texas 2021

Under a Personal Articles Floater, the total amount that will be paid for loss or damage to an unscheduled coin collection is:

$1,000

The Builders' Risk coverage form includes an additional coverage that provides a limited amount of coverage for lawns, trees, shrubs, or plants when located outside of buildings. This limit is:

$1,000, but $250 for any one tree, shrub, or plant

A fire in Josh's factory causes him to shut the doors for 45 days. While repairs take place, Josh spends $190,000 renting another building and equipment, to keep production going. Even though Josh's Commercial Property policy doesn't cover his lost business income, he does have Extra Expense Coverage with a $200,000 limit and Limits of Loss Payment set at 40% / 80% / 100%. How much indemnification can Josh recover from his insurer in this case?

$160,000.

Mr. York had his pickup truck stolen while it was parked in a "no parking" zone outside his office. The value of the truck was $18,500. In addition, tools valued at $200, extra tires and hubcaps for the truck valued at $550 and a tarp worth $50 were in the truck. Mr. York has a collision deductible of $500 and a comprehensive deductible of $250. The insurance company will pay what amount?

$18,800.

The insured has a $1,000,000 personal umbrella policy with a $5,000 retention limit. For a $7,000 liability loss not covered under the insured's personal auto policy, but covered under the umbrella policy, the insurance company would pay:

$2,000.

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?

$4,000

Heather's house is fully insured with a DP-3 with a limit of $85,000. One day, the house is struck by lightning, and despite the fire department's efforts, burns to the ground. She still had a balance of $20,000 left on her mortgage at the time of the fire. What is the maximum indemnification that would go to Heather, the fire department, and her mortgage lender respectively

$65,000; $500; $20,000

Personal property normally kept at other residences owned or rented to the insured is covered under the Homeowners forms for:

10% of the Coverage C limit or $1,000, whichever amount is larger..

To obtain an insurance agent, producer, or adjuster license, an applicant must be

18 years

An insured has received actual cash value payment from the adjuster for a covered loss. At the time he is satisfied with the payment. He later changes his mind and wants the full replacement value. How many days does he have to submit the receipts to get the replacement cost payment under a HO-3 form?

180 days

Part B of the personal automobile policy provides coverage, regardless of fault, for necessary medical and funeral expenses incurred within how many years of the date of the injury?

3

To be eligible for coverage under a standardized Dwelling policy, the insured must not allow more than _______ boarders to live on the premises.

5

Herb is a licensed Texas adjuster. He has been very busy and forgot to take the continuing education courses required for him to renew his license. How long does Herb have after the date his license expires to complete the required continuing education courses? What is the fine that he will have to pay?

90 days / $50 per deficient CE credit hour..

Which of the following statements best describes a "representation" made in an insurance application?

A representation is a statement made by the applicant that he believes to be true when made, but which might prove to be false

In which of the following situations should a non-waiver agreement be used?

An insured's house shows rot damage, and it appears there is a long-term plumbing leak.

When the Personal Liability Supplement is purchased as a monoline policy, all of the following are required conditions, EXCEPT:

Bankruptcy

Philip has several vehicles that are all covered under Personal Automobile policies. He has several acres of land with a barn and chicken coup on the property. To drive around on the acreage, Philip has a very old truck that is not licensed or insured. One afternoon, Philip is driving out to check on his cows when he hits a rut and his head slams down on the steering wheel, injuring him severely. How will Part B - Medical Payments provide coverage for Philip's injuries

Bodily injury sustained while occupying an uninsured auto owned by the insured is excluded under Part B, therefore no coverage would apply

Which of the following is a "broad form" peril of a Homeowners policy?

Discharge of water or steam.

An adjuster's report that contains all the facts, evidence and disposition of the claim and is considered to be the final report is known as the

Full or formal report.

Each of the following is considered to be an "implied warranty" in an Ocean Marine insurance policy, EXCEPT

General Average

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 will not sink. They toss overboard 10 tractors owned by John Deere. The cartons of tissues owned by Kleenex Corporation are safe as is the whipped marshmallow cream being shipped for Kraft Foods. When they get to Europe, Kleenex and Kraft are asked to share in the loss that John Deere sustained. This is an example of:

General Average Clause

Which of the following losses is NOT excluded under Part D of a standard Personal Auto policy

Glass breakage..

When an insurer "red tags" equipment and attaches the "suspension of coverage" endorsement to an Equipment Breakdown policy, the coverage suspension commences

Immediately

Which of the following statements is TRUE regarding the Personal Effects Floater?

It can be purchased either on a permanent basis for frequent travelers or for a single trip..

A Personal Umbrella liability policy:

May cover risks that are excluded by the underlying policy..

An alternative dispute resolution (ADR) method by which disputing parties use a neutral outside party to examine the issues and develop a mutually agreeable settlement is known as

Mediation

The importance of an "Insured or Witness Investigation" is that:

Obtaining their statements is very important in determining who is liable

The "Medical Expense" coverage of Section II of the Businessowners policy will pay the reasonable expenses for first aid, medical services, and funeral services, within

One year from the date of the accident..

George, an expert witness, is called to testify when a claim is being litigated. What type of evidence is George's testimony to the court?

Oral evidence

Which part of the Personal Automobile policy is automatically expanded to provide limits to meet the limits required if the insured is driving and has an accident in another state?

PART A

Which of the following endorsements permits the insured under a Commercial Property policy to increase their business personal property coverage amount for specified periods of time when inventory may be higher than usual?

Peak Season Endorsement

Which of the following is NOT covered under aircraft physical damage (hull) insurance?

Personal effects

Sally Roe's vehicle is rear-ended by John Doe. Sally and John are good friends. Sally tells John not to worry about the damage. She says she has insurance and will tell her insurance company to pay for the damage. She will waive her subrogation right so that John won't have to pay anything. Her insurer will:

Proceed with subrogation against John Doe and will not honor the waiver..

Which of the following coverages would NOT be included in the liability section of the Businessowners policy?

Professional liability

Aiden is reimbursed by his insurance company for the cost of a new sofa, after a 10-year-old sofa is destroyed by fire. Which of the following best describes the loss settlement method used in this situation?

Replacement cost

Which of the following is one of the duties of the insured as specified in a Commercial Inland Marine policy?

Submit to an examination under oath if the insurer requests it..

Which "conditions" form in a complete Commercial Property policy specifies the coverage territory

The Commercial Property Conditions form

Which of the following is the policy territory as described in the standard Personal Automobile policy?

The United States, its territories and possessions, Puerto Rico and Canada..

Which of the following statements is TRUE regarding nonwaiver agreements and reservation of rights letters?

The are used only with first-party claimants to protect the rights of insureds and insurers

Jerry is fishing from his 22-foot boat on Lake Norman when he is caught in a sudden hail storm. His boat suffers extensive hail damage. When he files a claim against his Homeowners policy, the most likely reason his claim is denied because:

The boat was not fully enclosed inside a building during the hail storm.

Which of the following statements is NOT TRUE regarding the implied warranties of an Ocean Marine policy?

The implied warranties are attached to the policy as an endorsement..

A method of setting claim reserves based on the claim's circumstances and the claim representative's experience in handling similar claims is known as:

The individual case method

Gerald owns an expensive and rare painting. He has it appraised by an art dealer and insures it for $50,000 under a Personal Articles Floater. A year later, several other rare paintings similar to Gerald's and painted by the same artist are discovered, causing the value of Gerald's painting to be reduced to $40,000. Soon after this development, the painting is destroyed in a fire at Gerald's place of business. After ruling out fraud, how will the insurance company settle the loss?

The insurance company will cover the item for the full $50,000 amount..

An insured has her property covered under an "open peril" cause of loss form. She experiences a loss. The burden of proof that the peril that was the actual cause of loss in the claim, lies with:

The insurance company..

Which of the following statements is NOT TRUE of the Loss Payment condition of the Building and Personal Property Coverage form?

The insurer may elect to take possession of the property and pay the insured 15% above the appraised value

Under a liability policy, "supplementary payments" include all of the following, EXCEPT:

The negotiated settlement..

The medical payments coverage of an Aircraft Liability policy can cover the expenses incurred for bodily injury to a passenger in all of the following situations, EXCEPT:

The passenger has slipped and fallen on a wet floor inside the airport, breaking a leg

In Texas it is considered to be an unfair or prohibited practice if an insurer does not keep a record of all complaints received for:

The preceding three years

Which of the following best describes how the peril of "theft" is covered under the 1943 New York Standard Fire policy?

Theft is a covered peril under the removal coverage..

All of the following are reasons that an adjuster should keep very detailed log notes, EXCEPT

To produce notes that will support a fraudulent denial of claims. .

What is the main purpose of an adjuster's interim or status report?

To report on the ongoing status of the claim

Which of the following employees is violating Texas law by NOT holding an adjuster license?

Tom, who works for an insurer and adjusts a loss for $550

Under "Coverage A - Building" of the BOP form, which of the following is NOT covered

Valuable papers and records

The Part B - Medical Payments coverage under a standard Personal Auto policy will cover the insured if he/she is injured while a passenger on a:

bus

Which of the following sections of an insurance policy contains language to assist an insurance company in managing moral and morale hazards?

exclusions

A voluntary act of destruction in which a ship's cargo is thrown overboard in order to save the ship is known as:

jettison

Samantha, who is covered under a Standard Fire policy, has suffered a loss and submitted a claim. After the claim was paid, Samantha's insurance company has decided to take possession of the damaged property to sell it for its salvage value. The insurance company must provide Samantha with _______ notice.

30 days' notice

Which of the following sentence which best describes the term "fiduciary".

A person who is entrusted with the assets of another.

Which of the following vehicles would NOT be eligible for coverage under a personal automobile policy

A vehicle leased for 4 months

An adjuster is conducting a prior claims investigation. She will be searching a database provided by:

An index bureau

Which of the following is a coverage that may be selected on an Equipment Breakdown form by showing a limit of liability amount next to the coverage?

Brands and labels

Ally's insurance agency has contracted with Indemnify Insurance to sell only those insurance products offered by Indemnify. Ally's is utilizing which of the following types of insurance marketing and distribution systems?

Exclusive agency system..

If the Value Reporting Form Endorsement is attached to a Commercial Property policy, business personal property is covered at all of the following locations, EXCEPT:

Exhibition locations

Jim and Tina are a married couple that enjoy the outdoors. They have their motor home and pick-up truck covered by a standard Personal Automobile policy and both vehicles are listed on the declarations page of the policy. They attend a Camping & RV show on May 1st and purchase a small camper to use when camping near their home that summer. Jim calls the insurance agent on May 10th and adds the camper to the policy. On May 24th, Jim and Tina are pulling their new camper with their pick-up truck on their way to a nearby camp site. Jim is driving and turns a tight corner, clipping a street lamp with the side of the camper. How will Jim and Tina's Personal Auto policy cover the body damage to their camper?

The body damage will be covered by Part D of the policy because Jim reported the new camper to the insurance agent within the required 14 days

If the Navigational Limits or Lay-Up period shown on the Declarations page of a standardized Yacht policy is breached because of something out of the control of the insured:

The insurer must be notified within 10 days after the breach and any additional premium that is due must be paid.

The insured is liable for $500,000 in damages for a personal injury claim that is covered under the insured's primary liability policy. The primary liability policy has a $300,000 limit per occurrence. The insured also has a $1 million Umbrella policy with a $3,000 self-insured retention limit. How would this claim likely be settled?

primary policy would pay $300,000 and the Umbrella policy would pay $200,000. .

Katrina has her commercial building covered by a Commercial Package policy. Which if the following is the section within her policy where she would see the dimensions of her building listed

the commerical property declarations page

Which of the following statements is TRUE concerning Part A - Liability coverage on a standard Personal Automobile policy?

the coverage is provided only for accidents caused by those who are "insureds" under the policy

Jeff has his 1974 Pontiac Firebird Trans-Am SD-455 covered under a standardized personal automobile policy. He has had a full restoration done to both the interior and exterior of his muscle car and he can't wait to show it off. When Jeff's buddy Dale sees the car, he challenges Jeff to race against him in his 1971 Chevy Camaro SS350. Jeff accepts the challenge and the two men set a date for the following week. The following week, many people find out about the race and come out to watch on race day. Shortly after the race begins, Jeff loses control of his car when a tire blows out and he swerves into the crowd of people watching the race, injuring several. He is sued for bodily injury. Which of the following statements best describes how Part A of Jeff's personal auto policy will cover the costs to defend the claims against Jeff?

The insurer will not defend against the claim because it is not covered under the policy

Which of the following statements is NOT TRUE regarding FAIR Plans

A FAIR Plan cannot deny coverage to anyone because their roof is in need of repair

Which of the following statements is NOT true regarding the insurer's request for an "examination under oath" when investigating a claim?

An EUO is usually requested by the insurer while investigating third-party claims to determine the truthfulness of the claimant's account of their injuries..

The crew of a ship is guilty of fraud with the intention of reaping gains at the expense of the owner. In ocean marine coverage, what is this called?

Barratry

The Garage Coverage form can be used to cover dealers that sell all of the following, EXCEPT:

Jet skis.

The insured carries a yacht policy. One of the crew members is injured while performing a work related task. What coverage must be added under the policy that would respond to cover the crew member's injuries?

Jones Act (crew coverage

Which of the following is not a common risk management technique?

Multiply the risk by engaging in hazardous activities. .

A home is insured under an HO-3 policy. One of the "other structures" on the same property is used by the insured for his business. The building burns in a fire. It would:

Not be covered because buildings used for business purposes are excluded. is correct.

The insured carries a standard Yacht policy on his vessel registered in Florida. One of the crew members is injured while performing a work-related task on the yacht while sailing off the coast of Italy. What coverage would respond to the crew member's injuries

The Jones Act

A home is insured by an unendorsed HO-3 form. The home burns and all of the policyholder's jewelry is destroyed. The maximum the insured can collect under the HO-3 policy for the jewelry is:

The actual cash value of the jewelry..

The additional coverage on the Building and Personal Property coverage of a Commercial Property policy for electronic data provides _________ for the cost of replacing and restoring electronic data that has been destroyed or corrupted by a covered cause of loss.

$2,500 in the aggregate

Which of the following describes a moral hazard

An arsonist applying for property insurance

A claim is made on an excess liability policy. It is discovered during the claims investigation, that the underlying liability policy and the excess liability policy have different inception and expiration dates. The adjuster finds that the different dates has created a situation where the underlying policy was not in effect at the time of the occurrence, and therefore cannot trigger the excess liability policy to pay the claim. This situation is known as:

Nonconcurrency

The Businessowners policy excludes coverage for all of the following, EXCEPT:

Property of others in the insured's care, custody, or control

Which of the following is NOT one of the four major coverages of an Ocean Marine policy?

Seaworthiness

In order to lawfully write insurance business in a state, an insurance company must hold:

A certificate of authority

Because a Homeowners policy provides both property and liability coverage in a single policy, the policy is called:

A multi-line policy

A claim is being litigated in court by Michael on behalf of Janet who was physically injured by a negligent party. Michael has called Janet's doctor to the stand to describe to the court the severity of Janet's injuries. The doctor is presenting which of the following types of evidence?

Oral evidence..

All of the following are duties conducted by insurance professionals who must be licensed before "transacting insurance", EXCEPT

An attorney who oversees the adjustment of claims

Of the following businesses, which one is NOT eligible for coverage under a Businessowners policy?

An auto dealership with $1 million dollars in gross annual sales

Which of the following is the type of policy that is written to cover the insured for occurrences in which they have become legally liable, but only for those exposures covered on their underlying liability policy?

An excess liability policy that is written on a follow-form basis

Which of the following statements is TRUE regarding the coverage extension of the standard Businessowners policy for "Business Personal Property Temporarily in Portable Storage Units"?

Coverage will not apply if the storage unit has been on the insured premises for longer than 90 days, even if the business personal property has only been stored there for less than 90 days

Which of the following is NOT considered "your covered auto" under a standard Personal Auto policy

A large truck used to transport manufactured goods for a corporation. .

Molly is a staff adjuster who works for Indemnify Insurance. The evidence in the investigation has caused Molly to suspect that the claim is fraudulent. She is told to put the claim file in order and transfer it Meg, an adjuster who specializes in fraud. Which of the following reports should Molly prepare and send to Meg along with the claim file?

A summarized report

Jerry Jones has suffered a property loss to his home. The adjuster, Anthony, has stated that the loss is covered when it actually is not. Jerry is relying on the statement made by Anthony. Therefore, the insurer may be ______ from denying the claim.

Estopped

Aircraft liability coverage is very similar to auto insurance coverage with which of following exceptions?

Liability to passengers is treated as a separate exposure. .

Section I of a Homeowners policy covers all of the following, EXCEPT:

Locations owned by the named insured that are not described on the declarations page of the policy