Texas Adjuster License 03/2023

Owned private passenger autos only

ABC Paving would like to purchase comprehensive coverage for all the passenger vehicles in their fleet of 87 cars. They don't feel it's necessary to get this coverage for their 4 tractors and 8 pavers. How would a business auto policy most likely apply this comprehensive coverage? Any auto Owned private passenger autos only Specifically described autos Non-owned autos

the average yield of other farms in the county, used to calculate a farmer's APH when the farmer does not have 4 years of production records.

A "transitional yield," or "T-yield," is: the average yield of other farms in the county, used to calculate a farmer's APH when the farmer does not have 4 years of production records. the threshold for the amount of damage sustained to a crop before insurance coverage will apply. a supplemental crop planted between growing seasons of the farmer's primary crop. the average yield of an entire farm for at least the previous 4 years.

Time element insurance

A fire breaks out in a toy factory, damaging the building and causing the business to lose income while the property is being repaired. What type of coverage would provide indemnification for the loss of income during the repair period? A. Time element insurance B. Extra expense insurance C. Excess damage insurance D. There is no coverage for this type of loss

Assignment

Bob has been in the construction business a long time and is ready to retire. He sells the company to his friend Scott and then lets the insurer know that any claims against his policy should be paid to Scott from now on. The insurer informs Bob that they cannot do this due to which condition? Liberalization Premium Audit Assignment Control of Property

Bobby has been diagnosed as mentally incompetent.

Bobby just purchased an insurance policy for his home from XYZ Insurance. Which of the following would be a reason this policy may not be legally binding? Bobby has an outstanding warrant for selling marijuana. Bobby paid his first premium when he and his agent agreed on a policy, but he is waiting for the policy documents to be prepared so he can sign them. Bobby has been diagnosed as mentally incompetent. Bobby is only 19 years old.

Bonnie's car catches fire.

Bonnie's PAP includes Comprehensive coverage. Which of the following losses could this coverage pay for? Bonnie's car breaks down due to an engine malfunction. Bonnie's car catches fire. Bonnie rolls her vehicle in a one-car accident. Bonnie rear-ends another vehicle.

Utmost Good Faith

Both parties must act honestly and openly in order for the contract to be valid. Adhesion Personal Aleatory Utmost Good Faith Conditional Unilateral

the premises owned or rented by the insured.

In a CGL policy, the Premises Liability hazard applies to claims arising from an occurrence on: the premises rented by the insured. the premises owned by the insured. the premises owned or rented by the insured. a third party's premises.

Hi-jacking

In an aviation policy, which of the following is only covered through an endorsement? A. Lightning B. Explosion C. Hi-jacking D. Theft

She has to pay a fee to retrieve relevant court documents.

In which case would the insured be indemnified by her liability coverage? She causes property damage to her neighbor. She gets into an accident that leaves her car totaled. She has to pay a fee to retrieve relevant court documents. none; liability coverage never indemnifies the insured.

Personal effects

James works for a contracting company that has a business owners policy in place. One day, James brings his laptop to work and leaves it in the manager's office while he heads out to a jobsite. While he is gone, a fire breaks out and destroys the office, with James' laptop inside. Which coverage extension could cover the loss of James' laptop? Personal effects Electronic data Computer operation interruptions Personal property off-premises

The hay was being transported.

Jamie is hauling a load of hay from the market to her farm when a strong gust of wind tips over the trailer on the highway and scatters her hay everywhere. If Jamie has Scheduled Farm Personal Property coverage, why won't the insurer pay for her loss? The hay was not on the farm premises. Scheduled Farm Personal Property coverage always excludes hay and grain. Wind is not a covered peril. The hay was being transported.

Excess liability policy

Jane caused an auto accident while driving the company vehicle for work. Unfortunately, the van she ran into was carrying 6 passengers, all of whom were injured in the accident. The total of everyone's injuries comes to $210,000. Jane's company's business auto policy only covers up to $100,000 in bodily injury per accident. Which of the following might help cover the remaining liability caused by Jane's accident? Extended liability policy Excess liability policy Business owners policy Commercial general liability policy

$200

Jeff's commercial property policy includes coverage for Fire Department Service Charge, with a limit of $500. When one of Jeff's business premises catches fire, he calls 911. The fire department arrives and puts out the fire, saving the majority of Jeff's business. Later that week, Jeff has to call the fire department again when another fire breaks out, this time at his second business location. When the bill arrives for the fire department's services, it shows a $600 fee for each call, totaling $1,200. Jeff files a claim with his insurer for the charges. How much of the bill will Jeff have to pay? $0 $700 $1,200 $200

$2,550

Jeremy owns a business with several machines covered under an equipment breakdown protection coverage form with a $500,000 limit. He has three deductibles on his policyL 1) a percentage deductible of 3% per loss, 2) a minimum deductible of $500, and 3) a maximum deductible of $10,000. After experiencing a covered loss of $85,000, how much will Jeremy have to pay out of his own pocket for the loss? $15,000 $2,550 $10,000 $500

$50,000

Jerrod owns two places and has liability insurance with the following limits: Bodily injury excluding passengers: - $250,000 / person - $500,000 / occurrence Passenger bodily injury: - $250,000 / person - $750,000 / occurrence Property damage: - $500,000 / occurrence When Jerrod crashes into a car while landing his plane, he injures the two people in the car and completely wrecks the car. The first person in the car suffers $200,000 in injuries, the second person suffers $300,000 in injuries. Replacing the car costs $45,000. Without taking deductibles into account, how much will Jerrod have to pay out of his own pocket? A. $95,000 B. $0 C. $100,000 D. $50,000

$5,000

Jerry is using an expensive video recorder near the family pool when he slips and falls in, destroying the camera. Jerry bought the camera three years ago for $4,000, and it depreciates at $500 per year. A new, similar camera costs $5,000 today. Assuming the loss is covered, if Jerry had a replacement cost policy, how much would Jerry's insurer indemnify Jerry for the destroyed camera? $5,000 $2,500 $3,500 $4,000

Control of Property

Jerry owns a hardware store and employs Bill. One day, while Bill is driving a forklift, he gets careless and crashes into a fully stocked shelf, damaging thousands of dollars worth of merchandise and other store property in the process. What policy condition allows Jerry to collect for the loss on his insurance contract? Subrogation Legal Action Against an Insurer Control of Property Separation of Interest

Property Removal coverage

Jerry's home lies in the path of an oncoming hurricane, so he decides to load his big screen television into his truck to get it out of harm's way. However, as he is driving the television to a more secure location, he hits a big pothole that sends the TV flying across the truck and destroys it. Which extended coverage of a homeowner's policy would indemnify Jerry for the loss of his television? Reasonable Repairs coverage Removal of Debris coverage Consequential Loss coverage Property Removal coverage

doesn't have to pay any premiums.

Jesse has a Suspension of Insurance endorsement. This means that, while he is out of country for business for 4 months, he can suspend his coverage. He usually pays $300 per month premium. During these 4 months, Jesse: only needs to pay the minimal premium payment of $100. will pay $50/month in premiums until coverage is renewed. has no deductible. doesn't have to pay any premiums.

The stolen money, the destroyed money, and the damage to the vault

Jill arrives to open the bank one morning to find the door hanging open. Upon entering the bank she sees the vault door has been blown open, most of the money has been stolen, and a large amount of money was burned when the explosive charge went off. Luckily, the bank has a commercial crime policy. Which of the following best describes what would be covered under inside the premises: theft of money and securities? The stolen money and the damage to the vault The stolen money, the destroyed money, and the damage to the vault The stolen money The stolen money and the destroyed money

Unethically

Jim adjusts auto damage claims. He supplements his paycheck with kickbacks from a local body shop that he recommends to claimants involved in these accidents. In accepting monetary gifts for business referrals, Jim is acting: A. Harmlessly B. Fairly C. Prudently D. Unethically

Civil trial

Jim and his insurer are in court over a claim dispute. Jim, the plaintiff, has accused his insurer of not indemnifying him enough for his loss. Jim needs to convince the jury of his case through a preponderance of evidence. In which type of trial are Jim and his insurer involved? Comparative negligence trial Civil trial Criminal trial Contributory negligence trial

Minor details

Jim is beginning negotiations with Sally and notices that her demeanor seems standoffish and defensive-almost angry. While reviewing his estimate, Jim notices a small clerical error which, once corrected, will increase Sally's indemnification by $300. He apologizes for the mistake and informs her of the favorable result. Which negotiating tip is Jim following? First impression Minor details Give and take Attitude

Investigation

Jim is currently working on a property damage claim, gathering evidence, reviewing police reports, and interviewing witnesses. In which stage of the claim adjusting process is Jim currently working? Resolution Negotiation Evaluation Investigation

negligence.

Jim is out turkey hunting on a private ranch when he hears some movement in the brush. Assuming it's a turkey, Jim raises his shotgun and fires. Unfortunately for Jim, he has not taken a turkey, but has severely injured one of the landowner's calves instead. Jim is responsible for the cost of the calf because he acted with: negligence. great care. liability. responsibility.

Jim's insurer did not provide him with 45 days' notice.

Jim receives a letter in the mail from his insurer notifying him that his commercial policy will not be renewed thirty days from now. Jim protests, saying he needs at least two months time to find a new policy. Jim ends up receiving an additional 30 days' coverage at the same premium as before, because: Jim prepays his insurance two months at a time. Jim's insurer did not notify him by phone. Jim is an exceptional negotiator. Jim's insurer did not provide him with 45 days' notice.

moral hazard.

John owes a lot more on his car than it is worth. He figures he would be better off if he burned the car and collected an insurance settlement. He has someone set fire to his garage to destroy the car. John's behavior would be considered a: moral hazard. physical hazard. hazard. morale hazard.

Hangarkeepers liability

John owns a storage facility for idle aircrafts. What type of liability insurance should be purchase to protect himself in case one of the planes is damaged while in his care? A. Hangarkeepers liability B. Cargo liability C. Airport liability D. Admitted aircraft liability

Conditions

Josephine's gas station suffered severe damage when one of the fuel tanks caught fire and exploded. After completing his inspection, the adjuster determines that Josephine's claim is not covered because she did not have automatic shut-offs for the fuel tanks. If this safety measure was in fact required in order for coverage to apply, where might Josephine find it in the policy? Endorsements Conditions Exclusions Declarations

Julie had the power to bind the insurer to her decision to pay the claim.

Julie works as an insurance adjuster for XYZ Insurance. While adjusting a claim, she determines that the claimant is covered by his insurance contract and issues him a settlement check for $5,000. The insured cashes the check and performs the repairs. Two months later, the insurer reviews the file and realizes that the claimant's damages were NOT covered by the policy. The insurer demands the settlement money back. Which of the following best explains why the claimant will most likely not have to return the money? Julie had the power to bind the insurer to her decision to pay the claim. Subrogation does not allow the insurer to recover payment. Julie issued the settlement based on guaranties provided by the claimant. The settlement payment was a warranty.

morale hazard.

Lucy has insurance on an expensive necklace she likes to wear to work every day. After work, she takes it off and leaves it in her car's cupholder so she can put it back on in the morning on her way to work. Lucy's behavior would be considered a: morale hazard. moral hazard. physical hazard. hazard.

$50,000

M City has a government crime discovery form with employee theft coverage of $50,000 per occurrence. One day, two of M's employees, Jarred and Damian, steal $45,000 and $50,000 respectively from M and skip town. M will receive _____ from its insurer. $0 $95,000 $50,000 $20,000

Leasehold Interest Coverage Form

Mackey Manufacturing signs a five-year lease at a new location, only to have the building burn down one year into their new lease. Now they have to lease a new property, and the rental prices have increased, so the company now has to pay higher rental costs. Which commercial property coverage form might indemnify Mackey Manufacturing for the difference in lease costs? Property Off-Premises Coverage Form None Leasehold Interest Coverage Form Preservation of Property Coverage Form

Hospital indemnity insurance

Maria was in the hospital for five days, recovering from a stroke. The bill she received for her hospital stay broke down the charges for room, lab fees, meals, and nursing care. However, her insurer paid a flat daily rate and she was left responsible for paying the remaining charges. What type of insurance does Maria have? A. Surgical expense insurance B. Accident insurance C. Hospital expense insurance D. Hospital indemnity insurance

Endorsements

Mark wants to add "towing and labor costs" coverage to his auto insurance policy. Under which part of the policy would he add this coverage? Declarations Conditions Endorsements Exclusions

general damages.

Mental anguish would be an example of: punitive damages. special damages. tangible damages. general damages.

15 business days

Once a policyholder makes a claim, how long does an insurance company have to respond? 15 business days The claim must be acknowledged with reasonable promptness. 14 days 7 business days

Comprehensive and Collision coverages automatically apply to his newly purchased car for the first 4 days after purchase.

One day after buying a nice used car, Ian drives to Cheryl's house to ask her out. on the way, a dog runs out in front of him. Ian veers to avoid the animal, but loses control of his car and crashes into a ditch, causing $16,500 in damage to the car. To make matters worse, Ian hasn't even reported the purchase to his insurer yet, and he doesn't have Collision or Comprehensive coverage. However, Ian need not fret too much. Why is that? Since Ian hasn't yet made his first car payment, he isn't responsible for the car. Comprehensive and Collision coverages automatically apply to his newly purchased car for the first 4 days after purchase. Comprehensive and Collision coverage automatically apply to his newly purchased car for the first 14 days after purchase. Since Ian was on his way to see Cheryl, her homeowner's policy will cover his loss.

Laura's liability coverage

Peggy is visiting her friend Laura at Laura's home. During the visit, Peggy trips over Laura's dog and takes a nasty fall down the stairs. Which homeowners coverage would pay for Peggy's injuries? Peggy's liability coverage Dwelling coverage Personal property coverage Laura's liability coverage

sold by nonadmitted insurers who are not licensed to do business in the state.

Surplus lines insurance property and casualty insurance: sold by admitted insurers who are licensed to do business in the state. sold by admitted insurers who are not licensed to do business in the state. sold by nonadmitted insurers who are licensed to do business in the state. sold by nonadmitted insurers who are not licensed to do business in the state.

Farm Pollution Liability

Sydney has just been sued by several residents of the town downstream from her farm. According to the lawsuit, the residents have been getting sick from pesticide runoff from Sydney's bean fields. What type of insurance coverage will protect Sydney in this case? Custom Farming Liability Farm Pollution Liability Farm Product Liability Farm Employees Liability

The insurer's limit of liability for that coverage

The Declarations page will always provide a list of the coverages provided within the policy. What will be listed next to each type of coverage on the Declarations page? The insurer's limit of liability for that coverage The expiration date of the coverage The policyholder's obligations regarding that coverage The name of the policyholder

applies not only to changes made during the policy period, but also to any changes made up to 60 days before the policy went into effect.

The Liberalization clause in a homeowners policy: states that the insurer is obligated to pay out only up to the limit set by the policy, but must do so within 60 days of receiving proof of loss. States that only losses occurring during the policy period will be paid. applies not only to changes made during the policy period, but also to any changes made up to 60 days before the policy went into effect. voids the policy if the insured deliberately conceals or misstates pertinent info.

The cost of bringing property up to code after a covered loss

The purpose of the increased cost of construction coverage in a BOP is to provide coverage for: The cost of bringing property up to code after a covered loss Damage to the insured's building while under construction The cost of keeping the business running while the covered property is being repaired after a covered loss Lost business income while the company's building is under construction after a covered loss

An insurable risk must have guaranteed protection from damage.

Which of the following is NOT a qualification of an insurable risk? An insurable risk must have a quantifiable value. An insurable risk must have definable parameters. An insurer must be able to charge premiums high enough to pay out claims. An insurable risk must have guaranteed protection from damage.

Provide a loss estimate from an appraiser.

Which of the following is NOT one of the typical duties of the insured after a loss? Sign a sworn proof of loss. Cooperate with the adjuster's investigation. Provide a loss estimate from an appraiser. Protect the property from further losses.

It provides benefits for insurance commissioners

Which of the following is NOT true about the National Association of Insurance Commissioners? It is a non-profit coalition of state insurance agencies It works to harmonize state insurance laws and regulations It provides benefits for insurance commissioners It drafts model legislation that is frequently adopted by most states

PIP is usually secondary coverage.

Which of the following is NOT true of Personal Injury Protection? PIP is primary coverage. PIP is usually secondary coverage. PIP restricts the policyholder's right to recover losses in civil court. PIP provides no-fault protection.

It requires the insurer to settle the claim, in whichever manner it chooses, within 30 days of receiving notice of the claim.

Which of the following is NOT true of the Company's Options provision in the standard fire policy? It mandates that the insurer notify the claimant of its choices within 30 days of receiving required proof of loss. It requires the insurer to settle the claim, in whichever manner it chooses, within 30 days of receiving notice of the claim. It allows the insurer the choice of whether to repair, rebuild, or replace damaged property. It states that the insurer may choose whether to take all, or part, of the damaged property at the agreed or appraised value.

Business Income coverage

XYZ Carpet Manufacturing's main factory burns down during the night due to faulty electrical wiring. No longer able to manufacture carpeting, XYZ Carpet faces a serious cash flow dilemma. Which insurance coverage might help pay XYZ Carpet's bills while the factory is repaired? Business Income coverage Control of Property coverage Preservation of Property coverage Builders Risk coverage

a claims-made form will always pay the excess after an occurrence form.

According to the Other Insurance provision in Commercial General Liability policies: claims-made forms will always pay out via contribution by equal shares. a claims-made form will always pay the excess after an occurrence form. an occurrence form will always pay the excess after a claims-made form. all CGL policies will cover claims on a pro rata basis.

Coverage C- Prohibited Substances Liability.

All of the following are coverages in a Commercial General Liability policy, EXCEPT: Coverage C- Prohibited Substances Liability. Coverage A- Bodily Injury and Property Damage Liability. Damage to Premises Rented to You. Coverage B- Personal and Advertising Injury Liability.

Leased business personal property that must be insured

All of the following are covered under coverage A of a business owners policy, except: Flooring and floor coverings Leased business personal property that must be insured Owner's furniture in an apartment that is rented as furnished Building maintenance equipment, such as fire extinguishers

Ensuring that the claimant's attorney understands his rights

All of the following are elements of the adjuster code of ethics, EXCEPT: A. Acting with speed and care in completing the adjusting process B. Ensuring that the claimant's attorney understands his rights C. Disclosing all direct and indirect financial interest the adjuster has in adjusting a claim D. Treating all claimants equally

Value of labor, service, or materials furnished for the personal property of others

All of the following are excluded from coverage under Coverages A and B in a BOP, except: Value of labor, service, or materials furnished for the personal property of others Watercraft while in the water Vehicles and aircraft that must be registered Land, lawns, or crops

All Risk Form.

All of the following are types of Cargo Coverage in Ocean Marine insurance, EXCEPT: Single Risk Form. Floating, Open or Long Term. Warehouse-to-Warehouse. All Risk Form.

Damage to premises rented by the insured

All of the following are typically excluded from liability coverage in a BOP, except: Property damage to the insured's products Damage to premises rented by the insured Employee injuries Contractual liability

Theft of money or securities outside the insured premises in the care of a messenger

All of the following are universal exclusions in a commercial crime policy, EXCEPT: Theft of money or securities outside the insured premises in the care of a messenger Indirect losses Seizure or destruction of property by government authority Theft or dishonest acts committed by the insured

Mechanical failure

All of the following causes of loss are excluded from coverage in an equipment breakdown protection coverage form, EXCEPT: Electrical testing Combustion explosion Mechanical failure Hail

A man is justly fired and files for unemployment benefits from his previous employer.

All of the following would fall under the definition of a "personal injury" in a Commercial General Liability policy, EXCEPT: A prominent businessman sues his competitor for slandering him in a TV commercial. A woman sues a company, claiming that they sued her for no reason. A man is justly fired and files for unemployment benefits from his previous employer. A woman sues her landlord for wrongful entry after being evicted from her apartment.

interim report.

An adjuster who has just taken witness statements for a claim she is currently investigating, but is not yet ready to close the claim, may submit to the insurer a/an: interim report. preliminary report. full report. witness disposition report.

four years ** statute of limitations for fraud in Texas is 4 years**

An individual has _______ to file a lawsuit for fraud in Texas. one year two years four years three years

Every claim the adjuster handles

An insurance adjuster is obliged to inform claimants of their rights under the insurance contract in which of the following stations? A. Claims involving traumatized claimants B. Claims involving elderly claimants C. Third party claims D. Every claim the adjuster handles

a formal request to settle the damage.

An insurance claim is essentially: a formal request to repair the damage. a formal explanation of insurance coverage. a formal request to settle the damage. a formal offer to repair the damage.

Texas Property & Casualty Insurance Guaranty Association

An insurance company that sells professional liability insurance in Teas must belong to the: Texas Life & Health Insurance Guaranty Association Texas Property & Casualty Insurance Guaranty Association Texas Self-Insurance & Small Business Group Guaranty Fund. Texas Title Insurance Guaranty Association

fails to pay the premium.

An insurer can rescind a policy if the policyholder does any of the following, EXCEPT: makes a mistake in the application that significantly affects the insurer. makes a fraudulent claim to get benefits. lies or conceals information in the application. fails to pay the premium.

foreign

An insurer that adheres to the laws of a state but is located outside of that state is called a(n) ______________ insurer. foreign alien national domestic

$5,000 **The Commissioner can fine an insurer up to $2,000 for each offense. This fine can increase to $5,000 if the Commissioner thinks that the offense was particularly egregious. If an insurer ignores his order, he can bring the case to court.**

An insurer that violates the insurance code can be fined up to ____ per violation. $5,000 $2,500 $10,000 $1,500

Property Off-Premises

An overhead projector is taken to a conference room at a local hotel for a week. Sometime during the week, the projector falls off its stand and is destroyed. Assuming it is a covered loss, what commercial property coverage might cover the projector? Extra Expense Preservation of Property Property Off-Premises Valuable Papers and Records

Andrew cannot obtain coverage through TAIPA because he does not have a valid driver's license.

Andrew was recently arrested for driving while intoxicated and his driver's license was suspended. He applied for auto insurance through TAIPA. Which of the following statements is TRUE? Andrew cannot obtain coverage through TAIPA because he has been convicted of driving while intoxicated. Andrew can only obtain coverage through TAIPA if he has been rejected for coverage by two insurers in the voluntary market. Andrew cannot obtain coverage through TAIPA because he does not have a valid driver's license. Andrew can still obtain coverage through TAIPA as long as his car has a valid registration.

Her home was fewer than 600 square feet

Antonia lives in a 560 square foot mobile home that is only 20 feet wide. She also has a detached garage. When Antonia's house is damaged by a flood, she hopes that she might be able to receive a special loss settlement. Why isn't Antonia eligible for a special loss settlement? Her home is less than 25 feet wide Special loss settlements only apply to condominiums Her principal residence is a mobile home Her home was fewer than 600 square feet

Settlement padding

April, an independent adjuster, gets paid on a fee schedule. This means that the larger the claim, the more money April makes form adjusting it. In order to increase her commission, she normally adds an additional 1% to the amount of the settlement. This illegal practice is known as: A. Settlement padding B. Inducement C. Kickbacks D. Commission inflation

Indemnity

Had divided by Should have had multiplied by Partial Loss =

$0

In January, a faulty pipe burst at Sunshine Farms, letting animal waste flow from some of their farms into the county's water supply. In September of that year, the EPA inspects Sunshine Farms' facility, discovers the animal waste pollution, and fines the company $500,000. In addition to the fine, Sunshine Farms will have to pay $300,000 in decontamination expenses and $150,000 to build an EPA-compliant waste management system for the farm. How much of this will be covered under Sunshine Farms' pollution cleanup and removal insurance? A. $800,000 B. $300,000 C. $0 D. $650,000

30 days

In a BOP, newly acquired properties coverage provides _____ of insurance for new buildings under construction or newly acquired business properties located off the insured premises. 30 days 60 days 14 days 4 days

the named insured's 26-year-old son who lives at home.

In a Personal Auto Policy, the term "family member" would include: the named insured's 18-year-old daughter, who lives with her husband in New Jersey. the named insured's 26-year-old son who lives at home. the named insured's ex-husband, who moved out 4 months ago. the named insured's ex-husband, who moved out 5 months ago.

the court decides the legal rights of both parties.

In a declaratory judgment action: the court's decision about the legal rights of the parties is not binding. the court decides the legal rights of both parties. the court makes a judgment about the insurer's unfair settlement practices. the court resolves the case.

Coverage B.

In a dwelling policy, coverage for a stand-alone lamp post in the front yard would fall under: Coverage B. Coverage D. Coverage C. Coverage A.

$2,500

In a farm policy, what is the limit of coverage for the theft of furs, jewelry, precious stones, and wristwatches? No limit $1,500 $3,000 $2,500

$480,000 divided by 80% = $600,000

In order to be considered fully insured, Nikki must have at least $480,000 limit on her homeowners policy. Assuming her insurer imposes the standard coinsurance requirement, what is the value of Nikki's home? $600,000 $384,000 $480,000 $520,000

tortfeasor.

In tort law, a person or entity that commits an act of wrongdoing or negligence that leads to damages to a third party is known as a(n): sacher torte. intentional tort. tortfeasor. tort.

Through an out of pocket (OOP) plan

Individuals CANNOT purchase comprehensive health or catastrophic health insurance plans: A. Through a health maintenance organization (HMO) B. Through a point of service (POS) plan C. Directly from an insurance provider D. Through an out of pocket (OOP) plan

Crop-Revenue insurance.

Insurance that provides coverage against the loss of crop value is called: Multi-Peril Crop Insurance. Crop-Revenue insurance. Crop-Yield insurance. Crop-Hail insurance.

Jake's coverage will be based on the amount of acreage he has.

Jake grows soybeans and strawberries on his farm. He is currently applying for Crop-Hail insurance with his agent. Which of the following statements is true in Jake's case? Both of Jake's crops can be covered under this policy. Jake's coverage will be based on the amount of acreage he has. Jake's policy will provide coverage against flood damage to his crops. Part of Jake's policy premiums are subsidized by federal government.

$110,000 ** Coverage B (detached guest house) is 10% of Coverage A **

Jake's house is covered under a DP-2 policy with a $100,000 Coverage A limit of liability. A fire destroys the dwelling and a $30,000 detached guest house. Assuming he has not endorsed or otherwise modified the coverage amounts of the policy, how much can Jake expect to receive from his insurer? Nothing-- fire is not a covered peril under a DP-2 policy $130,000 $100,000 $110,000

Jessica goes into the negotiation with a "win at all costs" attitude.

Jessica is trying to earn the trust of a claimant with whom she is negotiating a settlement. Which of the following actions will probably NOT help her to earn his trust? Jessica refrains from commenting on the way the claimant is dressed, and keeps her opinions about his appearance to herself. Jessica makes sure that she is dressed professionally. Jessica goes into the negotiation with a "win at all costs" attitude. Jessica makes eye contact with the claimant, smiles, and shakes his hand.

A binder

Jim applies for a homeowners policy with his agent, who gives him immediate temporary coverage. However, after checking Jim's background information, the agent discovers that Jim has been convicted of arson, so she declines his application. What type of coverage did Jim have before the agent declined his application? A warranty An estoppel A representation A binder

Negotiation and resolution

Jim is currently working on a liability claim, and has completed his investigation. He presents his findings to the claimant, who disagrees with the settlement offer. Into which stage of the adjusting process is Jim about to enter? Determining liability Negotiation and resolution Claim reporting Claim evaluation

Evaluation

Jim is working on a claim. Currently, he is applying all financial provisions of the policy, including the policy limits, coinsurance, valuation, and deductibles. In which stage of the claims process is Jim currently working? Evaluation Negotiation Investigation Reporting

Single risk form coverage

Jim leases a vessel in order to ship a collection of antique cars from Los Angeles to Tokyo. He is only making one trip, but wants to purchase insurance on his cargo so he won't be found personally liable if anything happens to the valuable cars. What type of ocean marine policy might Jim purchase? A. Single risk form coverage B. Inland marine coverage C. Hull coverage D. Floating, open or long term coverage

None ** would be Coverage A**

Joe has a DP-2 policy on his home. During a storm, lightning strikes a utility pole, causing it to fall onto his attached garage. The pole crashes through the garage roof and lands on Joe's water softener tank, destroying it completely. Which of these damages would be covered under Coverage B in Joe's policy? None Both the water softener and the roof The water softener The roof

Arson

Joe's restaurant business has been steadily losing money from the moment it started. Joe decides to stage a fire in the kitchen after dismantling the fire-safety equipment, so he can collect the insurance money for the place. This course of action is known as: A. Soft fraud B. Medical fraud C. Arson D. Fire fraud

concealment.

Knowingly preventing disclosure of materially relevant facts in an insurance case is called: concealment. representation. warranty. fraud.

Nothing. Damage from vehicles is not a covered peril under a DP-1 without an endorsement.

Leonard has a dwelling insured under a DP-1 with a limit of liability of $100,000 and no endorsements. An automobile swerves off the road and crashes through Leonard's dwelling. The cost to repair the damage to the wall is $10,000. However, when Leonard attempts to get the permits to do the repair, he finds out that current codes require that he perform a $1,000 upgrade to the plumbing in the wall. How much will the policy pay (ignore the deductible)? $10,000 Nothing. Damage from vehicles is not a covered peril under a DP-1 without an endorsement. $11,000 $1,000

Reasonable Repairs

Lightning strikes a tree in Pam's front yard, sending a limb crashing through her bay window. Pam hires a contractor to put up some plywood, temporarily sheltering the living room from the elements until she can get a few estimates and have the window replaced. Which coverage in her DP-3 could help with the cost of installing the plywood? Debris Removal Improvements, Alterations & Additions Reasonable Repairs Trees, Shrubs, Other plants

Conditions

Lists requirements that the insured must meet for coverage to apply. Endorsements Definitions Declarations Exclusions Insuring Agreement Conditions

2 months

Mary Jane's house is damaged by a kitchen fire, and the tenant that has been renting her upstairs bedroom has to move out. It takes Mary Jane two months to repair the damage, plus an additional four months to find a new tenant. How many months of lost rental income can Mary Jane expect to receive from her insurer? None- loss of rental income is not covered under a homeowner's policy 4 months 2 months 6 months

Trip transit policy

Micah owns an antique grand piano that is worth $38,000, and he is planning to ship the instrument to a famous auction house, in the hopes of selling it for top dollar. If Micah wants to insure the piano against any damage during this shipment, which policy would best meet his needs? A. Trip transit policy B. Annual transit policy C. Motor truck cargo policy D. Instrumentalities of transportation and communication policy

$12,000

Michelle's $300,000 home experiences $90,000 in damage from a lightning storm. The adjuster calculates depreciation at 25%, making the ACV loss $67,500. Although Michelle's policy covers repairs at replacement cost, she receives an initial check for $67,500. Actual repairs to her home end up totaling $79,500. How much, if any, further indemnification may Michelle receive from the loss? $12,000 $0 $22,500 $10,500

The damage to the door and the copper piping

Molly leaves town for a one-week vacation. When she returns, she finds that the back door to her house has been kicked in and damaged. Her laptop is gone, and - to her surprise - she finds that the copper piping in the basement has been torn out and stolen as well! She has a DP-3 with coverage for contents but no additional endorsements. What , if anything, is covered? Nothing; all theft is excluded under the DP-3 The damage to the door and the copper piping The copper piping only The damage to the door, the laptop, and the copper piping

$1,900

Nicole swerves to avoid a deer in the road and crashes into a guardrail. She causes $2,400 in damages to her car. How much might Nicole expect to receive from her insurance company if she has a fixed deductible of $500 on her auto insurance? $1,400 $2,400 $1,900 $500

Annual transit policy

OBC Inc. is an online retail business that ships several thousand packages nationwide every year. Which type of inland marine policy would OBC Inc. likely use to protect their shipments until they reach their customers? A. Annual transit policy B. Block policy C. Trip transit policy D. Motor truck cargo policy

Open lines of communication

Of the following adjuster duties, which would be first? Prepare adjustment reports Open lines of communication Investigate liability Assess the damages

Mexico City

PAP insurance coverage only applies in the "policy territory." Which of the following is NOT part of the policy territory? Mexico City Ontario, Canada Hawaii San Juan, Puerto Rico

the driver you struck.

PIP coverage will pay for injuries to all of the following persons, EXCEPT: your passenger without PIP. the driver you struck. you, when riding in another person's automobile. your family member.

Libel

Pat posts a scathing review of a rival business in the local paper. A week later he gets a phone call from the rival company's lawyer saying he will see him in court. According to Pat's CGL, this claim would be considered _____ and may be covered under Coverage B - Personal and Advertising Injury. Libel Wrongful Entry Malicious Prosecution Slander

Bias for the insurer

Patricia is a new adjuster whose primary goal is her employer's financial benefit. This goal makes Patricia susceptible to the ethical challenge of: A. Kickbacks B. Emotional or unruly claimants C. Bias for the insurer D. Inducements

eliminates risk.

Risk avoidance is a risk management technique that: increase risk. eliminates risk. counterbalances risk. reduces risk.

have the support of state Guaranty funds

Risk retention groups do NOT: provide liability insurance have permission to operate in Texas help fund residual market programs have the support of state Guaranty funds

loss.

Sarah is driving carelessly through the streets of Tallahassee when she hits a puddle and loses control of her car. She crashes into a telephone pole and the car is completely wrecked. To her insurer, Sarah's car is now considered a: hazard. loss. risk. peril.

Comparative negligence

Sarah is playing with a basketball on the stairs at Bob's house. In doing so, she trips, falls, and breaks her leg. She files a claim against Bob's insurance policy for her injuries. The adjuster determines that Sarah was 50% responsible for her own injuries, and therefore should only receive indemnification for 50% of her medical bills. What defense is the adjuster using? Contributory negligence Third-party negligence Assumption of risk Comparative negligence

$22,500

Scott lived in a mobile home before it was completely destroyed in a recent flood. The mobile home is large enough to qualify for a special loss settlement under his flood policy, which has a limit of $28,000. Before the flood, the mobile home was worth $15,000, but it would cost $25,700 to but a new one today. How much indemnification will Scoot receive for this loss? $15,000 $25,700 $28,000 $22,500

Advance payment settlement

Shirley was severely injured in a car accident and now cannot work as a result. Even though she filed her claim promptly, her insurer is taking a long time to decide on a final settlement amount. What kind of settlement option would be most convenient for both Shirley and the insurer? Scheduled payment release Full release settlement Advance payment settlement No release settlement

risk transference.

Six Stars Development Company has just been offered a great deal on a bulk purchase of dishwashers from a new company called Clean Machines. They've never purchased appliances from Clean Machines, so they're hesitant to make such a large purchase. Finally, Clean Machines offers to provide 10-year warranties for each of the dishwashers. For Six Stars Development, purchasing the warranties is an example of: risk retention. risk reduction. risk avoidance. risk transference.

risk avoidance.

Six Stars Development Company has just been offered a great deal on ten large properties in Las Vegas. The economy in Las Vegas has been declining recently, but the CEO of Six Stars expects it to recover soon. This could be an exceptional opportunity for Six Stars, but it's also pretty risky. Ultimately, the Six Stars executive team decides not to purchase the properties. This is an example of: risk avoidance. risk reduction. risk retention. risk transference.

the government.

Sovereign immunity restricts an individual's ability to file a lawsuit against: an individual or organization that deals with dangerous instrumentalities. the government. an insurance company. a defendant.

$85,000

Sue decides to get a valued insurance policy on her antique car. She and her insurance company agree to a value of $85,000. Three years later, the car is destroyed when a tree falls on it in a parking lot. The car depreciates at $2,000 a year, and its replacement cost is $100,000. Ignoring any deductible, how much can Sue expect her insurer to indemnify her? $94,000 $83,000 $79,000 $85,000

A clause that requires the insurance company to get approval from the insured before settling a claim

The "consent to settle" clause in the professional liability policy is best described as: A clause that requires the insured's approval before the insurance company discusses settlement options with a claimant A clause that requires the insurance company to settle all claims A clause that requires the insurance company to get approval from the insured before settling a claim A clause that requires the insured to get the consent of the insurer prior to settlement

Valuation

The process of estimating what an item is worth. Valued Policy Annual Depreciation Replacement Cost Accumulated Depreciation Valuation Actual Cash Value

General Average

This provision in Ocean Marine insurance obligates insurers of various interests to share the cost of losses associated with a captain's decision to voluntarily sacrifice a part of the ship or its cargo. Particular Average Loss of Vessel General Average Sue and Labor

Acme Insurance must automatically apply the broader coverage to Susan's policy.

Three weeks after Susan bought a DP-3 from Acme Insurance, the insurer decides to attract more customers by broadening the coverage offered by their DP-3, at no additional cost. Which of the following is TRUE? Acme Insurance must automatically apply the broader coverage to Susan's policy. Susan must submit a new application to benefit from the new, broader coverage. Acme Insurance must apply an automatic, pro-rated discount to Susan's policy. Acme Insurance must notify Susan of the change within 10 days and allow her to cancel and re-issue her policy with the new coverage.

special damages.

Tim is the plaintiff in a case involving an auto accident. To recover monies he feels are 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: general damages. imperative damages. tort damages. special damages.

Pollution Liability Coverage: Broad Form only

What CGL coverage form would protect a business from liability related to pollution and related clean-up costs? Standard Commercial General Liability policy Pollution Liability Coverage: Broad Form only None. Clean-up costs are never covered. Pollution Liability Coverage: both the Limited and Broad forms

Independent adjuster

What do you call a self-employed adjuster who works as a contractor for insurers or claims-handling companies? Independent adjuster Emergency adjuster Staff adjuster Public adjuster

The restaurant serves liquor

What might disqualify a restaurant from purchasing a BOP? The use of microwave ovens The restaurant occupies over 5,000 square feet The restaurant serves beer The restaurant serves liquor

25% or less of floor space is available to the general public, and less than 25% of gross income may come from retail sales

What requirements must wholesalers and distributors meet in order to be eligible for a BOP? 25% or less floor space is available to the general public, and less than 50% of gross income may come from retail sales 25% or less of floor space is available to the general public, and less than 25% of gross income may come from retail sales More than 10% of the floor space must be devoted to product storage, and less than 20% of expenditures may involve food service Less than 20% of annual expenditures may involved food service, and less than 10% of building area may be open to the public

Subrogation

When Shawn purposefully set fire to Jim's restaurant, Jim was covered under his commercial property policy. Which condition allows Jim's insurer to attempt to reclaim those damages from Shawn? Vandalism Legal Action Against the Insurer Misrepresentation Subrogation

Particular average clause

When XYZ Shipping's vessels sets off from port, it is carrying $150,000 in cargo for Sally's Salamander Oil, and $250,000 in cargo for Frank's Feline Air Fresheners. When a fire on deck totally destroys Frank's Feline Air Fresheners cargo, the insurer for Sally's Salamander Oil is not obligated to pay for any of the loss. This is because of the: A. Sue and labor clause B. Particular average clause C. General average clause D. Cost and freight clause

Within 30 days

When a company acquires a new vehicle under symbol #7, specifically described autos, when must the company report the new vehicle to the insurer? Within 14 days Within 45 days Within 30 days Within 4 days

Valuable papers business insurance

When a storm collapses the roof of Joshua's surveying business, rain soaks the interior and destroys most of his documents. Deeds, maps, drawings, and mortgages that Joshua kept on file have all been ruined and will need to be replaced. Which additional coverage could help defray some of the cost associated with replacing these documents? A. Valuable papers business insurance B. Electronic data processing insurance C. Pollution, cleanup, and removal insurance D. Law and ordinance insurance

HO-4 Contents Broad Form

Which ISO homeowners form is designed for renters and covers personal property only? HO-4 Contents Broad Form HO-2 Broad Form HO-1 Form HO-3 Special Form

Conceding to a claimant's point that is an obvious ploy

Which of the following activities would most likely not be a useful negotiation technique? Lengthening your silence to an uncomfortable point Making minor changes to the offer that still fall within the insurer's parameters Producing a backup offer if the first offer is completely rejected by the claimant Conceding to a claimant's point that is an obvious ploy

Equipment breakdown

Which of the following coverages, when added to a BOP, would cause the premium to increase? Inflation guard Pollution cleanup Business income, extra expense Equipment breakdown

Corn

Which of the following crops is covered under a Coarse Grains Provision? Corn Barley Wheat Oats

A man slips inside a grocery store and injures himself.

Which of the following incidents would a liability insurance policy cover? A fire damages the back bedroom of your house. A man crashes his car into his own fence. The company van is stolen from your warehouse. A man slips inside a grocery store and injures himself.

It will pay the least of ACV, the cost to restore, the cost to replace, or the lowest amount listed on the company's books

Which of the following is TRUE regarding loss settlement in a jewelers block? A. Historical or antique value is factored into the value of damaged property at the time of the loss B. It will pay the least of ACV, the cost to restore, the cost to replace, or the lowest amount listed on the company's books C. It pays on an agreed value basis D. Value of insured property is agreed upon at the policy inception and cannot change until the next policy period

Fire

Which of the following is not a common exclusion from aviation policies? A. Losses to tires B. Fire C. War risks D. Mechanical breakdown

Speak with the claimant beforehand to get an idea of the minimum amount she will accept.

Which of the following is not a necessary preliminary step for the adjuster who is entering negotiations? Speak with the claimant beforehand to get an idea of the minimum amount she will accept. Know the maximum amount the insurer will pay. Investigate the loss and complete an evaluation of the claim. Be familiar with the circumstances of the loss.

It is added by endorsement and increases the premium

Which of the following is not true about business income coverage, an additional coverage in a business owners policy? It provides up to 12 months of coverage It protects from loss of income caused by property damage It starts 72 hours after the damage occurred It is added by endorsement and increases the premium

It's also called "Payment of Property Damage; Bodily Injury Pending."

Which of the following is true about the partial release settlement option? Once the property damage settlement is made, the claim is closed. It's also called "Payment of Property Damage; Bodily Injury Pending." It's also called a "Rehabilitation Settlement." It's also called an "Open-Ended Release."

Business auto insurance

Which of the following lines of coverage could be found in a commercial package policy? Workers' compensation insurance Disability insurance Business auto insurance Health insurance

Accidental shooting of livestock

Which of the following losses to livestock would be covered by the Causes of Loss- Broad Form, but NOT by the Causes of Loss- Basic Form? Livestock struck by lightning Flood loss of livestock Accidental shooting of livestock Earthquake loss of livestock

A ship wanders into a war zone, is fired upon, and is struck by a missile

Which of the following losses would NOT be covered under the hull coverage of an ocean marine policy? A. A ship catches fire and sinks 10 miles from the destination port B. A bolt of lightning damages the wheelhouse of a ship during a storm C. A ship wanders into a war zone, is fired upon, and is struck by a missile D. A ship is hijacked by pirates and grounded in a war-torn country

Damaged factory-installed speakers

Which of the following losses would be covered by Section III of a BAP? Damaged factory-installed speakers Punctured tires Stolen CDs Legal defense costs

Equipment built to operate under internal pressure or vacuum

Which of the following may be covered under an equipment breakdown protection coverage form? Self-propelled equipment Equipment used solely for therapeutic or surgical purposes Dragline, excavation, and construction equipment Equipment built to operate under internal pressure or vacuum

Books

Which of the following personal property items does NOT have a special limit of liability in the Homeowners forms? Firearms Jewelry Cash Books

It is the result of an unconscious behavior.

Which of the following statements about a moral hazard is FALSE? It is intentionally reckless behavior. It is a hazard caused by human behavior. A moral hazard increases risk. It is the result of an unconscious behavior.

A speculative risk involves a conscious choice.

Which of the following statements about a speculative risk is TRUE? A speculative risk always results in a personal gain. A speculative risk involves a conscious choice. Insurance companies only insure speculative risks. A speculative risk can only result in a loss.

Estoppel protects the insured party from an insurer who initially approves coverage, but then later denies coverage after the insured pays for repairs.

Which of the following statements about the principle of estoppel is TRUE? Estoppel essentially guarantees no increases in the policyholder premiums after a policy term expires. Estoppel allows an insurer to change the coverage in an insurance policy without the policyholder's consent. Estoppel protects the insured party from an insurer who initially approves coverage, but then later denies coverage after the insured pays for repairs. Estoppel protects the insurer from the effects of a warranty.

Actual cash value is always most beneficial to a policyholder.

Which of the following statements regarding actual cash value is FALSE? The actual cash value generally reflects the market value of an item. Actual cash value is always most beneficial to a policyholder. Actual cash value includes the depreciation on an item. A replacement cost valuation will generally be more than the ACV valuation.

A six-unit apartment building

Which of the following would definitely NOT qualify for a homeowners policy? A six-unit apartment building A home under construction A four-family home A mobile home

The policy premium

Which of these is NOT an essential detail for an adjuster to include in a loss report? The policy number The policy premium The policy deductible The policy limit

Lightning

Which of these is NOT typically excluded from coverage in a property insurance policy? Civil confiscation Off-premises power failure Lightning Nuclear events

Failure to harvest mature crop

Which of these is a typical exclusion in a Crop-Hail policy? Fire Failure to harvest mature crop Excessive moisture Transit to storage after harvest

MPCI cannot be purchased after the sales closing date.

Which of these statements about Multi-Peril Crop insurance is true? MPCI cannot be purchased after the sales closing date. MPCI must be run by the state. MPCI does not cover earthquake. MPCI is too expensive for most farmers.

Personal and Advertising Injury coverage

Which type of CGL coverage would indemnify an insured party for damages resulting from a libel claim? Supplementary coverage Extra Expense coverage Personal and Advertising Injury coverage Medical Payments coverage

Collision Coverage

While adjusting the radio station, Jazmine accidentally pulls the steering wheel to the right and heads off the road, crashing into a telephone pole. She is not injured, but her car is ruined. Which coverage type can help pay for Jazmine's car even though she was at fault? Collision Coverage Liability Coverage Comprehensive Coverage Uninsured Motorist Coverage

Scheduled payment release

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 to pay for his weekly visits to the rehabilitation therapist. Which settlement option did Barry receive? Scheduled payment release Full release Partial release Advance payment

Section II

While driving the company car, Lloyd is distracted and rear-ends the car in front of him. Which section of the BAP policy would cover the damage Lloyd caused to the other car? Section II Section III Section IV Section I

Because any ambiguity in the language of the policy will favor the insured.

Why is it important to define terms in an insurance policy? Because any ambiguity in the language of the policy means that the insured must file a lawsuit when a claim arises. Because any ambiguity in the language of the policy will favor the insurer. Because any ambiguity in the language of the policy will void the contract. Because any ambiguity in the language of the policy will favor the insured.

To let the claimant know that there is a coverage dispute

Why might an insurer send a claimant a Reservation of Rights letter? To let the claimant know that there is a coverage dispute When the insurer needs more information before making a final decision To let the claimant know that the insurer has received all necessary paperwork When the insurer has decided not to cover the loss

Has no obligation to notify its insurer of the new employees, and its premiums will not increase during the current policy period

X County has a government crime policy in place. During the policy period, X County hires twelve new deputies for the sheriff's office and five new employees for the county's public libraries. X County: Must inform its insurer of the new employees, and its premiums are likely to increase as a result Has no obligation to notify its insurer of the new employees, and its premiums will not increase during the current policy period Must notify its insurer of the new hires, but its premiums will not increase during the current policy period Must have written consent from its insurer before finalizing the new hires

$9,000 ** $2,500 limit for silverware and $2,500 limit for watch**

Zane's farmhouse was burglarized. The thieves stole his $4,000 sofa, his $3,000 silverware collection, and his $5,000 watch. Under Zane's farm insurance policy, which has a Coverage A limit of $150,000, how much can he expect to receive in indemnification for this loss, assuming there are no endorsements and ignoring any deductibles? $12,000 $7,500 $8,000 $9,000

in workers' compensation claims.

A "scheduled payment release" is a settlement option most commonly used: in workers' compensation claims. in claims that seek damages for property damage. in flood claims. when an insurer cannot pay all its claimants and still remain solvent.

Premiums

A discussion of ethics in insurance adjusting would not focus on: A. Bias B. Equality C. Premiums D. Fiduciary duty

$127

A dryer fire scorches the interior of Bill's home, and he is billed $627 by the fire department. Assuming Bill has the Fire Department Service charge additional coverage, how much will Bill have to pay out of pocket? $0 $377 $427 $127

The employer

A fidelity bond provides a guarantee that an employee will NOT perform certain acts, such as theft or fraud. Who is the obligee in a fidelity bond? The employee The customer The employer The insurer

concealment.

A lightning strike causes one of the storage buildings on John's farm to burn to the ground, aided by the fuel tanks he kept in the building. John knows he wasn't supposed to store any fuel in the building, so he keeps that piece of information to himself when he files a claim. John's insurer may deny his claim based on his: hard fraud. arson. liberalization. concealment.

an unincorporated organization of subscribers that operates through an attorney-in-fact to provide insurance benefits for its members.

A reciprocal insurer is: an unincorporated organization of subscribers that operates through an attorney-in-fact to provide insurance benefits for its members. a non-profit mutual aid organization that engages in charitable or benevolent activities and provides insurance to its members. a publicly-traded insurance company owned by stockholders, which provide capital and participate in the insurer's profits and losses. an insurance company that is owned by its policyholders, is not traded publicly, and is governed by a board of directors elected by the policyholders.

mediator

A/An___________ plays an advisory role in the negotiation process, working from a neutral position to assist the opposing parties to come to an equitable resolution. mediator judge arbitrator adjuster

Contingent Business Interruption

ABC Acoustics builds replica Neumann microphones using tube technology. When a fire takes out the only factory that manufactures these vintage tubes, ABC Acoustics must halt production until their supplier's factory comes back online. Which commercial property insurance coverage option could indemnify ABC Acoustics from lost income due to halted production? Extra Expense Contingent Business Interruption Vintage Replacement Electronic Data

Ordinance or Law endorsement

ABC Computers experiences a fire overnight at their corporate offices. ABC Computers had purchased an older building to house their offices, and the repair costs include upgrading the old building to adhere to modern fire codes. Which coverage might indemnify ABC Computers for the added expense of these upgrades? Legal Liability coverage Builders Risk coverage Ordinance or Law endorsement Extra Expense coverage

Fraud

Deceiving an insurer or insurance agent to collect money to which you aren't entitled is: A. Slander B. Staging C. Misrepresentation D. Fraud

$12,000 policy limit is $50,000 per person. Richard has $62,000 in injuries. $62,000 - $50,000 = $12,000

Driving home one night, Jeff runs a red light and crashes into another car, injuring all three passengers: Clair, John, and Richard. Clair suffered $25,000 in injuries, John $45,000, and Richard suffered the most at $62,000. Assuming Jeff's liability policy limits are set at 50/150/75, how much, if any will Jeff be required to pay for the passengers' injuries? $0 $132,000 $62,000 $12,000

items containing inherent vice will eventually breakdown or self-destruct.

Dwelling policies exclude inherent vice because: items containing inherent vice will eventually breakdown or self-destruct. it is passed down from one vice to the next. theft of anything not attached to the structure is excluded. vandalism usually occurs when inherent vice overrides the will.

Alien Insurer

Eric works in Texas for Gemutlich Insurance. His company is licensed to sell insurance in Texas, but is based out of Munich, Germany. Gemutlich Insurance was formed under German law, but follows all applicable Texas laws and possesses a Texas certificate of authority. Which type of insurer does Eric work for? Alien Insurer Surplus Insurer Foreign Insurer Domestic Insurer

Insuring Agreement

Essence of the contract. Summarizes what the insurer will cover and how. Endorsements Definitions Insuring Agreement Conditions Declarations Exclusions

$250

Extended coverage under a commercial policy often provides coverage for damage to outdoor trees, plants, and shrubs. When covered, what is the maximum per-plant amount? $250 $200 $100 $50

formal request to settle the damage.

From a legal standpoint, when a policyholder files a claim against her insurance policy, she is essentially submitting a/an: formal request to settle the damage. indemnification. bill for damage repairs. order for damage repairs.

An insured automobile

From the point of view of an insurer, which of the following is a risk? A thunderstorm A large tree growing next to a house An insured automobile A hurricane

Products-Completed Operations Limit

Grace purchased a recliner from XYZ Furniture. After getting it home, she decided to try out the new chair. While leaning back, the chair broke and Grace injured her neck. She sued XYZ Furniture and was awarded $300,000. Under which limit in XYZ Furniture's CGL policy would these damages be paid? General Liability Limit Products-Completed Operations Limit General Aggregate Limit Negligence Limit

a hazard.

Fred has decided to store his fuel tanks inside his garage where he builds automobiles. To the insurer, the fuel tanks would be considered: an exposure. a peril. a risk. a hazard.

Penal sum.

In a surety bond, the maximum amount a surety is required to pay is known as a: Maximum allowance. Penal sum. Contract fee. Top rate.

Actual cash value

Under a BAP, a total loss is settled according to: Actual cash value Trade-in value Salvage value Replacement cost

Texas HO-A

Which standardized Texas homeowners policy is the most basic: providing actual cash value coverage on a named-peril basis for structures and personal property? Texas HO-A Amended Texas HO-B Texas HO-A Texas HO-C

Requires the insured party to attempt to minimize or prevent further losses if damage is caused by an insured peril

"Sue and labor" is a provision in ocean marine insurance that: A. Restricts the circumstances under which an insured may bring suit against the insurer B. Requires that the voyage must be legal, and states that involvement in contraband, smuggling, or any other illegal activity will nullify the insurance contract C. Requires the insured party to attempt to minimize or prevent further losses if damage is caused by an insured peril D. Requires the insured to sue the insurer for labor costs ensued in salvage

At the beginning of the investigation

At what point in the claims process might a Reservation of Rights letter be sent? When the investigation is complete When a witness statement contradicts the adjuster's evaluation At the beginning of the investigation At the end of the claims settlement process

Replacement Cost

Cost to replace an item at today's market value. Replacement Cost Accumulated Depreciation Valuation Actual Cash Value Valued Policy Annual Depreciation

Seller

Cost, insurance, and freight (CIF) coverage would be purchased by the _____ of goods. A. Buyer B. Seller C. Receiver D. Insurer

$12,000 60-20=40 40x100=4000 4000x$3= $12,000

Half of Kevin's 100-acre corn farm was destroyed by wildfire. His MPCI policy has a yield guarantee of 60 bushels per acre per season, but due to the fire, he only actually produced 20 bushels per acre. Kevin's policy pays #3 per bushel. How much will his policy pay him for his loss? $6,000 $9,000 $3,000 $12,000

a risk.

Harold wants to buy an insurance policy for his home in Atlanta. The insurance company writes him a policy. To the insurance company, Harold's home is considered: a loss. a risk. an asset. a hazard.

$1,000

If Farmer Brown sustains a 10% loss to his crop, and he has Crop-Hail Insurance with a $10,000 limit and a 5% minimum loss percentage, how much will his policy pay him? $1,000 $1,500 $500 $10,000

apply directly to the Insurance Commissioner's office. ** Under some circumstances, an adjuster may request an exemption from continuing education requirements by applying directly to the Office of the Insurance Commissioner. Situations that may call for exemption include disability, illness, or military service.**

If an adjuster needs an exemption to the Texas CE requirements for adjusters, she must: apply directly to the Insurance Commissioner's office. apply to her employer. have a medical excuse for her delay. pay a $100 fine.

for 60 days, the building is either closed or has less than 31% of its available square footage occupied.

In a typical commercial property policy, an insured building is considered "vacant" when: for 60 days, the building is either closed or has less than 31% of its available square footage occupied. for 25 days, the building is either closed or has no business personal property located in the building. for 30 days, the building is either closed or has less than 61% of its available square footage occupied. for 45 days, the building is either closed or has no business personal property located in the building.

A rock strikes and shatters Horace's windshield

In which of the following cases would mechanical breakdown insurance NOT apply? Sam's car transmission wears out During a long incline in Colorado, Seth's engine overheats, damaging the pistons A rock strikes and shatters Horace's windshield The air conditioning

Conditions

In which section of a Standard Fire Policy would you find information on rules of conduct and obligations the policy holder must follow in order for insurance coverage to apply? Conditions Declarations Exclusions Insuring Agreement

transfers

Vicarious liability _________ negligence. transfers negates causes prevents

Crop-Hail and MPCI

What are the two main types of Crop-Yield Insurance? Crop-Hail and RMA Crop-Hail and MPCI Crop-Yield and MPCI Crop-Yield and Crop-Revenue

Direct primary coverage

A garage-keepers policy can provide direct excess coverage or: Liability coverage Indirect excess coverage Direct liability coverage Direct primary coverage

Accumulated Depreciation

An item's annual depreciation multiplied by its age. Valuation Actual Cash Value Valued Policy Annual Depreciation Replacement Cost Accumulated Depreciation

annual depreciation.

An item's replacement cost divided by the number of years of its expected or useful life is its: accumulated depreciation. annual replacement cost. annual depreciation. actual cash value.

Waiting period

Insurers often protect themselves from providing insurance to people who are already ill by inserting which type of clause into a health insurance contract? A. Grace period B. Waiting period C. Time limit on defenses D. Double indemnity

An excess liability policy pays only after the base policy's limit has been exhausted

One day, a customer at Jim's Tire Sales was severely injured when a rack of tires collapsed and fell on her. Later, the customer filed a lawsuit against Jim for $750,000. Jim has a commercial general liability policy, but the limit for this type of loss is only $500,000. Not wanting to use his entire limit on this one claim, Jim tries to use his excess liability policy first, which has a limit of $1,000,000, so he can retain most of the aggregate limit in his base policy. Unfortunately for Jim, this is not possible because: Excess liability policies cannot follow commercial general liability policies Jim's excess liability policy is a stand alone policy An excess liability policy pays only after the base policy's limit has been exhausted All excess liability policies have a 10% per occurrence clause

The policyholder pays the appropriate portion of the premium on a pro rata basis

Ocean marine insurance gives the policyholder 45 days to pay the full premium or develop a payment plan with the insurer. If the policyholder cancels the policy before paying the premium, what happens? A. The insurer will refund the policyholder for all premium payments B. The policyholder pays the appropriate portion of the premium on a pro rata basis C. The insurer can sue the policyholder for the full premium amount D. The policyholder has 90 days to pay the full premium, or develop a payment plan with the insurer

5

Once a claim has been accepted and is undisputed, the insurer has ___ days to pay the claim. 5 10 15 45

plaintiff.

Once a claimant files a complaint to the court, the claimant will become the: plaintiff. answering party. defendant. negligent party.

Pasture Fencing

Which of the following would NOT be covered under Barns, Outbuildings, and Other Farm Structures coverage? A Feeding Pen Silo Pasture Fencing A temporary structure used in the storage of hay

Damage the insured causes to his own garage

Which of the following would NOT be covered under Part A of a Personal Auto Policy? Damage the insured causes to his own garage Lost wages Legal defense costs Damage the insured causes while driving his friend's car

Binders

There are several terms that are often interchangeable with "endorsements." Which of the following is NOT one of these terms? Binders Riders Attachments Addendums

General Agent

This agent works for only one insurer, and supervises and trains other agents. Captive Agent General Agent Exclusive Agent Direct Writer

Airport liability insurance

A man wanders onto the runway of a small airport and is injured by a taxiing plane. Which insurance policy would pay for his injuries? A. Hangarkeepers liability insurance B. Passenger bodily injury liability insurance C. Airport liability insurance D. Aircraft hull insurance

The insurer can settle anyway it finds advantageous to its interests.

A neighbor stepped on a rusty rake while walking through Jake's backyard, unannounced. He ends up with a bad case of tetanus and has to stay in the hospital for three days. He files a claim against Jake, who protests any wrongdoing because he believes his neighbor was trespassing and should be responsible for his own injury. Jake wants a court of law to settle the dispute. How can the insurer settle the claim put forth by Jake's neighbor? The insurer can settle anyway it finds advantageous to its interests. The insurer must use arbitration since Jake feels he is not at fault. The insurer can only settle in court if Jake demands a lawsuit. The insurer must settle however Jake's neighbor wishes.

needs to be signed by the policyholder in order to be valid.

A non-waiver agreement: informs the policyholder that the insurer has denied coverage. violates the doctrine of estoppel. needs to be signed by the policyholder in order to be valid. is another term for a "reservation of rights" letter.

Res Ipsa Loquitur.

A passenger on a commercial airline flight was injured when the plane crashed due to a mechanical problem. In court, the injured passenger's lawyer could invoke the doctrine of: Contributory negligence. Res Ipsa Loquitur. Comparative negligence. Assumption of Risk.

Building and Structures

"permanently installed fixtures" would fall under which coverage of a commercial property policy? Building and Structures Personal Property of Others Preservation of Property Business Personal Property

Mark must return $600 to the insurer.

17 year old Luke backs into his neighbor Mark's car and causes $1,000 in minor damage. To teach him a lesson, Luke's parents make him give Mark his $600 savings to help cover the damage. However, Mark had already filed a claim and received the necessary $1,000. Which of the following is TRUE? Mark can keep the excess money, but only if he uses it to pay his next PAP premium. Luke actually needs to give the money directly to the insurer, not Mark. Mark must return $600 to the insurer. Mark can keep the excess money and use it as he sees fit.

$0

3,200 acres of Jonathan's 40,000 acre farm of green beans were destroyed by wildfire. Jonathan has Crop-Hail insurance with a $60,000 limit and 10% minimum loss threshold. How much indemnification can Jonathan expect to receive when he files a claim for this loss? $0 $2,122 $6,000 $4,800

auto accidents.

A CGL can protect businesses from claims arising out of all of the following, EXCEPT: personal injury. damage to a rented premise. auto accidents. damages caused by contractors.

accident.

A Cause of Loss - Special Form provides open peril coverage for direct losses to physical property. This Special form excludes all of the following EXCEPT: acts of war. vandalism. rust, corrosion, or decay. accident.

An employee moving a pallet of plasma televisions accidentally hits the brakes. The pallet falls, destroying the stack of televisions.

A Commercial General Liability policy could protect a business in all of the following situations, EXCEPT: An employee moving a pallet of plasma televisions accidentally hits the brakes. The pallet falls, destroying the stack of televisions. A consumer purchases an appliance from XYZ Company. When the consumer plugs in the appliance, it catches on fire and burns down the consumer's kitchen. An employee gets in a fight with a customer and tackles the customer to the floor, causing serious back injuries to the customer. A woman is browsing through an antique store when a shelf collapses on top of her, causing her serious injuries.

Martin's crop was destroyed by caterpillars despite the fact that he used insecticide.

A Crop-Hail insurance policy would provide coverage for all of the following, except: Martin's crop was destroyed by caterpillars despite the fact that he used insecticide. Olivia's crop was destroyed by a hail storm. Lucy's crop was destroyed by a wildfire started by a lightning strike. Tom's crop was destroyed when he crashed his truck while transporting his crop to the silo for storage.

two

A Texas insurance adjuster's license must be renewed every ___ years. three two six four

exists solely to provide insurance for its parent company.

A captive insurance company: operates through an attorney-in-fact to provide insurance benefits for its members. exists solely to provide insurance for its parent company. provides insurance that is designed to meet the needs of the general public. provides insurance for insurers.

$150,000

A cargo ship's hull policy has a franchise deductible of $100,000. The vessel sustains $150,000 worth of damage due to a fire. How much will the insurer be responsible for? A. $50,000 B. $0 C. $150,000 D. $100,000

$115,000 ***The Dwelling Form pays up to 10% of the Coverage A limit for detached garages. 10% of $150,000 is $15,000. So, Howard's policy will pay $100,000 for the damage to Howard's dwelling, plus $15,000 for his detached garage, for a total of $115,000.***

A flood inundates Howard's property, causing $100,000 of damage to the dwelling and $25,000 of damage to the detached garage. If Howard has a Dwelling Form flood policy with a $150,000 limit, how much will the policy pay for the damage to Howard's home and detached garage combined? (Ignore deductible amounts.) $100,000 $150,000 $90,000 $115,000

Cyber and privacy insurance

A company that wants to insure itself against losses due to data breach should purchase: Directors and officers (D & O) liability insurance Cyber and privacy insurance Fiduciary liability insurance Malpractice insurance

issue a complaint against the policyholder.

A few weeks ago Christopher's garage was destroyed by an out-of-control motorist. Fortunately, the motorist had sufficient liability insurance to cover the damages. However, the insurer insists that Christopher's garage is worth far less than the appraisals he has received from contractors. Christopher and the insurer have gone back and forth in negotiations for weeks, making little headway. Christopher decides it's time to: issue a reservation of rights. issue a complaint against the policyholder. issue a judgment. issue an answer for the policyholder.

immediately notify his insurer.

A few weeks ago, Frank ran a red light and caused an accident. He didn't worry too much about it since he had liability insurance. But yesterday, Frank received a notice that he is named as the defendant in a lawsuit involving the accident. Frank's next course of action is to: immediately notify his insurer. settle the claim. call his lawyer. contact the claimant.

An insured business for loss resulting from any dishonest acts committed by its bonded employees

A fidelity bond covers: The public from a public official's lack of performance A self-insured business for workers' compensation claims filed by its employees when the business cannot meet its obligations Principal and interest payable under the terms of a contract or promissory note An insured business for loss resulting from any dishonest acts committed by its bonded employees

Business Income Coverage

A fire breaks out in Anton's manufacturing plant, causing extensive damage which will take at least three months to repair. In the meantime, Anton has rent and employees who still need to be paid, and many other expenses that can't wait until the business is up and running again. Which coverage form of his commercial property policy can help Anton with his cash flow? Builder's Risk Coverage Manufacturer's Risk Coverage Rent, Salary, and Repair Coverage Business Income Coverage

Law and ordinance coverage

A fire caused $10,000 in damage to Karen's kitchen. During the repairs, a city inspector comes to inspect the work and notes that Karen's foundation is eight inches too low according to city codes. Now Karen has to pay an additional $20,000 to raise her house and build up the foundation. What additional coverage could help Karen pay for this? A. This expense is not covered because it did not result from a covered loss B. Time element coverage C. Law and ordinance coverage D. Personal property coverage

$340,000

A fire in John's factory causes him to shut the doors for 90 days. While repairs take place, John rents another building, along with some machinery and manufacturing supplies, for $90,000. John's total loss is $300,000, but by renting the new building and equipment he manages to reduce that loss by $50,000. Assuming John's commercial property policy includes Business Income Coverage With Extra Expense, how much will his insurer indemnify him? $420,000 $300,000 $340,000 $120,000

$300,000

A fire in John's factory causes him to shut the doors for 90 days. While repairs take place, John rents another building, along with some machinery and manufacturing supplies, for $90,000. John's total loss is $300,000, but by renting the new building and equipment he manages to reduce that loss by $50,000. Assuming John's commercial property policy provides Business Income Coverage Without Extra Expense, how much will his insurer indemnify him? $300,000 $210,000 $260,000 $50,000

Electronic Data

A fire in the break room kitchen of Helen's small business spreads into the utility room, damaging the computer server. Her server is physically destroyed, along with a lot of vital information: client information, pending shipments, etc. Which coverage can help Helen with the costs associated with losing this information? Business Income Reasonable Repairs Records Recovery Electronic Data

Can provide primary or excess coverage

A government crime policy: Is always primary Can provide primary or excess coverage Only provides excess coverage Always pays on a pro-rata basis along with any other applicable policy

it bundles property and liability insurance into one policy.

A homeowner's policy is called a "package" policy because: it bundles property and liability insurance into one policy. it bundles dwelling and auto insurance into one policy. another name for a "dwelling" is a "package." it bundles residential and commercial insurance into one policy.

$6000: Lightning is a covered peril and damaged plants are covered at $500 per plant up to 5% of Coverage A limit

A lightning strike sparks a fire on the ground of Blake's property, causing damage to several trees and shrubs in the process. Assuming Blake carries a $120,000 DP-2 on his home with a trees, shrubs, and other plants endorsement, what is the maximum Blake can receive for his 15 damaged plants? $6000: Lightning is a covered peril and damaged plants are covered at $500 per plant up to 5% of Coverage A limit $7500: all perils are covered and all damaged plants are covered at $500 per plant $500: only one occurrence is paid $0: Lightning is not a covered peril with the Trees and Shrubs Additional Coverage

Not in motion

A plane was damaged while being towed by another vehicle. By policy definition, this damage is considered to have occurred while the aircraft was: A. In motion B. In transition C. Not in motion D. In flight

In flight

A plane was damaged while on its takeoff run down the airport runway. by policy definition, this damage is considered to have occurred while the aircraft was: A. In flight B. In conveyance C. Not in flight D. Not in conveyance

The power surge

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 shorts-out all the computers, causing thousands of dollars in damage. What is the proximate cause of the loss? The water from the sprinklers The electrical fire The automatic sprinkler system The power surge

Maxwell's insurer will pay nothing for this loss, because the damaged property was not inside a building

A recent flood caused $5,000 in damages to Maxwell's outdoor furniture and professional grade barbeque grill that he keeps on his patio. If Maxwell has a flood insurance policy with $25,000 of personal property coverage, which of the following statements is true? Maxwell's insurer will pay $5,000 to indemnify him for his damaged property Maxwell's insurer will pay nothing for this loss, because the damaged property was not inside a building Maxwell's insurer will pay nothing for this loss, because the damaged items are not considered personal property Maxwell's flood policy will cover the flood-damaged property, but only up to $2,500

Guarantees the health, safety, and welfare of the public during and after mining operations, and guarantees land will be restored to its original condition

A reclamation bond: Guarantees that principal and interest will be paid per the terms of the contract or promissory note Guarantees that an issuer of a copy of a lost financial instrument will not suffer an economic loss if the owner of the instrument later finds and negotiates the original Guarantees a principal will faithfully perform his duties as prescribed by law or the bylaws of the obligee Guarantees the health, safety, and welfare of the public during and after mining operations, and guarantees land will be restored to its original condition

a reminder that there will be a default judgement if the policyholder does not respond.

A reservation of rights letter must include all of the following, EXCEPT: an explanation that the policyholder may not receive compensation or may have to defend himself in court. the insurer's name, the policy number, and the event or loss that is being discussed. a reminder that there will be a default judgement if the policyholder does not respond. an explanation of potential consequences and that the policyholder might have to reimburse the insurer.

workers compensation.

A risk retention group can provide all of the following kinds of insurance, EXCEPT: workers compensation. medical malpractice. professional liability. product liability.

pure

A risk that carries no possibility of gain is called a ___________ risk. speculative slight monetary pure

Follows a base policy, but may have different exclusions and limitations

A stand alone excess liability policy: Excludes coverage for personal liability Can cover risks that are not covered in the base policy Follows a base policy, but may have different exclusions and limitations Can act as a primary policy

$60,000

A storm travels through town, partially destroying Wilma's business, which is covered by a commercial property policy. Wilma maintains Business Income Coverage with a $100,000 limit, and the Maximum Period of Indemnity coverage option. Wilma's business incurred the following losses: Monthly Losses Month - Amount Month 1 - $19,000 Month 2 - $16,000 Month 3 - $14,000 Month 4 - $11,000 Month 5 - $6,000 How much would her policy pay for lost income? $100,000 $60,000 $120,000 $66,000

$113,000

A storm travels through town, partially destroying Wilma's business. Wilma maintains a Business Income coverage policy with $120,000 limit, and the Monthly Limit of Indemnity coverage option. Wilma's business incurred the following expenses: Monthly Expenses Month - Amount Month 1 - $29,000 Month 2 - $36,000 Month 3 - $24,000 Month 4 - $31,000 How much would her policy pay for lost income if Wilma had a monthly limit of 1/4 in place? $129,000 $113,000 $136,000 $120,000

The pier on Wyatt's 10-acre pond

A terrible storm blew through Wyatt's farm last night, causing extensive damage. Which of the following would NOT be covered under Wyatt's Farm Policy? The pig pen Wyatt's satellite dish The pier on Wyatt's 10-acre pond A destroyed grain silo

Inside the premises - theft of money and securities

A thief breaks into XYZ Metals and steals 100 travelers checks the company had purchased for their employees as a bonus. Which commercial crime coverage would indemnify XYZ Metals for their loss? Inside the premises - robbery or safe burglary of other property Inside the premises - theft of money and securities Forgery or alteration Employee theft

No coverage applies to this loss * no loss has occurred as no damage was done*

A windstorm blows down trees all over town, sending one of Greg's neighbor's trees into Greg's yard. Luckily for Greg, the tree doesn't hit his house, cause any damage to his fence, or even block his driveway. It's merely an eyesore. Which coverage in Greg's DP-2 would pay to remove the tree from his yard? Reasonable Repairs Trees, Shrubs, Other Plants No coverage applies to this loss Debris Removal

Business interruption coverage will indemnify the butcher for the cost of the rentals, but only if he succeeds in preserving his inventory

A windstorm cuts the power supply of a wholesale butcher. To keep his inventory from spoiling, the butcher immediately runs to the store and rents generators to keep his freezers working. Which of the following statements is TRUE? A. Business interruption coverage will indemnify the butcher for the cost of the rentals, but only if he had to close the store for more than 15 minutes while picking them up B. Business interruption coverage will indemnify the butcher for the extra expense, even if renting the generators fails to keep the meat from spoiling C. Business interruption coverage does not cover extra expenses, such as equipment rental D. Business interruption coverage will indemnify the butcher for the cost of the rentals, but only if he succeeds in preserving his inventory

$0: Wind is not a covered peril under the Trees, Shrubs, and Other Plants coverage.

A windstorm passes over Blake's property, causing damage to his roof and tearing up several trees and shrubs in the process. Assuming Blakes carries a $120,000 DP-2 on his home, with a Trees, Shrubs, and Other Plants endorsement, what is the maximum Blake can receive for his 15 damaged plants? $0: Wind is not a covered peril under the Trees, Shrubs, and Other Plants coverage. $6,000: All perils are covered and damaged plants are covered at $500 per plant, up to 5% of Coverage A limit. $500: Only one occurrence is paid. $7,500: All perils are covered and all damaged plants are covered at $500 per plant.

Special Form

A winter storm has left a lot of snow and ice on the roof of Helen's business. The weight is too much for the roof to bear and it gives way, bringing with it a torrent of melting ice and snow cascading down on the interior of Helen's warehouse. Her commercial property policy covers the damage, even though "weight of ice and snow" is not specifically listed as a covered peril. Therefore, which type of Causes of Loss form does Helen have attached to her Building and Personal Property Coverage Form? Basic Form Universal Form Special Form Broad Form

must have a chance to correct anything that is incorrect.

A witness who has had a recorded interview: is taken more seriously. must have a lawyer present during the interview. must have a chance to correct anything that is incorrect. must do so under oath.

Financial guarantee bond

All of the following are examples of court bonds, EXCEPT: Injunction bond Attachment bond Replevin bond Financial guarantee bond

Parker Sureties can seek recompense from ABC Construction

ABC Construction recently won a bid to reconstruct the town park. After a few months of work, ABC Construction realizes they won't make any money on the project and walk away, leaving the park half-finished. Luckily, the town had required ABC Construction to hold a surety bond from Parker Sureties, who can now step in to finance the completion of the job. Which of the following statements is TRUE? Parker Sureties will have to pay half the remaining costs for completing the park Parker Sureties will not be able to seek recompense from ABC Construction Parker Sureties will have to pay 75% the remaining costs for completing the park Parker Sureties can seek recompense from ABC Construction

Employee theft - scheduled positions

ABC Credit Union has an employment opening for a "vault controller," who would be responsible for a large amount of cash in the vault. They want to acquire an insurance coverage protecting them from theft by the vault controller only. What insuring agreement in their commercial crime policy would provide this coverage? Employee theft - all employees Employee theft - scheduled persons Employee theft - forgery or alteration Employee theft - scheduled positions

vicarious liability.

ABC Homebuilders hires Frank's Roofing to work on several units in its new subdivision. While roofing one of the homes, a worker drops a bag of nails onto a neighbor's AC unit. Some nails fall inside, destroying the unit. ABC Homebuilders is ultimately responsible for the destruction of the air conditioning unit through: personal liability. vicarious liability. homeowner's liability. subcontractor liability.

ABC Homebuilders

ABC Homebuilders hires Frank's Roofing to work on several units in its new subdivision. While roofing one of the homes, a worker drops a bag of nails onto a neighbor's AC unit. Some nails fall inside, destroying the unit. Who is ultimately responsible for the damage done to the air conditioning unit? ABC Homebuilders ABC Homebuilders & Frank's Roofing are each 50% responsible The owner of the AC unit Frank's Roofing

Indemnitor

ABC Insurance decides to take on the role of a surety, guaranteeing the performance of Gradient Industries in the construction of a new shopping complex. ABC Insurance wants to provide themselves a safety net in case Gradient Industries fails to deliver and ABC Insurance ends up on the hook for millions of dollars. ABC Insurance turns to a fourth company, who agrees to indemnify ABC Insurance in the even Gradient Industries fails to perform. This fourth party would be considered a / an: Indemnitor Principal Trust Obligee

Employee theft - all employees

ABC Markets is concerned about declining revenues. Though business seems to have increased, ABC can't quite figure out the source of the poor sales performance. When the president suggests that employees might be stealing money, ABC Markets decides to purchase commercial crime insurance that would protect against theft by all 1,320 employees of the chain. Which type of commercial crime coverage would best apply in this situation? Forgery or alteration Employee theft - scheduled persons Employee theft - all employees Employee theft - scheduled positions

The insurer pays $100,000; the aggregate limit is now $200,000; and ABC Masonry must pay $50,000.

ABC Masonry, Inc. has an aggregate liability policy with limits of 100,000/300,000. One day, an accident at a construction site leads to $150,000 in damage to public property. Assuming the cause of loss is covered under ABC Masonry's liability policy, how will this claim be paid? The insurer pays $150,000 and the aggregate limit is now $200,000. The insurer pays $100,000; the aggregate limit is still $300,000; and ABC Masonry must pay $50,000. The insurer pays $150,000 and the aggregate limit is still $300,000. The insurer pays $100,000; the aggregate limit is now $200,000; and ABC Masonry must pay $50,000.

Product Liability

ABC Motors produces luxury cars, but lately some of their automobiles have been shipped out with faulty accelerators that stick. One such car was sold to an elderly man who was pulling into a parking space when his car engine suddenly revved to 4,000 RPMs, crashing into a parked car. The resulting damage would fall under what coverage in ABC Motors' Commercial General Liability policy? Completed Operations Liability Operations Liability Premises Liability Product Liability

Extra Expense

ABC Paving owns a warehouse where they store all their pavers. Lightning strikes the warehouse, which burns to the ground and destroys the entire fleet of pavers. In order to complete the projects they are currently working on, ABC Paving has to lease four pavers from another company. What commercial insurance coverage might pay for this expense? Preservation of Property Legal Liability Extra Expense Order of Civil Authority

Kickbacks

ABC Renovations has negotiated a deal with Tim: if he is involved in settling a claim needing interior or exterior renovations, Tim will steer business towards ABC Renovations. ABC Renovations will pay Tim $50 per referral. In participating in this deal, Tim is accepting: A. Settlement padding B. Double dipping C. Inducements D. Kickbacks

Per Occurrence Limit: $150,000; General Aggregate Limit: $1,850,000

ABC Sawmill has a Commercial General Liability policy which includes a $2,000,000 General Aggregate Limit, and a $150,000 Per Occurrence Limit. A covered accident occurs, and the injured party is awarded $150,000. After this unfortunate situation, what are the limits remaining in ABC Sawmill's policy? Per Occurrence Limit: $0; General Aggregate Limit: $2,000,000 Per Occurrence Limit: $150,000; General Aggregate Limit: $2,000,000 Per Occurrence Limit: $0; General Aggregate Limit: $1,850,000 Per Occurrence Limit: $150,000; General Aggregate Limit: $1,850,000

Dwelling policy

ABC Trucking owns a nice vacation house in the country, to which they regularly bring high-ticket clients as a benefit for staying loyal to them. They would like to purchase a policy to insure the property from things like fire, windstorm damage, or vandalism. What policy type could ABC Trucking purchase to cover the property? Dwelling policy Homeowners policy Commercial liability policy Standard fire policy

coinsurance payment.

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. coinsurance payment. B. deductible C. copayment. D. capitation.

The insured's ex-wife who moved out of the house 4 months ago

According to the "Definitions" section of a Personal Auto Policy, Which of the following would NOT qualify as a "family member"? The insured's foster child The insured's cousin who is living with the insured The insured's ex-wife who moved out of the house 4 months ago The insured's adopted daughter

medical costs for the driver you struck.

After a covered accident, your PIP will provide coverage for all of the following, EXCEPT: medical costs for the driver you struck. medical costs for your passenger with no PIP. medical costs for your friend who was driving your car with permission. your medical costs.

Rachel leaves her cat in her car, with the windows cracked, while she goes into the drugstore to fill a prescription.

According to the "Definitions" section of a Personal Auto Policy, which of the following is NOT "occupying" her vehicle? Trishey is leaning on her car during a lunch break while she eats her lunch. Jordan is sitting in her parked car listening to music while she waits for her sister to finish yoga class. Rachel leaves her cat in her car, with the windows cracked, while she goes into the drugstore to fill a prescription. Jaminda is sitting on top of her car as she talks to her best friend on the phone.

the insured must allow the insurer to inspect the insured premises at any time.

According to the Inspection and Surveys provision: the insured must respond to insurer surveys, which are used to gather information about the insured's payroll or annual sales. the insured must submit regular self-inspection reports to the insurer, which are used to determine insurability and premiums. the insurer will conduct a survey at the end of each policy period to determine its actual exposure over the course of the past policy period. the insured must allow the insurer to inspect the insured premises at any time.

The mortgagee may change the coverage amount.

According to the Mortgagee Clause, what is NOT one of the rights of the mortgagee? The mortgagee may be indemnified, even in the event of fraud by the insured. The mortgagee will be notified if the insurer intends to cancel the policy. The mortgagee may change the coverage amount. The mortgagee may receive a portion of claim payments.

Calling the claimant and leaving a documented voicemail message

According to the Unfair Settlement Practices Act, an insurer must respond to a claim reasonably promptly. Which of the following is NOT an acceptable way of responding to a claim? Calling the claimant and leaving a documented voicemail message Calling the claimant and documenting the conversation Speaking to the claimant in person and documenting the conversation Mailing the claimant a letter

15 business days

According to the Unfair Settlement Practices Act, how long does an insurer have to affirm or deny a claim? 30 business days 15 business days one business day 7 business days

Notify the claimant of the delay and explain why extra time is needed to come to a decision. If the insurer cannot come to a decision within 15 days, it may extend the deadline to 45 days by notifying the claimant and explaining why it needs more time to come to a decision.

According to the Unfair Settlement Practices Act, what must an insurer do if it cannot affirm or deny a claim within a reasonable time frame? Notify the claimant of the delay and explain why extra time is needed to come to a decision. If the insurer cannot come to a decision within 15 days, it may extend the deadline to 45 days by notifying the claimant and explaining why it needs more time to come to a decision. Issue a conditional advance payment of 10% of the claim amount, to be refunded if the insurer ultimately denies the claim. If the insurer cannot come to a decision within 15 days, it may extend the deadline to 45 days by notifying the claimant and explaining why it needs more time to come to a decision. Submit a report to the Commissioner of Insurance, explaining why extra time is needed. If the insurer cannot come to a decision within 15 days, it may extend the deadline to 45 days by notifying the claimant and explaining why it needs more time to come to a decision. Request that the claimant re-submit the claim to grant the insurer additional time to process it.

A fiduciary

According to the employee retirement income security act (ERISA), an individual or corporation who exercises discretionary authority or control over the management of an employee benefit plan is called: A fiduciary An operations manager A broker An investor

$70,000

Acme Boats experiences a devastating fire in their factory. They turn to their Business Income coverage to recover their loss of income due to the fire. When Acme Boats initiated the policy, they chose the Maximum Period of Indemnity coverage option with a policy limit of $150,000. Acme Boats experienced the following loss of business income in the months after the fire: Monthly Income Losses Month - Amount Month 1 - $20,000 Month 2 - $20,000 Month 3 - $15,000 Month 4 - $15,000 Month 5 - $10,000 Month 6 - $10,000 How much money might Acme Boats be indemnified for the loss of business income? $40,000 $90,000 $70,000 $20,000

An "object"

Acme Bottling Co. makes bottles for a large food manufacturer. Acme has dozens of machines, including conveyors, fillers, and cappers, to name a few. Acme Bottling Co. has a boiler and machinery insurance policy to protect its financial investment in these machines. On their policy, each of their machines would be referred to as: An "object" A "machine" A "covered peril" An "item"

Obligee.

Acme Construction enters into a contract to build a shopping mall for XYZ Associates. Having never worked with Acme Construction before, XYZ Associates demands a surety bond to guarantee the work of Acme Construction. ABC Insurance Company agrees to underwrite the bond. In this example, XYZ Associates is the: Insurer. Principal. Obligee. Surety.

Acme Construction

Acme Construction is in charge of building a new subdivision in the city, and hires Jim's Masonry to lay the foundations. As part of the deal, Jim's Masonry is required to purchase Owners & Contractors Protective Liability to protect Acme Construction in the event Jim makes a mistake that results in a liability claim. Who will be listed as the named insured on this policy? Jim's Masonry The city Acme Construction The insurance agent

Jim's Masonry

Acme Construction is in charge of building a new subdivision in the city, and hires Jim's Masonry to lay the foundations. As part of the deal, Jim's Masonry is required to purchase Owners & Contractors Protective Liability to protect Acme Construction in the event Jim makes a mistake that results in a liability claim. Who will end up paying the premi9ums for this additional policy? Jim's Masonry Acme Construction The city, or local municipality Jim's Masonry and Acme Construction split the cost

Liberalization

Acme Insurance is trying to attract new commercial clients, so they decide to broaden coverage for business personal property items without increasing the premium. Which condition would allow the current clients of Acme Insurance to benefit from the new expanded coverage? Policy Period Changes in Policy Liberalization Control of Property

Products-Completed Operations aggregate limit.

Acme Kitchen loses a lawsuit brought by a claimant who suffered injuries resulting from a design flaw in a kitchen knife she purchased. When Acme Kitchen's CGL insurer pays out on the claim, the amount they pay will be subtracted from Acme Kitchen's: Per Occurrence aggregate limit. Personal Injury and Advertising aggregate limit. General aggregate limit. Products-Completed Operations aggregate limit.

Directors and officers (D & O

Acme University buys liability insurance for each of its board members, to protect them against lawsuits that might be brought against them specifically in their capacity as board members. What kind of liability insurance is this? Fiduciary Cyber Employment practices Directors and officers (D & O)

4 years

Actual Production History (APH) is based on a farmer's previous crop yields. A farmer must provide how many years of records to determine the APH? 10 years 5 years 2 years 4 years

Additional Living Expenses.

Actual losses incurred for increased expenses over and above what you normally would spend for food, shelter, or related items is called: Additional Living Expenses. Fair Rental Value. Household Personal Property Limits. Unscheduled Personal Property.

The roads present a physical condition that increases the chance of a loss.

Adam has a treacherous drive to work every day. Not only does he have to drive down the pothole-strewn access road to the highway, but he also must traverse several icy bridges on the way to work. Why does the insurance company call these hazards "physical hazards"? They take a toll on Adam physically, increasing the chance of a loss. The roads present a physical condition that increases the chance of a loss. Adam is indifferent to any losses he may suffer. Adam doesn't consciously choose to take this route.

Endorsements

Add, reduce, or change the coverage of the policy in some way. Definitions Insuring Agreement Exclusions Declarations Endorsements Conditions

Elliot Designs

After Jerry pulled the fire alarm, the indoor sprinkler system came on and flooded the offices at Elliot Designs, causing thousands of dollars in damage. Elliot Designs filed a claim with KLM Insurance, who dispatched Chrystal to investigate and process the claim. Who is the claimant in this scenario? Chrystal Elliot Designs Jerry KLM Insurance

Tom's vandalism was intentional, and therefore excluded under his liability policy.

After Tom and his neighbor get into a heated argument, Tom destroys his neighbor's A/C compressor with a baseball bat, causing $2,600 in damages. The next day, Tom realizes his poor behavior and files a claim with his insurer for his liability in the damages to his neighbor's A/C unit. Why might Tom's insurer deny his claim? Tom's neighbor must be the one to file a claim with Tom's insurer. Tom's vandalism was intentional, and therefore excluded under his liability policy. Homeowner's coverage does not include vandalism. Tom's neighbor was partially responsible for the damage, since he made Tom angry.

Computers used by the condo as a whole

After a fire burns through XYZ Condominiums, they have to replace most of the interior. Which of the following WILL be covered under the Condominium Coverage Form of the condo association's commercial property policy? Computers used by one of the commercial units Upgrades within individual condos Personal property of a commercial unit Computers used by the condo as a whole

Upgrades within individual condos

After a fire burns through XYZ Condominiums, they have to replace most of the interior. Which of the following will NOT be covered under the Condominium Coverage Form of the condo association's commercial property policy? Computers used by the condo The common areas of the condo building Piping, ductwork, or wire units Upgrades within individual condos

$3,000

After a heavy rain, the river running through Randy's farm rose so high that it flooded part of his barley crop. The flood caused $3,000 in damage to his $20,000 crop. Randy's crop insurance policy has a 5% threshold. Based on this information, how much will Randy's insurer pay him for this loss? $2,000 $1,000 $2,850 $3,000

plant a replacement crop within 72 hours.

After a loss, the insured farmer will typically have to do all of the following, EXCEPT: notify the insurer immediately. protect the crop from further damage. plant a replacement crop within 72 hours. leave samples of the damaged crop for the adjuster to inspect.

the driver they struck.

After a night at the bar with friends, the designated driver John drives everyone home in Anne's car. The crash into another car at an intersection and everyone sustains varying degrees of injuries. Anne's PIP will cover the medical costs for all of the following people, EXCEPT: the driver they struck. Anne. John. Erin, one of the passengers in Anne's car who has no PIP of her own.

A public adjuster

After a storm demolished Greg's house, his insurance company sent an adjuster out to adjust his claim. After investigating Greg's claim, the adjuster offered him a settlement which Greg felt was too low. Not knowing much about property insurance, Greg wants a second opinion to make sure he is receiving what he deserves. who might Greg hire to help him with negotiating a fair settlement? An insurance commissioner A staff adjuster A public adjuster An independent adjuster

Increased Construction Costs

After a tornado completely destroys the roof and windows of Calah's business building, she finds that there are new codes in place requiring thicker shingles and reinforced window frames. Calah insured her business using a replacement cost policy. Which commercial property coverage can help Calah with the added costs of bringing her building up to code? Debris Removal Business Interruption Preservation of Property Increased Construction Costs

apparent authority

After her business suffered damage in a fire, Jane filed a claim with Acme Insurance, which dispatched Bob to adjust it, even though he was not allowed to adjust commercial claims. He investigated Jane's losses and submitted his estimate to Acme Insurance, which issued her a settlement check based on that estimate. Bob had _____ because Acme Insurance accepted his estimate and paid Jane's claim. expert authority express authority apparent authority agency authority

$22,000; $110,000 **Coverage for Other Structures is limited 10% of the amount of dwelling coverage. Coverage for personal property is limited to 50% of the Dwelling limit. So, since Ajax has $220,000 in coverage, he has 10% of that amount ($22,000) in coverage for Other Structures, and up to 50% of that amount ($110,000) in coverage for personal property**

Ajax has a HO-A policy through the Texas FAIR plan. His Dwelling limit is $220,000. This means that his coverage for Other Structures is _______ and his coverage for personal property could be up to ____. $44,000; $110,000 $44,000; $55,000 $55,000; $220,000 $22,000; $110,000

Submitting a bank statement

All Texas drivers must prove that they are financially responsible. Which of the following is NOT a way for a driver to show financial responsibility? Buying an insurance policy Submitting a bank statement Becoming bonded Providing a certificate of self-insurance

It is a single policy that covers personal and business needs

All of the following may be considered beneficial characteristics of a commercial package policy, except: It is a single policy that covers personal and business needs It has a common declarations page an a common conditions page It reduces premiums It eliminates coverage gaps

A homeowner's living room furniture

All of the following would be covered by the NFIP general property form, except: A motel lobby's furnishings A homeowner's living room furniture A furniture store's inventory A medical office

Allen can adjust the claim, but ABC Insurance must write the settlement check.

Allen is adjusting an auto claim on behalf of ABC Insurance, which has given Allen $5,000 in draft authority. The total damages in the auto claim come to $7,200. Which of the following is true? Allen can write a check for a half of the damages and ABC Insurance will write another check for the other half. Allen is not allowed to adjust this claim, because the amount of damages exceeds his draft authority. Allen must negotiate with the claimant to reach an agreement on a settlement amount of $5,000 or less. Allen can adjust the claim, but ABC Insurance must write the settlement check.

Bodily injury excluding passengers

Amanda is walking her dog in a rural area when a small plane suddenly crashes only 15 feet in front of her. Amanda is not hurt, but she is so distressed that she files an insurance claim for mental anguish. Which aviation coverage would pay this claim? A. Passenger bodily injury liability B. Bodily injury excluding passengers C. All risks - ground and flight D. All risks - not in motion

risk reduction.

Amy needs more floor space in her antique furniture store, so she buys a storage building 3 miles away. She is worried about keeping the furniture in the storage building safe, so she puts in an alarm system and smoke detectors. By purchasing the alarm system and smoke detectors, Amy is practicing: risk reduction. risk transference. risk avoidance. risk retention.

an unexpected event that causes a loss.

An "occurrence" is defined as: an unexpected event that causes a loss. something that increases the chance of a loss. an insured item. the likelihood of experiencing a loss.

that her words or actions may bind the insurance company.

An adjuster acts as an agent for the insurer. As such, it is essential that the adjuster understand: that her words or actions may bind the insurance company. her duty to check-in daily with the insurance company. her duty to profit from every claim investigation. that she must always offer a settlement favorable to the claimant.

The power outage occurred off-premise ** Off-premise power failure is an excluded peril even though the freezer and meat would usually be covered under Coverage C**

An extended power failure in Tom's neighborhood causes his freezer to thaw, along with all the meat inside, resulting in an $800 loss. He files a claim with his DP-3 insurer for the loss, which come back denied. For what reason would the insurer deny the claim? Tom should have relocated the meat to another location Tom should have rented a generator to prevent the thawing The power outage occurred off-premise There is no such thing as meat coverage in a dwelling policy

protect the insurer from the claim.

An insurance adjuster will do all of the following regarding a claim EXCEPT: investigate the claim. decide whether the claim has any merit. protect the insurer from the claim. determine if the claim falls under the coverage of the insurance policy.

two

An insurance agent in Texas must renew his license every ____ years. two three four ten

$3,200

An out-of-control motorist careens off the road and smashes through Sally's front yard and into her attached garage, taking out several lamp posts, her mailbox, and a small gazebo along the way. If Sally has a $100,000 homeowner's policy and the replacement costs for the damaged items were as follows: the lamp posts and mailbox: $700; the gazebo: $2,500; and the garage: $12,500, what will Sally's Coverage B- Other Structures pay for her losses (assuming no deductible)? $15,700 $12,500 $3,200 $10,000

The lamp posts, mailbox, and gazebo

An out-of-control motorist careens off the road and smashes through Sally's front yard and into her attached garage, taking out several lamp posts, her mailbox, and a small gazebo along the way. Under Sally's homeowners policy, which items might be covered under Coverage B- Other Structures? The garage only The lamp posts, mailbox, and gazebo The lamp posts, mailbox, gazebo and garage The gazebo and garage

Fire, lightning, internal explosion

An unendorsed DP-1 Basic Form covers what three perils? Fire, lightning, external explosion Vandalism, malicious mischief, windstorm Windstorm, fire, lightning Fire, lightning, internal explosion

After Mario has received his monetary sum to indemnify him for the loss of his fingers, he can sue Andrew because of recurring back pain

Andrew's friend Mario asked for a ride form Detroit to Cleveland, and Andrew decided to take Mario in his plane. Getting out of the plane, Mario trips and falls into the propeller and ends up losing 3 fingers on his right hand. Mario also signed a form agreeing to release Andrew from further liability in exchange for a sum of money. Which of the following is FALSE? A. Andrew has a form of coverage called guest voluntary settlement B. Andrew has a form of coverage that will make it possible to avoid a lawsuit with his friend Mario C. After Mario has received his monetary sum to indemnify him for the loss of his fingers, he can sue Andrew because of recurring back pain D. Andrew can decided whether he would like his friend's injuries to be covered under his base liability policy

Only Annalise

Annalise has an Extended Non-Owned coverage endorsement on her PAP. Who is covered by this endorsement? Anyone driving the car with Annalise's permission Annalise, her family members, and any passengers that do not have their own insurance Annalise, her husband, and their 2 children Only Annalise

HO-3

Anton is purchasing a homeowners policy for his house in the woods. He wants to make sure he is covered for damage done to his home by wild animals. Which of the following would be his LEAST expensive option? HO-8 HO-2 HO-3 HO-5

Builder's Risk coverage

Argo Sciences Inc. wants to build a new testing laboratory for their line of chemicals. They want insurance coverage to protect their insurable interest in the building and materials while under construction. What commercial property coverage might Argo Sciences Inc. purchase to protect their new facility while it's under construction? Preservation of Property Builder's Risk coverage Extra Expense coverage Business Income coverage

An employee drives a forklift into a wall of Ark Inc.'s owned factory, causing it to collapse.

Ark Inc. purchases a CGL policy to protect the company against lawsuits for which they might be found legally liable. Which would NOT be covered by their CGL? An employee of Ark Inc. assaults a retailer during a routine delivery. A popular product produced by Ark Inc. causes a child to choke. An employee drives a forklift into a wall of Ark Inc.'s owned factory, causing it to collapse. A woman slips on the floor at Ark Inc. headquarters and breaks both of her arms.

Arlene has just committed soft fraud.

Arlene's house suffered structural damage in an earthquake last year, but her policy does not cover earthquake damage, so Arlene never got it fixed. When a tornado rips through her neighborhood, it causes some roof damage totaling $2,000, and Arlene sees an opportunity in the situation. She files a claim for the roof damage, but also claims that the tornado caused the structural damage to her house that was actually caused by the earthquake last year. Which of the following statements is true? Arlene has just committed soft fraud. Arlene has just created a morale hazard. Arlene has just created a physical hazard. Arlene has just committed hard fraud.

Obligor

As a requirement for getting his California adjuster license, Danny is required to submit proof of bonding with his application. He purchases a surety bond from PBJ Bonds. In this contract, Danny is considered the: Guarantor Obligor Obligee Indemnitor

The model law states that insurance companies must form or enlist fraud busting units

As a way of preventing and working against insurance fraud, the Coalition Against Insurance Fraud developed the model law. Which of the following is NOT a part of the model law? A. The model law states that insurance companies must form or enlist fraud busting units B. The model law requires insurance forms to state that insurance fraud is a serious crime C. The model law requires insurers to develop ways of preventing and detecting fraud D. The model law creates state fraud bureaus

Questioning the claimant's ethics when the claimant is apparently lying.

Asking questions can be a useful negotiation technique. Which of the following would NOT help the adjuster during negotiations? Questioning the claimant's ethics when the claimant is apparently lying. Clarifying questions to attempt to understand the claimant's perspective. Sincere questions to better understand any new factors presented by the claimant. Detailed questions to discover the claimant's ultimate goal.

Valued Policy

Assigns a set value to each insured item. Accumulated Depreciation Valuation Actual Cash Value Valued Policy Annual Depreciation Replacement Cost

When the rotors begin to revolve

At what point does a helicopter start to be "in flight," according to aviation policy definitions? A. When the engine is turned on B. When the pilot takes a seat in the cockpit C. When the landing skids leave the ground D. When the rotors begin to revolve

The maximum amount XYZ Insurance will pay for the claim

Barbara is preparing to negotiate an auto claim on behalf of XYZ Insurance. She knows the circumstances of the loss and has completed the investigation and evaluation. What other piece of information must Barbara know before entering into negotiation with the claimant? The maximum amount XYZ Insurance will pay for the claim A good auto body shop to whom she can refer the claimant The amount of the claimant's monthly premium The maximum punitive damages the claimant will likely have to pay

Imposed stiff prison sentences and heavy fines

Because fraud is such a big problem, the federal government has become more active in preventing it. In addition to enacting tougher penalties and expanding current fraud laws, the federal government has also: A. Imposed stiff prison sentences and heavy fines B. Reduced the number of insurance licenses issued nationally C. Made insurance fraud a forcible felony D. Significantly increased awareness training, incorporating law enforcement investigation practices

A public parking garage

Because of the lack of a bailee agreement, which of the following establishments would NOT be held liable for damages to a vehicle in the business' care? A public parking garage A transmission repair shop A muffler and exhaust garage A body shop

Building Additions and Alterations *** Building Additions and Alterations is an additional coverage found only in HO-4 and HO-6 policies, and covers building improvements or additions made at the tenant's own expense.***

Ben built a small shed in the backyard of the house he's renting, to hold his lawn equipment and other tools. One afternoon, a strong storm brought a tree down on Ben's shed, practically destroying it. Which type of coverage in Ben's HO-4 policy could indemnify him for the cost of replacing the shed? Building Additions and Alterations coverage The shed would not be covered under an HO-4. Debris Removal coverage Reasonable Repairs coverage

Determine the insurer's liability

Ben is an adjuster with XYZ Insurance and is currently working on a claim. He has already called the claimant and has just finished preparing all the paperwork needed to move forward with the claim. What is the next step for Ben? Begin negotiations Open a line of communication with the claimant Determine the insurer's liability Investigate the claim

Peak Season

Ben owns a souvenir shop in a small town. During the winter time, the population consists of about 2,000 locals, but once the summer season hits, it's a mad-house. The island can see over a million travelers during the summer season, and Ben must be ready with enough inventory to handle the demand. Which endorsement to his commercial property policy could temporarily increase Ben's coverage limits during this high-volume time? Legal Liability Peak Season Protective Safeguard Tourism Endorsement

Full release settlement

Ben's automobile was struck by another driver, Roxanne. Ben files a claim with Roxanne's insurer, who accepts the claim. Ben signs a release form and is issued a check that covers the damage to his car. Which settlement type would this fall under? Advance payment Full release settlement Partial release settlement No release settlement

At the time of the breakdown or 24 hours before Bill was notified of the breakdown, whichever is later

Bill has experienced a loss covered under the business income and extra expense coverage in his equipment breakdown protection coverage form. When does the period of restoration begin? 72 hours after the breakdown occurred Five days after repair re replacement of covered equipment At the time of the breakdown or 24 hours before Bill was notified of the breakdown, whichever is later After a length of time in which Bill should have reasonable been able to repair or replace the damaged equipment

Settlement padding

Bill is an independent adjuster who gets paid on a commission basis. The larger the claim, the more money he makes. Because of this, Bill usually increases the settlement amount by about 1 or 2%, to increase his commission. This practice is known as: A. Settlement padding B. A percentage deductible C. Commission inflation D. Inducement

making a good first impression.

Bill is preparing to meet with a claimant to negotiate a settlement. He combs his hair, polishes his shoes, and irons his business casual clothes. Bill is hoping this will help with the negotiation process by: making a good first impression. showing he is part of a large and powerful corporation. being a pleasant surprise. showing he is humble and flexible.

contracts of adhesion.

Bill purchased a policy from ABC Insurance. Several months later, he filed a claim which was denied. While reviewing his policy, he found several ambiguities in the policy and decided to challenge the insurer's decision. When the dispute went to trial, the court ruled in Bill's favor. This is because insurance policies are: aleatory contracts. contracts of adhesion. personal contracts. contracts of utmost good faith.

Franchise Deductible

Bill's insurance policy will pay for the entire loss, up to the limit, as long as the loss exceeds a set amount. What type of deductible does Bill have? Fixed Deductible Percentage Deductible Franchise Deductible

Coverage A- Dwelling

Bob owns a farm that has been handed down through his family for six generations. One night, a fierce storm brings down several trees onto the family's private cemetery, damaging three headstones. Which coverage would help Bob with the cost of replacing the headstones? Coverage D- Loss of Use Coverage B- Detached Structures Coverage C- Personal Property Coverage A- Dwelling

Symbol #30

Bob owns a garage. He routinely has customer vehicles in his shop for extended periods of time while he services and repairs them. Which coverage symbol in his garage-keepers policy pertains to the coverage that Bob is required to have to protect the vehicles left in his care? Symbol #27 Symbol #29 Symbol #30 Symbol #21

Misrepresentation

Bob recently had a fire totally destroy his auto servicing garage. When an adjuster comes to investigate the fire, he asks whether Bob had stored any large containers of fuel in the garage. Bob did store two large containers of fuel in the garage, but he knows that, if the insurance company finds out, they will not indemnify him and he will be financially ruined. Bob tells the adjuster "no." Which of the following most accurately describes Bob's statement to the adjuster? Moral hazard Warranty Hard Fraud Misrepresentation

Because the policyholder (Jane) is 84 years old and seems to have trouble remembering what happened before the accident, Bobby should feel free to contact her 45 year old caretaker for clarification

Bobby is adjusting a complicated auto claim. Which of the following is TRUE? A. Because the policyholder (Jane) is 84 years old and seems to have trouble remembering what happened before the accident, Bobby should feel free to contact her 45 year old caretaker for clarification B. Since the policyholder (Jane) and the third party claimant (Neil) disagree as to who was at fault, Bobby must advise Jane to hire an attorney C. Bobby needs to obtain permission from Neil, the claimant, before he interviews Jessica, who was riding in the car with Neil and witnessed the accident D. Since the policyholder (Jane) and the third party claimant (Neil) disagree as to who was at fault, Bubby must advise Neil to hire an attorney

Newly Acquired Property

Celina's business is growing and she needs more space for her inventory. A week ago, a crew started work on constructing a new building on Celina's business premises. Last night, a bolt of lightning set fire to the still-unfinished new building and burned it to the ground. Celina's property is fully insured under a commercial property policy. Which coverage extension in her policy would cover this loss? Personal Effects Property On-Premise Outdoor Property Newly Acquired Property

Passenger bodily injury liability

Cassandra opens the overhead bin after a flight, and a large, heavy bag falls out, giving her a concussion. Which aviation coverage will indemnify Cassandra for her injuries? A. All risks - ground and flight B. Cargo liability C. Passenger bodily injury liability D. Admitted aircraft liability

Exclusions

Causes of loss or items of property that are not covered by the policy. Definitions Insuring Agreement Conditions Endorsements Declarations Exclusions

Listed on his adjuster license as his "place of business."

Charlie is an independent adjuster who rents out office space in a nearby building, where he does most of his work. The address of his office should be: Listed on his adjuster license as his "place of business." within 5 miles of his home address. as close as possible to the area in which he adjusts the majority of his claims. listed on the TDI website.

Endorsements

Charlotte's son just turned 16 and got his driver's license. She wants him to be covered, so she adds him to her auto insurance policy. Where would this addition be found in Charlotte's policy? Conditions Exclusions Insuring agreement Endorsements

Excess liability policies cover only what is also covered by the base policy

Christine was looking quickly at her cell phone when she crashed into her garage, smashing the door. Since her auto liability won't cover the damage because it doesn't extend to property she owns, she hopes her excess liability policy will cover the damage to the garage door. Why is this NOT possible? Excess liability policies cover only what is also covered by the base policy Excess liability policies only cover bodily injury Excess liability policies only cover damages to the insured's house, not attached structures Christine's auto liability policy will cover the damages to her garage

Chuck would receive full indemnification for the damaged half of the corn field.

Chuck's field of corn usually produces $20,000 per year. After a wildfire wipes out half of his field, the other half's yield does exceptionally well and brings in twice as much revenue. If Chuck files a claim against his Crop-Hail policy, which of the following statements would most likely be true? Chuck would receive an amount equal to half of the damaged portion of the corn field. Chuck would receive full indemnification for the damaged half of the corn field. Chuck would no receive anything, because the yield from the undamaged half made up for the loss. Chuck's claim would be denied because Crop-Hail insurance does not protect against wildfire.

mutual insurance company.

Cindy holds an insurance policy from Sine Nomine Insurance. This is not a publicly traded company, and Cindy can participate in the election of the board, receiving dividends if the company does well. Sine Nomine Insurance could be best described as a: mutual insurance company. stock insurance company. a risk retention group. fraternal benefits society.

civil trials.

Claim disputes are usually settled in: criminal trials. bench trials. show trials. civil trials.

Errors and omissions insurance

Cliff receives a letter from the IRS, informing him that he has severely underestimated his adjusted gross income for the past year. Cliff was oblivious to this fact because XYZ Accounting has filed his taxes for him for the past 15 years. Now, Cliff owes $15,00 in back taxes. He sues XYZ Accounting for this mistake. Which of the following would cover the cost of the lawsuit for XYZ Accounting? Accounting insurance Malpractice insurance Commercial liability insurance Errors and omissions insurance

the exposure.

Cliff wants to build a cabin in a heavily wooded area. He would like to buy insurance for this cabin, but the underwriter of his insurance company first wants to research the history of forest fires in the area in which Cliff wants to build. The underwriter is trying to determine: the exposure. the risks. the hazards. the perils.

1980.

Congress first authorized Federal Crop Insurance in the 1930s. It remained experimental, covering only major crops in central producing areas, until the Federal crop Insurance Act was passed in: 1994. 1996. 1980. 1978.

A professional advertising firm knowingly publishes untrue statements about a company.

Coverage B - Personal and Advertising Injury in a CGL policy will cover all of the following, EXCEPT: A professional advertising firm knowingly publishes untrue statements about a company. A shop owner accuses an innocent person of shoplifting. A landlord uses improper means to repossess an apartment from a tenant. A children's clothing manufacturer uses the image of a popular cartoon character in its advertisements without permission.

Windows

Coverage B of the BOP would provide indemnification for damages to all of the following except: Office furniture Windows Inventory An office copy machine

the expenses are reported within one year of the occurrence.

Coverage C - Medical Payments in a CGL policy will ONLY cover claims IF: the named insured caused the injuries through negligence. the expenses are reported within one year of the occurrence. the injured party has been hospitalized for more than 24 hours. the expenses are reported within one year of the policy's expiration.

anywhere in the world.

Coverage C- Personal Property can apply to losses that occur: anywhere in the world. outside of the insured's dwelling only. in the U.S. or Canada only. in the insured's dwelling only.

Concealment, Misrepresentation, and Fraud

Cyril recently purchased a small machining shop. When asked on his commercial property insurance application about how the property will be heated in the winter, he replies "central heat," when in fact it will be heated by a wood stove. Under which condition could the insurer deny coverage? No Benefit to Bailee Changes to the Policy Control of Property Concealment, Misrepresentation, and Fraud

Collision Coverage

D'Anton spills coffee in his lap while driving, causing him to veer off the road and smash into a telephone pole. Which part of his Auto Insurance Policy will help him pay for the repairs to his car? McDowells Coffee Coverage Comprehensive Coverage Collision Coverage Liability Coverage

Punitive Damages

Eileen has been the victim of libel & slander. She decides to take the culprit to court and is awarded damages. Which type of damages best describes those awarded to Eileen? Punitive Damages BAP Liability No-fault Damages Medical Payments

had divided by should have had multiplied by partial loss =indemnity $150,000 divided by $200,000 multiplied by $15,000 = $11,250

Darren suffers a $15,000 loss on his $250,000 home. Darren's homeowners' policy limit is $150,000. His insurer decides to apply the coinsurance penalty for not meeting the 80% coverage requirement. Ignoring any deductibles, how much money will Darren Receive in indemnification?

Coverage A

Dan has a DP-3 policy on his $100,000 home. A tree falls onto his attached garage during a storm and breaks through the roof, causing $5,000 in damage. Under which coverage within the dwelling policy would the damage to roof possibly be covered? Coverage C Coverage A Coverage D Coverage B

Darren can use 80% of the county transitional yield for the missing 3 years of records.

Darren is new to the farming business and has just planted his second year of barley. He is currently applying for a Multi-Peril Crop Insurance with his agent, but he doesn't have the 4 years of records needed to calculate his APH. Which of the following statements is true in Darren's case? Darren can use the county transitional yield as his APH until he has four years of records. Darren can use 80% of the county transitional yield for the missing 3 years of records. Darren can use 90% of the county transitional yield for the missing 2 years of records. Darren can use 65% of the county transitional yield for the missing 3 years of records.

80% of $250,000 = $200,000

Darren suffers a $15,000 loss on his $250,000 home. Darren's homeowners' policy limit is $150,000. His insurer decides to apply the coinsurance penalty for not meeting the 80% coverage requirement. How much insurance should Darren have had in order to avoid the coinsurance penalty?

should have had: 80% of $250,000= $200,000 what he had divided by what he should have had: $150,000 divided by $200,000 = 75%

Darren suffers a $15,000 loss on his $250,000 home. Darren's homeowners' policy limit is $150,000. His insurer decides to apply the coinsurance penalty for not meeting the 80% coverage requirement. What percentage of the loss will be paid after the application of the coinsurance penalty?

Hard fraud; soft fraud

Deliberately causing or faking a loss in order to file an insurance claim is called _____, while exaggerating or inflating a legitimate loss in order to increase the indemnification is called _____. A. Misrepresentation; hard fraud B. Concealment; misrepresentation C. Soft fraud; hard fraud D. Hard fraud; soft fraud

Promptly report the occurrence to his insurer

Dennis was injured when Ruby rear-ended his car while he was stopped at a red light. Which of the following would NOT be a duty that Ruby's liability insurer may require of Dennis? Provide proof of the accident Submit to a physical examination Promptly report the occurrence to his insurer Authorize access to his medical records

Extra Expense Coverage

Diana owns a manufacturing company. One evening, a windstorm blows a tree through the side of her building, leaving a hole in the wall and damaging one of her production machines. Diana temporarily fixes the hole with some plywood, but will have to rent a new production machine until hers is repaired. Which coverage in her commercial property policy could indemnify Diana for the cost of the machine rental? Profit & Loss Form Rental Equipment Coverage Extra Expense Coverage Operating Expense Coverage

Scheduled Mobile Agricultural Machinery and Equipment Form

Diane needs to insure her new $90,000 combine. She already has an insurance policy for her farm, but it currently doesn't provide enough coverage for such an expensive piece of equipment. What type of coverage does Diane need to purchase to cover the combine? Unscheduled Farm Personal Property Scheduled Farm Personal Property Excess Machinery Floater Scheduled Mobile Agricultural Machinery and Equipment Form

insurable interest.

Direct financial interest in protecting something or someone is called: insurable interest. subrogation. first party claim. lender investment.

A man sues Dr. Jones on July 26, 2009 for a damaging knee surgery performed on March 3, 2006

Dr. Jones' current occurrence malpractice policy is in effect from July 1, 2005 through July 1, 2006. Which lawsuit would trigger this malpractice insurance policy? A man sues Dr. Jones on February 36,2007 for misdiagnosing cancer on December 21, 2006 A man sues Dr. Jones on July 26, 2009 for a damaging knee surgery performed on March 3, 2006 A woman sues Dr. Jones on July 17, 2005 for a poor nose job he performed on May 2, 2005 A woman sues Dr. Jones on January 24, 2006 for an eye surgery he performed on July 1, 2004

Committing health insurance fraud

Dr. Nelson routinely schedules her patients for lab tests that they don't need so she can charge their insurers for more money. Dr. Nelson is: A. Operating within the letter of the law, if not its intent B. Committing health insurance fraud C. Committing subrogation D. Committing a tortfeasor

A claim filed on January 13, 2007 for surgery performed on June 28, 2005

Dr. Smith has a claims-made malpractice insurance policy with a policy period from June 30, 2006 to June 30, 2007. Which claim would trigger this policy? A claim filed on September 20, 2007 for surgery performed on June 1, 2007 A claim filed on January 13, 2007 for surgery performed on June 28, 2005 A claim filed on October 24, 2007 for surgery performed on November 15, 2006 A claim filed on December 7, 2007 for surgery performed on June 1, 2006

an indirect loss.

Driving home after a 14-hour shift, Sam falls asleep at the wheel and plows into Sandra's home, causing extensive damage to the East wall and roof. As a result, Sandra and her family must move into a hotel until the repairs are completed. The cost of staying in a hotel is: a physical hazard. an indirect loss. the proximate cause. a direct loss.

Fine between $175 and $350

Driving home from work one night, Judy is pulled over by a state trooper. When she asks why she was stopped, the trooper informs Judy that her auto insurance has lapsed. This is Judy's first offense. What penalty will Judy face, if any? 90-day suspension of her driver's license Fire of $500 and suspension of her driver's license for six months There is no penalty because this is Judy's first violation Fine between $175 and $350

None *** Homeowners policies do not cover property damage caused by water. ***

During a heavy rainstorm, Ben's basement flooded and suffered extensive water damage. Which section of Ben's Homeowners 3 policy will cover this damage? Coverage C- Personal Property None Discharge of Steam or Water Coverage A- Dwelling

Malpractice insurance

During a routine tooth extraction, Dr. Dentem administers too much laughing gas and causes brain damage to his client. The family sues Dr. Dentem for failing to follow procedure. Which kind of insurance would cover the cost of the lawsuit? Errors and omissions insurance Personal injury protection insurance Malpractice insurance Dental insurance

a direct loss.

During a storm, lightning strikes a tree in Harry's yard and starts a fire that spreads to his shed where he keeps all his equipment for his landscaping business. In addition to the shed, Harry has to purchase all new equipment to stay in business. The cost to replace the equipment would be considered: a direct loss. an indirect loss. a peril. an occurrence.

a fraternal benefit society.

Edward is a member of the Knights of Columbus, a religious group dedicated to voluntary service to the benefit of society. He also recently purchased a $100,000 life insurance policy from the organization. This was possible because the Knights of Columbus is: a reciprocal insurer. a risk retention group. a mutual insurer. a fraternal benefit society.

When she either repairs or replaces the machine and submits receipts to her insurer

During a strong storm, Missy's grain drill was picked up and dropped by a tornado, which mangled the machine and rendered it useless. Before the damage, the grain drill was worth $25,000, but it would cost $45,000 to buy a new one today. Missy's farm policy has a replacement cost endorsement. When will Missy receive full indemnification for this loss? When she either repairs or replaces the machine and submits receipts to her insurer After her insurer applies the co-insurance requirement Within 180 days of filing her claim After she submits a proof of loss for to her insurer

peril.

During a violent summer storm in Tulsa, a bolt of lightning hits Mr. Jones' house, damaging a large portion of the roof. In this case, the insurer would call the lightning bolt a: risk. peril. loss. hazard.

a car parked in a detached garage.

Dwelling coverage would provide indemnification for damages to all of the following items EXCEPT: a stairwell leading up the the front door. a car parked in a detached garage. a pool house on the property. a sun porch built away from the home.

Dwelling policies do not provide liability insurance.

Dwelling policies and homeowners policies provide a variety of insurance protections for consumers. What is the primary difference between a typical homeowners policy and a dwelling policy? Dwelling policies do not provide liability insurance. Dwelling policies do not cover owner-occupied properties. Dwelling policies do not offer "loss of use" coverage. Dwelling policies do not provide coverage for personal possessions.

$1,500

Elizabeth has a laptop computer that she takes everywhere she goes. While she is at the grocery store, her car is broken into and the laptop is stolen. Assuming it is valued at $2,000, how much can Elizabeth expect to be indemnified by her insurer (ignoring any deductible)? $500 $1,500 $2,000 $1,000

$1,400

Elizabeth has a personal laptop worth $1,400. One night, while Elizabeth is out, a thief breaks into her home and steals her laptop. How much can Elizabeth expect to be indemnified by her insurer for the loss of her laptop (ignoring any deductible)? $2,100 $1,500 $1,400 $500

$100,000

Eloise borrows Uriah's car so she can run to the grocery store to pick up a few things. While out, she rear-ends a minivan, injuring the driver and 3 other passengers. Each of the passengers suffers $45,000 in injuries, and the driver suffers $40,000. Uriah has a liability policy with limits of 50/100/50, while Eloise carries the minimum liability coverage for Texas. How much will the primary policy pay for this occurrence? $60,000 $100,000 $50,000 $160,000

90; 90 **Emergency licenses are valid for 90 days, and can be extended for 90 more days by the commissioner.**

Emergency adjuster licenses in Texas are valid for ____ days, and can be extended for ____ more days by the Commissioner. 90; 180 60; 60 90; 90 90; 60

Custom farming liability

Farmer Fred hired Farmer Bob to apply chemicals to a field of tomatoes. Thinking that Fred was talking about a field of potatoes, Bob inadvertently destroyed the field of tomatoes by applying chemicals that were meant for potatoes. What type of coverage would protect Bob? Farm product liability Bodily injury and property damage liability Custom farming liability Farm employee's liability

Damage that would not otherwise be covered because the insured made a mistake or unintentionally omitted information required by the insurer

Errors and omissions coverage in an equipment breakdown protection policy provides coverage for: Losses sustained by the insured's customers because of the insured's error or omission of material information Damage that would not otherwise be covered because the insured made a mistake or unintentionally omitted information required by the insurer Damage sustained by the insured after a contingent business made a mistake or unintentionally omitted information required by the insured Losses sustained by the insured because of the insurer's error or omission of material information

Definitions

Explains exactly what specific words mean in the context of the policy. Conditions Declarations Exclusions Endorsements Definitions Insuring Agreement

Farm Insurance for raising show animals.

Farm Insurance policies can include all of the following EXCEPT: Property Insurance for the main dwelling. Farm Insurance for raising show animals. Mobile Agricultural Machinery and Livestock. Farm Liability Insurance.

Jim's cattle were in the process of being transported.

Farmer Jim crashes his truck while moving some cattle from one pasture to another. Jim had insured the cattle under his Scheduled Farm Person Property, but his claim won't be covered because: Jim's cattle were in the process of being transported. Jim's livestock were considered "off premises." Scheduled Farm Personal Property does not cover damage caused by vehicles. The accident was Jim's fault.

sales closing date.

Farmer Ron wants to make some changes to the insurance policy covering his wheat crop, but he must do so before the: debt termination date. production reporting date. sales closing date. final planting date.

$65,000

Farmer Steve barely escapes a massive tornado, but the storm does completely destroy one of the barns on his property. Luckily, Steve has an insurance policy on his barn with a replacement cost endorsement, and the barn was fully insured. At the time of the loss, the actual cash value of the barn was $65,000, and its replacement cost is currently $85,000. What is the most Steve can collect from his insurer before he completes the repairs? $85,000 $68,000 $65,000 $52,000

Grave Markers coverage ** Vandalism damage is covered under Grave Markers coverage, additional coverage in a homeowners policy that provides up to $5,000 against covered perils at burial plots.**

Frances is visiting her mom's grave and notices that several headstones in the cemetery have been defaced with spray-paint, including her mother's. Frances hires a professional cleaning service to remove the spray-paint from her mother's headstone. Which type of additional coverage in her homeowners policy could help Frances with the cost of removing the paint? None Grave Markers coverage Reasonable repairs coverage Debris Removal coverage

Flora will file a first-party claim for the damage to her car and Cam will file a third-party claim for the damage to his billboard.

Flora is driving in the rain when she skids off the road and slams into Cam's billboard, totaling her car and causing $2,000 in damage to the billboard. Flora has an auto policy with ABC Insurance, and both Cam and Flora submit claims against this policy for their damages. Which of the following is TRUE? Flora will file a first-party claim for the damage to Cam's billboard and a third-party claim for the damage to her car. Flora will file a third-party claim for the damage to Cam's billboard and a first-party claim for the damage to her car. Flora will file a first-party claim for the damage to her car and Cam will file a third-party claim for the damage to his billboard. Flora will file a third-party claim for the damage to her car, and Cam will file a first-party claim for the damage to his billboard.

Weight loss surgery

Following a covered loss, which of these expenses would NOT be covered under Coverage F - Medical Payments in a homeowners policy? Funeral services Dental costs Hospital stays Weight loss surgery

the amount of punitive damages requested.

For a bodily injury liability claim, the adjuster must determine all of the following, EXCEPT: the presence of any pre-existing conditions. the amount of punitive damages requested. the severity of the injury. the type of injury.

None

For occurrences that are reported during the supplemental extended reporting period, what is the time limit in which a claim must be made in order to be covered by a claims-made CGL policy? 7 years 5 years None 2 years

damage caused by an inherent vise is excluded.

Francois has a DP-3 policy on his home, which covers him from most losses on an open-peril basis. He likes to collect old films, many of which are recorded on Safety Film (cellulose acetate). The problem is that cellulose acetate film gradually breaks down over time and will eventually "self destruct." The films are uninsurable for gradual breakdown under the DP-3 policy because: damage caused by an inherent vise is excluded. they are extremely flammable. they have depreciated to have no actual cash value. they are essentially food products.

Symbols 3 & 4

Frank owns a catering business and uses three vans for transporting food products; four passenger vehicles for his employees; and one large box truck to haul around tables and chairs, etc. Which set of coverage symbols could Frank use to cover all of his company's vehicles? Symbols 4 & 9 Symbols 3 & 8 Symbols 4 & 19 Symbols 3 & 4

$0

Frank purchased a $150,000 insurance policy for his home, which is valued at $125,000, with the hopes of making a $25,000 profit in the event his home is destroyed. After Frank burns his house down, he files a claim against his homeowners policy. Assuming that Frank's policy includes an overinsurance provision, how much will his insurer indemnify Frank for his loss? $150,000 $25,000 $0 $125,000

Stock insurer

Frank purchases an automobile policy from publicly-traded XYZ Insurance. He pays regular monthly premiums, and also purchases stock in XYZ and receives dividends when the company turns a profit. From which type of company has Frank purchased insurance? Re-Insurer Mutual Insurer Stock insurer Reciprocal insurer

Dwelling Policy

Frank recently purchased some rural property that he would like to use as a hunting lodge. He won't be able to live there year-round, but will keep it furnished with the regular camping equipment. Frank needs to purchase insurance to protect his investment. Which type of policy would best fit Frank's needs? Homeowners Policy Commercial General Liability Dwelling Policy Standard Fire Policy

Preservation of Property

Frank's computer store lies in the direct path of a rapidly approaching wildfire. In an attempt to diminish possible damages, Frank loads his most valuable computers into a truck and drives them to a remote storage facility. However, as he is unloading the computers, someone hijacks his truck and steals all of the merchandise still inside. What commercial property coverage would indemnify Frank for the theft of the computers? Electronic Data Preservation of Property None Extra Expense

Criminal trial

Frank's home burned to the ground under suspicious circumstances. Upon further investigation of the claim, the adjuster finds an accelerated burn pattern near the electrical box in the basement, consistent with the use of an accelerant, such as gas or kerosene. Frank is charged by the state with arson, and thus will be tried in what kind of trial? Civil trial Criminal trial Contributory negligence trial Comparative negligence trial

Up to $2,000

Fred lives near a business that is currently the object of a protest. As policy try to break up the protesters, a riot ensues and spills onto Fred's property, where protesters set fire to four of his trees. How much can Fred be indemnified for the loss of all four trees (ignoring any deductible)? Up to $400 Up to $500 Up to $1,000 Up to $2,000

Umbrella coverage

Generally speaking, which of the following has the broadest coverage? Stand alone umbrella liability Follow form excess liability Umbrella coverage Stand alone excess liability

Falling objects Aircraft

George has an HO-2 policy on his home. One day, a plane flying overhead loses a tire which smashes through George's roof, causing extensive damage to his home and its contents. George files a claim with his insurer for the damages to his property. Select the two perils under which George's insurer may cover the claim. Vehicle Falling objects Sudden collapse Aircraft

$30,000 for bodily injuries and $12,000 for property damages **George meets his home states minimum liability limits so the out-of-state provision matches the minimum required liability for the state the accident happens in. Texas limits are 30/60/25**

George lives in Connecticut and carries the minimum amount of auto liability insurance for that state, which is 20/40/10. On a trip to Texas, George causes an accident that leaves the other motorist with $35,000 in bodily injuries and $12,000 in property damage. How much will George's liability coverage pay the other driver? $20,000 for bodily injuries and $10,000 for property damages $5,000 for bodily injuries and nothing for property damages $25,000 for bodily injuries and $10,000 for property damages $30,000 for bodily injuries and $12,000 for property damages

$700,000

George owns a shipping company that transports goods all over the world. While sailing across the Atlantic, a mighty storm gathers and his vessel sustains $700,000 worth of damage. Assuming the ship had a $550,000 franchise deductible, how much of the damages would George's policy cover? $150,000 $700,000 $0 $550,000

$700,000 (with Franchise deductible, since covered damages were more than the deductible the policy will pay 100% of damages)

George owns a shipping company that transports goods all over the world. While sailing across the Atlantic, a mighty storm gathers and his vessel sustains $700,000 worth of damage. Assuming the ship had a $550,000 franchise deductible, how much of the damages would George's policy cover? $150,000 $700,000 $0 $550,000

tortfeasor.

Ginger, under the mistaken impression that Jackie made a lewd gesture at her, attacks and injures Jackie after a soccer game. When Jackie takes Ginger to court, Ginger is the: accuser. plaintiff. tortfeasor. felon.

Discovery form

Going over the numbers, Henry notices that his annual sales revenue seems to be lower than it should be. He suspects that this may be caused by employee dishonesty, and discreetly launches an investigation into his business. He finds that a theft occurred two years ago. Which type of commercial crime coverage would be best suited to cover Henry's loss? Loss sustained form Discovery form Subrogation form Past and present theft

Agreed Value

Grace owns a high-end tea shop and, to improve the ambiance, has purchased some old antique furniture and statues. While these items have intrinsic value, it's difficult to assign them an actual cash value. Which type of coverage in her commercial property policy could help assign value to these items in the event of a loss? Value Reporting Inflation Guard Replacement Cost Agreed Value

Dwelling policy

Grace purchase 40 acres of land a couple miles outside of town. To save time and money, she put up a basic mobile home and installed it permanently to the ground. Not planning on farming any of the land, Grace is now looking for a way to insure this second home and property. Which policy could best fit her needs? Dwelling policy Commercial policy Homeowners policy Farm and ranch policy

Single limits

Greg has two limits listed on his homeowners policy for liability coverage: one for bodily injury and one for property damage. Each limit applies on a per occurrence basis. What type of limits are these? Single limits Aggregate limits Split limits Situational limits

Sinkhole Collapse endorsement ** no mention of earthquake.. cannot assume the cause of damages**

Greg is sitting in his home when he feels the ground shake and give way beneath him. He is just able to escape before a large portion of his house falls into an enormous hole. Which endorsement would help Greg cover the losses caused by the ground falling out from underneath his home? Sewer Backup endorsement Sinkhole Collapse endorsement Hurricane Damage endorsement Earthquake endorsement

Volunteer Worker

Greg owns a construction business and has been really swamped lately. His friend Chuck is looking to become a claims adjuster, but doesn't have very much construction experience, so Chuck offers to help Greg on the weekends for free. This way Chuck gains his experience, while Greg catches up on work without the additional cost of hiring someone. According to the definitions in Greg's CGL policy, which of the following best describes Chuck? Leased Worker Part-time Worker Volunteer Worker Temporary Worker

There are now five families living in the building.

Greg owns a four-unit townhouse, in which he and three other families reside. Greg decides to finish the basement and leases it out as a garden apartment to another family, generating more income. After an intense blizzard causes the roof to collapse under the weight of the snow, Greg files a claim against his HO-3 policy. The claim comes back denied because: There are now five families living in the building. collapse is not a standard covered peril. the temperature outside had fallen below ten degrees Fahrenheit, weakening the roof. natural disasters are not covered under homeowner's policies since they are an "act of God."

The principle of indemnity

Greg plays trombone in his school band during football games. During a rally song in the stands one day, Greg annoys one of the opposing team's fans, who grabs his $400 trombone and hurls it down the bleachers, completely destroying it. Greg's insurance pays him $400 to replace the trombone, but then the opposing team's coach also offers to replace the instrument, at whatever the cost. So Greg orders a new $3,200 trombone and has the opposing team's athletic department absorb the cost. Which Principle has Greg Violated? The principle of indemnity The principal of the opposing team The principle of consideration The principle of legal purpose

None ** DP-1 with extended coverage endorsement still does NOT coverage falling objects.**

Greg's neighbor Sam is trimming his trees in his back yard. In the process, a big limb from one of Sam's trees crashes down onto Greg's fence. Assuming Greg has a DP-1 policy with the Extended Coverage endorsement, which of the following could help indemnify Greg for the repairs to his fence? Trees, Shrubs, Other Plants Reasonable Repairs Debris Removal None

Twisting

Greg, an agent for ABC Insurance Brokers, is trying to sell a new policy to Sally. Sally, however, is perfectly happy with her current policy and has no intention of cancelling it. Greg tells Sally that upcoming legislation is set to increase the minimum requirements for insurance, and that her current policy will not be available once the bill passes. He fails to tell her that if her policy is already in effect, this legislation won't affect her insurance. Which unlawful or unfair practice is Greg guilty of? Baiting Twisting Libel Defamation

insurers

Guaranty Associations are funded by: insurers the state the federal government the insurance commissioner

Percentage Deductible

Rhonda's homeowners policy states her deductible is 2% of the value of her home. What type of deductible does Rhonda have? Fixed Deductible Percentage Deductible Franchise Deductible

Hard fraud

Haley takes a bottle of water into a store, pours some of it on the floor when no one is looking, and then pretends to slip and fall. She cries out for help in apparent pain until someone comes to her aid. She then sues the store for her fake injury in an effort to collect an insurance settlement. What has Haley committed? A. Hard fraud B. Soft fraud C. Tortfeasor D. Misrepresentation

the HO-6 form only covers the owner's belongings and finished surfaces, not the unit's structure.

Harold has owned his condo for five months, and he is insured with an HO-6 policy. One night, lightning strikes a tree next to the building, causing it to fall on the roof of his condo. Harold files a claim with his insurer for the cost of repairs; however, the claim comes back denied because: Harold did not take reasonable measures to prevent the damage. Harold has only had the policy for less than 6 months. the HO-6 form only covers the owner's belongings and finished surfaces, not the unit's structure. HO-6 forms cover fallen trees, but only if felled by the insured.

0 hours—Extra Expense coverage kicks in immediately

Helen owns a manufacturing company. She maintains a commercial property policy that includes Business Income and Extra Expense coverage. One evening, a windstorm blows a tree through the side of her building, leaving a hole in the wall and damaging a production machine. When Helen has to rent another machine to keep her business in operation, how long will she have to wait before she can be indemnified for this indirect loss? 24 hours 72 hours 0 hours—Extra Expense coverage kicks in immediately 12 hours

Newly Acquired Property

Helen's business is growing rapidly, so she decided to add an annex onto her office and hire another worker. A storm blows down most of the annex structure while it is under construction, forcing Helen to restart from scratch. Assuming she maintains the 80% coinsurance requirement on her commercial policy, which coverage extension could help Helen rebuild? Outdoor Property Reasonable Repairs Property Off-Premise Newly Acquired Property

The insurer collects premiums from all policyholders and pools them to pay the claims of the few.

How can insurance companies afford to pay for an individual's catastrophic loss? The insurer puts each insured's premium payments into an interest-bearing account, which is then used to pay for that insured's claims, if they occur. The insurer collects premiums from all policyholders and pools them to pay the claims of the few. The insurer will deny claims if it doesn't have enough money in the bank. The insurer will only pay up to the amount already collected from each insured.

Constructive total loss

If insured cargo can be salvaged from a damaged vessel, but the cargo is damaged beyond repair and the repair costs would exceed the cost to replace, an insurer would consider the cargo a / an: A. Constructive total loss B. Actual total loss C. Total loss D. Freight loss

Cost, Insurance, and Freight (CIF)

In Ocean Marine insurance, this term of sale states that the seller of goods is responsible for damage to the cargo during shipment: A. Cost, Insurance, and Freight (CIF) B. Free on Board (FOB) C. Cost and Freight (C&F) D. General Average (GA)

require a claimant to produce his federal tax returns before agreeing to settle his claim.

In Texas, an insurer may not: require a claimant to produce his federal tax returns before agreeing to settle his claim. require an insured to submit a preliminary claim report before moving forward on the claim. pay undisputed settlements under one portion of a claim before the entire claim has been settled. consult with the insured before instructing a body shop to conduct repairs on the insured's vehicle.

Cover costs associated with defending and investigating a claim against the insured

In a BOP, the purpose of supplementary payments in conjunction with liability coverage is to: Cover the cost of additional damage that was discovered after the settlement was paid Cover costs associated with defending and investigating a claim against the insured Make incidental payments to an injured claimant before the final settlement amount is reached Cover a claimant's lost wages after suffering an injury caused by the insured

60

In a CGL policy, the basic extended reporting period provides extended coverage for an "occurrence" that is reported within _____ days of the end of the policy period. 360 30 120 60

tail.

In a Commercial General Liability policy, the basic extended reporting period is also known as a(n): representation. tail. premium. insured contract.

Symbol #3

In a business auto policy, which symbol applies to private passenger autos owned by the insured, excluding trucks, buses, and specialty vehicles? Symbol #7 Symbol #3 Symbol #1 Symbol #19

Preponderance of the evidence

In a civil trial, the jury makes their decision based upon which of the following? Preponderance of the evidence Proof beyond a reasonable doubt Recommendation of the presiding judge Conference decision

The value of the completed building

In a commercial property policy, Builders Risk coverage is sold based on which of the following values? The value of the land underneath the new construction The highest value of a building currently insured by the policyholder The value of the completed building The value of labor and materials used in construction

personal property of others.

In a commercial property policy, Coverage C of the Building and Personal Property Coverage Form provides coverage for: personal property of others. liability and medical payments. business personal property. buildings and structures.

From the point of initial damage until the moment the business is up and running again

In a commercial property policy, Extra Expense Coverage provides indemnification to the policyholder for additional expenses incurred during which of the following time frames? From 72 hours after the initial damage until the business is up and running again From 72 hours after the initial damage until 72 hours before the business is up and running again From the point of initial damage until the moment the business is up and running again From the point of initial damage until 72 hours before the business is up and running again

Coverage D - Loss of Use

In a commercial property policy, the Building and Personal Property Form contains three coverages. Which of the following coverages is NOT a part of this form? Coverage C - Personal Property of Others Coverage B - Business Personal Property Coverage D - Loss of Use Coverage A - Buildings and Structures

From 72 hours after the initial damage until the business is up and running again

In a commercial property policy, the Business Income Coverage Form provides indemnification to the policyholder for the loss of income during which of the following time frames? From 72 hours after the initial damage until 72 hours before the business is up and running again From the point of initial damage until the moment the business is up and running again From the point of initial damage until 72 hours before the business is up and running again From 72 hours after the initial damage until the business is up and running again

requires an insured to parcel the stated policy limit into a fractional maximum amount of coverage available per month during the period of restoration.

In a commercial property policy, the Monthly Limit of Indemnity coverage option for Business Income insurance: requires an insured to parcel the stated policy limit into a fractional maximum amount of coverage available per month during the period of restoration. automatically raises the policy limit every month, to protect against the effects of inflation. requires the insured to maintain at least an 80% level of coinsurance on the insured property. establishes a separate aggregate limit for each month of the entire policy period.

Unscheduled Farm personal property

In a farm policy, which form provides blanket coverage to all farm personal property? Barns, Outbuildings, and Other Farm Structures Scheduled Farm personal property Mobile Agricultural Machinery and Equipment Unscheduled Farm personal property

available with an endorsement.

In a garage-keepers policy, PIP coverage is: available with an endorsement. Included unless the insured declines it in writing. not available. mandatory.

loss of use.

In a homeowner's policy, Coverage D provides coverage for: other structures. dwelling. loss of use. personal property.

50% of Coverage A limit.

In a standard farm policy, the limit for Coverage C- Household Personal Property coverage is: 10% of the Coverage B limit. 50% of the Coverage A limit. 10% of the Coverage A limit. 50% of the Coverage B limit.

states that the insured is prohibited from forcing the insurer to take possession of damaged property.

In an insurance policy, the Abandonment Clause: states that the insured is prohibited from forcing the insurer to take possession of damaged property. ensures that the insurer has the right to take possession of any abandoned property. states that if property is abandoned, it becomes uninsurable. states that the insured may abandon the policy at any time.

the claimant's premium payment history.

In an investigation, "critical evidence" could include all of the following, EXCEPT: photographs of the damage. statements from the claimant and at-fault party. sketches of the property. the claimant's premium payment history.

Uses the same provisions, exclusions, and coverages as the base policy

In excess liability insurance, the follow form: Uses the same provisions, exclusions, and coverages as the base policy Can act as the primary policy, if necessary Is an essential part of an umbrella policy, listing the umbrella's coverages and provisions Must be submitted to the insurer with every liability claim

The insured may compel the insurer to take the damaged property to keep the salvage value from being deducted from the claim settlement.

In insurance terms, which of the following statements about salvage is FALSE? The insurer may deduct the salvage value from the amount paid to the claimant for the loss. The insured may compel the insurer to take the damaged property to keep the salvage value from being deducted from the claim settlement. The insurer may take ownership of damaged property after paying the claimant for a total loss. The insurer may choose how to handle salvage, depending on the policy.

Attend an NFIP claims presentation every 3 months

In order to adjust claims for the NFIP, adjusters must meet several requirements. Which of the following is NOT one of these requirements? Have at least 4 consecutive years of full time property loss adjusting experience Attend an NFIP claims presentation every 3 months Be NFIP certified Attend an NFIP claims presentation annually

warranty.

In order to qualify for an insurance policy, Lydia's Fine Jewels must agree to have a security guard on the premises 24/7. This is called a: waiver. binder. representation. warranty.

a third party.

In property insurance claims, the claimant is commonly the insured, whereas in liability insurance claims, the claimant is typically: a third party. a tortfeasor. the insurer. always the insured.

A 40-ton printing machine affixed to a factory floor

In the Business and Personal Property Form of a commercial property policy, Coverage A - Building and Structures coverage would apply to which of the following features of a commercial enterprise? A small copy machine in the break room A 40-ton printing machine affixed to a factory floor A briefcase left in the lunchroom by a client A leased mainframe computer

The shortest time required to make repairs or replacements needed to return the property to rentable condition

In the DP=2 and DP-3, what is the time-based limit for Coverage D- Fair Rental Value? The shortest time required to make repairs or replacements needed to return the property to rentable condition 60 days 180 days, or the amount of time needed to repair or replace damaged property, whichever is shorter The amount of time that it takes for the insured to start receiving rental income again after a loss

The bundles of cash that were stored in the safe

In the middle of the night, armed robbers break into the headquarters of Superior Industries and restrain the night guard. Then, they blow open the safe and steal the contents. Luckily, Superior Industries has a commercial crime policy. Which of the following would NOT be covered under inside the premises - robbery and safe burglary of other property coverage? The damage to the surrounding room from the explosion The damage to the door of the safe The bundles of cash that were stored in the safe The damage to the front door caused by robbers breaking the glass to access the building

Causes of Loss Forms

In what part of a commercial property policy would you look to see if flood damage to your factory is covered? Causes of Loss Forms Declarations page Conditions page Coverage Forms

Conditions

In which section of the policy might you find the following statement? "Damage to insured property must be reported within 15 days of the damaging occurrence." Exclusions Conditions Definitions Declarations page

Declarations

In which section of the policy might you find the following statement? "Property Address: 246 Rosemead Drive." Conditions Definitions Declarations Exclusions

An action, item, or promise made to someone to motivate him toward certain desired behaviors

Inducement can be defined as: A. Allowing one's emotions and feelings to dictate one's course of action B. Withholding material information in order to get a claimant to accept a lower settlement amount C. An action, item, or promise made to someone to motivate him toward certain desired behaviors D. Falsely increasing the settlement figure to increase the adjuster's income

Declarations

Information that makes the policy unique to a specific insured. Exclusions Endorsements Definitions Insuring Agreement Conditions Declarations

Liquor liability insurance

J. Darby's Local Bar is being sued for selling alcohol to minors who then vandalized several houses. Fortunately for J. Darby's, it has _____ to help cover the costs of the lawsuit. Liquor liability insurance Commercial liability insurance Employment practices liability insurance Dram shop liability insurance

Coverage C

James rents a home to Jill and maintains a DP-3 policy on the dwelling. One day, Jill accidently leave the oven on all day while she is out, and James' house burns to the ground, along with all the contents. Which coverage in James' DP-3 might pay for the items he left in the home for Jill's use? Coverage A Coverage D Coverage C Coverage B

Jack has a duty to report Gregg's ethical violations

Jack and Gregg are both adjusters working claims in the same area after a large hailstorm. One day, Gregg tells Jack that he should inflate the settlements on his claims so he can make some extra money in commissions. Gregg says that he does it all the time, since things are so hectic after a storm that no one will notice if a little extra is added to each of the claims. What should Jack do in this situation? A. Jack should take Gregg's advice and pad his own claim settlements B. Jack has a duty to uphold the bond between adjusters and should keep this news to himself C. Jack should investigate Gregg's past claims and look for ethical violations D. Jack has a duty to report Gregg's ethical violations

A fiduciary bond

Jack has been appointed to manage Margaret's financial estate, but Margaret requires Jack to be bonded. What kind of bond might Jack seek? A fiduciary bond A performance bond A license or permit bond A payment bond

plaintiff

Jackie files a lawsuit against Ginger after Ginger's three-year-old daughter ruins Jackie's laptop during a flight. When they go to court, Jackie is the: tortfeasor plaintiff tort defendant

$60,000

Jackson County has a government crime loss sustained form with employee theft coverage of $30,000 per employee. Three months after the policy expires, a Jackson County finance analyst realizes that two other county employees collaborated to steal $40,000 each from the county while the policy was still in effect. How much will Jackson County's insurer pay for this theft? $80,000 $0 $30,000 $60,000

$150,500

Jacob's home burns to the ground, despite the fire department's attempt to save it. His home was fully insured under his DP-3 policy for $150,000. How much can Jacob expect to receive from his insurer to cover the loss and any bills he may receive from the fire department? $120,000 $150,000 $100,500 $150,500

Transportation Expenses

Jada has to leave her car in the shop after crashing it into a telephone pole, but she still needs to get to work and back everyday. She does some research and, three days after the crash, she buys a bus pass for $85/month. Assuming her car is in the shop for three months and she had previously purchased the additional coverage, which policy provision in Jada's personal auto policy could help cover her bus fare? Workers' Compensation Medical Transportation Transportation Expenses Public Transit Endorsement

Yes; Jake exercised apparent authority when he wrote that Olivia had hail coverage.

Jake is selling insurance policies for XYZ Insurance. Olivia buys a homeowners policy from Jake and asks him to write down on a separate piece of paper all the perils the policy covers so she can show her husband. Jake writes "hail," but when Olivia's house is damaged by hail, the adjuster says "hail isn't covered in your policy." Olivia produces the piece of paper and threatens to sue XYZ Insurance if they don't pay. Does she have grounds for a lawsuit? Why or why not? Yes; Jake exercised apparent authority when he wrote that Olivia had hail coverage. Yes; hail coverage is standard in property policies, and the insurer should have included it in the first place. No; Jake had no authority to promise coverage that was not listed in Olivia's policy. No; Jake was unaware of the policy's hail coverage exclusion.

a joint tortfeasor.

James and Eric want to play a prank on Bob for Halloween. They dress up like headless horsemen and throw ignited Jack O'Lanterns at his house. Unfortunately, one of the inflamed pumpkins catches the porch on fire, causing $3,500 in damages. Bob doesn't find this tomfoolery very entertaining and sues both James and Eric for the cost of the repairs. In court, James and Eric would be: intentional tort. the plaintiffs. a tortfeasor. a joint tortfeasor.

HO-3 & HO-5

James has just purchased a single-family home and wants to purchase an open-peril homeowner's policy to protect his financial interest in the property. From which policies should James choose to get the amount of coverage he's looking for? HO-2 & HO-4 HO-6 & HO-8 HO-3 & HO-8 HO-3 & HO-5

Premises Liability

James is expecting a very important client to arrive in an hour so he decides to sweep and wash the floor. James finishes the job in time and goes to look over his bid for the contract one more time. James comes back out to the lobby to find his potential client laid out on the floor, having slipped and fallen. Which type of commercial general liability coverage would indemnify James' client for his injuries? Insured Contacts Liability Operations Liability Premises Liability Product Liability

$2,000

James is walking down the street when Andrea, an uninsured motorist, strikes him with her car. James suffers $12,000 in injuries from the accident. He 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. $5,000 $2,000 $12,000 $10,000

$150,000/$465,000

James owns a masonry business and has a commercial liability policy with the following liability limits: $150,00 per occurrence / $500,000 per policy term. While at a job site, his cement truck's chute cannot reach the pour site, so the operator adds two extra chutes, extending its length. The chute collapses under the weight of the concrete, causing $35,000 in injury to one of the workers. The loss is covered by the policy, and James' insurer pays the claim. What will the new limits be for the remainder of the policy term? $150,000/$500,000 $115,000/$465,000 $115,000/$500,000 $150,000/$465,000

Special Form

James owns a metal machining shop where he does contract work for local mechanics, manufacturing hard-to-find parts or custom fittings. Being a cautious man, James wants commercial property insurance that provides coverage on an open-peril basis. Which Causes of Loss Form would best suit James' needs? Universal Form Special Form Basic Form Broad Form

Express authority

James signed a contract with XYZ Insurance that enables him to sell insurance policies and collect premiums on their behalf. What authority has James been granted? Implied authority Express authority Apparent authority Full authority

$6,200

Jamie's PIP limit is $10,000, and it covers 100% medical expenses and 60% of lost wages. After a bad car accident, Jamie incurs $5,000 in medical expenses and misses two weeks of work. If she makes $1,000 a week, how much will Jamie's PIP insurance pay for this occurrence? $6200 $1,200 $5,000 $5,600

Extra expense coverage

Jane owns an aquarium supplies store and purchases a business owners policy to protect her assets. Which of the following protections can Jane expect from her standard BOP with no endorsements? Insurance for her company-owned vehicles Malpractice insurance Extra expense coverage Named peril coverage

Lost instrument bond

Jane owns stock in Company B, but she lost her stock certificate. When she asked for a duplicate, Company B said she must purchase a bond guaranteeing that if Jane finds the original certificate, she will return it for proper disposal and that Company B will not suffer an economic loss. What type of bond does Jane need? Financial guarantee bond Attachment bond Reclamation bond Lost instrument bond

Extra expense coverage

Jane's Bakery has equipment breakdown protection coverage on a large industrial oven used in producing several hundred loaves of bread a day. One day, the oven malfunctions and catches fire, rendering her business inoperable for four days. In order to fill bread orders, Jane must ship her dough to a warehouse where she found another oven to rent while her oven is repaired. Under which coverage would Jane be indemnified for the shipping and oven rental costs? Supplementary payments coverage Valued business interruption coverage Automatic coverage Extra expense coverage

the Wrongful Death Act.

Jane's husband was killed when an improperly pressurized gas container exploded as he was transporting it. Jane can collect damages under: the Wrongful Death Act. the Breach of Product Warranty. a Statute of Limitations. Sovereign Immunity.

The tornado

Jane's shed burns to the ground during a tornado, when the high winds break a wall of the shed, knocking over a lantern inside. What is the proximate cause of the loss? Fire The lantern Wall collapse The tornado

A list of the witnesses of the accident

Janine is in a car accident that is covered by her Personal Auto Policy. What information does Janine NOT have to submit to her insurer? Medical bills from the collision A proof of loss, when requested A list of the witnesses of the accident The report from a damage appraisal

Medical payments

Jason crashes his single-engine plane while Jim and Barbara are on board. Jim has a broken leg and Barbara has a concussion. Jason has a broken wrist. Which coverage in Jason's aviation insurance policy could cover Jim's broken leg? A. Medical payments B. All risks - ground and flight C. All risks - not in motion D. Bodily injury excluding passengers

Jason's policy was rated per acre.

Jason has an MPCI policy on his corn crop. All of the following statements could be true of Jason's policy, EXCEPT: Jason's policy coverage is based on a percentage of his actual production history. Jason's policy covers him for damage to his crop caused by weather-related perils. Jason's policy protects him against damage to his crop from wildlife and insects. Jason's policy was rated per acre.

The insurer will pay the claim because of the implied waiver they have made by not canceling Jason's policy the previous times he was late with his payments.

Jason's auto policy states that the insurer may cancel coverage if a premium is more than 30 days late. However, Jason is currently more than 30 days late, and has been so five times in the last year, and his insurer has done nothing about it. When Jason gets into an accident and files a claim, which of the following is most likely to happen? The insurer will pay the claim because of the implied waiver they have made by not canceling Jason's policy the previous times he was late with his payments. The insurer will pay the claim because of the express waiver they have made by not canceling Jason's policy the previous times he was late with his payments. The insurer will deny the claim and cancel Jason's policy because of the implied waiver they have made by not canceling his policy the previous times he was late with his payments. The insurer will deny the claim and cancel Jason's policy because he is more than 30 days late with his payment.

Contingent business income and extra expense

Jay's Chip Factory makes potato chips, and it gets chip bags from Bags, Inc. One day, the bag-making machine at Bags, Inc. broke down, and thus, Jay's Chip Factory couldn't get the bags it needed to bag its potato chips. Jay's Chip Factory had to shut down production temporarily while waiting on Bags, Inc. to fix their machine. Jay's lost business income may be covered under what coverage in its equipment breakdown protection coverage form? Brands and labels None Business income and extra expense Contingent business income and extra expense

The cost of lodging for Jean and the lost rental income from Rita.

Jean operates a home-based business. She also leases her basement out to a friend, Rita, who also works from home. When a kitchen fire causes extensive smoke damage to her home, she and her tenant must find another place to live and work while repairs are being made. Which of the following expenses might Coverage D- Loss of Use help pay for? Only Jean's lost income. The cost of lodging for both Jean and Rita. The cost of lodging and lost income for both Jean and Rita. The cost of lodging for Jean and the lost rental income from Rita.

$500,000

Jerome was shopping at ABC Imports when a light fixture fell from the ceiling and hit him on the head. Jerome's injuries resulted in an extended hospital stay, so he sued ABC Imports and was awarded $400,000. Assuming ABC Imports carries a CGL with a General Aggregate of $750,000 and a Per Occurrence limit of $250,000, what will the new General Aggregate Limit be after this claim is paid? $500,000 $750,000 $250,000 $350,000

special damages.

Jerrod is awarded $4000 in a court case after Ollie accidentally starts a fire and burns down his detached garage. This award is an example of: statutory damages. general damages. punitive damages. special damages.

80% of $200,000 = $160,000 (coinsurance is met so full payout of damages is made) $10,000

Jesse's home is worth $200,000 and he has a homeowners policy with a $160,000 limit. After a covered loss, Jesse is left with a total of $10,000 in damages. Assuming the insurer requires the standard 80% level of insurance for coinsurance purposes, and ignoring any deductibles, how much will Jesse receive in indemnification? $10,000 $9,500 None $8,000

Split limits

Jim has a liability insurance policy with three limits: one for the maximum amount of bodily injury per person, one for the maximum amount of bodily injury for all persons, and one for the maximum amount of property damage. Each of these limits apply to any one occurrence. What type of limits does Jim's policy have? Situational limits Aggregate limits Single limits Split limits

reputation.

Jim has been an adjuster for several years. He is always candid and genuine in his negotiations, and he listens to his claimants' needs. Jim exercises an appropriate amount of "give and take" in his negotiations, and he always does extensive research on every claim, to ensure that he offers a fair and equitable settlement. Jim's actions help to build his: first impression. attitude. reputation. portfolio.

Policy X will pay $50,000 and Policy Z will pay $12,000

Jim has two policies that cover the same risk, but they respond differently: Policy X is primary and Policy Z is excess. Policy X has a limit of $50,000 and Policy Z has a limit of $25,000. When Jim suffers an insured loss totaling $62,000, how will each policy respond? Policy X will pay $50,000 and Policy Z will pay $12,000 Policy X will pay $31,000 and Policy Z will pay $31,000 Policy X will pay $41,335 and Policy Z will pay $20,665 Policy X will pay $37,000 and Policy Z will pay $25,000

tortfeasor.

Jim is out turkey hunting on a private ranch when he hears some movement in the brush. Assuming it's a turkey, Jim raises his shotgun and fires. Unfortunately for Jim, he has not taken a turkey, but instead severely injured one of the landowner's calves. The landowner decides to sue Jim for the cost of the calf. In the civil lawsuit that follows, Jim would be the: tortfeasor. victim. plaintiff. joint tortfeasor.

plaintiff.

Jim is out turkey hunting on a private ranch when he hears some movement in the brush. Assuming it's a turkey, Jim raises his shotgun and fires. Unfortunately for Jim, he has not taken a turkey, but instead severely injured one of the landowner's calves. The landowner decides to sue Jim for the cost of the calf. In the civil lawsuit that follows, the landowner would be the: joint tortfeasor. tortfeasor. plaintiff. defendant.

Premises Liability

Jim owns a small boutique. Jim forgot to turn off the automatic lawn sprinklers during the frigid winter weather, and when they came on last night, they created a thick layer of ice on his sidewalk. Before he could put salt on the ice, a customer came to the shop, slipped on the ice, and broke her hip. Which type of commercial general liability coverage would provide coverage in this situation? Completed Operations Liability Product Liability Premises Liability Mobile Equipment Liability

Symbol 9

Jim uses his own car to deliver pizzas for his employer, Delicioso Pizza. Which coverage symbol should Delicioso use to provide liability coverage for Jim while he is on the clock and delivering pizza for them? Symbol 2 Symbol 8 Symbol 9 Symbol 3

Coinsurance payment

Jim's health insurance policy states that he is responsible for 10% of the total cost of his medical bills. This percentage might be referred to as a: A. Coinsurance payment B. Capitation C. Copayment D. Subrogation

Jimmy's Burger Barn must report the claim as soon as possible, even if that means it makes the report after the policy expires.

Jimmy's Burger Barn has a pure claims-made policy that is about to expire, but a customer just filed a liability claim against the company. If Jimmy's wants to have insurance pay for the damages, it must do which of the following? Jimmy's Burger Barn may report the claim at any point for two years after the policy's expiration date. Jimmy's Burger Barn must report the claim before its policy expires. Jimmy's Burger Barn must report the claim as soon as possible, even if that means it makes the report after the policy expires. Jimmy's Burger Barn is ineligible for coverage unless it has already requested a renewal of its policy in writing.

Andy's insurer will send Joan a reservation of rights.

Joan files a lawsuit against Andy because his dog escaped and caused her to fall on an icy sidewalk. Which of the following statements is FALSE? Andy must notify his insurer that he is being taken to court. Andy's insurer will send Joan a reservation of rights. Andy's insurer is obliged to defend him in court until it proves that there is no coverage under the policy in question, or until the suit is settled. Andy must submit an answer to avoid a default judgment.

None ** with no endorsements, DP-1 only covers fire, lightning, and internal explosion for perils.**

Joe has a basic DP-1 policy on his home, without any endorsements. During a storm, a tree limb is blown down onto his attached garage. The limb crashes through the roof and lands on Joe's water softener tank, destroying it completely. Which of these damages would be covered under Coverage A in Joe's policy? The water softener The roof None Both the water softener and the roof

a hazard.

Joe's driveway has a very steep grade with several sharp turns, and it gets very muddy during rains. To an insurance company, Joe's driveway might be considered: a loss. a peril. a risk. a hazard.

Joe's policy still has $150,000 available for bodily injury liability coverage.

Joe's homeowners policy has a single limit of $150,000 for bodily injury liability coverage. One day, Joe's friend was injured in an accident on Joe's property, and the medical bill came to $15,000, which were covered by Joe's homeowners policy. Which of the following is TRUE? Joe's per occurrence limit has been reduced by $15,000, but the aggregate limit is unchanged. Joe's policy now has $135,000 available for bodily injury liability coverage. Joe's policy still has $150,000 available for bodily injury liability coverage. Joe's aggregate limit has been reduced by $15,000, but the per occurrence limit is unchanged.

Unfair discrimination.

John and Lucy both apply for policies with Acme Insurance at the same time. The are exposed to similar hazards and would present essentially the same amount of risk to Acme Insurance. Acme Insurance offers Lucy a premium policy at excellent rates, but restricts John to a very limited policy with high premiums. Acme Insurance may be guilty of: Boycotting. Unfair discrimination. Coercion. Misrepresentation.

John's deductible: 3% of $600,000 = $18,000 indemnity: $80,000 - $18,000 = $62,000

John has purchased a homeowners insurance policy with a percentage deductible based on the total limit of insurance for his home. John insures his home for $600,000, and the policy includes a 3% deductible. A huge thunderstorm passes through one night and blows the roof off his house. The insurance company estimates that covered damage totals $80,000. How much indemnification should John Expect for the losses to his roof? $18,000 $77,600 $62,000 $80,000

Defamation

John works for ABC Insurance. He is paid on a commission basis and needs to meet certain sales goals in order to draw a reasonable salary. To help in this endeavor, John regularly tells potential clients that XYZ Insurance and Integritas Insurance often fail to pay claims, and that they charge unreasonably high premiums. In speaking falsely of his competition, John has indulged in which unethical practice? Kickbacks Defamation Boycott Twisting

will be covered under the normal policy limits.

John's home is totally destroyed by a fire, and along with it most of his personal property. A few of the items were scheduled in his homeowners policy, such as his Rolex watch and a few antiques, but everything else was left as "unscheduled property." These "unscheduled" items, will not be covered. will have to be scheduled before they can be covered. will take twice as long for indemnification since their times weren't scheduled. will be covered under the normal policy limits.

Cost and Freight

Jones' Auto in Dallas, Texas buys 50 cars from ABC Auto in Tokyo, Japan. 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. Cargo, Insurance, and Freight B. Cost, Insurance, and Freight C. Free on Board, Dallas D. Cost and Freight

Because the damage took place while the plane was being transported, the deductible won't apply to this loss

Jordan is moving from San Francisco to Philadelphia, and he is bringing his private plane along with him. While it's being transported, the plane is damaged in a minor accident. Which of the following is true? A. Because the damage took place while the plane was being transported, the deductible won't apply to this loss B. Because the damage took place while the plane was being transported, the loss will not be covered C. Jordan's plane was considered to be "in motion" at the time of the loss D. Jordan's loss will be covered under all risks - ground and flight

a CGL does not cover auto accidents.

Josh is driving through town in the company truck when he misses his turn. He decides just to make a U-turn and double back. Unfortunately, he doesn't see the car coming up alongside of him and the two collide. Josh files a claim with the company's CGL, but the claim is denied because: Josh was at fault in the accident. a CGL does not cover U-turns. Josh was driving a commercial pickup truck. a CGL does not cover auto accidents.

Julie will be indemnified by her insurer for $10,000.

Julie maintains collision coverage with a $1,000 deductible on her 2007 pickup truck. While returning home from work, Julie swerves to miss a deer and ends up crashing into a telephone pole. Julie's truck sustains $35,000 in damages, yet the actual cash value of the vehicle is only $11,000. Which of the following statements is TRUE? Collision coverage will not pay for Julie's accident. Julie will be indemnified by her insurer for $34,000. Julie will be indemnified by her insurer for $10,000. Julie will be indemnified by her insurer for $11,000.

Windstorm ***since the items were moved to prevent damage during the hurricane (windstorm), even though they were damaged in the flood, the covered peril is still the windstorm because that was the reason for moving them. ***

Just two days before a hurricane hits New Orleans, Jim brings most of his valuable items (TV, stereo, jewelry, firearms, etc.) to his parents' house in Hammond, to keep them safe from the storm. Two weeks later, Jim's valuables are destroyed when a flood sweeps through Hammond, severely damaging his parents' house. Under which peril are the valuables covered? Flood Water Accidental Discharge or Overflow of Water Windstorm

A claim filed on May 10, 2005, for an injury suffered on March 1, 2004

Kelly Supply purchases a claims-made CGL policy with a policy period of March 15, 2005 to March 15, 2006. The retroactive date is established as January 1, 2001. Which of the following events would trigger Kelly Supply's policy to respond? The policy would respond to any injury suffered during the policy period. A claim filed on May 10, 2005, for an injury suffered on March 1, 2004 A claim filed on May 10, 2005, for an injury suffered on November 15, 2000 An occurrence on November 2, 2005, regardless of when the claim is filed

Employment practices liability insurance

Ken, an editor for a major newspaper, is fired after arriving to work late. He files suit against his employer for wrongful termination. Which type of insurance would Ken's employer need to help cover the costs of the lawsuit? Commercial liability insurance Employment practices liability insurance Workers compensation insurance Fiduciary liability insurance

$1,900

Kevin has a homeowners policy with replacement cost valuation and a coverage limit of $90,000 for his personal property. Three years ago, Kevin purchased a sofa and love seat for $1,000 and $500 respectively. Both pieces of furniture depreciate at $100 per year. A house fire damaged many of Kevin's belongings, including the sofa and love seat, which now cost $1,200 and $700 to purchase today. Ignoring any deductibles, how much will Kevin's insurer give him for the damaged sofa and love seat? $1,500 $900 $1,300 $1,900

Bailee Coverage

Kyle operates a collision repair garage and has many vehicles in his care, some for extended periods of time. Which type of coverage protects Kyle from any liability claims which may arise if one of the cars is further damaged or destroyed while in his possession? Non-Owned Vehicle Coverage Bailee Coverage Bailment Subrogation

Bailment

Kyle operates an auto body repair shop, where customers sometimes leave their cars in his car for extended periods of time. This exchange of control of property is best described as: Subrogation Non-owned vehicle coverage Bailment Bailee coverage

Lacey's beach house is not her principle residence.

Lacey owns vacation home on the beach in North Carolina. It is 2,600 square feet and includes a finished basement. She'd like to buy flood insurance through the NFIP with replacement cost coverage. Why won't Lacey be able to purchase a replacement cost policy? Lacey's beach house is not her principal residence. Lacey's home has a finished basement. Lacey's home is more than 2,500 square feet. The NFIP does not offer replacement cost policies.

Broad Form and Special Form

Lanny was unloading his steers from the transport when the ramp slipped off the back of the trailer and two steers fell and broke their legs. As a result of this accident, Lanny had to put down the injured steers. Which farm policy cause of loss form would indemnify Lanny for this loss? Basic, Broad, and Special Forms Broad Form and Special Form Broad Form only Special Form only

a legal hazard.

Last month an elderly man slipped and fell on a cracked, uneven icy sidewalk on Mulberry Street. He sued the homeowner and was awarded $60,000. The insurers of other properties on Mulberry Street would consider this award to be: a moral hazard. a morale hazard. a physical hazard. a legal hazard.

theft.

Laura's corn crop is covered under a Multi-Peril Crop Insurance policy. Under this policy, Laura is covered for all of the following perils, except: frost. low/poor crop yield. flood. theft.

plaintiff.

Lee was watching out his kitchen window and saw his neighbor, Sam, reach across the fence with a pole saw and cut down one of Lee's trees. When the tree fell, it landed on Lee's gazebo and damaged it. Lee is furious and sues Sam for the damages. When they go to court, Lee is considered the: plaintiff. tort. tortfeasor. defendant.

tortfeasor.

Lee was watching out his kitchen window and saw his neighbor, Sam, reach across the fence with a pole saw and cut down one of Lee's trees. When the tree fell, it landed on Lee's gazebo and damaged it. Lee is furious and sues Sam for the damages. When they go to court, Sam is considered the: tort. plaintiff. tortfeasor. intentional tort.

morale hazard.

Lewis owns a computer store, and he spends many hours a day on the sales floor demonstrating his products to customers. He often gets very animated when showing the electronics and, although he does not intend for anything bad to happen, he doesn't worry too much about handling them carefully, since he knows that his insurance policy will cover any damages. This behavior would be called a: morale hazard. moral hazard fraud. physical hazard.

$1,000 - the policy covers only satellites and antennas at $1,000 per occurrence

Lightning destroys a $5,000 satellite dish that Farmer Carla recently installed. Assuming Carla meets the 80% coinsurance requirement, how much would her farm policy pay for the damages to the satellite dish? $0 - satellites and antennas are not covered $4,000 - the policy covers 80% of the satellite dish $5,000 - the full cost of the satellite is covered $1,000 - the policy covers only satellites and antennas at $1,000 per occurrence

$10,000

Lori's property was damaged in a recent flood. The damages to her home and detached garage came to $80,000 and $15,000, respectively. Lori has a dwelling form flood policy with a $100,000 limit. How much indemnification can Lori expect to receive for the damage to her garage? $90,000 $10,000 $0 $15,000

Theft by employees

Losses caused by _____ are always excluded in garage-keepers policies. Vandalism Malicious mischief Theft by employees Explosions

Report the loss to the police

Louise's car is severely damaged during a storm when a tree falls on it. What is NOT one of her duties as an insured? Allow the insurer to inspect the car and appraise the damage Report the loss to the police Authorize the insurer to obtain pertinent records Protect the car from further damage

Marco lives in Nueces County, one of the 14 coastal counties where residents can obtain coverage for wind and hail through TWIA. **Marco's policy doesn't cover wind and hail because he lives in Nueces County, one of the 14 coastal counties in Texas where people can get coverage for wind and hail through the Texas Windstorm Insurance Association (TWIA). Because this coverage is available through TWIA, FAIR plan policies issued in these counties exclude coverage for wind and hail.**

Marco lives in Nueces County on the Gulf Coast of Texas. His house is insured through the Texas FAIR plan, but Marco's policy doesn't cover wind or hail. Why does Marco's policy have these exclusions? No Texas FAIR plan policy covers wind or hail. Wind and hail coverage are not available to any residents of coastal counties in Texas. Marco chose not to add a very expensive wind and hail endorsement to his policy. Marco lives in Nueces County, one of the 14 coastal counties where residents can obtain coverage for wind and hail through TWIA.

Fraternal Benefit Society

Mark belongs to a non-profit organization that engages in charitable activities and provides Mark with death and disability insurance coverage. To what kind of organization does Mark belong? Fraternal Benefit Society Mutual Insurance Company Reciprocal Insurer Risk Retention Group

unvalued

Mark has an ocean marine insurance policy with cargo coverage. The type and value of his cargo varies from one shipment to the next, so rather than having a set value for this coverage, the amount of his settlement is only determined after a covered loss. Mark's cargo coverage is written on a/an ______ basis. actual cash value replacement cost valued unvalued

Coverage D

Mark has to move out of his farmhouse for a few months while repairs are made after a kitchen fire renders the dwelling uninhabitable. Which coverage in Mark's farm policy will pay for the additional living expenses that he will incur because of this loss? Coverage A Coverage D Coverage B Coverage C

the principle of indemnity

Mark incurred $8,000 damage to his car in an accident. He received $8,000 from his insurance company and $4,000 from the other driver. By receiving a profit from the loss, Mark could be in violation of: the principle of indemnity the principle of profit and loss the principle of financial restoration the principle of financial status

$20,000

Mark is driving along and looking for an address on the East side of Walker Street. As he squints to see the numbers posted on the buildings, he plows into the back of a car waiting at a stoplight. Both the driver and the passenger of the struck car are injured. The driver suffers $60,000 in bodily injury, the passenger suffers $55,000 in bodily injury,, and the vehicle Mark his sustains $30,000 in damage. Mark has liability coverage with split limits of 50/100/25. How much will Mark be responsible for out-of-pocket after this accident? $15,000 None; Mark is totally covered by his policy. $45,000 $20,000

July 14, 2011 ** Statute of limitations for personal injury is 2 years in Texas**

Mark suffers injuries when a kitchen appliance he is using breaks apart during operation. If the accident occurred on July 14, 2009, in Texas what is the last date Mark can file a lawsuit for his injuries? January 14, 2010 July 14, 2013 July 14, 2011 July 14, 2010

Matt's financial interest in the truck is protected, should a covered loss occur.

Matt offers to lend Shawn his truck so he can pick up some stones for his landscaping project. Matt tells Shawn, "Don't worry, my truck is insured." What is Matt really saying? Shawn is protected from damage while driving Matt's truck. Shawn's financial interest in the truck is protected, should a covered loss occur. Matt's truck is protected from damage. Matt's financial interest in the truck is protected, should a covered loss occur.

Value Reporting

Matt, a real estate developer, must submit a report to his insurer every 30 days listing the value of all his properties over the past month. In turn, the insurer adjusts Matt's premiums based on the values he submits. Which optional coverage does Matt subscribe to? Value Reporting Optional Reporting Agreed Value Adjusted Income

three years

Medical Payments pays for covered medical expenses for up to _______ after an accident. three months six months six years three years

$1,800

Melanie owns a set of 3 antique crystal vases that is worth $2,800, but during her most recent move, one of the vases was broken beyond repair. Melanie and her insurer have been unable to find a replacement vase to complete the set and bring it back to its original value. Without the broken vase, the remainder of the set is only worth $1,000. What should Melanie receive from the insurer under the pair and set provision of her personal articles floater? A. $933 B. $0 C. $1,800 D. $2,800

$12,000

Melanie's $300,000 home suffers $90,000 in damage from a fire. The adjuster finds the home's value since 2008 has depreciated 25%, making the Acv loss $67,500. Although Melanie's policy covers repairs at their replacement cost, she receives $67,500 at the time of loss. Repairs to her home end up totaling $79,500. How much, if any, further indemnification may Melanie receive from the loss? $10,500 $0 $12,000 $22,500

If Mervyn wants to be licensed in Texas, he can designate Texas as his home state, and he must meet all the same requirements as a Texas adjuster.

Mervyn is from Kansas, a state that does not license insurance adjusters. Which of the following is TRUE? If Mervyn wants to be licensed in Texas, he can designate Texas as his home state, and he must meet all the same requirements as a Texas adjuster. Mervyn cannot be licensed in Texas until Kansas initiates a licensing procedure. Mervyn needs to obtains a license in a state that is reciprocal with Texas before he can obtain a license in Texas. If Mervyn wants to be licensed in Texas, he can designate Kansas as his home state, and he must meet all the same requirements as a Texas adjuster.

Michelle should politely refuse because the quilt could be considered an inducement

Michelle is at Betty's house, adjusting her water damage claim. While walking through the house, Michelle notices an intricate quilt laying on the back of Betty's sofa and makes a comment about how pretty it is. After completing her inspection, Michelle comes back to Betty to review her findings with her, but before she gets the chance, Betty tells Michelle that she would like her to have the quilt as a gift. What should Michelle do? A. Michelle should accept the gift because she doesn't want to offend Betty B. Michelle should wait until after reviewing the claim with Betty, and accept the quilt only if Betty agrees to the settlement C. Michelle should politely refuse because the quilt could be considered salvaged misappropriation D. Michelle should politely refuse because the quilt could be considered an inducement

HO-5 *** most comprehensive homeowners coverage available ***

Mike is wanting to upgrade is homeowner's insurance so he will have the best coverage possible. "You get what you pay for;" says Mike, "and, I'm purchasing total peace of mind." Which policy is Mike referring to? HO-3 HO-8 HO-5 HO-2

comparative negligence.

Most states' courts today follow the doctrine of: comparative negligence. contributory negligence. strict negligence. conducive negligence.

$20,000

Mr. Dewitt's homeowners policy has a $200,000 limit of liability for Coverage A- Dwelling. How much coverage will his policy automatically provide for Other Structures (assuming he has a typical policy with no endorsements)? $100,000 $50,000 $10,000 $20,000

Customs bond

NOP Systems, a U.S. company, has just signed a contract with Xen Electronics, a Malaysian company, to sell its superconductors overseas. One of the terms of the contract was that NOP Systems guarantee that they will pay all applicable taxes and fees, as well as follow all exportation laws. NOP Systems can accomplish this by purchasing a: Fidelity bond Customs bond Fiduciary bond Ocean marine bond

Joe's

Nancy and Drew borrow Joe's car so they can have a picnic at the old water tower. On their way to the picnic, Drew accidentally rear-ends Mr. Jackley, causing $2,900 in damage. Whose liability insurance will pay first for the damages? Mr. Jackley's Drew's Nancy's Joe's

Nick was assigned a primary care physician who must coordinate his health care within a network, but Charity may choose a primary physician outside the network.

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 plan allows him to go to any hospital for emergency services, but Charity is restricted to approved hospitals within the network. C. Nick's policy was automatically accepted by his insurer, but Charity had to prove her current health status before being accepted. D. Nick was assigned a primary care physician who must coordinate his health care within a network, but Charity may choose a primary physician outside the network.

Nina's insurer will still pay the claim, up to the limit of her liability coverage.

Nina is deep in debt and files bankruptcy after crashing her car into Ben's luxury sedan and can't afford to pay the portion of the damage that exceeds her policy limit. Which of the following statements is true? Nina's insurer will still pay the claim, up to the limit of her liability coverage. The Assignment clause allows Nina's insurer to assign the claim to Ben's insurer because of Nina's bankruptcy and can write off all of her debts. The Apportionment clause allows Nina's insurer to share the loss with Ben's insurer, splitting it equally between the two policies.

typically only provides coverage for bodily injury.

No-fault insurance in a personal auto policy: is limited, but will pay for any damages an insured may cause without requiring proof of loss. is mandatory in all states. typically only provides coverage for bodily injury. provides liability coverage for a third party, regardless of who is at fault.

$5,000

Noreen is a professional photographer, and she has a personal articles floater that covers her best camera for up to $6,000. While she is working a wedding, the camera gets knocked into a pool and is ruined. Before the accident, her camera was worth $5,000, but a new, comparable one would cost her $7,000. How much will Noreen's PAF pay her for this loss? A. $5,000 B. $6,000 C. $0 D. $7,000

$50,000

Norris borrows Arnold's truck to pick up some lumber from the hardware store. on the way to the store, Norris collides with a car, injuring the three people inside. The driver suffers $15,000 in injuries, one passenger suffers $25,000, and the other passenger suffers $20,000. Norris has a PAP with liability limits of 50/100/50, and Arnold's policy has liability limits of 25/50/10. How much will the primary policy pay for the injuries? $50,000 $25,000 $60,000 $100,000

Insurers pool risk with re-insurers and underwriting groups

One important characteristic of aviation insurance is the small insurance pool, combined with the enormous exposure. What is one of the results of this situation? A. Aviation insurance is only available to commercial airlines B. Terrorism and war risks are never covered in an aviation policy C. Insurers pool risk with re-insurers and underwriting groups D. Aviation insurance is so expensive that it will soon be obsolete

Adhesion

One party sets the terms of the contract; the other may simply agree or not agree. Conditional Aleatory Utmost Good Faith Adhesion Unilateral Personal

Unilateral

Only the insurer makes a promise to act; the insured can void contract at any time. Unilateral Personal Conditional Utmost Good Faith Adhesion Aleatory

Floating, open or long term

Oversea Industries transports multiple shipments of goods every year, to and from ports all over the world. What type of cargo coverage would Oversea Industries purchase to protect its cargo? A. Floating, open or long term B. International cargo form C. Single risk form D. Port-to-port

Inflation Guard

Paul lives in an area where property values are appreciating rapidly. He would like his homeowner's policy to reflect the increase in the value of his home. Which endorsement might Paul purchase to accomplish this? Inflation Guard Increased Limits on Personal Property Additional Structures Valuation Endorsement

Dwelling Under Construction

Phil is moving to a new town, but he's having a new house built. He hires a home builder and purchases a DP-3 policy to cover the new home. Which endorsement will help insure his house, even before it is finsihed? Debris Removal Reasonable Repairs Dwelling Under Construction Ordinance or Law

pleasant surprise.

Pointing out a piece of evidence that works in a claimant's favor, and then conceding that point to a claimant is a negotiating technique known as a/an: pleasant surprise. agreement. diversion. demonstration.

Fixed Deductible

Richard's auto policy states his deductible is $250 dollars. What type of deductible does Richard have? Fixed Deductible Percentage Deductible Franchise Deductible

Seaworthiness

Preparing for voyage, ABC Shipping loads its ship to maximum recommended capacity with shipping containers. When a client shows up with an extra 300 containers of cargo, ABC Shipping decides to make some quick cash and take on the extra cargo, even though it will overload the ship. The weight proves too much for the ship, and it sinks just off the coast of England. All cargo is lost. Which implied warranty has ABC Shipping violated, potentially voiding their ocean marine policy? A. Conditions of cargo B. Legality C. Seaworthiness D. No deviation in voyage

False information and advertising

RWW Insurance creates a radio promotion where they advertise that they will insure any care for $200 a year. They don't actually offer such a plan, but they figure they will be able to sell hundreds of policies to people who show up looking for the bargain. What type of unfair insurance trade practice does this behavior exemplify? Unfair discrimination False information and advertising Misrepresentations Illegal kickbacks

Rachel can't apply directly to the Texas FAIR Plan Association for coverage, but an authorized insurance producer can file an application on her behalf.

Rachel has tried to obtain insurance coverage for her home, but its location, age, and condition have made it difficult to find an insurer that is willing to insure it. Which of the following is TRUE? Rachel can't apply directly to the Texas FAIR Plan Association for coverage, but an authorized insurance producer can file an application on her behalf. The Texas FAIR Plan Association doe not take a building's location, age or condition into account when underwriting a policy. Rachel's home won't qualify for coverage under the Texas FAIR plan unless she makes less than $40,000 per year. Rachel will qualify for a Dwelling policy, but not a Homeowners policy, under the Texas Fair plan.

Motor carrier

Randy runs a business where he takes on the possessions of others and transports them from one location to another for a fee. Randy also keeps his business model diverse by occasionally taking on legal passengers as clients, and helping them get from one place to another for a fee. Randy would be best described as a: Motor carrier Delivery driver Trucker Salesman

A windstorm blows shingles from the policyholder's roof all over the policyholder's front yard.

Removal of Debris coverage would pay for the cleanup of which of the following occurrences? A windstorm blows shingles from the policyholder's roof all over the policyholder's front yard. A neighbor's trampoline blows over the policyholder's fence and into the policyholder's yard. A windstorm overturns a dumpster near a policyholder's home, blowing hundreds of pounds of garbage onto the policyholder's property. Several very large branches fall from a dead tree in the policyholder's backyard, without causing damage to the home.

Annual Depreciation

Replacement cost divided by item's useful life. Valuation Actual Cash Value Valued Policy Replacement Cost Accumulated Depreciation Annual Depreciation

Actual Cash Value

Replacement cost minus accumulated depreciation. Actual Cash Value Valued Policy Annual Depreciation Replacement Cost Accumulated Depreciation Valuation

insurers

Residual market insurance programs are funded by: banks private owners investment companies insurers

High-risk consumers

Residual market insurance programs are primarily designed to meet the needs of which type of consumer? Consumers needing multiple policies Low-income consumers High-risk consumers Consumers with physical disabilities

The damaged property is not covered, because the damage was not caused by the flood

Rick and his wife were evacuated due to rising flood waters in their neighborhood. They brought along a small trailer with their belongings in order to save them from the flood, but the trailer was unsteady and several items fell off, causing $1,500 in damage when they hit the ground. Assuming Rick has a SFIP, which of the following statements is true? The damaged property is covered under the SFIP, and the couple will receive $1,500 for this claim The damaged property is covered under the SFIP, but the couple will only receive $1,000 for this claim The damaged property is covered under the SFIP, and the couple will receive $1,250 after their $250 deductible The damaged property is not covered, because the damage was not caused by the flood

general damages

Ricky was watching a baseball game at XYZ Stadium, when the railing on which he was leaning gave way and he fell two stories. As a result of his fall, Ricky broke his back and is now paralyzed from the waist down. Ricky sued the owners of XYZ Stadium and was awarded $150,000 to cover his medical bills and $2.5 million in _____________ because of the permanent nature of his injury. punitive damages special damages tort damages general damages

Rise & Shine must report the claim before its policy expires.

Rise & Shine Light Bulb Co. has a claims-made & reported policy that is about to expire, but a customer just filed a liability claim against the company. If Rise & Shine wants to have insurance pay for the damages, it must do which of the following? Rise & Shine must report the claim as soon as possible, even if that means it makes the report after the policy expires. Rise & Shine must report the claim before its policy expires. Rise & Shine is ineligible for coverage unless it has already requested a renewal of its policy in writing. Rise & Shine may report the claim at any point for two years after the policy's expiration date.

Coercion

Robert applies for an auto loan from his local bank. He meets with a loan officer, who goes over Robert's paperwork. The loan officer tells Robert: "I'll give you a loan as long as you insure the car with ABC Insurance." This is an example of: Defamation Coercion Misrepresentation Unfair discrimination

$20,000 ** Coverage B is 10% of coverage A**

Rodney has a typical farm policy with a limit of $200,000 for the main house. During a storm, lightning strikes a $2,500 satellite dish, which sparks a fire that destroys a little guest house worth $25,000. How much can Rodney receive from his insurer in response to his claim? $27,500 $26,000 $25,000 $20,000

Advance payment

Rodney has been unable to go back to work since he was struck by a vehicle while crossing the street. He is still going through treatment for his injuries and his medical bills are starting to pile up. The insurer has issued him two partial payments to aid his financial situation until the settlement is reached. once the settlement is final, the amount of these payments will be subtracted from Rodney's final check. Which settlement option applies to Rodney's situation? Full release Scheduled release Partial release Advance payment

Investigation

Roger is an insurance adjuster. He has just arrived at the claimant's home with an engineer in order to determine the exact repair costs of repairing the home's foundation that was damaged in an earthquake. Which step of the claim process is Roger currently engage in? Reporting Investigation Claims management Negotiation

Coverage D - Loss of Use

Ron works from home. After a kitchen fire renders his home uninhabitable, he is forced to rent an apartment in town while the repairs are made. Which type of coverage could help Ron pay the cost of renting the apartment? Coverage B- Other Structures Coverage A - Dwelling None Coverage D - Loss of Use

$6,000

Ron works from home. After a kitchen fire renders his home uninhabitable, he is forced to rent an apartment in town while the repairs are made. not knowing how long the repairs will take, Ron signs a 6 month lease at $1,500/month. The repairs are completed in just four months time. Assuming Ron holds a $200,000 standard HO-3 policy, how much will he be covered under Coverage D- Loss of Use? $2,000 $9,000 $6,000 $3,000

The insurer will pay Rosa $45,000 first, and then up to another $15,000 once repairs are completed.

Rosa's barn burned down when it was struck by lightning during a storm. The barn was fully insured at replacement cost under Rosa's Farm policy. At the time of the loss, the barn was valued at $45,000, but it will cost $60,000 to replace it. How will Rosa's insurer respond to her claim? The insurer will pay Rosa $45,000 first, and then up to another $15,000 once repairs are completed. The insurer will pay Rosa $30,000 first, and then up to another $30,000 once repairs are complete. The insurer will give Rose one check for $60,000. The insurer will give Rosa one check for $45,000.

$11,600

Roxanne's house is struck by lightning during a thunderstorm, which results in $10,000 in covered damage to the structure and $2,800 in covered damage to her personal property. Roxanne's homeowners policy has a fixed deductible of $1,200. How much can she expect to receive in her settlement from her insurer for this claim? $12,800 $8,800 $1,200 $11,600

Farm Product Liability

Roy's crop of spinach goes to market, but after several confirmed cases of E. coli, the produce is pulled from the shelves. What type of insurance coverage does Roy need to cover the claims submitted by the people infected by his tainted spinach? Medical Payments Farm Product Liability Bodily Injury and Property Damage Personal and Advertising Injury

He will be fined $400 for his missing credit hours.

Ryan has been adjusting claims for six years, but he must complete continuing education courses before he can renew his license. Ryan has been putting off his coursework and now it's time to renew. He is 8 hours short in terms of the requirement. What can he expect? He will have 30 days grace period to complete the missing hours. He will have a 30 day grace period to complete the missing hours. He will be fined $400 for his missing credit hours. His license will be suspended.

Find a new employer and preserve his reputation as an honest and ethical adjuster

Ryan works as an adjuster for Sectanda Insurance. The company routinely pressures Ryan to withhold information from claimants in order to negotiate smaller settlements. What should Ryan do in this situation? A. Start issuing larger settlements for as much commission as he can before switching employers B. Start issuing smaller settlements in order to perform his fiduciary duty C. Find a new employer and preserve his reputation as an honest and ethical adjuster D. Bring his concerns to the press

Subrogation

Sally throws a cigarette butt into Neal's dumpster, starting a fire on Neal's property that costs him $10,000. Neal files a claim with his insurer. The insurer pays Neal and then demands $10,000 from Sally to pay for the loss she caused. What gives the insurer the right to collect payment from Sally? Right of recovery Vicarious liability Subrogation Estoppel

loss.

Sally's home in Roswell burns to the ground after a lightning strike. Sally has a homeowners policy that covers lightning damage. The insurance company now views Sally's house as a: hazard. loss. risk. peril.

contributory negligence

Sam is a claimant seeking damages from XYZ Insurance. The XYZ adjuster comes to meet with Sam to hear the circumstances of her injury. The adjuster determines that Sam played an active role in her own injuries, and therefore XYZ Insurance will pay her nothing at all for her injuries. What defense is the adjuster using? Comparative negligence Full negligence No negligence Contributory negligence

By accepting payment from ABC Insurance, Sam forfeited his right to collect this amount from Nicole.

Sam suffers $6,000 in injuries when Nicole runs a red light and crashes her uninsured car into Sam's. Sam's own insurance company, ABC Insurance, immediately pays him $5,000 for his injuries. Sam then ponders whether to file a $6,000 lawsuit against Nicole. Why can't Sam sue Nicole for the full amount of his injuries? Sam first needs to wait to see how much Nicole pays to ABC Insurance. By accepting payment from ABC Insurance, Sam forfeited his right to collect this amount from Nicole. Once ABC Insurance indemnifies Sam for $5,000, Sam is blocked from any further legal action. Nicole has already forfeited her rights to Sam's insurance company.

an intentional tort.

Sam was tired of the neighbor's trees along the fence line poking through the fence and dropping leaves in his yard, so he reached across the fence with his pole saw and cut down the neighbor's tree. Sam's neighbor was upset and sued him for the damages. Sam's actions could be classified as: a defendant. a negligent tort. a tortfeasor. an intentional tort.

Exclusive agent

Sam works on commission only, selling only insurance products from XYZ Insurance. What type of agent is Sam? Exclusive agent Independent sales agent Direct writer General agent

Utility services - time element

Sam's Dry Cleaners' power shuts off due to a lightning strike at the supplying power station just down the street. For three days the business cannot operate due to the damage incurred at the power station. Which endorsement would cover Sam's Dry Cleaners for the loss of business? Equipment breakdown Protective safeguards Ordinance or law Utility services - time element

$75,000 **If a covered loss exceeds the amount of the franchise deductible, the insurer pays for the entire loss, so Sam's policy will pay the full $75,000.**

Sam's Ocean Marine hull policy has a franchise deductible of $50,000. When Sam's ship suffers $75,000 in damage after being overtaken by pirates, how much indemnification can Sam expect to get from his insurer? $0 $25,000 $75,000 $50,000

$10,000 *** "fully insured" 80% of $200,000=$160,000 (had) $80,000 divided by (should have had) $160,000 multiplied by (partial loss) $20,000= (indemnity) $10,000****

Sam's house is underinsured. It has a replacement cost of $200,000, but Sam's policy only covers losses up to $80,000. During a violent hailstorm, Sam's $20,000 roof is completely destroyed. Assuming his insurer requires the standard 80% level of coverage, how much will Sam receive as a settlement for the roof (ignore the deductible)? $20,000 $10,000 $15,000 $5,000

a reservation of rights

Sam's neighbor, Lee, is suing him for intentionally cutting down Lee's tree and damaging his gazebo when the tree fell on it. When Sam notifies his insurer of the lawsuit, the insurer issues Sam______, which gives him fair warning that he may need to prepare his own defense if the insurer finds this case is not covered. a reservation of rights a complaint a notice of rights an answer

Sean failed to know his limits and did not use "stop marks" when modifying the acceptance offer.

Sean is negotiating a claim with a claimant and wants to show his flexibility. By making minor changes in the acceptance offer, he shows there is some "wiggle room." The two reach an agreement, and Sean heads back to the office, only to find that he has drastically over-extended the offer. Where did Sean go wrong in the negotiating process? Sean needed to make sure he received something in return- in favor of the insurer. Sean violated the first rule of negotiations: never give in. Sean failed to know his limits and did not use "stop marks" when modifying the acceptance offer. Sean should have called the insurer after reaching an agreement with the claimant, making sure he didn't exceed the maximum amount the insurer was willing to pay.

Preferred Provider Organization

Shelly has been suffering from chronic headaches for over a year. She is sure that there is something medically wrong, despite what the doctors in her network have told her. So, she decides to visit a doctor that her friend recommended, even though he charges more and is not in Shelly's approved network. Shelly's insurer paid for the cost of the appointment up to the amount she would have reasonably been charged by an in-network physician, and Shelly was responsible for paying the remaining balance. Which type of health insurance plan does Shelly have? A. Major Medical plan B. Health Maintenance Organization C. Preferred Provider Organization D. Point of Service plan

risk retention.

Six Star Development Company has just purchased several large properties in Las Vegas. As a result of this large purchase, they are a little short on money and decide to save money by not purchasing insurance on their new properties. Six Stars is practicing: risk avoidance. risk retention. risk reduction. risk transference.

$6,000

Stan built a porch for his home three years ago at a cost of $10,000. The value of the porch has depreciated by $6,000, and it would cost $12,000 to replace it today. After Stan's porch burnt down during a BBQ today, how much would a Standard Fire Policy indemnify Stan for his porch? $12,000 $4,000 $10,000 $$6,000

Miscellaneous Vehicle Endorsement

Stan has a personal auto policy to cover his two vehicles, but he recently purchased a custom built motorcycle as well. Which type of endorsement will Stan need to cover the motorcycle? Miscellaneous Vehicle Endorsement Two-wheeled Vehicle Endorsement Customized Equipment Endorsement Motorcycle Endorsement

Debris removal coverage

Stan owns ABC Mattress Supply. During a storm, lightning strikes a large tree, causing it to fall through the front of his building, resulting in $23,000 in damages. Which coverage in a BOP would pay for the extraction of the tree from Stan's store? Debris removal coverage Business interruption coverage Liability coverage Extra expense coverage

The exposure to loss is too great based on where Stanley lives.

Stanley lives in a rough neighborhood with a high crime rate. When he inherits a very valuable original painting by Picasso, he tries to buy an insurance policy on the painting, but has trouble finding an insurance company that will sell him a policy. Why might this be? The peril is higher than the insurer is willing to take on by issuing a policy. The painting is not an insurable risk. Since Stanley did not buy the painting, it does not have a quantifiable value. The exposure to loss is too great based on where Stanley lives.

holds a person liable for his actions regardless of how much care he demonstrates.

Strict liability: releases an individual from liability in dealing with dangerous objects. holds an individual to a lower level of care. does not hold up in a court of law. holds a person liable for his actions regardless of how much care he demonstrates.

Reasonable Repairs

Strong winds have blown many shingles off of Mark's roof, and the weather forecast is predicting an 80% chance of thunderstorms tomorrow. Mark heads to his local hardware store and purchases a ladder and tarp so he can temporarily keep water out of his home until the roof can be repaired. Which type of additional coverage might reimburse Mark for the cost of the materials purchased? Property Removal Reasonable Repairs Loss Assessment Debris Removal

Monoline Policy

Stu has a collection of rare comic books. He wants to purchase theft insurance for his collection, separate from his home and other property. What term most accurately describes the type of policy Stu would purchase? Valuable Papers Policy Actual Cash Value Policy Standard Fire Policy Monoline Policy

80% of $600,000 = $480,000

Sue owns a home and property valued at $600,000. In order to be considered "fully insured," Sue would have to insure the home for at least: $600,000 $480,000 $300,000 $700,000

Accept the claim, since the damage has been proven and the total is very close.

Sue suffered some property damage to her home. She makes a claim with her insurer based on a damage estimate of $12,000 she received from a contractor. The adjuster inspects the damages as well and comes up with an estimate of $11,957. What is the best solution to resolve this claim? Accept the claim, since the damage has been proven and the total is very close. Allow a court to decide a proper settlement amount, since the two estimates are different. Negotiate the claim until the claimant and the adjuster come up with closer settlement amounts. Reject the claim, since the claimant's offer is higher than the adjuster's estimate.

a domestic insurer.

SureTrust Insurance was founded and operates in Texas. In Texas, SureTrust is considered: an alien insurer. a foreign insurer. a domestic insurer. a state insurer.

Dana

Susan accidentally rear-ended Dana in an auto accident and caused Dana several thousand dollars in injuries and damages. Susan's insurer offered Dana a settlement, but Dana felt the amount was too low, and after negotiations failed, the case ended up in court. Who is the claimant in this scenario? The state Susan's insurer Dana Susan

Employee theft: all employees

Susan owns a convenience store and wants to protect her business from employee dishonesty or theft. She trusts all of her employees equally, and doesn't want to single any one of them out. She also would rather not insure them by job description. Which type of insuring agreement in her commercial crime policy would best suit Susan's business needs? Employee theft: scheduled positions Employee theft: subordinates coverage Employee theft: scheduled persons Employee theft: all employees

Collision Coverage

Taylor is involved in a hit-and-run accident. He is stunned by the encounter and doesn't get the make, model, or license plate of the hit-and-run offender. Which of Taylor's insurance coverages could help him pay for the damages to his car? Collision Coverage Comprehensive Coverage Bodily Injury Uninsured Motorist Coverage Liability Coverage

Ted's vandalism was intentional, and therefore excluded under his policy.

Ted gets into an argument with his neighbor over parking arrangements. In a fit of anger, Ted goes over to his neighbor's home and scratches up her car with a key, causing $2,000 in damages. The next day, Ted realizes his poor behavior and files a claim with his insurer for his liability in the damages to his neighbor's car. Why might Ted's insurer deny his claim? Ted's neighbor was partially responsible for the damage, and thus will pay a pro rata portion of the loss. Insurance policies do not cover vandalism. Ted's vandalism was intentional, and therefore excluded under his policy. Ted's neighbor will have to file a claim with her own insurer.

$22,050

Terry is fully insured by his farm policy. When a tornado rips through Terry's farm, it destroys a barn worth $15,600, a corral and two livestock chutes worth $6,300, and a light pole worth $400. How much indemnification can Terry expect to receive for this claim? $22,050 $22,200 $21,800 $22,750

TexasSure

Texas created a financial responsibility program to identify which drivers do not have insurance. What is the program called? TexasSure SureTexas Tex-a-Sure Sure Thing Tex

Occurrence

The BOP offers liability coverage on a / an _____ basis. Occurrence Statutory Claims-made Regressive

12 months

The BOP provides loss of income on an "actual loss" sustained basis for up to: 18 months 24 months 12 months 6 months

requires the insurer to provide notice before cancelling a policy.

The Cancellation/Nonrenewal provision: requires the insurer to provide notice before cancelling a policy. states that if the insured fails to cancel a policy at least 20 days prior to the renewal date, the policy will remain in effect for at least another policy term. limits the allowable reasons an insured may cancel a policy. states that policies may only be canceled within the first policy term- canceling a renewed policy is prohibited.

The policies will pay on a pro-rata basis

The City of Seagoville has two primary government crime discovery forms in place which have the same terms and conditions, but Policy A's coverage is set at a $500,000 limit, and Policy B's limit is $100,000. If a large loss occurs, how will the policies go about paying for damages? The policies will share the cost of damages equally The policies will pay on a pro-rata basis Policy B will pay the excess after Policy A's limits are exhausted Policy A will pay the excess after Policy B's limits are exhausted

Light fixtures on the building's exterior

The Homeowners 6 policy would likely NOT cover which of the following? Furniture inside the unit Light fixtures on the building's exterior Paint on the walls of the insured's unit Carpet inside the insured's unit

keeping a record of all investigations

The Insurance Commissioner is responsible for: ensuring that all adults have auto insurance. hiring adjusters keeping a record of all investigations handling claims when insurers are overwhelmed.

states that any change to a policy form that broadens coverage without increasing the premium will automatically apply to existing policies.

The Liberalization Clause in an insurance policy: states that any change to a policy form that broadens coverage without increasing the premium will automatically apply to existing policies. states that, in the event of a loss, the insurer will only pay up to the insured value of the risk. states that the insurer is obligated to pay for covered losses only up to the limit set by the policy. voids the policy if the insured deliberately conceals or misstates pertinent info.

$250,000

The Newly Acquired Property extension in a commercial property policy provides ________ in coverage for buildings under construction at the insured premises, or for any newly acquired business property off the insured premises. $50,000 $250,000 $100,000 $1 million

issuing crop assignments to farmers.

The Risk Management Agency is responsible for all of the following, except: assigning commodity prices. reimbursing private crop insurers for administrative costs. setting critical production dates. issuing crop assignments to farmers.

coverage applies to each insured separately, as if no other insured existed.

The Severability of Interest condition states that: an insured has the right to cancel an insurance policy at any time. when an insurer pays a total loss settlement, policy coverage may terminate and any unearned premiums will be refunded to the insured. coverage applies to each insured separately, as if no other insured existed. an insurer has the right to cancel an insurance policy at any time.

Collapse

The Smiths have decided to hold a New Year's Eve party. Over 80 people attend, 40 of which end up on the balcony for some fresh air. Under the weight of so many people, the wooden frame of the balcony gives way. Which type of coverage in their HO-2 policy would help pay to rebuild the Smiths' balcony? Product Liability Negligent Construction Coverage A - Dwelling Collapse

four

The Standard Fire Policy divides a basic property insurance policy into _________ parts. five three two four

all insurers who can sell auto insurance in Texas.

The Texas Automobile Insurance Plan (TAIPA) is mandatory for: all insurers who can sell auto insurance in Texas. Texas insurers who only provide personal lines auto insurance. the 10 largest auto insurers in Texas. all domestic Texas insurers.

Increased Construction Costs

The XYZ Company has an attached balcony on the top floor of their headquarters. During a summer storm, a lightning bolt strikes the metal railing of the balcony, splitting the balcony into two. XYZ Company would like to repair the balcony, but new building codes require more expensive construction materials. What commercial property coverage pays for this extra expense? Increased Construction Costs Extra Expense Newly Acquired Properties Preservation of Property

Statutory

The city of Hillsdale passed a law dictating that all dogs must wear collars with tags. This is an example of what kind of law? Unfair Tort Common Statutory

allowing the lender to cancel the insurance policy at any time.

The conditions page in an insurance contract may allow a lender all of the following provisions EXCEPT: allowing the lender to cancel the insurance policy at any time. promising to give the lender notice if the policy is canceled, reduced, or has expired without payment. permitting the lender to pay the policy premium if the insured fails to do so to maintain coverage. allowing a lender to be listed as a payee on the policy.

24; 2

The continuing education requirement for adjusters in Texas is ___ hours every ___ years. 24; 2 30; 2 24; 4 30;4

Requires that every fiduciary of an employee benefit plan and every person who handles funds or other property of those plans must be bonded

The employee retirement income security act (ERISA): Regulates how insurance companies collect, use, and share personal information about their policyholders Requires that every fiduciary of an employee benefit plan and every person who handles funds or other property of those plans must be bonded Regulates how financial institutions collect, share, and use consumers' personal and financial information Safeguards medical patient privacy and establishes rules about how patients' personal information should be treated

Aleatory

The execution of the contract depends on an unknown future event. Personal Conditional Aleatory Utmost Good Faith Adhesion Unilateral

Evidence of coverage

The health insurance contract, also called the _____, spells out the exact provisions of a policyholder's health insurance coverage. A. Evidence of coverage B. Conditions page C. Exclusions page D. Declarations page

enforces state laws relating to insurance.

The insurance Commissioner: enforces state laws relating to insurance. sets insurance rates writes insurance policies passes state laws relating to insurance

48 hours

The insured carries a BOP policy with protective systems such as a sprinkler system. If the system becomes inoperative, the insured must advise the insurance company of the problem within _____ if the system cannot be restored to working order. 60 days 30 hours 30 days 48 hours

Personal

The insured person is protected from losses, not the covered property. Unilateral Personal Utmost Good Faith Adhesion Conditional Aleatory

Conditional

The insurer must only honor the contract if the insured meets certain conditions. Utmost Good Faith Adhesion Aleatory Unilateral Personal Conditional

the insurer has the right to settle liability cases out of court.

The insuring agreement for Part A- Liability in a personal auto policy states that: the insurer will cover the costs to defend the insured in court, up to the policy limit. the insurer will cover the costs to defend the insured in court in subsequent lawsuits related to the same occurrence, even after the policy limit is reached. the insurer will pay for "bodily injury" or "property damage" to any "insured" because of an auto accident. the insurer has the right to settle liability cases out of court.

Provides flood insurance for individuals in communities complying with NFIP standards

The national flood insurance program: Is available to anyone living in a flood plain Does not provide coverage for renters Provides flood insurance for individuals in communities complying with NFIP standards Requires a 60 day waiting period before coverage begins

To provide insurance protection against damages to customers' autos while in the care and custody of the insured party

The primary purpose behind garage-keepers insurance is: To provide insurance protection against damages to the garage in which other people's autos are stored To provide personal injury insurance to the owners and operators of garage businesses To provide insurance protection against damages to customers' autos while in the care and custody of the insured party To provide insurance protection against the theft of customers' vehicles and their contents by the insured's employees

to prevent an insured from making a profit on a loss.

The purpose of the principle of indemnity is: to prevent an insured from making a profit on a loss. to prevent an insurer from making a profit on a loss. to transfer the risk of financial loss from one party to another. to transfer the right to collect a debt from one part to another.

restrict the amount of time a claimant has to file a lawsuit.

The statute of limitations is intended to: restrict the jurisdiction in which a claimant can file a lawsuit. limit the amount of financial damages a claimant can request in a lawsuit. limit the amount of damages awarded in a lawsuit. restrict the amount of time a claimant has to file a lawsuit.

Securities

The valuable papers and records floater can cover losses to all of the following, EXCEPT: A. Deeds B. Books C. Securities D. Maps

Sell standardized NFIP policies

The write your own program allows private insurers to: Change coverage after a claim has been filed Sell standardized NFIP policies Give policyholders the opportunity to design their own policies Write their own flood policies

Theft of the insured's property while the insured is on vacation

Theft is a covered peril under a homeowner's policy, but not all theft losses are covered. Which of the following theft losses IS covered? Theft of the insured's property while the insured is on vacation Theft of the insured's tenant's property Theft from the insured's under-construction dwelling Theft by the insured's husband who lives with the insured

Exclusive Agent

This agent works for only one insurer and is paid commission. Independent Adjuster Independent Agent Exclusive Agent General Agent

Contractor's equipment floater

This type of inland marine policy covers expensive construction machinery while being transported, on-site, or in storage A. Boiler and machinery policy B. Mechanical breakdown coverage C. Construction block policy D. Contractor's equipment floater

Agreed value

Thoroughfare Shipping is about to undergo another long voyage across the Pacific and wants to insure their cargo in case anything goes wrong with the trip. Included in the cargo is a collection of rare impressionist paintings and Roman artifacts. A cargo policy written on a / an _____ basis would best fit the needs of Thoroughfare Shipping. A. Actual cash value B. Unvalued C. Replacement D. Agreed value

total coverage: $100,000 + $25,000 = $125,000 Policy X is 80% limit of total limit ($100,000 divided by $125,000) Policy Y is 20% limit of total limit ($25,000 divided by $125,000) Policy X will pay $60,000 and Policy Y will pay $15,000

Tina has two policies (Policy X and Policy Y) that cover the same risk on a pro rata basis. Policy X has a limit of $100,000 and Policy Y has a limit of $25,000. When Tina suffers a loss totaling $75,000, how will the two policies respond? Policy X will pay $37,500 and Policy Y will pay $25,000 Policy X will pay $75,000 and Policy Y will pay nothing Policy X will pay $60,000 and Policy Y will pay $15,000 Policy X will pay $50,000 and Policy Y will pay $25,000

Employee theft: scheduled positions

Tina owns Peachtree Savings and Loan, which has 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 the best choice for Tina's needs? Employee theft: high-security Employee theft: all employees Employee theft: scheduled positions Employee theft: scheduled persons

$44,000

Tina's $150,000 home is covered by a Texas HO-B policy with a Coverage A limit of $145,000 and a Coverage B limit of $50,000. One day, Tina's home and possessions are damaged in a fire. The replacement cost of repairing the damage to her home is $35,000, but the ACV is $25,000. And, the cost of replacing her damaged personal property is $12,000, but the ACV is $9,000. Ignoring any deductibles, how much can Tina expect to receive from her insurer for this claim? $34,000 $47,000 $44,000 $37,000

$400,000

To meet the 80% level of co-insurance required by his lender, Tom discovers he must insure his home for at least $320,000. What is the value of Tom's home? $256,000 $320,000 $400,000 $440,000

Tom's financial interest in the home

Tom decides to purchase an insurance policy to protect his home. According to the definition of a personal contract, which of the following most accurately describes what Tom's insurance actually protects? Tom's financial interest in the home Tom's house and the entire property Tom's entire family The house itself

Non-Owner Coverage

Tom doesn't own a car and usually borrows his roommate Marie's car when he needs to drive somewhere. Since he borrows the car so frequently, he has decided that he should get some coverage. Which endorsement is the best fit for Tom? Non-Owner Coverage Extended Non-Owned Coverage Additional Resident of Your Household Miscellaneous Vehicle Coverage

Captive Agent

Tom is looking for a job in the insurance industry. He wants to work for only one insurance company selling policies on commission basis. Which type of insurance agent position best fits what Ton is looking for? General Agent Captive Agent Independent Agent Direct Writer

Tom's insurer may cancel his policy, but must notify Tom about the cancellation at least 10 days in advance.

Tom owns a home in Texas that's insured under an HO-B policy. He is 30 days late in paying his monthly premium, and his insurer wants to cancel his policy. Which of the following is TRUE? Tom's insurer may cancel his policy, but must notify Tom about the cancellation at least 30 days in advance. Tom's insurer may cancel his policy, but must notify Tom about the cancellation at least 10 days in advance. Tom's insurer cannot cancel coverage until the receive notification from Tom about his desire to cancel the policy. Tom's insurer must wait an additional 60 days before cancelling Tom's policy.

Airport liability insurance

Trevir is heading toward his gate, hoping to catch his flight on time, when he slips on a spilled slushie and breaks his ankle. Which liability coverage would pay for Trevir's injuries? A. Airport liability insurance B. Guest voluntary insurance C. Trevir's health insurance D. Bodily injury excluding passengers

flood.

Typical Crop-Hail insurance provides coverage for all the following perils, EXCEPT: flood. wildfire. hail. transit to storage after harvest.

Coverage F is voluntary coverage: even if a claim is paid, it is not an admission of the insurer's liability.

Under Coverage F - Medical Payments to Others, the Payment of Claim provision states: all payments made under Coverage F will be paid at actual cash value. Coverage F is voluntary coverage: even if a claim is paid, it is not an admission of the insurer's liability. no payments will be made until the insurer's liability has been determined. the insurer reserves the right to demand a proof of loss before paying an indemnity under Coverage F.

Liability

Under a business auto policy, symbol 1 for "any auto" usually applies to what type of insurance coverage? Collision Comprehensive Uninsured motorist Liability

when he files a property claim.

Under the Requirements in Cass Loss Occurs provision, the insurer typically requires that the claimant make a claim inventory form: when he files a property claim. at the end of the settlement process. for commercial claims only. only in the case of total loss.

Veronica has now put the building to its intended use

Veronica is in the process of building an extra structure for the sole purpose of kiln firing her pottery. After 40 days of waiting for it to be completed, she decides to go ahead and begin using it, since the kiln is already set up, even though the interior drywall isn't completely finished. Her Builder's Risk Coverage Form is then terminated because: interior drywall isn't covered under a Builder's Risk Coverage Form. Veronica has now put the building to its intended use. Builder's Risk policies are only good for 30 days. the risk of fire voided the policy.

$12,500 **In an HO-A policy under the Texas FAIR plan, the limit for Loss of Use is 10% of the Dwelling limit. In this case, Waldo's Dwelling limit is $125,000. 10% of $125,000 is $12,500.**

Waldo has an HO-A policy through the Texas FAIR plan, with a Dwelling limit of $125,000. When Waldo's home is partially destroyed, and he is unable to live there while the repairs take place, what is the most he could receive for Loss of Use? $12,500 $1250 $2500 $100,000

HO-8

Which homeowners policy is the most basic, only providing coverage on a named-peril basis and only paying actual cash value for all covered damages? HO-2 HO-5 HO-8 HO-4

Strict adherence to good maritime practices is required

What does "implied warranties" mean in the context of ocean marine insurance? A. Mid-route deviation in voyage must be documented upon arrival B. Strict adherence to good maritime practices is required C. Coverage is implied for all cargo on an insured vessel, regardless of legality D. All cargo must be new and under warranty in order to be covered

A base flood is a flood that has a 1% chance of being equaled or exceeded in any given year

What is a base flood? A base flood is any flood caused by runoff waters A base flood is a flood that has a 1% chance of being equaled or exceeded in any given year A base flood is the highest flood level that has been reached in the previous 50 years A base flood is the average flood level expected in any given year

A pool of collected premiums that the insurer sets aside to pay claims

What is a reserve, in insurance terms? A pool of collected premiums that the insurer sets aside to pay claims The amount of revenue that the insurer sets aside to pay employee salaries A group of policyholders who pay into the same pool of premiums A set of rules governing how the insurance industry should work

An Unfair Claims Settlement Practice

What is it called when an insurer makes a habit of delaying payment on legitimate claims? boycotting An Unfair Claims Settlement Practice A Moral Hazard Defamation of Insurers

Determining time and cost of repairs

What is the first step of the evaluation process of a claim? Determining the cause of the loss Investigating the claim Acknowledging the claim Determining time and cost of repairs

Replacement cost minus total depreciation

What is the formula for actual cash value? Replacement cost minus annual depreciation Replacement cost minus total depreciation Original cost minus total depreciation Fair market value minus annual depreciation

It provides separate insurance coverage for specific jobs performed by an independent contractor.

What is the main purpose of an Owners and Contractors Protective Liability Form that can be added to a CGL policy? As opposed to a CGL, it provides Medical Payments coverage to the insured. It provides separate insurance coverage for specific jobs performed by an independent contractor. It increases the General Aggregate limits on a standard CGL. It provides Completed-Operations liability for multiple locations at one time.

The Broad Form pays for pollution clean-up costs, while the Limited Form does not.

What is the primary difference between the Pollution Liability Coverage-Broad Form and the Pollution Liability Limited Coverage Form? The Broad Form pays for pollution clean-up costs, while the Limited Form does not. The Broad Form applies only to independent contractors, while the Limited Form applies to the hiring business. The Broad Form is cheaper than the Limited Coverage Form. The Broad Form covers bodily injury and property damage, while the Limited Form only covers bodily injury.

A contract of adhesion implies an unequal balance of power in the creation of the contract.

What is the primary distinguishing characteristic of a contract of adhesion? A contract of adhesion implies an unequal balance of power in the creation of the contract. The amounts exchanged over the course of the contract are unequal. A contract of adhesion benefits only one party to the contract. A contract of adhesion takes precedence over a contract of utmost good faith.

$500

What is the standard deductible on an equipment breakdown protection coverage form? $0 $1,000C $500 $250

Insurance adjuster

What is the title of the insurance professional who processes claims for compensation? Insurance salesman Insurance broker Insurance adjuster Insurance agent

Public adjuster

What kind of adjuster represents the insured rather than the insurer? Emergency adjuster Public adjuster Independent adjuster Staff adjuster

Total revenue, cost of goods sold, operating expenses

When Bill's business is interrupted because of a fire, he must provide a profit and loss statement to his insurer so they can determine an accurate amount of indemnification. Which three core elements from the profit and loss statement are used to calculate the net income? Operating expenses, inflation, cost of goods sold Total revenue, cost of goods sold, operating expenses Inflation, depreciation, cost of goods sold Total revenue, inflation, operating expenses

Soft fraud

When Emma's house was burglarized, the thieves stole several pieces from her art collection. Although the pieces were only prints, Emma files a claim stating that they were originals, and therefore worth a good deal more than they really are. What has Emma committed? A. Hard fraud B. Concealment C. Tortfeasor D. Soft fraud

Ordinance or Law

When Herb was just starting out in the textile business, he purchased an older factory building in order to acquire as much square footage as possible, for the lowest cost. After a massive storm blows the roof off the building, Herb finds that the structure will require massive upgrades to bring it up to code. Which endorsement to his commercial property policy can help with this added cost? Ordinance or Law Legal Liability Protective Safeguard Differences in Condition

Soft fraud

When Jane rear-ends Frank, she causes minor damage to Frank's car, but Frank is not hurt. However, when Jane's insurer asks him about the accident, Frank claims that his back and neck have been hurting a lot because of the collision, even though he is actually fine. Frank is guilty of: A. Insurer fraud B. Soft fraud C. Hard fraud D. Medical fraud

Fiduciary duty

When Jeanette shows up to handle a claim on behalf of ABC Insurance, she evaluates the claim and negotiates a settlement. Maintaining her integrity and acting ethically, Jeanette is fulfilling her: A. Double duty B. Fiduciary duty C. Sales duty D. Insurance duty

Committing hard fraud

When Louise goes online and fills out phony applications with XYZ Auto Insurance in order to print the temporary insurance cards and sell them for a profit on the black market, she is: A. Committing hard fraud B. Using a Ponzi scheme C. Committing soft fraud D. Using a regular business practice

Making sure the claimant is happy with the settlement amount

Which is the LEAST important duty of an insurance adjuster? A. Fulfilling one's fiduciary duty to the employer B. Executing a thorough investigation of the claim C. Providing a fair and equitable settlement for the policyholder D. Making sure the claimant is happy with the settlement amount

Insurers cannot make material changes to insurance coverage without providing adequate notice to policyholders.

When Marla files a claim, the adjuster tells her that the loss isn't covered. Marla finds her insurance contract and shows the adjuster where it explicitly states the loss is covered. The adjuster replies, "Oh, we used to cover that, but we took that coverage out of those policies." Marla asks, "Did the insurance company send out a notice?" The adjuster replies, "Well, we hardly ever see this type of loss, so we didn't feel it was necessary." Why might the insurer's actions be considered an unfair claims settlement practice? Insurers cannot make material changes to insurance coverage without providing adequate notice to policyholders. An insurance adjuster cannot speak on behalf of an insurer. Marla's insurer isn't responding to Marla's compaint. The adjuster will now make Marla fill out unnecessary paperwork.

General Aggregate: $300,000; Per Occurrence: $100,000

When Sally slips and falls at XYZ Furniture, she injures her back and incurs $145,000 in covered medical expenses. Assuming XYZ Furniture carries a CGL policy with a General Aggregate of $400,000, and a Per Occurrence limit of $100,000, what will the new limits be after paying this claim? General Aggregate: $300,000; Per Occurrence: $100,000 General Aggregate: $400,000; Per Occurrence: $100,000 General Aggregate: $255,000; Per Occurrence: $0 General Aggregate: $300,000; Per Occurrence: $0

Policy premium

When Sandra files a claim with XYZ Insurance after a hailstorm, an adjuster comes out to inspect the damages. He tells Sandra that he will evaluate her claim and get back to her promptly. Which of the following items will the adjuster NOT take into account while evaluating Sandra's claim? Policy deductible Policy premium Coverage limits Valuation of Sandra's property

Personal Auto Policy (PAP)

When Stephen bundles his personal auto liability coverage with another auto insurance coverage, what can his policy be called/ Multi-Lines Auto Policy (MAP) Contingent Responsibility Auto Policy (CRAP) Personal Auto Policy (PAP) Combined Auto Policy (CAP)

Matt has already received indemnification from his insurer.

When Zach intentionally burned down Matt's restaurant, Matt's insurer paid the claim and then pursued subrogation. Matt is furious about the incident and wants to sue Zach. Why is it NOT possible for Matt to sue Zach? Zach may not be tried for the same thing twice. matt was not present at the time of the fire. Zach is protected by the Statute of Limitations. Matt has already received indemnification from his insurer.

Umbrella policy

When a faulty electrode in a children's toy is recalled by ABC Toymakers Inc., it is a costly endeavor. Especially since ABC Toymakers Inc.'s base insurance policy doesn't cover product recalls. Which excess liability coverage could help pay for losses associated with the recall? Follow form policy Stand alone policy Product recall policy Umbrella policy

The rolls of newspaper stock

When a fire burns through The Chronicle newspaper company, it takes out two permanently-installed printing presses, three employees' personal laptops, five rolls of newspaper stock, and in a twist of irony, two fire extinguishers. Which of these would be covered by the Building & Personal Property Form under Coverage B -Business Personal Property? The employees' personal laptops The rolls of newspaper stock The printing presses and newspaper stock The printing presses and fire extinguishers

The printing presses and fire extinguishers ** covers buildings, machinery fixtures, equipment inside the building if permanently installed and property used to maintain the business as well**

When a fire burns through The Chronicle newspaper company, it takes out two permanently-installed printing presses, three employees' personal laptops, five rolls of newspaper stock, and in a twist of irony, two fire extinguishers. Which of these would be covered under Coverage A - Buildings and Structures? The printing presses only The employees' personal laptops The printing presses and newspaper stock The printing presses and fire extinguishers

When the umbrella policy covers a loss that is excluded by primary policies

When is a self-insured retention applies in an umbrella policy? When the umbrella policy excludes the peril in question When the umbrella policy covers a loss that is excluded by primary policies Whenever the umbrella policy covers a claim There are no self-insured retentions in umbrella policies

Paul should apply 5% to his garage and the remainder to the home

When a flood inundates Paul's property, it causes $190,000 in damage to his home and $18,000 in damage to his detached garage. Paul has a dwelling form flood policy with a $200,000 limit. How much coverage should Paul use for his garage if he wants to have enough coverage to repair his home completely? Paul MUST apply 10% to the garage if he chooses this option under coverage A Paul's garage is not covered under coverage A since it is a detached structure Paul should apply 9% to his garage and the remainder to his home Paul should apply 5% to his garage and the remainder to the home

Outdoor Property

When a gas line explodes close to Georgia's business, it destroys most of her landscaping, leveling trees and uprooting shrubs. Which coverage extension could help cover the cost of replacing these plants? Property Off-Premise Shrubbery Endorsement Outdoor Property Property On-Premise

Appraisal

When a storm rolled through town a month ago, John's home suffered substantial damage. He filed a claim, but his insurer has offered a settlement much lower than John feels is fair. Both John and his insurer have each selected an appraiser, who in turn have agreed on an umpire, to help settle the claim. What type of dispute resolution is this? Appraisal Arbitration Litigation Mediation

Taking possession of salvaged property for his own use or benefit

When an adjuster is engaging in salvage misappropriation, he is: A. Taking possession of damaged property on behalf of the insurer B. Taking possession of salvaged property for his own use or benefit C. Incorrectly calculating the salvage value or the damaged property D. Failing to account for the salvage value in the loss estimate

representations.

When an applicant for a homeowners insurance policy lists the address, size, and description of his home, he is providing: factual misrepresentations. misrepresentations. declarations page. representations.

The adjuster acts as a liaison between the claimant and the insurer.

When an insurer assigns an adjuster to a claim, which of the following best describes the adjuster's role in relation to the claimant? The adjuster agrees to represent the claimant in court. The adjuster agrees to get the claimant the highest possible insurance settlement. The adjuster acts as a liaison between the claimant and the insurer. The adjuster collects the premiums from the claimant.

re-insurance.

When an insurer buys insurance to reduce its exposure to loss, this is called: re-insurance. loss reduction. mitigation. co-insurance.

offer the same premium rates and policy coverage as before for an additional 30 days.

When an insurer decides to not renew an existing commercial property policy, it is obliged to follow the Cancellation and Nonrenewal condition of supplying notice to the policy holder 45 days in advance. If the insurer fails to meet this deadline, it must: offer the same premium rates and policy coverage as before for an additional 3 months. offer an additional 30 days of coverage without charging any premium. offer the same premium rates and policy coverage as before for an additional 30 days. pay a fine of up to $5,000.

Once she begins to board the plane

When is someone considered a passenger, and thus covered under passenger bodily injury liability? A. Once she begins to board the plane B. After clearing the airport security checkpoint C. Once she takes a seat on the plane D. After booking a plane ticket

6

When it comes to insuring office buildings, most BOP policies require a building to be _____ or fewer stories in height. 10 6 2 4

Janie loses a month of rental income when her tenant must move out while repairs are made to the home.

When record-breaking rainfall causes severe flooding in Janie's home town, Janie's rental property suffers extensive damage. Which of the following is an indirect loss? Janie must hire a contractor to reinforce a damaged retaining wall in the backyard of her rental unit. Janie loses a month of rental income when her tenant must move out while repairs are made to the home. Janie's tenant has to replace his sofa that was damaged by the water. Janie must pay to have the wood floors replaced in her rental unit.

settle the claim quickly and fairly without litigation.

When responding to a claim, the adjuster's primary motivation should be: negotiate effectively. settle the claim for the least possible amount. settle the claim quickly and fairly without litigation. find a way to deny the claim.

Per Occurrence Sub-Limits

When shelving falls on two of Phil's customers at his store, his CGL covers their medical expenses under Medical Payments coverage. Which of the following will tell Phil the most his policy will pay to each injured party? Per Occurrence Sub-Limits General Aggregate Conditions section Products—Completed Operations Aggregate

Texas Department of Insurance

When talking about insurance in Texas, the term TDI comes up quite often. TDI stands for: Texas Department of Insurance Turbo Diesel Injection Totally Defunct Insurers Texas Deficiency Insurers

Legality

When the Coast Guard stops and boards a ship operated by XYZ Herbal Shipping, they find four pounds of contraband mixed in with other herbal supplements imported from South America. The Coast Guard seizes all the cargo and arrests the operators of the vessel. XYZ Herbal Shipping files a claim with its insurer for the seized cargo, but the claim comes back denied. Which implied warranty explains why this coverage was denied? A. Condition of cargo B. Legality C. No deviation in voyage D. Seaworthiness

Homeowners 4

Which homeowners policy form is intended for renters? Homeowners 8 Homeowners 3 Homeowners 4 Homeowners 5

the file can be used as evidence in a court case.

When we say that a claims file is "discoverable," we mean that: the insured is entitled to a copy of the entire file. the adjuster must keep a copy of the file for at least 10 years. the file can be used as evidence in a court case. the insurer has the right to review the file weekly.

When a defendant does not answer a complaint

When would a default judgment occur? When a defendant does not answer a complaint When an insurer sends a reservation of rights In cases that involve an intentional tort When a defendant submits an answer

When the farmer suffers loss of yield and production is low for the entire county

When would a farmer receive an indemnity payment under an Area Yield Protection policy? Any time the farmer has damage to his crops Only after the actual county revenue decreases by at least 50% because of a disastrous loss Only after the governor declares a state of emergency for the county in which the farm is located. When the farmer suffers loss of yield and production is low for the entire county

Employee as Additional Insured

Which Business Auto Policy endorsement covers employees while using their personal cars for business purposes? Mobile Equipment Drive Other Car Employee as Additional Insured Individual Named Insured

General form

Which NFIP flood insurance form can insure residential buildings that do not meet the requirements specified by the dwelling form? NFIP form Residential condominium building association policy Alternative dwelling form General form

Texas HO-C

Which Texas homeowners policy provides the most comprehensive coverage? Texas HO-C Texas HO-A Texas HO-A+ Texas HO-B

FIN506

Which application must you submit if you want to be an insurance adjuster in Texas? FIN506 FIN507 FIN508 FIN509

An insurance company offering a settlement for less than is reasonable

Which best describes the unfair practice of low-balling? An insurance company offering a settlement for less than is reasonable A policyholder negotiating to reduce his premiums An insurance company denying a claim without explanation Requesting additional information from the insured in an attempt to deny the claim

A 15-room motel

Which building would fall under a general property form flood insurance policy? A single family home An individual's condominium in a condo complex A residential townhouse A 15-room motel

The operation of a car wash

Which characteristic would prohibit a convenience store / gas station from purchasing a BOP? The operation of a car wash The use of microwave ovens Gasoline accounts for over 50% of sales Over 4,000 square feet of retail space

Special form

Which commercial property Causes of Loss form offers open-peril (also called "all-risks") coverage? Basic form Broad Form All commercial insurance coverage is open peril Special form

Comprehensive coverage

Which coverage in a BAP would indemnify the insured for damage caused by a tree branch falling onto a company car? Comprehensive coverage Property damage liability Liability coverage Collision coverage

Trailer interchange coverage

Which coverage under a trucker's policy covers damage to other people's trailers in the care of the insured for transport purposes? Trailer interchange coverage Motor carrier coverage Trucker liability coverage Direct excess trailer coverage

False pretense coverage

Which endorsement to a garage-keepers policy would cover the theft of a vehicle by someone who was pretending to take it for a test-drive? Drive other car coverage Collision coverage Theft coverage False pretense coverage

Standard form 25

Which financial institution bond is designed for all types of insurance companies? Standard form 24 Standard form 25 Standard for 23 Standard form 15

Federal Crop Insurance Corporation

Which government entity is responsible for subsidizing Multi-Peril Crop Insurance policies? National Crop Insurance Services Federal Crop Administration US Department of Agriculture Federal Crop Insurance Corporation

The final settlement amount

Which item would NOT belong in an adjuster's initial report on a claim? The date that the adjuster first contacts the claimant A list of all known circumstances surrounding the claim The final settlement amount A detailed list of the damages being claimed.

Losses are normally paid at replacement cost, but an insured may change this with an actual cash value endorsement

Which of the following BEST describes how covered losses are settled under a typical equipment breakdown protection coverage form? Losses are paid at replacement cost if the replacement or repair occurs within 12 months of the accident Losses are normally paid at replacement cost, but an insured may change this with an actual cash value endorsement Losses are paid at actual cash value Losses are normally paid at actual cash value, but an insured may change this with a replacement cost endorsement

A surety bond guarantees one party that another party will perform certain duties; but a fidelity bond guarantees that a party will not perform certain acts

Which of the following BEST describes the difference between surety bonds and fidelity bonds? Surety bonds are similar to insurance policies, but fidelity bonds don't usually involve insurance companies A surety bond guarantees one party that another party will perform certain duties; but a fidelity bond guarantees that a party will not perform certain acts A surety bond covers an employer against losses incurred from employee dishonesty, but a fidelity bond guarantees that an employee will fulfill his stated duties competently Surety bonds are only purchased by companies, but fidelity bonds may be purchased by companies or individuals

Homeowners 3

Which of the following ISO forms is most commonly used? Homeowners 6 Homeowners 3 Homeowners 4 Homeowners 5

A small insurance pool and enormous exposure

Which of the following accurately characterizes aviation insurance? A. A small insurance pool and enormous exposure B. A small insurance pool and minimal exposure C. An extraordinarily large insurance pool and minimal exposure D. An extraordinarily large insurance pool and enormous exposure

Working for multiple insurers

Which of the following actions by an adjuster would NOT result in disciplinary action by the Commissioner? Working for multiple insurers Offering rebates on premiums to an insured Failing to pay money owed to an insurer Working without a license

Buying a lottery ticket

Which of the following activities is considered a speculative risk? Buying a lottery ticket Flying in an airplane Leaving your jewelry on a bed stand Driving a car

A small business that makes less than $70,000 per year

Which of the following applicants would NOT be eligible for a homeowner's policy? An individual owner of a residential building under construction A small business that makes less than $70,000 per year A tenant of an apartment building An owner who occupies one unit of a tri-plex

Tires

Which of the following automobile components is NOT covered by a mechanical breakdown insurance policy? Drive train Engine Steering assembly Tires

A company, group, or government agency offering financial protection.

Which of the following best defines "insurer"? Transfer of the risk of financial loss from one party to another. A company, group, or government agency offering financial protection. An individual or organization that pays premiums in exchange for protection. A legally binding contract in which the insurance company agrees to pay for specified losses in exchange for premiums.

The fee paid by the insured in exchange for an insurance policy

Which of the following best defines premium? The fee paid by the insured in exchange for an insurance policy A legally enforceable agreement between parties Transfer of risk of financial loss from one party to another A legal agreement providing temporary evidence of insurance until a policy is issued

Insurance that guarantees a minimum amount of income from a crop

Which of the following best describes Crop-Revenue insurance? Insurance that guarantees a minimum amount of yield on a crop Insurance that guarantees a minimum amount of income from a crop Insurance that protects against physical damage to a crop due to any weather-related peril Insurance that protects against damage caused by poor farming practices

Insurance that protects against physical loss of or damage to a crop

Which of the following best describes Crop-Yield insurance? Insurance that protects against physical loss of or damage to a crop Insurance that guarantees the revenue of the entire farm rather than an individual crop Insurance that indemnifies if the producer chooses the wrong crop type Insurance that protects against a loss of the value of the crop due to a decline in the market price

A fraternal benefit society is a social organization based around common interests and beliefs.

Which of the following best describes a Fraternal Benefit Society? A fraternal benefit society uses investors' money to pay claims. A fraternal benefit society pays dividends to its stockholders. A fraternal benefit society is a social organization based around common interests and beliefs. A fraternal benefit society is a for-profit provider of insurance.

Money is valued at face value; securities are set at their value on the day the loss is discovered; and other property is valued at the lesser of the cost to repair or replace

Which of the following best describes how losses are valued under a commercial crime policy? Money is valued at face value; securities are set at their value on the day the loss is discovered; and other property is valued at actual cash value Money is valued at face value; securities are set at their value on the day the loss is discovered; and other property is valued at the lesser of the cost to repair or replace Money is valued at face value; securities are set at their value on the day the settlement is paid; and other property is valued at the lesser of the cost to repair or replace Money is valued at face value; securities are set at their value on the day the settlement is paid; and other property is valued at replacement cost

An economic device used to protect against the risk of unforeseen and extraordinary financial loss

Which of the following best describes insurance? An economic device used to protect against the risk of unforeseen and extraordinary financial loss A legally enforceable agreement between parties Restoration to the previous financial condition, no more, no less Transfer of right to collect a debt from one entity to another

The possibility of damage or loss

Which of the following best describes the insurance concept of "exposure"? The cause of damage or loss The reduction in value of an insured item The possibility of damage or loss A condition that increases the possibility of a loss

A record store

Which of the following businesses would NOT need bailee coverage? A. A jewelry repair shop B. A dry cleaner C. A shoe repair shop D. A record store

Property Damage Liability

Which of the following can NOT cover the death of the insured's cow due to a lightning strike? Scheduled Farm Personal Property coverage Livestock Floater Unscheduled Farm Personal Property coverage Property Damage Liability

Hazardous material remediation was needed after a mechanical breakdown of the exhaust system's turbine caused ammonia to be released into the factory, contaminating the entire area

Which of the following claims may be covered under an equipment breakdown protection coverage form? A self-propelled machine used to transport heavy objects within the factory experienced a malfunction in its computer program, causing it to run into a wall, which damaged it to the point of needing repair A severe hail storm damaged a company's air conditioning units While adjusting a pressurized boiler, an employee accidentally set the calibrations to incorrect levels, which damaged the boiler to the point of needing repair Hazardous material remediation was needed after a mechanical breakdown of the exhaust system's turbine caused ammonia to be released into the factory, contaminating the entire area

Replacement Cost

Which of the following coverage options does NOT waive the coinsurance requirement in a commercial property policy? Monthly Limit of indemnity Replacement Cost Maximum Period of Indemnity Agreed Value

Medical Payments

Which of the following coverage would need to be added by endorsement to a DP-3? Other Structures Personal Property Medical Payments Loss of Use

Personal and Advertising Injury

Which of the following coverages is NOT subject to a Per Occurrence limit? Bodily Injury and Property Damage Damages to Premises Rented by You Medical Payments Personal and Advertising Injury

Barley

Which of the following crops is covered under a Small Grains Provision? Grain sorghum Barley Soybeans Corn

Unilateral Contract

Which of the following describes a contract in which only one party makes a promise to perform? Unilateral Contract Personal Contract Aleatory Contract Utmost Good Faith Contract

Psychological trauma

Which of the following does NOT count as "bodily injury" according to a personal auto policy? Sickness Disease Psychological trauma Death

Jim, who regularly eats at Big Ed's Steak House because it's his favorite restaurant.

Which of the following does NOT have an insurable interest in Big Ed's Steak House, a local restaurant? Ed, who owns 51% of the restaurant. Jim, who regularly eats at Big Ed's Steak House because it's his favorite restaurant. Ed's partner, Bill, who owns 49% of the restaurant. ABC Bank, which holds the mortgage on Big Ed's Steak House.

The reports should include advice on how to get out of paying covered claims.

Which of the following does not apply to the adjuster's responsibility of reporting to the principal? The reports should include any pertinent information about investigations the adjuster has performed. The reports should include information that would benefit the principal. The reports should include advice on how to get out of paying covered claims. The reports should be frequent and detailed.

The vessel must not travel in stormy or otherwise dangerous weather conditions

Which of the following does not describe one of the implied warranties of ocean marine insurance? A. The vessel must not travel in stormy or otherwise dangerous weather conditions B. The route of the voyage must be clearly stated prior to departure, and adhered to throughout the voyage C. The owner of the cargo must guarantee that the cargo is sound and loaded properly D. The vessel must be seaworthy, and have a competent captain and crew

Administrative costs related to renewing the insured's policy

Which of the following expenses would NOT be covered under a homeowners policy additional coverage called Claims Expenses? Interest accrual on judgements Administrative costs related to renewing the insured's policy Premiums for bonds required in a lawsuit defended by the insurer Up to $250 per day for the insured's lost wages while the insured is helping with the claim investigation

An insurer may cancel an insurance contract; a surety cannot cancel a surety bond

Which of the following highlights a major difference between an insurance contract and a surety bond? An insurance company may check the background of a policyholder; a surety has no need to check the background of a principal An insurance contract always provides the insurer with legal recourse to collect monies paid as damages to a policyholder; a surety has no legal recourse against a principal An insurance contract involves one person; a surety bond involves two parties An insurer may cancel an insurance contract; a surety cannot cancel a surety bond

Hospitalization expense insurance

Which of the following insurance packages will indemnify a policyholder for a variety of hospital-related expenses such as nursing care, supplies, and rooming charges? A. Surgical expense insurance B. Accident insurance C. Hospitalization expense insurance D. Hospital indemnity insurance

Risk retention groups are considered an insurer of last resort

Which of the following is FALSE about risk retention groups in Texas? All members must be engaged in similar business endeavors Risk retention groups must participate in the residual market programs in the state Risk retention groups are considered an insurer of last resort The name of the group must include the words "risk retention group."

Co-insurance reduces the risk of damage to a home.

Which of the following is NOT a benefit of a co-insurance clause? Partial losses to insured property will be covered at 100%. Co-insurance reduces the risk of damage to a home. The insurer receives ample premiums to cover the risks of providing an insurance policy. The policyholder gets sufficient coverage.

The insurer pays for certain future "incidentals" related to the claim.

Which of the following is NOT a characteristic of a full release settlement? The insurer pays an immediate, single lump sum to the claimant. The insurer pays for certain future "incidentals" related to the claim. All damages are paid at once. The claimant signs a Full Release Form.

Social insurance programs are for-profit programs.

Which of the following is NOT a characteristic of social insurance programs? Social insurance programs are designed to meet the needs of the general public as a whole. Social insurance programs involve mandatory participation. Social insurance programs are for-profit programs. The benefits of a social insurance program may be prescribed by federal law.

The cause of the breakdown cannot be associated with the front-end suspension

Which of the following is NOT a condition for payment on a mechanical breakdown insurance claim? The cause of the breakdown cannot be associated with the front-end suspension The insured must provide the insurer proof of regular maintenance prior to the breakdown The insurer has the right to inspect the vehicle before repairs are made The operator of the vehicle must have made a reasonable effort to minimize repair costs

Negotiating settlements

Which of the following is NOT a duty of a captive agent? Servicing policies Negotiating settlements Representing the insurer Selling insurance policies

Usually actual cost valuation

Which of the following is NOT a feature of a typical business owners policy? Usually actual cost valuation Liability protection for lawsuits from accidents or products Extra expense coverage Built-in inflation protection

Increasing your insurance coverage when you think a loss is likely

Which of the following is NOT a form of insurance fraud? A. Faking a death B. Increasing your insurance coverage when you think a loss is likely C. Lightning a candle and leaving it next to your window curtains before leaving for work D. Staging an accident

The insured must actively avoid parking in high crime areas.

Which of the following is NOT a nearly universal condition of a PAP policy? The insured must file a report for hit-and-run accidents with the police. The insured must cooperate with the insurer during the investigation process. The insured must allow the insurer to inspect a vehicle during the claims process. The insured must actively avoid parking in high crime areas.

To prohibit insurance-rating

Which of the following is NOT a purpose of insurance regulation? To promote reasonable insurance rates To promote insurance availability To prohibit price-fixing To prohibit insurance-rating

The condition of the vehicle

Which of the following is NOT a rating factor for a personal auto liability policy? The condition of the vehicle The location of use The driving record The driver's age

To reduce your insurance costs

Which of the following is NOT a reason to purchase umbrella liability coverage? To avoid paying out of pocket for liability exceeding the limit of your liability insurance To reduce your insurance costs To provide higher liability limits and broader coverage To provide coverage for things the underlying coverage excludes

Courts and laws favor litigation to negotiation.

Which of the following is NOT a reason why litigation is considered a "last resort" for the insurer? The insurer's reputation may be at stake. it is an expensive process. It is unpredictable because control is relinquished to a potentially prejudice jury. Courts and laws favor litigation to negotiation.

It must be a notarized document.

Which of the following is NOT a requirement for a legally binding contract? There must be mutual consent. There must be a legal purpose. Both parties must bring something of value. It must be a notarized document.

Offer to continue coverage until the insured has secured a new policy for the property.

Which of the following is NOT a requirement of an insurer if it does not intend to renew a homeowners policy in Texas? Offer to continue coverage until the insured has secured a new policy for the property. Notify the insured 30 days before the policy will expire. Inform the insured that he may be eligible for coverage under the FAIR plan. Notify the insured of the reasons for non-renewal.

Risk equality

Which of the following is NOT a risk management technique? Risk avoidance Risk equality Risk retention Risk reduction

Lightning

Which of the following is NOT a universal commercial property policy exclusion? Warfare Floods Earthquakes and land movements Lightning

Front end loader

Which of the following is NOT an "auto" according to the BAP? Minivan used for shuttle Cherry picker truck Owner's car Front end loader

Denying a claim when the insured has violated a policy condition

Which of the following is NOT an Unfair Claims Settlement Practice in the state of Texas? Denying a claim when the insured has violated a policy condition Failing to acknowledge claims promptly Denying a claim without explanation Denying a claim without conducting a reasonable investigation

Patio furniture

Which of the following is NOT an example of property eligible for coverage under the outdoor property coverage extension in a BOP? Patio furniture Trees Detached signs Fences

A small town

Which of the following is NOT an insurable risk? A collection of jewelry A small town An airplane A forklift

Equipment that is buried in the ground

Which of the following is NOT considered "covered equipment" under an equipment breakdown protection coverage form? Mechanical equipment that generates energy Equipment that operates under internal pressure or vacuum Computer equipment Equipment that is buried in the ground

A periodic assessment of inventory reveals that 4% of a store's inventory is inexplicably missing

Which of the following is NOT considered a covered theft in a commercial crime policy? A customer dashes out of the store with a bag full of goods The delivery man secretly withholds a package of goods for his own use after having them signed for Three employees are discovered siphoning cash from the register at regular intervals A periodic assessment of inventory reveals that 4% of a store's inventory is inexplicably missing

Damage caused by pollutants

Which of the following is NOT covered by Coverage A of a Commercial General Liability policy without an endorsement? Bodily injury to a third party on the insured premises Contractual liability for insured contracts Damage to property of others caused by employees working outside the insured premises Damage caused by pollutants

Failure to reseed

Which of the following is NOT covered by an MPCI Policy? Failure to reseed Volcanic eruption Late planting Locusts

Breakdown due to the cracking of an engine block

Which of the following is NOT excluded from coverage under a mechanical breakdown insurance policy? Breakdown due to racing or reckless driving Breakdown due to the cracking of an engine block Breakdown covered by regular auto insurance Breakdown due to neglect or delay in maintenance

Flexibility shows the claimant that the adjuster has more authority than the insurer.

Which of the following is NOT one of the advantages of being flexible during the negotiation process? Flexibility can speed up the negotiation process. Flexibility shows the claimant that the adjuster is willing to change his position, within reason. Flexibility shows the claimant that the adjuster has more authority than the insurer. Flexibility builds trust between the adjuster and the claimant.

A BAP uses coverage symbols to designate covered autos.

Which of the following is NOT one of the differences between a BAP and a truckers policy? Liability coverage in a truckers policy includes coverage for people who hire out or lend their cars to the insured for business purposes. A BAP typically excludes businesses that transport the property of others. A BAP uses coverage symbols to designate covered autos. A truckers policy includes trailer interchange coverage.

Liquor must not account for more than 25% of total annual sales

Which of the following is NOT one of the requirements that a "fast food restaurant" business must meet in order to qualify for a BOP? Liquor must not account for more than 25% of total annual sales The restaurant must maintain appropriate fire extinguishing equipment The restaurant must not exceed 7,500 square feet The restaurant may not seat more than 150 people

It applies to both the insured property and any property of others on the insured premises.

Which of the following is NOT true of the Replacement Cost endorsement to the Buildings & Structures Form of a commercial property policy? The policy still pays ACV up front, and then the remainder of the actual cost to repair or replace after the repair/replacement has been completed. It changes the loss settlement terms of the policy from ACV to RCV. It always requires the policyholder to meet at least an 80% level of coinsurance. It applies to both the insured property and any property of others on the insured premises.

CGL policies cover product liability claims if the product is made or sold in the US, Puerto Rico, and Canada.

Which of the following is TRUE of the Policy Territory condition of a Commercial General Liability policy? CGL policies cover product liability claims if the product is made or sold in the US, Puerto Rico, and Canada. CGL policies only cover product liability claims where the damage occurred in the US, Puerto Rico, and Canada. CGL policies will cover occurrences anywhere in the world, as long as the company's headquarters is based in the US, Puerto Rico, or Canada. CGL policies cover product liability claims anywhere in the world, regardless of where the product was made.

It establishes the parameters for considering a building vacant for the purpose of coverage.

Which of the following is TRUE of the vacancy condition in a typical insurance policy? It states that the insurance policy will terminate if the insured building is vacated. In commercial policies, it states that a building is vacant if more than 31% of the building is unoccupied. It establishes the parameters for considering a building vacant for the purpose of coverage. It states that a dwelling vacant for more than 15 days is not insurable.

Inflation guard for buildings and structures

Which of the following is a feature typically found in a business owners policy? Coverage for company-owned vehicles Inflation guard for buildings and structures Professional liability coverage Malpractice coverage

"The physical damage to the insured's roof appears inconsistent with that of typical hail damage."

Which of the following is an example of appropriate language for an adjuster's claim file? "The claimant obviously caused the roof damage herself, and was dumb enough to leave the hammer that she used up on the roof next to the damage." "I didn't need to ask the claimant any questions, because I knew she was going to lie to me." "The physical damage to the insured's roof appears inconsistent with that of typical hail damage." "Just left a message- asked the 'mamasita' to call me back."

A woman files an insurance claim when she is injured by an employee at a local bar.

Which of the following is most likely a third party claim? A man files a claim against his health insurer for a surgery to remove his appendix. A man files a homeowners claim when his house is struck by lightning. A woman files an insurance claim when she is injured by an employee at a local bar. A woman files an insurance claim after she backs her car into a guardrail.

Ensuring that a settlement favors the insurer

Which of the following is not a part of the adjuster code of ethics? A. Promptly reporting conduct violations of licensed insurance representatives B. Making truthful and unbiased reports C. Ensuring that a settlement favors the insurer D. Exercising care when dealing with elderly clients

Generally it is available from private insurers.

Which of the following is true for Crop-Hail insurance? It is subsidized by the government. Generally it is available from private insurers. It does not cover fire. It cannot be added during the growing season.

Kevin's insurance policy covers him for losses to his new car, even though he sold his truck, which was previously covered under his policy, to Bill.

Which of the following is true? Kevin's auto insurance policy protects his car from damage. Kevin's auto insurance policy now covers Bill, who bought Kevin's truck. When Kevin sold his truck to Bill, he lost his auto insurance coverage. Kevin's insurance policy covers him for losses to his new car, even though he sold his truck, which was previously covered under his policy, to Bill.

A television that belongs to the insured's tenant staying in the guest house

Which of the following items would NOT be covered against loss or damage under Coverage C- Personal Property of a homeowners insurance policy? A set of appliances stored in the main dwelling A camera taken on vacation by the insured A television that belongs to the insured's tenant staying in the guest house A set of golf clubs stored in a detached structure

The removal of a cancerous tumor

Which of the following medical conditions would NOT be covered under the terms of a typical accident insurance contract? A. A dislocated shoulder B. A burn suffered in an explosion C. The removal of a cancerous tumor D. A broken leg suffered in a skiing accident

Rafael accidently slipped on a wet floor at the supermarket. Although his only injury was a sprained ankle, he claimed he had back and neck pain when he sued the supermarket in an effort to get more money in the settlement

Which of the following people committed soft fraud? A. Ian, who works as a claims processor for ABC Insurance, regularly creates fake claims and has the settlement checks sent to his brother B. Rafael accidently slipped on a wet floor at the supermarket. Although his only injury was a sprained ankle, he claimed he had back and neck pain when he sued the supermarket in an effort to get more money in the settlement C. Taariq slammed on the brakes in order to make the person behind him run into the back of his truck, so he could collect a settlement from their insurance D. Farah doused her sofa with gasoline, started a fire, and burned down her house so she could collect money from her insurer

An employee's spouse, who finds the keys to a company car and makes a quick run to the grocery store

Which of the following people would NOT be covered under Section II of a BAP? An employee's spouse, who finds the keys to a company car and makes a quick run to the grocery store The wife of the CEO, whose husband brought a company car home for her to use while her own car is in the shop An employee who is unpacking crates of surplus makeup products from the company van An employee who is using a company car to pick up an interviewee from the airport

Mica owns a farm where she raises racehorses.

Which of the following people would NOT be eligible for a farm insurance policy? Danica owns a farm where she grows cotton. Jeffery owns a farm where he grows corn and raises sheep. Mica owns a farm where she raises racehorses. Vernon owns a farm where he raises cattle.

A 5-family Dwelling

Which of the following properties would NOT qualify for a dwelling policy? A 5-family Dwelling A permanently installed mobile home A four-plex with 5 tenants A single-family dwelling owned by a partnership

Indemnification

Which of the following refers to being restored to the financial condition you were in before a loss? Indemnification Subrogation Restoration Estoppel

Dwelling Under Construction, Theft (Limited or Broad), Automatic Increase, and Liability Coverage

Which of the following represent the four most common endorsements for dwelling policies? Liability, Theft (Limited or Broad), Debris Removal, Reasonable Repairs Debris Removal, Reasonable Repairs, Fire Dept. Service Charge, and Liability Liability Coverage, Theft (Limited or Broad), Automatic Increase, Debris Removal Dwelling Under Construction, Theft (Limited or Broad), Automatic Increase, and Liability Coverage

Declarations page

Which of the following sections of a homeowners policy lists the facts that are particular to the homeowner and the insured property? Definitions page Insuring agreement Declarations page Insured conditions page

A company is sued for copyright infringement in their advertisement.

Which of the following situations would be covered by a standard CGL insurance policy with no endorsements? A company is sued for copyright infringement in their advertisement. An employee is injured in the stockroom by a falling package. A tavern over serves alcohol to a customer, who then goes out and causes a fatal car accident. A defective product is shipped en masse to the public and must b

It is mandatory for all farmers who sell their produce for a profit on the open market.

Which of the following statements about Federal Crop Insurance is FALSE? It is regulated by the Risk Management Agency under the USDA. It is mandatory for all farmers who sell their produce for a profit on the open market. It was first authorized in the 1930s. It is supervised on a national level by the National Crop Insurance Services.

Each item has a separate Cause of Loss form.

Which of the following statements about Scheduled Farm Personal Property coverage is TRUE? Each item has a separate Cause of Loss form. Coverage insures all items, but only during certain periods of the policy. It lists the items specifically excluded from coverage. Each item is insured under blanket coverage.

A PAF always pays actual cash value for damaged property

Which of the following statements about a personal articles floater (PAF) policy is FALSE? A. A PAF offers worldwide coverage B. A PAF is used to provide personal property floaters in a single policy form C. A PAF always pays actual cash value for damaged property D. A PAF provides coverage on an open-peril basis

An arbitrator makes a legally binding decision based upon the evidence.

Which of the following statements about arbitration is TRUE? An arbitrator costs significantly more than a civil trial. An arbitrator plays no role in the outcome of negotiations. An arbitrator tries to get both sides to come together in agreement. An arbitrator makes a legally binding decision based upon the evidence.

An HMO will pay for both in-network and non-network care, but only up to the amount established by network providers

Which of the following statements about health maintenance organizations is FALSE? A. An HMO assigns a primary physician to each policyholder B. An HMO will pay for both in-network and non-network care, but only up to the amount established by network providers C. An HMO establishes a network of care providers D. HMO's promote health and wellness programs for policyholders in order to curb healthcare costs

Maintaining property values allows your neighbor to have an insurable interest in your house.

Which of the following statements about insurable interest is FALSE? Purchasing an insurance policy on your home helps protect your insurable interest in a home. Insurable interest reduces the incentive for someone to cause damages intentionally to insured property. Maintaining property values allows your neighbor to have an insurable interest in your house. When a renter leases your house, your insurable interest in the home remains.

Risk retention groups must be licensed in every state in which they operate.

Which of the following statements about risk retention groups is FALSE? Risk retention groups can provide commercial liability insurance. Risk retention groups must be licensed in every state in which they operate. Risk retention groups are a form of self-insurance. Risk retention groups are subject to state laws regarding Unfair Claims Settlement practices.

It is the basis of all property insurance policies.

Which of the following statements about the Standard Fire Policy is TRUE? It is an open peril policy. It is the basis of all property insurance policies. It offers replacement cost valuations. It offers coverage against wind and hail damage.

It provides coverage for money the insured expects to collect, but cannot because of damage to accounting records caused by a covered peril

Which of the following statements about the accounts receivable coverage extension in a BOP is TRUE? It only provides coverage if the loss occurred on the insured premises It provides coverage for lost income resulting from having to write off accounts receivable due to non-payment by the insured's customers It provides coverage for the insured's lost business income resulting from a covered loss suffered by a major customer It provides coverage for money the insured expects to collect, but cannot because of damage to accounting records caused by a covered peril

It is subject to state courts

Which of the following statements about the standard flood insurance policy is FALSE? It is available through the direct program and the write your own program It is governed by federal law It is not subject to local courts It is subject to state courts

The insured must divulge the exact nature and potential of the risks being transferred to the insurer.

Which of the following statements applies to the concept of the utmost good faith? Utmost good faith is based upon the number of misrepresentations made in an application. The insured must divulge the exact nature and potential of the risks being transferred to the insurer. Utmost good faith applies to the insured, but not the insurer. The insurer can choose to suspend the utmost good faith requirement in an insurance contract, but only if the insured agrees.

Subrogation transfers a portion of the rights of the claimant to the insurer. Subrogation prevents injured persons from collecting twice on the same damages. A claimant forfeits his right to seek restitution to the insurer (up to the amount of indemnification).

Which of the following statements apply to subrogation? Select all that apply. The exact amount of subrogation will usually be determined by a court of law. Subrogation transfers a portion of the rights of the claimant to the insurer. Subrogation prevents injured persons from collecting twice on the same damages. A claimant forfeits his right to seek restitution to the insurer (up to the amount of indemnification). Subrogation transfers a portion of the rights of the insurer to the claimant.

Commercial crime insurance can protect a business form losses due to theft from employees and outsiders

Which of the following statements best applies to commercial crime insurance? Commercial crime insurance can protect a business form losses due to theft from employees and outsiders Commercial crime insurance coverage is free additional coverage in a commercial liability policy Commercial crime insurance cannot single out coverage for specific employee positions Commercial crime insurance is designed to only cover risks associated with employee crime

The larger the number of units insured, the more accurately the insurer can predict the number of claims from that group.

Which of the following statements best describes the Law of Large Numbers? The larger the amount an insurance company can charge in premiums, the less likely a policyholder will file a claim. The larger the number of units insured, the more accurately the insurer can predict the number of claims from that group. The larger the number of insurance policies written, the more an insurer will pay out. The larger the number of insurance policies written, the higher the profit for the insurer.

High-risk consumers need insurance, yet no private insurer wants to issue high-risk policies.

Which of the following statements best explains why residual market insurance programs exist? Most private insurance policies are too complex, and residual market insurance provides easy to understand, basic coverages for high-risk consumers. High-risk consumers need more insurance coverage than private insurers can generally offer. Some people cannot afford insurance, so residual market insurers provide cut-rate insurance policies for low-income consumers. High-risk consumers need insurance, yet no private insurer wants to issue high-risk policies.

It automatically covers wind and vandalism.

Which of the following statements does NOT apply to the Standard Fire Policy? It pays actual cash value. It automatically covers wind and vandalism. It is a named peril policy. It is the basis for all homeowners policies.

An agent always has a fiduciary duty to defend the claimant.

Which of the following statements is FALSE? An agent may represent more than one party. An agent's actions are construed as those of the party she represents. An agent always has a fiduciary duty to defend the claimant. An agent is authorized to act as a representative of another party.

All flood insurance policies are settled on an ACV basis

Which of the following statements is FALSE? Condominium associations can purchase flood insurance Flood insurance is always backed by the National Flood Insurance Program Flood insurance can be purchased through private commercial companies All flood insurance policies are settled on an ACV basis

The concept of utmost good faith only applies to the insured.

Which of the following statements is NOT true about an insurance policy? An insurance policy actually protects the policyholder's interests in the insured item, not the insured item itself. The insurer holds the balance of power in the creation of an insurance policy. The concept of utmost good faith only applies to the insured. Ambiguities in contracts of adhesion often favor the insured.

An insurance adjuster receives her authority to sell products on behalf of the insurer through a written contract.

Which of the following statements is NOT true of an insurance adjuster? An insurance adjuster receives her authority to sell products on behalf of the insurer through a written contract. An insurance adjuster must always use reasonable judgement for both the insurer and the claimant. An insurance adjuster who settles claims on behalf of an insurer has the power to bind that insurer, even if she makes a mistake. An insurance adjuster is an agent.

An endorsed policy will always provide more coverage than an unendorsed policy.

Which of the following statements is NOT true of endorsements? An endorsed policy will always provide more coverage than an unendorsed policy. An endorsed policy has been changed from the original version. Endorsements may be added to a policy at any time during the policy period. Endorsements may be added to a policy at the time of purchase and at renewal.

Flexibility prevents negotiation and causes frustration.

Which of the following statements is NOT true of the "give and take" nature of the negotiation process? "Give and take" is the heart and soul of a successful negotiation session. Conceding some points increases the likelihood of the opposing party also conceding points. Flexibility prevents negotiation and causes frustration. It is not always possible to prevail on every point.

Rowboats and canoes are covered, but only while on the premises.

Which of the following statements is TRUE about Coverage C under a DP-2 or DP-3? Boats of any kind are covered, but only while on the premises. Rowboats and canoes are covered, but only while on the premises. Coverage for rowboats and canoes is excluded; other boats are covered. Coverage for boats of any kind is excluded under "general exclusions."

If a principal fails to meet the terms of the contract, the surety is responsible for completing the contract for the obligee

Which of the following statements is TRUE about a suretyship? An obligee always guarantees the work of the surety If a principal fails to meet the terms of the contract, the surety is responsible for completing the contract for the obligee An indemnitor is always responsible for indemnifying the principal A surety bond requires two or more parties

If the plaintiff is found to be at all negligent, she will receive no settlement.

Which of the following statements is TRUE of a claim dispute litigated in a state that follows the doctrine of Contributory Negligence? The settlement amount will be reduced by the percentage of the defendant's negligence. If the defendant is found to be at all negligent, she will receive no settlement. If the plaintiff is found to be at all negligent, she will receive no settlement. The settlement amount will be reduced by the percentage of the plaintiff's negligence.

It will not cover the cost of repairs that exceed the value of a vehicle

Which of the following statements is TRUE regarding mechanical breakdown insurance? It would indemnify a policyholder for damage to an engine caused by the owner inadvertently driving into a lake It will not cover the cost of repairs that exceed the value of a vehicle It covers oil changes and tire rotation It covers damage caused by the towing process

Ken lights a candle, set it right next to the window draperies and leaves the house to go to work.

Which of the following statements is an example of a moral hazard? The road that leads to Mike's house is steep and narrow. Ken lights a candle, set it right next to the window draperies and leaves the house to go to work. Nancy falls asleep with a lit cigarette in her hand. Kim is jamming out to her music while driving to work and accidentally runs a red light.

They are endorsements added to a policy's major coverage

Which of the following statements is typically TRUE regarding "additional coverages"? A. They can only be added to commercial policy packages B. They are endorsements added to a policy's major coverage C. They can only be added to residential policy packages D. They are endorsements to cover large, general losses

A CPP is an elective-based policy

Which of the following statements regarding commercial package policies (CPP) is TRUE? A CPP is an example of a monoline policy A CPP is an elective-based policy A CPP requires a separate declarations page for each coverage Workers' compensation insurance is automatically included with a CPP

To be covered, members of an HMO must receive treatment for their medical conditions within the established network of healthcare providers

Which of the following statements regarding health insurance is TRUE? A. As opposed to joining a group insurance plan, purchasing health insurance on an individual basis can save a consumer thousands of dollars a year. B. An HMO is usually the most expensive group insurance provider C. Major medical plans tend to be very restrictive regarding the selection of physicians D. To be covered, members of an HMO must receive treatment for their medical conditions within the established network of healthcare providers

Preferred provider organizations do not allow policyholders to choose a primary care physician

Which of the following statements regarding primary care physicians is FALSE? A. Point of service plans allow a policyholder to select his own primary care physician B. A primary care physician must approve all medical procedures for policyholders in a health maintenance organization C. Major medical plan policyholders can choose any primary care physician they'd like D. Preferred provider organizations do not allow policyholders to choose a primary care physician

All employees are bonded for the same aggregate amount

Which of the following statements regarding scheduled fidelity bonds is FALSE? Employees can be bonded for different amounts A limit of liability is defined for each employee or position They are applicable to only select employees or positions All employees are bonded for the same aggregate amount

Period of Restoration

Which of the following terms refers to the time elapsed between a covered loss to a commercial building and the return to full business operations of the same building? Period of Construction Period of Restoration Period of Indemnity Property Preservation Window

Umbrella

Which of the following types of insurance will sometimes cover losses that the base (underlying) policy will not? Stand alone excess liability Umbrella Base-plus liability Follow form excess liability

Covered perils

Which of the following will NOT appear on the Declarations page of a commercial property policy? Address of the insured business Coverage limits Coverage deductibles Covered perils

The color of the vehicle

Which of the following would NOT affect the rating for comprehensive and collision coverage on a vehicle? The model of the vehicle The age of the vehicle Where the vehicle is driven The color of the vehicle

A truck

Which of the following would NOT be considered an instrumentality of transportation and communication? A. A dock B. A bridge C. A truck D. A road

An 18-wheeler with a driver and a passenger

Which of the following would NOT be covered under a Personal Auto Policy? A passenger car loaned to a friend A passenger car used by a son or daughter who is home from college An 18-wheeler with a driver and a passenger A 15-passenger van weighing 7,200 lbs

The owner sustains a financial loss when her vessel is confiscated by the government. **Piracy is a covered peril in an ocean marine policy. However, confiscation is excluded.**

Which of the following would NOT be covered under a typical Ocean Marine policy? The vessel is robbed of its cargo by pirates. The owner sustains a financial loss when her vessel is confiscated by the government. The vessel's galley catches fire, and the fire spreads to the sleeping quarters. A bolt of lightning strikes the vessel and fries its communication system

Bodily injury claim

Which of the following would NOT be covered under errors and omissions insurance? Discrimination claim Sexual harassment claim Bodily injury claim Wrongful termination claim

When trying to renew her dog's license, Ellen has to pay a penalty to the city for letting its rabies vaccination lapse.

Which of these scenarios is NOT an example of indemnification? When trying to renew her dog's license, Ellen has to pay a penalty to the city for letting its rabies vaccination lapse. Alice's insurer pays to rebuild her house after it burns down. Joe-Bob forces his son Ted to pay their neighbor $500 after Ted breaks the neighbor's $500 TV. XYZ insurance pays $300 to rent a car for Hugh while Hugh waits for his own car to be repaired.

Martin's crop was destroyed by caterpillars despite the fact that he used insecticide.

Which of these scenarios would NOT be covered under a Multi-Peril Crop Insurance policy? Olivia's crop is destroyed by a late frost that came early in the growing season. Martin's crop was destroyed by caterpillars despite the fact that he used insecticide. Lucy's crop is destroyed by lava flow from a volcanic eruption. Tom's crop is destroyed by flood waters after a heavy rain.

Endorsements

Which section of a PAP would include a provision allowing the insured to suspend coverage on a vehicle for an extended amount of time? Conditions Endorsements Declarations Part B

Excess liability insurance that "follows" the base policy, but includes its own set of limitations and exclusions

Which statement BEST describes a stand alone excess liability policy? Excess liability insurance that "follows" the base policy, but includes its own set of limitations and exclusions Excess liability insurance that "follows" the base insurance policy to the letter Excess liability insurance that often covers more risks than the base policy Insurance coverage for damages caused by an excess of any one peril

Excess liability insurance that can also provide additional coverages not provided by the base policy

Which statement BEST describes umbrella coverage? Excess liability insurance that "follows" the base insurance policy to the letter Insurance coverage that doesn't have deductibles Excess liability insurance that "follows" the base policy, but includes its own set of limitations and exclusions Excess liability insurance that can also provide additional coverages not provided by the base policy

The premiums are paid by the insured.

Which statement about the Catastrophic Risk Protection Endorsement is FALSE? It pays on crop losses in excess of 50%. It is an optional coverage of MPCI. The premiums are paid by the insured. It pays 55% of the price of the commodity.

It includes the perils of windstorm and hail.

Which statement is FALSE about coverage for Trees, Shrubs, and Other Plants in the DP-2 and DP-3? It is limited to $500 per tree or plant. It pays in addition to the Coverage A limit of liability. It includes the perils of windstorm and hail. It cannot pay more than 5% of the Coverage A limit of liability.

Coverage C

While attending a free-sample tasting of Craig's Famous Rock Candy, Claire bites into a sample containing an actual rock and breaks a tooth. Which coverage section of Craig's CGL would cover Claire's tooth? Coverage B Coverage D None—there is no provision for Dental Coverage Coverage C

None. An HO-2 covers damage caused by vehicles, but damage to a fence, driveway, or walkway is not covered if it was caused by a vehicle driven by a resident of the "residence premises."

While backing out of his driveway, Gary accidentally puts the car into drive and plows through several yards of his privacy fence. the total damage to the fence comes to $3,500. Assuming Gary has an HO-2 Broad Form policy, how much of the damages will be covered? None $2,500 $1,500 $3,500

Sue is legally liable for the damages to Jane's car.

While driving, Sue looks down to adjust the radio and crashes the car into Jane's car, damaging both cars and injuring herself. Which of the following statements applies to Sue? Sue is legally liable for the damages to Jane's car. Jane is liable for Sue's injuries. Sue's liability insurance would cover Sue's injuries. In order to be indemnified by Sue's insurer, Jane must prove Sue's legal liability in court.

is a claims-made policy.

While going over his CGL policy, Bill pauses on the Declarations page. He finds the usual items: named insured, address, policy period, premiums, and the limits of insurance. But he also finds a retroactive date listed. This tells Bill his policy: is a policy from the 1970s. is an occurrence policy. is a claims-made policy. will only pay claims retroactively, meaning the policy must have expired before claims will be paid.

$0

While making a right-hand turn from the right lane, Ben is sideswiped by Roxanne, totaling the car he bought new 12 years ago for $15,000. Roxanne is judged to be at fault. She has an auto policy with a $500 deductible on her collision coverage. Assuming Ben's car depreciates at a rate of $1,100 a year, how much will Roxanne have to pay out of pocket when Ben files a claim against her insurer for the damages? $1,800 $500 $0 $1,100

Josefina has the right to collect the remaining $5,000 from Jacob or Jacob's insurer.

While out driving, Jacob doesn't stop at a stop sign and hits Josefina, whose resulting injuries cost $15,000. If Josefina's insurance policy pays first and maxes out at $10,000 of coverage, which of the following is TRUE? Josefina does not have a right the the remaining $5,000. Josefina has the right to collect the remaining $5,000 from Jacob or Jacob's insurer. Josefina has the right to collect the remaining $5,000 from her insurer. Josefina has the right to collect $10,000 from her insurer and $15,000 from Jacob.

Theft: Broad Form Broad Form provides coverage for personal property anywhere in the world.

While traveling abroad, Christopher's belongings are stolen out of his hotel room. He is fortunate enough to have planned ahead for this by maintaining a DP-3 policy with which additional coverage? Theft: Special Form Theft: Broad Form Theft: Abroad Form Theft: Limited Form

Legal Liability coverage

While working on a customer's industrial copier in the repair facility, an employee at RZJ Electronics Repair accidentally destroys the copier, causing $3,000 in damage. What commercial property coverage might apply? Extra Expense coverage Legal Liability coverage Business Interruption coverage Employees Personal Property coverage

Customers

Who is NOT covered for their legal liability under a CGL? Employees Managers Executives Customers

The Texas Commissioner of Insurance

Who ultimately decides whether the settlement practices of an insurer are unfair to the consumer? The Texas Commissioner of Insurance The claimant The Attorney General The adjuster

implied authority.

William is wearing an ABC Insurance jacket and has an ABC Insurance sign over his rented office. The walk-in customer could reasonably believe that he has the authority to write an insurance contract because of his: implied authority. apparent authority. agent authority. express authority.

Control of Property

William owns a paint store and employs Brent. One day, while Brent is decorating the window display, he gets carried away dancing to the music in his headphones, falls off his ladder, and smashes through the glass. What policy condition allows William to collect for the loss on his insurance contract? Subrogation Other Insurance Liberalization Control of Property

Operations Liability

Wilma works for a professional cleaning service. While cleaning a ceiling fan at a customer's home, she leans too far forward, upsets the step stool, and falls. In an effort to prevent her fall, Wilma grabs the ceiling fan, but just ends up pulling the fan down and leaving a gaping hole in the ceiling. The damage Wilma caused would fall under what coverage in her company's Commercial General Liability policy? Premises Liability Product Liability Operations Liability Completed Operations Liability

at least 12

Within each reporting period, how many CE hours must an adjuster complete in a classroom or in the equivalent of a classroom setting? 24 at least 15 at least 2 at least 12

XYZ Autos assumes responsibility for the autos until they reach Tallahassee

XYZ Auto sells 20 cars to a buyer across the country. As part of the deal, XYZ Auto ships the cars "FOB Tallahassee." Which of the following statements accurately explains what this phrase means? A. Once the cars reach Tallahassee, XYZ Autos will be responsible for any further transportation costs B. The buyer of the cars is responsible for all transportation costs of the autos until they reach Tallahassee C. The buyer and XYZ Autos agree to split the cost of the auto delivery to Tallahassee D. XYZ Autos assumes responsibility for the autos until they reach Tallahassee

Business Interruption

XYZ Computer's production building for circuit boards is struck by lightning, which results in a fire that burns down the entire facility. XYZ Computer cannot continue the production of computers until the facility is rebuilt. Which insurance coverage might indemnify XYZ Computer for lost revenue until a new facility is built? Business Interruption Extra Expense Builders Risk Leasehold Interest

XYZ Insurance participates in the NFIP Direct Program.

XYZ Insurance is a private insurer that sells flood insurance policies. Which of the following statements is FALSE? XYZ Insurance is responsible for adjusting all flood claims made by its policyholders. XYZ Insurance is responsible for paying claims. XYZ Insurance receives expense allowances from the federal government. XYZ Insurance participates in the NFIP Direct Program.