Adjusters Exam

If the insured purchases a new aircraft to replace a scheduled aircraft, there is automatic coverage provided the insurance company is notified within ______ days of the purchase and premium payment is made.

30

The Texas Department issues emergency adjuster licenses in case of an emergency arising out of a disaster. An emergency license is valid for ______ days.

90

When a covered loss disables the insured watercraft, the standard Watercraft policy provides coverage for "towing and assistance" in the amount of:

: $500 for a single event and $1,000 for the entire policy period

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

A certificate of authority

Which of the following vehicles is considered "your covered auto" under a standardized Personal Auto policy?

A replacement car purchased by the insured a week ago, but not yet reported to the insurance company.

Anna is walking through the park one day while unwrapping an ice cream sandwich. It was a windy day, and the ice cream wrapper was covered with partially melted ice cream. Anna doesn't want to look for a trash can to throw away the wrapper so she simply throws it down. The wind takes the wrapper across the park and drops it to the ground just in time for Ulysses to ride onto it with his unicycle. The melted ice cream on the wrapper causes Ulysses' unicycle to slip out from under him and he falls backward, striking his head on the pavement. Several witnesses saw Anna throw the ice cream wrapper into the wind, so Ulysses sues her for his medical bills. Ultimately, Anna was not proven to be negligent and her insurance company did not have to pay damages to Ulysses. What is the most likely reason for the court's finding?

Anna could not have foreseen that the act of throwing her ice cream wrapper into the wind would have resulted in the bodily injuries to Ulysses.

The Business Income from Dependent Properties -- Broad Form is a variation of the Business Income form as it:

Provides coverage for loss of income to the insured business when direct physical damage has occurred at another business upon which the insured business depends in some way.

Replacement cost value (RCV) coverage is best defined as:

Replacement cost without deduction for depreciation

Sam has his current business locations covered under a standard Businessowners policy. He purchases a new building to add another business location. Which of the following statements best describes how coverage will apply for Sam's newly acquired property?

Sam will have $250,000 of coverage for 30 days or until he reports his newly acquired property to the insurer, whichever comes first.

The HO-3 form insures for direct physical loss to covered property involving collapse of a building caused by all of the following, EXCEPT:

Settling

Ocean marine coverage for losses to the insured vessel caused by bursting boilers, latent defects in the vessel and negligence of the master or crew members are addressed by which of the following?

The Inchmaree clause.

What is the minimum limit for Coverage L of the Personal Liability Supplement that can be attached to a Dwelling Property policy?

100,000

Under a surety bond, the "principal" is the party that:

Agrees to fulfill an obligation.

An insured has purchased Coverage A and Coverage B of a standard Businessowners policy and the limit of insurance shown in the Declarations is 80% of the replacement cost value, how will losses be settled?

Both Coverage A and Coverage B will be settled on a replacement cost basis.

On Monday afternoon, Carissa's boss requested that she finish updating the company website by Tuesday morning. Carissa did not want to stay at the office late into the evening so she took her work home to complete it there. On the way home, Carissa remembers that she left an external hard drive back at the office. This hard drive contained files that she needed to complete the website updates so she turns her car around and heads back to the office to retrieve it. Two blocks away from her office, another car runs a stop light and smashes into Carissa's car, severely injuring her. Which of the following statements would be TRUE in how Carissa would be handled by her employer's workers compensation coverage?

Carissa's injuries are not compensable as she was commuting to work and coverage does not apply in that case.

If the "other insurance" clause in a policy specifies that more than one policy will share equally in the loss until the lowest policy limit is exhausted and continue in that fashion until all policy limits are exhausted. This is known as:

Contribution by equal shares.

Which of the following statements is TRUE regarding the "debris removal" coverage of the Dwelling forms?

Coverage A and Coverage B both include an amount for debris removal.

Which of the following would cover "unattached structures" under a Homeowners policy?

Coverage B.

The limit of liability under an HO-4 form is based on the primary amount of insurance for:

Coverage C

The primary amount of insurance on an HO-6 is:

Coverage C.

Bob and Pete's Used Cars has purchased a Garage policy with dealer's physical damage coverage on the cars owned by the dealership at its location. Pete goes to an auto auction 150 miles away, purchases a vehicle and drives it The "Dealers Drive Away Collision" endorsement eliminates the 50 miles coverage limitation of the dealer's physical damage coverage. back to the dealership. If Pete suffers a physical damage loss during this trip:

Coverage will apply only if the "Dealers Drive Away Collision" endorsement is attached to the Garage policy.

Which of the following would be covered under the Jones Act?

Crew members of a ship

When a standard Personal Umbrella policy has been in effect for less than 60 days, the insurer may terminate (cancel) the policy:

For any reason.

All of the following statements are TRUE regarding automobile "no-fault" laws, EXCEPT:

Medical payments and physical damage claims are paid by the state assigned risk fund without determining fault to any party in the accident.

Ted is applying for an insurance policy to cover his dwelling and the application asks if the home to be insured is covered in fire-resistant siding. Ted says that his home IS covered in fire-resistant siding when he knows it is not. The act Ted has committed is known as:

Misrepresentation.

For a liability policy to pay a claim, the person who is legally liable:

Must be an "insured" under the policy

Under the additional coverages of the standardized Businessowners policy, how much is the limit for "Pollutant Clean-Up and Removal" if caused by a covered loss?

$10,000 in any 12-month period.

A distinguishing difference between Umbrella policies and Excess policies is:

Both policies provide an excess amount of insurance, but an Umbrella policy can also broaden the coverage

Which of the following is an "other coverage" provided on a DP-1 form?

Fire Department Service Charge.

Which of the following is NOT an intentional tort?

Negligence.

Which of the following losses would be paid under the Part D - Other Than Collision coverage of the Personal Auto policy?

The insured automobile was stolen and never recovered.

An insured who is covered under a Commercial Property policy with the Building and Personal Property Coverage form attached, suffers a loss to business personal property. The insurance company has paid the claim, but now the property has been recovered. All of the following statements are TRUE regarding how this situation should be handled according to the form, EXCEPT:

The insured must incur any expenses to recover the property.

Which of the following statements is TRUE regarding controlled commercial inland marine forms?

These forms are usually issued according to published rules and rates.

Robert is an adjuster for Indemnify Insurance, Inc. and he has been assigned a claim and acknowledged receipt of the loss notice. Which of the following is the next step Robert will take to process the claim?

Verify coverage for the claim under the policy.

Which of the following best describes when an aircraft is "in motion?"

When the plane is moving under its own power or from momentum generated from its own power.

The medical payments coverage of an Aircraft Liability policy provided coverage for bodily injury expenses incurred by accident:

Within one year of the accident

When an employer self-insures their workers' compensation risks, but would like to purchase insurance to cover claims that may exhaust their self-insured limits, what coverage should be purchased?

excess coverage

Which of the following coverages of a Personal Automobile policy provides "Collision" and "Other Than Collision" coverage?

part D

The additional coverage of the Commercial Property cause of loss forms known as the "Limited Coverage for Fungus, Wet Rot, Dry Rot, and Bacteria" provides:

$15,000 coverage for all occurrences within a 12-month period.

Hannah must take time away from work to help assist in the investigation of a claim that was made against her BOP policy. The policy will pay for Hannah's actual loss of earnings up to:

$250 per day

Jessica took an adjuster prelicensing course approved by the Texas Department of Insurance. She has received her certificate showing that she passed the state licensing exam as well. How long does Jessica have to submit her license application to the Department before she will be required to take the state licensing exam again?

12 months from the date she passed her state licensing exam.

A leased vehicle is considered to be a covered auto under the personal auto policy (PAP) if it is a private passenger auto leased for at least:

6 continuous months.

Payment for a covered loss under the 1943 New York Standard Fire policy must be made within ______ days after a satisfactory proof of loss has been received by the insurer.

60

If a building insured by a standardized Businessowners policy has been vacant or unoccupied beyond _______ the insurer can send the insured a notice of cancellation.

60 days

For restaurants to be eligible for coverage by the standard BOP policy, they cannot exceed _______ in total floor area.

7,500 square feet

Drew's agent is putting together a Commercial Property policy for him. The declarations page, the conditions page and several endorsements have been included. Which of the following must still be included to complete the policy?

A cause of loss form.

What is the "retained limit" of a Personal Umbrella policy that must be paid when the umbrella policy covers a claim that was excluded by the underlying policy?

A deductible that the insured must pay when the Personal Umbrella policy covers a claim that was excluded by the underlying liability policy

The aircraft physical damage (hull) deductible is normally expressed as:

A percentage of the value of the aircraft.

After a standard Personal Automobile policy has been in effect for more than 60 days, the insurer may cancel the policy for all of the following reasons, EXCEPT:

A regular operator of the vehicle has received a citation for speeding

What is the limit for the "Business Income" additional coverage under a standard Businessowners policy?

Actual loss sustained for up to 12 months.

Which of the following relieves the financial burden on the claimant by making certain payments to the claimant even before the claim is negotiated?

Advance payment.

A "dual capacity" claim in workers' compensation is filed:

Against an employer that was acting in a capacity "other than as an employer" at the time the injury occurred

Which of the following most closely describes a claim reserve?

An amount expected to be ultimately paid on an open claim.

All of the following are exceptions to the workers' compensation exclusive remedy, EXCEPT

An on-the-job injury caused by worker fatigue from working an excessive number of over-time hours.

With a Commercial Package Policy (CPP), "interline endorsements":

Apply to more than one coverage part of the package policy

A contractor's bid bond is used:

As a promise from the surety that if the principal is awarded the contract, the principal will enter into the contract for the bid amount and provide required performance bonds.

The endorsement used to report the insured's actual and estimated business income under an Equipment Breakdown policy is called:

Business income—Report of Values form.

After a blizzard, the roof on the insured's home collapsed because the ice and snow was so heavy. This damage would be covered under which of the following forms?

DP-2 form.

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

Exclusive agency system

According to the Texas Labor Code, a "sanction" includes all of the following, EXCEPT:

Exemption

An adjuster is engaged in the unauthorized practice of law if they perform any of the following duties, EXCEPT:

Filling in the blanks of a form with factual data.

All of the following statements about the HO-8 are correct, EXCEPT:

HO-8 covers the same named perils as the HO-2.

All of the following statements are true regarding the Standard Fire policy, EXCEPT:

If there is an endorsement attached to the SFP and it contains a deductible, the amount will only be deducted from the coverage provided by the endorsement and not from the coverage provided by the SFP form itself.

All of the following statements are TRUE regarding an interline endorsement used in a Commercial Package policy (CPP), EXCEPT:

It can apply to one or more coverage parts.

Which of the following statements is NOT TRUE with regard to Coverage E: Additional Living Expenses under a DP-2 or DP-3 form?

It pays a percentage of the Coverage C limit.

The "additional coverages" provided by a Personal Liability Supplement are identical to the all of the following Section II "additional coverages" provided by a Homeowners policy, with the exception of:

Loss assement.

Actual cash value is defined more recently as "replacement cost less a deduction that reflects" all of the following, EXCEPT:

Market saturation

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

Mediation

Which of the following is the alternative dispute resolution (ADR) that is most commonly used to settle a coverage dispute when settling an insurance claim?

Negotiation

The agreement between the parties to an insurance contract is known as:

Offer and acceptance.

A "hostile fire" is defined by the Standard Fire policy as:

One that burns beyond its intended boundaries

In ocean marine insurance, each of the following is true about the term "general average", EXCEPT:

Only the party having an interest in the lost property suffers a loss.

Which of the following is NOT a coverage extension on the Building and Personal Property coverage form?

Outdoor property up to a maximum of $500.

Which of the following is NOT eligible for a coverage under a Homeowners insurance policy?

Owner-occupants of a 5 to 6-family dwelling

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

Peak Season Endorsement.

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

Personal effects.

Which of the following "additional coverages" under the Building & Personal Property coverage form does not increase the limit of liability of the policy?

Preservation of Property.

All of the following statements are TRUE regarding Section II - Liability of the Garage Coverage form, EXCEPT:

Provides coverage when an employee causes damage to a customer's vehicle.

Which of the following is considered an Unfair Claim Settlement Practice?

Requiring a claimant to submit a preliminary claim report before moving forward on the claim.

Which of the following Ocean Marine implied warranties is considered to be the most important?

Seaworthiness.

Part One of the NCCI standard workers' compensation policy specifies the:

Statutory provisions of the policy

Which of the following types of businesses is most likely to be covered under the Auto Dealers' (Garage) form?

Tex's Auto Sales & Service, Inc.

If a Condominium Association policy and a Condominium Unit-Owners policy are in force on the same property, how would the claim be handled?

The Condominium Association form is primary.

Which of the following statements is NOT TRUE regarding Part B of the personal automobile policy?

The coverage includes split limits to cover more than one person, per accident.

Willie's Widgets has leased a business location for a term of 10 years. In the seventh year of the lease, the location is destroyed by fire. As luck would have it, Willie had purchased "Leasehold Interest" coverage as part of his Commercial Package policy. All of the following would be covered for Willie, EXCEPT:

The damage that Willie caused to the parking lot by bringing large, heavy rigs onto the lot, causing the asphalt to buckle.

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

The individual case method.

A written insurance contract that includes all coverage forms and endorsements is known as:

The insurance policy.

The additional coverage for debris removal under the standardized Building and Personal Property coverage form will only be paid if:

The insured reports the debris removal expenses to the insurance company in writing within 180 days of the loss.

Which of the following is NOT one of the three elements that cause non-waiver agreements and reservation of rights notices to be effective are:

These agreements must be signed by the insurer, the insured, and a judge

Which of the following is NOT TRUE regarding surety bonds?

They are an agreement that in exchange for a premium, the surety will indemnify the obligee.

Under Coverage B of the BOP, how are exterior signs covered?

They are listed as "property not covered" but they can be covered if they are scheduled on the policy.

All of the following statements are TRUE regarding the fiduciary responsibilities of an adjuster, EXCEPT:

The adjuster must make statements in writing before they will bind the principal.

Part One of the standard workers' compensation policy describes:

The insurer's duty to pay promptly, when due, the benefits required of the employer by the workers compensation statute.

When a loss occurs and coverage is provided by a reciprocal exchange, which of the following is responsible to cover the loss?

The member insurers.

If an insurer in Texas has received a large number of complaints of unfair claim settlement practices, the Department may subject the insurer to closer supervision. As part of this closer supervision, the Department can request that the insurer submit periodic reports containing claims information for:

The preceding 12 months or from the date of the insurer's last periodic report, whichever is shorter.

Which of the following would NOT be determined by a court when an insurer has filed a declaratory judgment action?

The type and amount of damages that will be paid to a plaintiff for the claim that is being disputed.

Which of the following statements is NOT true regarding a "prompt notice of loss" provided by the insured to their insurance company?

This notice should be provided only after the insured has determined the extent of the loss or damage and confirmed that the amount will be higher than the insured's deductible.

All of the following are duties of the insurer in case of a loss as specified by insurance policies, EXCEPT:

To pay amounts to the insured or a third-party claimant that are at least as high as the national average of similar claim settlements.

Sarah is purchasing a 100-year-old home that hasn't had significant renovations. She has contacted her insurance company and requested coverage under an HO-3 form. Her insurance company has refused to place the coverage but offered to cover the home under an HO-8 form instead. All of the following statements provide a reasonable explanation for the insurance company's choice of the HO-8 form, EXCEPT?

The HO-8 form provides higher limits of coverage to replace items such as antique building materials to allow the home to remain true to its original design.

A 40-year old commercial building is insured with a limit on the building of $300,000 and has suffered a partial loss as a result of a hot water heater explosion. It will cost $17,000 for the increased cost of construction to comply with the building codes and $20,000 for all other covered damages. The building is covered under a standardized Building and Personal Property coverage form, with the special cause of loss form attached. The insured submits the proof of loss for all of the repairs, including the increased costs to comply with the new building codes. Which of the following describes how this claim will be paid?

The insurer will pay $10,000 for the increased cost of construction, plus $20,000 for the cost of all other covered damages.