,000
Which of the following is one of the duties of the insured as specified in a Commercial Inland Marine policy? a. submit to an examination under oath if the insurer requests it b. accept responsibility for the loss immediately c. leave damaged property and undamaged property together because moving the property could compromise the claims investigation d. notify law enforcement immediately at the time of the loss, regardless of whether or not the loss involved criminal activity
a. submit to an examination under oath if the insurer requests it
The Medical Payments coverage of the standard Yacht policy covers all medical expenses incurred by an insured, family members, invitees, or guests if a claim is submitted. a. within 1 year following a covered accident b. within 5 years following a covered accident c. within 3 years following a covered accident d. within the policy period.
a. within 1 year following a covered accident
An insured under an unendorsed Homeowners policy can be all of the following, EXCEPT: a. a 14 year old niece of whom the named insured has custody b. A childhood friend of the named insured who is visiting from England for a month c. The named insureds 22 year old daughter who a full time graduate student d. the spouse of the named insured who is also a resident of the insured location
b. A childhood friend of the named insured who is visiting from England for a month
What is the limit for "Business Income" additional coverage under a standard Businessowners policy? a. $100,000 b. Actual loss sustained for up to 12 months c. Actual loss sustained after the time deductible, until the business has resumed normal operations d. the actual loss of income from the date of the damage to the end of the policy period
b. Actual loss sustained for up to 12 months
All of the following statements are TRUE regarding a Commercial Inland Marine Policy, EXCEPT: a. coverage is not dependent on the property being located at a specific "premises" at the time of the loss b. the coverage is most often written on a named peril basis c. the coverage moves with the property being covered d. the controlled forms may be used as part of a Commercial Package Policy
b. the coverage is most often written on a named peril basis
The insured carries an unendorsed DP-3 dwelling policy on his home and personal contents. While traveling abroad someone broke into the home and stole $200. in cash, a shotgun valued at $1,000. and other household items valued at $2,000. Damage caused by the burglars is $1,500. Assuming no deductible applies to their coverage how much would be paid? a. $3200 b. $4500 c. $1500 d. $2000
c. $1500
Fred owns two commercial buildings and carries NFIP coverage on them. The area where the buildings are located is a full risk zone in the Regular Program. Both buildings are 30 years old and when they are damaged by flood, Fred finds that the cost to comply with the new Floodplain Management Ordinance will be quite expensive. What is the total amount of coverage Fred could receive for the Increased Cost of Compliance? a. $59,000 b. $58,000 c. $60,000 d. $30,000
c. $60,000
A home is insured by an unendorsed HO-3 form. The home burns an all of the policyholders jewelry is destroyed. The maximum the insured can collect under the HO-3 policy for the jewelry is: a. $500 b. $1500 c. ACV of jewelry d. Replacement cost of jewelry
c. ACV of jewelry
The Part B- Medical Payments coverage of Dorinda's personal automobile policy has a limit of $5,000. Three of Dorinda's friends were injured in an accident that occurred while they were riding in Dorinda's car. The amount of medical expenses per person were as follows: harvey- $1500 diane- $4575 thomas- $6250 a. Each of the three people would receive $1667 to apply to their medical expenses b. Harvey would receive $1500, Diane would receive $4575, and Thomas would receive $6250 c. Harvey would receive $1500, Diane would receive $4575, and Thomas would receive $5000 d. the injured parties would each receive $5000, the limit of Dorindas policy, per person
c. Harvey would receive $1500, Diane would receive $4575, and Thomas would receive $5000
With workers compensation insurance, an experience rating serves all of the following purposes, EXCEPT: a. to encourage employer to prioritize safety b. to reward employers with lower premiums if they have had a good loss experience c. to provide a reason that employers with a poor loss experience can be denied coverage d. to provide a financial incentive for employers to control hazards in the workplace
c. to provide a reason that employers with a poor loss experience can be denied coverage
Watercraft owned by the insured are excluded from coverage under a Commercial General Liability policy EXcEPT when the watercraft is: a. in the water b. on a public roadway or trailer c. being raced in an organized sporting event d. ashore on the insureds premises
d. ashore on the insureds premises
Under which of the following Aviation physical damage losses would a deductible apply? a. fire caused by lightning b. theft or pilferage c. a deductible applies to all aviation physical damage losses d. fire caused by a collision
d. fire caused by a collision
On the way to Europe, heavy seas place a cargo ship in danger of sinking. The crew decides that if they dispose of the heavy equipment they are hauling the ship wont sink. They toss overboard 10 tractors owned by John Deere. The cartons of cotton balls owned by Eli Cotton are safe as is the whipped marshmallow cream being shipped for Kraft Foods. When they get to Europe, Eli and Kraft are asked to share in the loss that John Deere sustained. This is an example of: a. demurrage b. sue and labor clause c. free of particular average clause d. general average clause
d. general average clause
All of the following would NOT be covered under any section of the Businesss and Personal Property coverage form, EXCEPT: a. automobile held for sale b. an automobile that is licensed for use on public roads c. retaining walls that are not a part of the building described in the declarations but are destroyed by a covered cause of loss d. the cost to restore electronic data that was corrupted by a covered cause of loss
d. the cost to restore electronic data that was corrupted by a covered cause of loss
Under a DP-2 or DP-3 standardized policy what is the maximum that would be paid for one month for additional living expenses if Coverage A was $75,000? a. $1,250 b. $500 c. $1000 d. $750
a. $1,250
A personal automobile policy provides liability coverage on a single limit basis for $100,000. A covered accident caused by Mr.Jones involves a $75,000 liability judgment to Mr.Allen for his injuries and $25,000 liability judgement for the damage to his car. In addition, $20,000 in legal bills are incurred defending the insured. The company will pay: a. $120,000 b. $25,000 c. $75,000 d. $100,000
a. $120,000
The named insured is aware that his Business Auto policy provides transportation expense in the event of total theft of an insured private passenger vehicle. While the sales manager is attending a seminar in a neighboring state, his company car is stolen on March 10. Since his hotel is located 10 miles from the seminar site, he rents a car that same day. The insurance company pays the insured for the theft loss on March 20 after the police department had recovered the vehicle on March 17. The car had been burned and was a total loss. The insured turned in rental costs of $20/day for 11 days and mileage expense of 800 miles at 30 cents per mile. How much will the insurance company pay for these expenses? a. $160 b. $120 c. $240 d. $460
a. $160
In South Carolina, uninsured motorists property damage coverage may include a deductible of: a. $200 b. $100 c. $125 d. $250
a. $200
Which of the following could be considered a "covered auto" under a standard ISO Personal Auto policy? a. a newly acquired car reported to the insurer b. an owned vehicle not listed on the declarations page c. a non owned vehicle available for regular use d. a vehicle used in speed contests
a. a newly acquired car reported to the insurer
The doctrine that states an insureds policy should provide the coverage that a sensible and prudent person would expect is: a. the reasonable expectation doctrine b. the applied principle doctrine c. the ambiguous language doctrine d. the limited liability doctrine
a. the reasonable expectation doctrine
An insured has an auto accident and sustains bodily injury worth $50,000. The responsible party carries auto liability limits of 15/30/15 which provides $15,000 for bodily injury for any one person per occurrence. The insured carries Underinsured Motorist limits providing $100,000 bodily injury for any one person per occurrence. Therefore, the responsible partys policy will pay its limit of $15,000 and the insureds Underinsured Motorist policy will pay: a. $15,000 b. $35,000 c. $25,000 d. $100,000
b. $35,000
When a covered loss disables the insured watercraft, the standard Watercraft policy provides coverage for "towing and assistance" in the amount of: a. $250 for a single event and $1000 for the entire policy period b. $500 for a single event and $1000 for the entire policy period c. $1000 for a single event and $1500 for the entire policy period d. $0
b. $500 for a single event and $1000 for the entire policy period
When a claim reserve is set subjectively it is set: a. by using a reserve chart in a claims adjusting manual b. by using the judgement of experience claims adjusters c. by arbitrarily selecting a loss ratio d. by using a mathematical formula to calculate the reserve amount
b. by using the judgement of experience claims adjusters
Personal Injury is best described in which of the following situations? a. death as a result of cancer b. calling a client a cheat and a fraud c. a dog bite d. a broken leg
b. calling a client a cheat and a fraud
Which of the following statements best describes the process of mediation? a. it is the most common alternative dispute resolution used to resolve claim disputes b. both parties select an impartial expert and those experts select a third. The decision reached by all three impartial experts is legally binding on the disputing parties c. both parties present their dispute to a neutral third party, but no decision reached by the mediator is legally binding d. both parties present their dispute to a neutral third party and the decision of the mediator is legally binding
both parties present their dispute to a neutral third party, but no decision reached by the mediator is legally binding
The minimum financial responsibility limits required for auto insurance in South Carolina are: a. $15/30/10 b. $20/40/10 c. $25/50/25 d. $50/100/25
c. $25/50/25
If the South Carolina Workers Compensation Commission determines that an employer is subject to workers compensation laws and is operating without insurance or as unqualified self-insurer, the Commission will notify the Fund, who will pay or defend the claim as appropriate. The Fund may place a lien on the employers assets to protect the Fund from payments of costs and benefits. This is considered: a. a third lien in terms of priority of payment b. a second lien in terms of priority of payment c. a first lien in terms of priority of payment d. a special and priority lien
c. a first lien in terms of priority of payment
An adjuster license is for a term of: a. 2 years b. 1 year c. an indefinite period of time d. 3 years
c. an indefinite period of time
A formal request to an insurance company requesting a payment according to the terms of an insurance contract is known as: a. a notice of lawsuit b. a declaratory judgement request c. an insurance claim d. a service of process
c. an insurance claim
All of the following are covered under the "supplementary payments" section of a Commercial General Liability policy, except: a. court costs b. costs incurred by the insurer in investigating the claim c. costs of repair service performed on personal property at the scene of the accident d. insureds loss of earnings incurred at insurers request
c. costs of repair service performed on personal property at the scene of the accident
An insured has reported a claim late that occurred over one year ago and now seeks defense representation and coverage under his automobile policy. What should the adjuster do? a. deny the claim b. investigate the claim c. issues a reservation of rights letter to the insured d. advise the insured to seek his own legal counsel
c. issues a reservation of rights letter to the insured
Which of the following would be covered under Business Auto Symbol 7? a. hired autos only b. non-hired autos c. specifically described auto only d. any auto
c. specifically described auto only
Robert is an adjuster for Indemnify Insurance, Inc. and he has been assigned a claim and acknowledged receipt of the loss notice. Which of the following is the next step Robert will take to process the claim? a. contact the third party claimant who submitted the claim b. contact the insured covered by the policy to set an appointment to take a statement c. verify coverage for the claim under the policy d. begin lining up experts to assist in the investigation
c. verify coverage for the claim under the policy
The penalty for acting as an adjuster without a license is: a. A fine of not more than $5,000 and six months in jail b. A fine of not more than $10,000 and six months in jail c. A fine of not more than $10,000 and one year in jail d. A fine of not more than $10,000 and/or two years in jail
d. A fine of not more than $10,000 and/or two years in jail
When is a nonresident of South Carolina permitted to hold an adjuster license in the state? a. At the discretion of the Director of Insurance b. If south Carolina has a reciprocal agreement with the adjusters home state c. If the adjusters home state will allow licensees of South Carolina to hold a nonresident license in that state d. All of the choices are correct
d. All of the choices are correct
The most common method of settling liability insurance claims is through: a. ADRs b. Arbitration c. Mediation d. Negotiated settlement
d. Negotiated settlement
In order to lawfully write insurance business in a state, an insurance company must hold: a. a certificate of agency b. a certificate of authorization c. a certificate of admission d. a certificate of authority
d. a certificate of authority
The NFIP Dwelling form provides coverage for all of the following, EXCEPT: a. a single family residence b. a three family dwelling c. manufactured housing d. a five unit apartment building
d. a five unit apartment building
Nathan owns an ice cream shop in a strip mall next door to Eli's Hot Dogs and More restaurant. Eli's restaurant is damaged by fire, and Nathan is denied access to his ice cream shop by the fire department because it is adjacent to the damaged restaurant. If Nathan's Commercial Property policy includes a Business Income coverage form, then the insurance company will cover Nathan's loss of business income for: a. a maximum of six months b. a maximum of 30 days c. a maximum of 60 days d. a maximum of four weeks
d. a maximum of four weeks
The type of auto body frame that is most often used in today's automobile and is a single molded unit, is known as: a. a universal frame b. a subframe c. a conventional frame d. a unibody frame
d. a unibody frame
Lara is moving to Europe for two years in order to take advantage of a promotion at her job. She will not take her 4 seat propeller plane with her. What type of aviation policy would be best for Lara to purchase for coverage on her plane while it is still in storage and she is in Europe? a. all risks- ground and flight b. admitted aircraft liability c. hangarkeepers liability d. all risks- not in motion
d. all risks- not in motion
