Oklahoma Adjuster License - 3
Which of the following is NOT a typical deductible amount found in Section I of a standard Homeowners policy?
$1,500 $1,500 is NOT considered a typical deductible amount found in Section I of a standard Homeowners policy.
Morton was injured on the job and died from his injuries. He left behind no surviving spouse and 7 children under age 18. The lump-sum benefit received by the children will be a pro-rata share of:
$150,000 When there are more than six children beneficiaries, they will receive a pro-rata share of $150,000.
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 The policy states, "a private passenger type auto, pickup, or van will be deemed to be owned by a person if leased for a continuous period of at least 6 months."
Coverage under the Builders' Risk form is written for:
A period of one year Builders' Risk coverage is written for a period of one year.
All of the following statements are TRUE regarding a proof of loss statement, EXCEPT:
A proof of loss is also known as a loss notice The "loss notice" is NOT the formal proof of loss. The loss notice is provided by the insured to the agent or insurer as soon as possible after the loss has occurred.
Under the Gramm-Leach-Bliley Act, there is a "pretexting provision". What is the definition of "pretexting"?
Accessing private information using false pretenses. Accessing private information using false pretenses is the definition of "pretexting".
The ACV settlement under a property insurance policy may be determined using "broad evidence rule", which means that the loss is valued:
By establishing the value of the property using any evidence a court finds relevant The broad evidence rule takes different methods of valuation into consideration, most often "fair market value" is included in making the determination of the ACV of damaged or destroyed property.
Which of the following would cover "unattached structures" under a Homeowners policy?
Coverage B Coverage B - Other Structures covers structures that are unattached to the covered dwelling.
Under the DP-3 special form, which of the following losses would NOT be covered?
Damage to the dwelling that is caused by an infestation of mice The broad form is a named peril form and does not list damage caused by wild animals as a covered peril.
With a "claims-made" CGL form, the policy is:
Excess over any other policy that is not claims-made A claims-made CGL form is excess over any other policy that is not claims-made.
Max has his home covered under a DP-2 form. During a storm, a large oak tree in Max's yard splits in two and one side of the tree falls against the back wall and roof of the covered dwelling. Which of the following accurately describes the coverage that will apply to Max's loss?
Max will be covered for the damage to both the exterior of his dwelling and the interior of his dwelling
Which of the following Dwelling Insurance forms is also referred to as the "Dwelling Fire" form?
The DP-1 form The DP-1 form is also referred to as the "Dwelling Fire" form.
Which of the following cause of loss forms provides named peril coverage?
The basic and broad forms only
Only the Dwelling and ATTACHED structures are covered under Coverage A of the Dwelling policy.
The boat was not fully enclosed inside a building during the hail storm For the size boat Jerry owns, the boat must have been enclosed inside a building when the hail storm hit or the Homeowners policy would not provide coverage.
Which of the following statements best describes the "Efficient Proximate Cause Doctrine"?
Two or more perils that are dependent on each other because one peril instigated the other perils The "Efficient Proximate Cause Doctrine" refers to two or more perils that are dependent on each other because one peril instigated the other perils.
The standardized Building and Personal Property Coverage form requires the insured to submit a signed, sworn proof of loss statement:
Within 60 days of the insurance company's request
Gavin, the named insured under a Personal Auto policy, his daughter Tabitha, and two of her friends are riding in the covered auto when Gavin accidentally runs a stop sign, striking another vehicle. Everyone in Gavin's vehicle was injured as well as the driver and two passengers in the other car. How long do Tabitha's friends have to submit their medical expense claims for coverage under Part B of Gavin's standardized Personal Auto policy?
Within three years of the date of the accident Reasonable medical and funeral expenses will be paid under Part B - Medical Payments if they are submitted within three years of the date of the accident.
Which of the following is a coverage that may be selected on an Equipment Breakdown form by showing a limit of liability amount next to the coverage?
Brands and labels Of all the answer choices listed, "brands and labels" is the only one that is a coverage listed on the form that can be selected by the insured by showing a limit amount.
A standard Homeowners policy has been issued with a $300,000 limit to cover a four-family dwelling. What is the automatic amount that will be provided for Coverage C?
$75,000 When a four-family dwelling is covered with a Homeowners policy, 25% of the Coverage A limit is automatically provided for Coverage C - Personal Property coverage. 25% of $300,000 is $75,000.
Ted was injured on the job in Oklahoma and later died from his injuries. When Ted's wife, Monica, decides to remarry, she will receive:
2 years of indemnity benefits in one lump sum Ted was injured on the job in Oklahoma and later died from his injuries. When Ted's wife, Monica, decides to remarry, she will receive two years of indemnity benefits in one lump sum.
In Oklahoma, adjuster licensees may carry over over ____ excess continuing education credit hours to the next 24-month reporting period.
6 Oklahoma permits adjuster licensees to carry over 6 excess continuing education credit hours to the next biennium (24-month reporting period).
Paolo has an expensive boat and is purchasing insurance to cover it. He is discussing the deductible and his agent suggests a deductible amount that Paolo could pay if the Hull of his boat was severely damaged. Which of the following types of deductibles would be best for Paolo?
A percentage deductible A percentage deductible is used with boats that are very expensive. This type of deductible is a percentage of the total amount it would take to repair the hull of the boat if it was severely damaged.
Charlene states on an application for personal automobile insurance, that she has not been involved in any "at-fault" accidents within the past five years. The next day, Charlene later remembers an accident and corrects this statement to include an accident that occurred three years ago. Charlene's original statement can be described as:
A representation A representation is a statement that is believed to be true when made, which might later prove to be false. In this case, the applicant made no apparent attempt to conceal or misrepresent the time when the accident occurred, it was simply a mistake.
Which of the following is eligible to be a named insured under a Homeowners policy?
A trust A trust is eligible to be a named insured under a Homeowners policy. A corporation, a partnership, nor an estate is eligible to be a "named insured" under a Homeowners policy.
Which of the following statements is NOT TRUE regarding the actual cash value endorsement to an Equipment Breakdown policy?
ACV payment will be higher than the cost to repair or replace the damaged property with property of like kind. ACV settlement is less than the cost to repair or replace with like kind, not more
Coverage D of a Dwelling policy provides coverage for:
Fair Rental Value. Coverage D of a Dwelling policy is the Fair Rental Value insuring agreement.
Which of the following is NOT usually excluded under a Professional Liability policy?
Financial losses Economic and financial losses are the subject of coverage under a Professional Liability policy. Therefore, financial losses are NOT excluded.
All of the following items are given a "special limit of liability" under Coverage C of the Homeowners policies, EXCEPT:
Motorized land vehicles Motorized land vehicles are not given a special limit of liability under Coverage C of the Homeowners forms.
Which of the following acts is NOT considered to be "transacting insurance" within the state of Oklahoma?
Taking an agency's incoming payments, sometimes containing premium payments, to the bank for deposit A staff person in an agency office who is simply taking a deposit to the bank is not transacting insurance even if that bank deposit contained premium payments.
Which of the following is a type of "voluntary loss" taken to save the property from further loss?
General Average Loss A "General Average Loss" is a partial loss that is "voluntary". This type of loss is taken to save the property from further loss, such as an insured who uses a garden hose to extinguish a fire that has started on her couch. The water damage is "voluntary" but it prevented further loss to the house.
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. The untrue statement in the answer choices is: "Medical payments and physical damage claims are paid by the state assigned risk fund without determining fault to any party in the accident." These benefits are paid by the insured's own policy, not by the state's assigned risk plan fund.
James owns a sedan, a truck, and an SUV. He carries Part C -- Uninsured Motorist Coverage on his SUV, but does not carry it on his sedan or truck. James' son is driving the truck one afternoon and accidentally strikes James who is driving the SUV, causing James to sustain bodily injury. How will Part C apply in this situation?
No coverage will apply for James' bodily injury. Part C -- Uninsured Motorist Coverage specifically excludes coverage for bodily injury sustained by an insured when struck by an auto that is owned by the insured but is not covered for uninsured motorist coverage or the primary uninsured motorist coverage is included on a policy covering a different vehicle.
The insured has suffered a severe storm and some of his trees, shrubs, and plants are heavily damaged by the wind. How much coverage could the insured expect to receive for his claim under his DP-3 Dwelling policy?
$0. The Dwelling policy provides an additional coverage for trees, shrubs, and plants. However, the coverage applies for specified perils and "wind" is a peril that is NOT covered for the loss to trees, shrubs, and plants. The insured will not collect anything for this loss.
The Section II - Additional Coverages of Homeowners policies, damage to the property of others (whether or not in the insured's custody and regardless of fault) is covered up to:
$1,000 per occurrence
The insured carries an unendorsed DP-3 dwelling policy on his home and personal contents. While traveling abroad someone broke into the home and stole $200 in cash, a shotgun valued at $1,000, and other household items valued at $2,000. Damage caused by the burglars is $1,500. Assuming no deductible applies to their coverage how much would be paid?
$1,500 The DP-3 only provides damage to covered property caused by the burglars. Theft is excluded under the DP-3 unless endorsed with the theft endorsement.
Workers' compensation benefits in Oklahoma for temporary partial disability may not exceed:
52 weeks in total
According to the Oklahoma Workers' Compensation Act, a request for vocational rehabilitation services must be filed with the Commission not later than _______ from the date of receiving permanent disability status.
60 days. When an injured employee receives a disability rating of "permanent", they must file a request for vocational rehabilitation services within 60 days if they would like to receive those services.
Which of the following losses would be covered by the EC peril of "Windstorm or Hail" under a Dwelling policy?
A roof that suffered damage in a tornado The roof is the only property that would be covered under the Dwelling EC peril of windstorm and hail.
What is the limit for the "Business Income" additional coverage under a standard Businessowners policy?
Actual loss sustained for up to 12 months There is no specific amount listed in the policy as the business income limit of liability. Coverage applies for the actual loss sustained for up to 12 months, even if the policy was set to expire in the meantime.
Which of the following Dwelling insuring agreements would be included on a DP-3 form but not on a DP-1 form?
Additional Living Expenses
All of the following are characteristics of a principal that a surety will scrutinize during the underwriting process, EXCEPT:
Consideration Consideration is NOT one of the characteristics a surety would look for in a principal during the underwriting process. Capability, character, and capital ARE characteristics a surety will be looking for in a principal.
Homeowners policies provide personal liability coverage that follows an insured anywhere in the world under:
Coverage E Personal liability coverage for the insured under a Homeowners policy is found in Section II - Coverage E of the Homeowners policy.
With a Commercial Package Policy (CPP), the term that refers to the combination of forms and endorsements selected by the insured for a certain line of insurance is:
Coverage part Monoline policies are not part of a CPP. The common policy conditions apply to all the lines covered in the CPP. Interline forms and endorsements may be used for two or more lines of insurance contained in the CPP.
Real estate investment trusts are can covered by which of the following financial institution bonds?
Form #15 Standard Form #15 covers finance companies, including real estate investment trusts.
The optional coverage for "Money and Securities" under a standard Businessowners policy provides for the loss of money and securities used in the insured's business as a result of all of the following, EXCEPT:
Fraud. When someone uses fraud to take money from the insured, it is not covered under the optional coverage for "Money and Securities". Theft, disappearance, and destruction ARE all covered.
The "Pollution Clean-Up and Removal" coverage under the Building and Personal Property coverage form of a CPP:
Is an additional coverage "Pollution Cleanup and Removal" is an additional coverage under the Building and Personal Property coverage form (one of several Commercial Property coverage forms that can be added to a Commercial Package Policy).
Which of the following BEST DESCRIBES the function of a retroactive date in a Commercial General Liability policy?
It establishes the date when claims-made coverage begins A retroactive date is applicable only on a claims-made CGL policy and it establishes the date when that coverage begins under the current policy.
All of the following statements regarding the basic extended reporting period in a Commercial General Liability policy are TRUE, EXCEPT:
It extends the policy period by 60 days The basic extended reporting period of a claims-made CGL policy does not extend the policy period by 60 days. However, it DOES pay claims first received and recorded within 60 days of the policy expiration date.
Which of the following statements is NOT TRUE regarding the HO-3 form?
It provides coverage for the basic and broad perils for the Dwelling & Other Structures
Which of the following statements is FALSE concerning coverage under the Business Auto policy?
Medical payments coverage is automatically provided. Medical payments coverage is an optional coverage (and not automatically provided) for autos under the Business Auto policy.
Which of the following coverages would NOT be included in the liability section of the Businessowners policy?
Professional liability All of the answer choices contain liability coverages under the Businessowners polict, EXCEPT professional liability. This would not be covered.
Which of the following Dwelling forms provides "open peril" coverage for dwellings and other structures?
The DP-3 special form The DP-3 special form is the only Dwelling form that provides "open peril" coverage on the dwelling and other structures. The DP-1 and DP-2 are "named peril" forms.
The DP-1 basic form peril of "internal explosion" will cover which of the following losses?
The explosion of a furnace that the insured owns, inside the covered dwelling The only loss that would be covered by the peril of "internal explosion" under a DP-1 form is the explosion of the furnace that the insured owns, inside the covered dwelling.
All of the following statements regarding eligibility of self-storage facilities for a standard BOP policy are true, EXCEPT:
The facility cannot exceed more than 500 individual self-storage units The BOP DOES NOT require a self-storage unit to be limited to no more than 500 individual self-storage units to be eligible for coverage. All of the other answer choices are eligibility requirements of the BOP for coverage of self-storage facilities.
Coverage A - Dwelling of a standard Homeowners policy provides coverage for all of the following, EXCEPT:
The land where an insured structure is being built Land is NOT covered under the Coverage A insuring agreement of a standard Homeowners policy.
Which of the following statements is NOT TRUE regarding public adjusters licensed in Oklahoma?
They can investigate and negotiate casualty losses Public adjusters in Oklahoma are not permitted to investigate and negotiate casualty (liability) losses.
Capital Heating & Air Conditioning installs a central air conditioning system in a newly constructed office building. The system is defective and will not work, delaying the opening of the building and costing the building owner lost rental revenue. Is the owner's claim covered under Capital's CGL policy?
This claim is not covered because of loss of use of "impaired property" exclusion. The loss would not be covered under Capital's policy because of the "impaired property" exclusion because they used a deficient product in their work that caused the loss of use of the building for the owner.
Tom rents half of a duplex. During a severe storm, lightning strikes a tree in the front yard and it falls, causing damage on Tom's side of the duplex. Which of the following losses will be covered by Tom's HO-4 policy?
Tom's TV and entertainment system that were damaged when the tree fell through the roof An HO-4 covers personal property if damaged by a covered peril. There is no coverage for real property under an HO-4 policy.
Which of the following zones is not expected to flood during the "base flood"?
X zones X zones are not expected to flood during the base flood.
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 $500 for a single event and $1,000 for the entire policy period is available under the standard policy for "towing and assistance".
The spouses of workers who died from their work-related injuries are entitled to what percentage of the employee's average weekly wage?
70% Spouses will receive 70% of their deceased spouse's average weekly wage as part of the benefits they will receive.
In Oklahoma, which of the following will the Commissioner impose on a person for engaging in an unfair method of competition?
A cease and desist order For engaging in an unfair method of competition, licensees would be subject to a cease and desist order after a hearing.
When insurance is written on a Dwelling form, each of the following types of property would be insured under Coverage A, EXCEPT:
A detached garage Only the Dwelling and ATTACHED structures are covered under Coverage A of the Dwelling policy.
Acme Corp. requested three bids from different contractors for the construction of its new office building. Acme accepted the lowest bid from Corbett's Contracting and entered into a contract to have the office building constructed. After construction was completed, Corbett's presented Acme with a bill for construction costs over and above the amount of the bid that was agreed to in the contract. Which of the following types of bonds would protect Acme from paying the additional costs?
A performance bond. A performance bond guarantees the owner that the bidder will complete the work at the price that was bid as per the contract specifications.
If the insured carries a DP-2 Dwelling form and insures the dwelling for 80% of its replacement cost value (the co-insurance requirement), what will he be paid if his 30-year-old roof sustains $10,000 in damages (disregarding any deductible)?
$10,000 If the insured carries 80% to value (co-insurance) he would be entitled to full replacement cost coverage for his damaged roof. Nothing to calculate here, full replacement cost is $10,000.
Kari has her home covered under a DP-3 form and has suffered a loss that will require major repairs. How much coverage does she have to comply with laws causing an increase in costs due to new regulations requiring newer plumbing materials be used when the repairs are made?
10% of the Coverage A limit as additional insurance In Kari's situation, she will have 10% of the Coverage A limit as additional insurance under the "Ordinance or Law" other coverage of the DP-2 and DP-3.
Under an HO-6 form, the additional coverage for damage to trees, shrubs and other plants is provided at:
10% of the Coverage C limit, or a maximum of $500 for any one tree, shrub, or other plant. Under the HO-6 form, coverage for trees, shrubs and other plants is 10% of the Coverage C limit, or a maximum of $500 for any one tree, shrub, or other plant.
After a proof of loss has been filed with the Oklahoma Workers' Compensation Commission for death benefits payable to a guardian of a beneficiary, the employer or their insurer must begin paying the death benefits within:
15 days Death benefits to the guardian of a beneficiary must begin within 15 days of the Commission's determination of the proper beneficiaries.
Employees in Oklahoma who are temporarily totally disabled in a work-related injury do not receive indemnity benefits under workers' compensation for ______ after the disability occurs.
3 days
Loss settlement for personal property that is covered under Coverage C of a standard unendorsed ISO Homeowners policy is on a(n):
Actual cash value basis. Unless endorsed, Coverage C - Personal Property of the standard Homeowners policies settles losses on an actual cash value basis, but no more than the cost to repair or replace the property.
An insured has her business automobiles covered under a Business Auto policy with Symbol 7 specified on her Declarations page. She has purchased a trailer with a load capacity of 2,500 pounds and hitched it to a covered van. While she is driving the van, the trailer breaks free and crashes into another vehicle, causing bodily injury. Which of the following statements is true regarding this insured's situation?
Liability coverage is not extended under Symbol 7 for a trailer with a load capacity of more than 2,000 pounds, therefore coverage will not apply Liability coverage is not extended under Symbol 7 for a trailer with a load capacity of more than 2,000 pounds, therefore coverage will not apply because the load capacity of the trailer in the question is listed at a load capacity of 2,500 pounds.
Allen, an insured in Oklahoma, was stopped at a DUI checkpoint while driving his car one evening. The officer at the checkpoint arrested him for driving under the influence, but when Allen was taken back to the station, it was determined that his blood-alcohol content was not above the legal limit. Allen's insurer, Binders Keepers, Inc. raises his automobile insurance premium rate due to the arrest. Which of the following statements is CORRECT in this situation?
The Oklahoma Commissioner may revoke Binders Keepers' certificate of authority Because Allen was arrested but no charges were filed, Binders Keepers is not permitted by Oklahoma law to raise Allen's insurance premium. However, the Commissioner may revoke the insurer's certificate of authority, censure or fine the insurer for raising Allen's premium rate.
Which of the following is NOT an exclusion of Coverage B under a Commercial General Liability policy?
Being sued when another company accuses the insured company of stealing their slogan and using it in their advertising When an insured is sued when another company accuses the insured company of stealing their slogan and using it in their advertising, it is not excluded by the CGL policy, unless the insured KNOWINGLY steals a slogan. However, the other company would need to prove this.
In Oklahoma, employers may contract with a managed care plan to provide medical care for their injured workers at a reduced cost. These plans are known as:
Certified Workplace Medical Plan A Certified Workplace Medical Plan is the name that Oklahoma titles managed care plans for employers.
Which of the following is NOT an "other coverage" of the DP-1 form?
Collapse The "other coverage" for collapse is included on the DP-2 and DP-3 forms but not the DP-1.
Which of the following statements is TRUE with regard to law?
Statute law is codified
Water leaking from an automatic sprinkler system IS COVERED by the basic cause of loss form attached to a Commercial Property policy.
The insured will pay the deductibles on all policies that pay on the loss. Deductibles will apply as usual on all policies covering the loss.
All of the following are methods used by state Insurance Departments to protect the insurance consuming public, EXCEPT:
Writing new and expanded insurance laws Again, the Insurance Commissioner (the head of the Insurance Department) does NOT write insurance laws. Only the legislative branch of a government can write laws.
Terrence was receiving weekly benefits of $300 for a permanent total disability he sustained on the job in Oklahoma until he died of cancer unrelated to his disability. Terrence's wife and sole beneficiary will receive a one-time lump sum payment of:
$7,800. Terrence's wife will receive a one-time lump sum benefit of $7,500. This is equal to 26 weeks of Terrence's benefits ($300 x 26 = $7,500).
Which of the following statements best describes a "representation" made in an insurance application?
A representation is a statement made by the applicant that he believes to be true when made, but which might prove to be false.
Noemi is a fashion designer who owns a company that sells her designs to high-end boutiques. She has her company automobiles covered by a standard Business Auto policy. Noemi has decided to rent a villa in the south of France for two months so she can work with some French designers to create a new line of handbags. When Noemi arrives in France, she rents a cute convertible that she drives for the duration of her stay. Noemi is driving the car back to the airport to return it and catch her flight back to the United States when she has an "at-fault" accident and injures several people. The injured people file a lawsuit against Noemi in a French court. Which of the following statements best describes how coverage will apply under Noemi's Business Auto policy?
Coverage will not apply because Section II of the BAP only provides world-wide liability coverage for private passenger autos that the insured hires, leases, rents, or borrows without a driver, for 30 days or less
Which of the following statements regarding the eligibility requirements for coverage under a Dwelling policy is TRUE?
Dwellings owned by corporations or other business entities are eligible. The only answer choice that is TRUE is: "Dwellings owned by corporations or other business entities are eligible."
Under the standardized Homeowners forms, how much "additional coverage" is provided under Section II - Liability for loss of earnings by the insured to assist the insurer in the investigation or defense of a claim?
$250 per day This limit is $250 per day to appear at hearings or trials to assist the insurer in the defense of the insured. This is the amount under the ISO standardized form.
Adam is an Oklahoma worker who was injured on the job and is eligible to receive permanent total disability benefits. These benefits will be calculated at _____ of his average weekly wage.
70% Permanent total disability benefits in Oklahoma are calculated at 70% of the injured worker's average weekly wage.
Jason has his home covered by a Dwelling policy with Coverage C included. When he transports covered property temporarily off the premises, it is destroyed by fire. How much coverage does Jason have to cover his destroyed property?
10% of the Coverage C amount. Jason has 10% of the Coverage C amount to cover his destroyed personal property.
Risk is best defined as:
An uncertainty of loss Insurance companies insure against the uncertainty of loss. Risk is the uncertainty that a loss might occur and is the reason why people buy insurance.
Which of the following statements is TRUE regarding the Personal Effects Floater?
It can be purchased either on a permanent basis for frequent travelers or for a single trip
In Oklahoma, when an administrative law judge finds that a consequential work-related injury has occurred and additional time is necessary to reach MMI, temporary total disability benefits may continue for a period of not more than an additional:
52 weeks Temporary total disability may continue for a period of not more than an additional 52 weeks if an administrative law judge finds that consequential injury will require additional time for the worker to reach maximum medical improvement.
An additional coverage provided by Part D of the Personal Watercraft policy includes coverage for "salvage liability". This is best described as:
A maritime law requiring watercraft owners to recover items that have gone overboard The additional coverage for "salvage liability" refers to a maritime law requiring watercraft owners to recover items that have gone overboard.
Injured workers in Oklahoma can receive temporary total disability benefits under workers' compensation law for:
A maximum of 156 weeks Injured workers in Oklahoma can receive temporary total disability benefits under workers' compensation law for a maximum of 156 weeks.
Mort was killed on the job in Oklahoma leaving a wife and two children. Mort's children will receive a lump-sum payment of _______ in addition to a percentage of the injured employee's or state average weekly wage.
$25,000 Upon the death of an injured employee in Oklahoma, his/her children (if there are 1 or 2) will receive (in addition to a percentage of average weekly wage) a lump-sum of $25,000.
A standard Homeowners policy has been issued to cover a one-family structure with a coverage limit of $75,000 on the dwelling (Coverage A). What is the automatic amount of insurance coverage on personal property (Coverage C)?
$37,500. Personal property is automatically covered for 50% of the amount of the dwelling limit for one or two-family dwellings.
Font Masters Printing Company has a printing press that suffers a covered total loss. The company paid $25,000 ten years ago for the press. Actual cash value is $40,000 and the replacement cost is $55,000. The company has had to cancel several contracts for printing due to the loss of the press and they are anxious to resume full production. Font Masters is covered under a Businessowner's Policy (BOP). How much will the insurer pay for this claim?
$55,000 The Businessowners policy settles property claims on a replacement cost basis. The insurer will pay $55,000 to Font Masters for this claim as that is the replacement cost of the damaged property. The price the insured paid for it 10 years ago as well as the actual cash value of the press are not considered in settling the loss.
An insured is covered under a DP-2 broad form Dwelling policy. A water pipe has frozen and burst and the insured has suffered floor and ceiling damage in his two-story home. The cost to remove and replace the walls to get to the pipe is $300. The cost to repair the floor is $400. The pipe that burst must now be replaced with a more expensive option to meet newer building codes. The cost to replace the pipe is $200. How much will the insurer pay?
$700. The form will not cover the pipe that burst and caused the damage, but will cover the other damages.
An insured has received actual cash value payment from the adjuster for a covered loss. At the time he is satisfied with the payment. He later changes his mind and wants the full replacement value. How many days does he have to submit the receipts to get the replacement cost payment under a HO-3 form?
180 days The homeowner forms that provide for replacement cost coverage contain a clause which allows the insured to accept "actual cash value" for the loss. If the insured wants to pursue replacement cost for his damaged property, he must notify the insurance company of his intent to do so within 180 days after the date of the loss.
All of the following would be excluded by the basic cause of loss form under a Commercial Property policy, EXCEPT:
Water leaks from the sprinkler system in the building, causing wall and floor damage Water leaking from an automatic sprinkler system IS COVERED by the basic cause of loss form attached to a Commercial Property policy.
Personal property that is covered under the Personal Property Replacement Cost Endorsement of a Homeowners policy is damaged and a claim has been filed. The replacement cost of the property at the time of the loss is $2,500. The full cost to repair the property is $2,000. The Coverage C limit of the Homeowners policy is $8,000. No special limits apply to this property and there is no limit applied to the type of property being claimed. Which of the following is the amount that will be paid under the endorsement?
$2,000. The endorsement will pay the smallest amount of the replacement cost at the time of the loss, the full repair cost, the Coverage C limit, any applicable special limits, or the limit that applies to the type of property being claimed.
All of the following statements are true regarding Difference in Conditions insurance (DIC), EXCEPT:
Covers losses due to windstorm DIC insurance covers any cause of loss that leaves the property in a different condition than it was prior to the loss, up to the limit specified in the policy. This type of insurance does not cover fire or any of the extended coverage perils. Therefore, the UNTRUE statement is: "Covers losses due to windstorm". As you know, "windstorm" is an extended coverage (EC) peril.
If the insured dies, which of the following is automatically transferred under a Commercial General Liability policy?
Rights and duties. When an insured dies, the rights and duties of that insured are automatically transferred.
Pete's Plumbing, Inc. has two identical Business Auto policies written by Indemnify Insurance, Inc. The policies cover the five autos Pete's employees use each work day. One afternoon an employee backs a covered vehicle into a telephone pole and dents the rear of the vehicle. Which of the following statements best describes how this loss will be paid?
The highest policy limit of ONE of the policies covering the vehicle is the most that will be paid. The highest policy limit of ONE of the policies covering the vehicle is the most that will be paid for the damage. This is because the same insurer provides coverage under both policies and one of those policies was not written as excess insurance.
