Texas Practice Exam 8
Dan insures a home for adequate limits under a DP-2. If a flood causes $1,000 in damage, what is the maximum the insurer will pay, disregarding deductibles? a. $0 b. $750 c. $900 d. $1,000
a. $0 Flood is an excluded peril.
A Personal Automobile policy provides liability coverage on a single limit basis for $100,000. A covered accident caused by Mr. Jones involves a $75,000 liability judgment to Mr. Allen for his injuries and $25,000 liability judgment for the damage to his car. In addition, $20,000 in legal bills are incurred defending the insured. The company will pay: a. $120,000. b. $25,000. c. $75,000. d. $100,000.
a. $120,000.
The insured is covered under a personal auto policy with collision coverage and a $500. deductible. He is involved in an at-fault accident. The loss involves $4,000 damage to the vehicle and a $45.00 storage fee. How much will the insurer pay? a. $3,545 b. $4,000 c. $3,500 d. $4,045
a. $3,545
Under an Equipment Breakdown Protection policy with $500,000 in coverage, a covered "accident" resulted in the following: I. $500,000 worth of damage to the property. II. $10,000 damage to the property of another in the insured's care. III. $5,000 in legal fees to defend the insured in this case. The policy will pay a total of: a. $505,000. b. $500,000. c. $510,000. d. $515,000.
a. $505,000.
An insured owns a set of six drawing pens designed and used by Benjamin Franklin. Each pen is worth $1,000 alone, but the set is worth $12,000. One pen is destroyed by a covered peril. Under the pair or set clause the insurance company will pay a maximum of which of the following amounts? a. $7,000 b. $1,000 c. $12,000 d. $2,000
a. $7,000
A Texas insurer is liable for a claim but is in violation of Texas regulations as to the timely payment of the claim. Texas requires that the insurer must pay, in addition to the settlement amount, interest on the amount of the claim at the rate of _____% per year. a. 18 b. 15 c. 20 d. 17
a. 18
Under the dwelling forms, personal property moved to a new principal residence will be automatically covered at the new location (subject to policy expiration) for a period of: a. 30 days. b. 10 days. c. 20 days. d. 60 days.
a. 30 days.
Physical damage to a contractor's bulldozer is best covered under which of the following? a. A Commercial Inland Marine Contractors Equipment Floater b. A Commercial Building and Personal Property Form c. A Commercial Auto Policy d. A Commercial General Liability Policy
a. A Commercial Inland Marine Contractors Equipment Floater
All of the following injuries occurring on the job would probably be deemed compensable, EXCEPT: a. A cerebral hemorrhage occurring at work and caused from years of high blood pressure. b. A back injury resulting from lifting a heavy object with another employee. c. A heart attack from overexertion while moving an object at work. d. A foot injury caused by a fellow employee running over it with a tow motor.
a. A cerebral hemorrhage occurring at work and caused from years of high blood pressure.
Commercial Inland coverages can be written as a stand alone policy and not included in the Commercial Package Policy (CPP), this would be called: a. A monoline policy b. A BOP c. An endorsement d. An individual policy
a. A monoline policy
The amount it would cost to repair or replace property minus depreciation is the definition of: a. Actual cash value. b. Replacement cost. c. Market value. d. Functional replacement cost.
a. Actual cash value.
Under an unendorsed commercial building and personal property form, loss valuation is based on: a. Actual cash value. b. Market value. c. Original cost. d. Replacement cost.
a. Actual cash value.
Homeowners Coverage D - Loss of Use, would apply to which of the following? a. Additional living expenses of the insured after a covered fire. b. Personal property that the insured can no longer use. c. The insured's costs of replacing their music collection. d. A garage that suffers glass breakage in a windstorm.
a. Additional living expenses of the insured after a covered fire.
Mary has a personal auto policy in force, including other than collision (comprehensive) coverage, when her automobile is stolen. The theft is properly reported to the police and the insurance company. She then rents a car. Which of the following is true? a. After a waiting period of 48 hours her policy will pay rental costs up to $20 per day up to a maximum of $600. b. Rental costs will be covered until her vehicle is recovered. c. Rental costs are only covered if a rental car is damaged. d. Rental costs are covered up to $20 per day subject to a maximum of $600 with no waiting period.
a. After a waiting period of 48 hours her policy will pay rental costs up to $20 per day up to a maximum of $600.
Under a personal property floater, a loss is covered when it occurs: a. Anywhere in the world, except for fine arts. b. In the United States only. c. In the United States and Canada only. d. In the United States, Canada, and Mexico only.
a. Anywhere in the world, except for fine arts.
With a Commercial Package Policy (CPP), "interline endorsements" are endorsements that: a. Apply to more than one coverage part of the package policy. b. Are attached to the common Declarations page. c. Apply only to the common policy conditions within the package policy. d. Apply only to the Commercial Property coverages within the package policy.
a. Apply to more than one coverage part of the package policy.
Which of the following would qualify for the Transportation Expense coverage: I. Car rental fees incurred by the insured due to physical damage to his covered auto. II. Loss of use expenses for which the insured is liable because of physical damage to his covered auto. a. Both I and II b. Neither I nor II c. I only d. II only
a. Both I and II
The "other insurance clause" is included in insurance policies to deal with: a. Duplicate policies. b. Excessive policies. c. Conditional coverages. d. Inadequate coverages.
a. Duplicate policies.
Which of the following are also insureds in connection with conducting the insured's business under a commercial umbrella policy? a. Employees in connection with bodily injury to third parties b. Employees in connection with bodily injury to another employee c. Employees participating in a recreational athletic event not sponsored by the employer d. None of the responses are correct
a. Employees in connection with bodily injury to third parties
Under the personal auto policy the "supplementary payments" coverage is: a. In addition to the limit of liability. b. Added by endorsement. c. Included in the limit of liability. d. Not available under the personal auto policy.
a. In addition to the limit of liability.
A print shop is insured under a Businessowners Policy with a separate policy covering the press. If a loss occurs that is covered under both policies, how will the Businessowners Policy respond? a. In this situation, the BOP is considered "excess" coverage. b. The BOP would not respond to this claim at all because other coverage was in effect. c. The BOP will pay a share of the loss in proportion to the other policy. d. The abandonment clause under the BOP policy will allow the insured to abandon the property to the other insurer.
a. In this situation, the BOP is considered "excess" coverage.
Standard and Poors, A.M. Best and Moodys are examples of: a. Independent rating services. b. Insurance department regulatory agencies. c. Federal insurance regulatory agencies. d. State run monopolies.
a. Independent rating services.
An aleatory contract is most accurately described by which of the following? a. It is a contract in which the performance of one party is contingent upon the occurrence of a fortuitous (accidental) event. b. It is a contract which alleges certain facts to be true in the written agreement. c. It is a contract in which one party offers payment in exchange for the other party's performance. d. It is a contract which alters a previous agreement.
a. It is a contract in which the performance of one party is contingent upon the occurrence of a fortuitous (accidental) event.
Which of the following statements is NOT correct regarding proof of loss? a. It is the insureds option to complete. b. The insurance company requests it. c. It confirms the insureds opinion of the loss. d. It is often a sworn statement.
a. It is the insureds option to complete.
In the ocean marine insurance policy, the term "average" means: a. Loss or damage. b. The ACV of the ship. c. The average value of the claim insured against by the perils of the sea . d. That coverage is written on a named peril basis.
a. Loss or damage.
Under a Personal Watercraft, Boatowners or Yacht policy, how are physical damage claims settled? a. On an actual cash value (ACV) basis. b. On a replacement cost basis. c. On a functional replacement cost basis. d. On an agreed amount basis.
a. On an actual cash value (ACV) basis.
The clause in an ocean marine policy that refers to "particular average" means: a. Only one party shares in the loss. b. Damage to cargo losses will be shared by all parties. c. Payment must be made under the freight insurance coverage. d. Payment must be made under the 'running down clause'.
a. Only one party shares in the loss.
A mutual insurance company is: a. Owned by its policyholders. b. Owned by stockholders. c. A reciprocal insurance company. d. Similar to Lloyds of London.
a. Owned by its policyholders.
Paul's neighbor Pete gives Paul the keys to his uninsured pickup truck to use whenever Paul wants to. When would this vehicle NOT be considered a "covered auto" on Paul's auto policy? a. Paul's vehicle is out of gas. b. Paul's vehicle has a dead battery. c. Paul's vehicle is in for repair work. d. Paul's vehicle was wrecked and towed away.
a. Paul's vehicle is out of gas.
The three parties to a contract bond are: a. Principal, obligee, surety. b. Obligor, principal, surety. c. Principal, obligee, employee. d. Employee, obligor, principal.
a. Principal, obligee, surety.
All of the following would be covered under a Builders Risk Policy, EXCEPT: a. Prospective buyer. b. Contractor. c. Owner. d. Sub-contractor.
a. Prospective buyer.
After an auto collision loss an insurance company may elect to pay the insured's claim and take possession of the vehicle. This practice is referred to as: a. Salvage. b. Subrogation. c. Warranty. d. Deductible.
a. Salvage.
The appraisal clause in a policy is used to: a. Settle disputes concerning the amount of loss. b. Determine who is liable for damages. c. Deny coverage. d. Obtain facts prior to going to court.
a. Settle disputes concerning the amount of loss.
An insured carries aircraft liability coverage with "admitted aircraft liability coverage." Who negotiates the payment of the claim if a passenger is injured in an accident? a. The Insurer b. The Insured c. A Third Party d. A Special Aviation Court
a. The Insurer
Who must be notified when a commercial property policy is cancelled? a. The first named insured b. Any insured c. A representative of the insured d. The Insurance Department
a. The first named insured
Isaac owns a home with an older furnace in need of repair. He leaves his home for a month to avoid the cold weather. He returns to find that the furnace had stopped working. Water pipes have frozen and burst and his property has been damaged. Since the water ran for almost a month, his water bill is extremely high. What will the adjuster pay? a. The water damage. b. The increased cost of the water bill. c. The cost to replace the particular part in the plumbing system that busted and caused the damage. d. The furnace repairs and/or replacement.
a. The water damage.
Which of the following best describes the concept of risk? a. Uncertainty of Loss b. Result of Loss c. Amount of Loss d. Cause of Loss
a. Uncertainty of Loss
In a contract of adhesion, how are disputes between the parties generally resolved in court? a. Unclear provisions in the contract will be resolved in favor of the non-writing party's reasonable interpretation of those provisions. b. Both parties must adhere strictly to the contract terms for the contract to be valid. c. The party which most closely adhered to the contract provisions will win the dispute. d. The dispute must be resolved by binding arbitration.
a. Unclear provisions in the contract will be resolved in favor of the non-writing party's reasonable interpretation of those provisions.
Vehicles which may be insured by a personal auto policy are described in the eligibility rules. Each of the following statements is true about vehicles eligible for personal auto policy (PAP) coverage, EXCEPT: a. Vehicles with fewer than four wheels are eligible. b. Vans used for business are not eligible. c. Vehicles owned by an individual or married couple may be insured. d. Private passenger autos and pickup trucks may be insured.
a. Vehicles with fewer than four wheels are eligible.
If an insured intentionally conceals a material fact about property to be covered by a policy, coverage may be: a. Voided. b. Suspended. c. Reduced. d. Restricted.
a. Voided.
Under a Standard Fire Policy, intentional misrepresentation of material facts (fraud) on the part of the insured: a. Voids coverage on the part of the insured. b. Voids coverage on the part of the mortgagee. c. Voids coverage for both the insured and the mortgagee. d. Coverage would be void for neither the insured nor the mortgagee.
a. Voids coverage on the part of the insured.
When the Agreed Value Option is used, the coinsurance requirement is: a. Waived b. Still applies c. Converted to a reporting form d. Never reinstated
a. Waived
A family takes their 50 horsepower power boat to the lake on a trailer towed behind their personal auto. The pleasure boat is adequately covered under which of the following policies? a. Watercraft. b. Dwelling. c. Homeowners. d. Automobile.
a. Watercraft.
Which of the following is covered under the Commercial Property broad cause of loss form, but is not covered by the basic cause of loss form? a. Weight of ice and snow b. Vandalism c. Riot d. Sinkhole collapse
a. Weight of ice and snow
When is a passenger first covered under an aircraft policy? a. When Entering the Aircraft b. When in an airport with a ticket for a flight. c. While on the Runway d. While walking down the passenger walkway.
a. When Entering the Aircraft
An insured has a $2 million limit of insurance under a Personal Umbrella policy with a $2,000 self-insured retention limit. The insured is sued for $1 million in personal injury damages and $1.5 million in property damages arising from the same occurrence. The insured's underlying liability policies exclude coverage in this case, but the claim is covered under the Umbrella policy. In this case, the umbrella policy will pay: a. $1 million of the damages. b. $1,998,000 of the damages. c. $2 million of the damages. d. $2,500,000 of the damages.
b. $1,998,000 of the damages.
A house has a market value of $180,000, an actual cash value of $150,000 and a replacement cost of $200,000. To be certain that the 80% provision of the HO-3 form is met, the minimum amount for which the house must be insured is: a. $150,000 b. $160,000 c. $180,000 d. $200,000
b. $160,000
An insured has an auto accident and sustains bodily injury worth $50,000. The responsible party carries auto liability limits of 15/30/15 which provides $15,000 for bodily injury for any one person per occurrence. The insured carries Underinsured Motorist limits providing $100,000 bodily injury for any one person per occurrence. Therefore, the responsible party's policy will pay its limit of $15,000 and the insured's Underinsured Motorist policy will pay: a. $15,000 b. $35,000 c. $25,000 d. $100,000
b. $35,000
The additional coverage for Debris Removal will now pay to clean up the debris of others on the insured premises even if the insured has no damage to their own property. The maximum payable to remove this debris of others is: a. $25,000 b. $5,000 c. $10,000 d. $50,000
b. $5,000
When a covered loss disables the insured watercraft, the standard Watercraft policy provides coverage for "towing and assistance" in the amount of: a. $250 for a single event and $1,000 for the entire policy period. b. $500 for a single event and $1,000 for the entire policy period. c. $1,000 for a single event and $1,500 for the entire policy period. d. $0.
b. $500 for a single event and $1,000 for the entire policy period.
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. ABC Company is covered under a Businessowner's Policy (BOP). How much will the insurer pay for this claim? a. $25,000 b. $55,000 c. $40,000 d. $20,000
b. $55,000
Which of the following is not considered an instrumentality of transportation or communication under the nationwide inland marine definition? a. A toll bridge b. A truck-tractor c. Electric transmission lines d. A television transmitter
b. A truck-tractor
All of the following are Texas adjusters who are not permitted by law to adjust a loss related to roofing damage on behalf of an insurance company, EXCEPT: a. An adjuster who is also a roofing contractor. b. An adjuster that has taken roofing classes and is capable of repairing a damaged roof. c. An adjuster who sells roofing products and services. d. An adjuster who also holds a controlling interest in a roofing-related business.
b. An adjuster that has taken roofing classes and is capable of repairing a damaged roof.
All of the following could be examples of strict liability activities, EXCEPT: a. Determination of the duty owed and to whom it was owed. b. Assumption of risk. c. Determination of breach of duty. d. Determination of causation (proximate cause) and resulting damages.
b. Assumption of risk.
The chief deputy of the county auditor steals $2.5 million from the county and gambles it away. What bond if any would the county need to have in place in order to try and recoup this loss? a. Employee dishonesty b. Blanket Public Official Bond c. Fiduciary bond d. Extortion-Commercial entities
b. Blanket Public Official Bond
Medical coverage under a personal auto policy will cover the insured if he/she is injured while a passenger on a: a. Train. b. Bus. c. Subway. d. Airplane.
b. Bus.
Which of the following would not be improvements or betterments? a. Carpet b. Furniture c. Interior walls d. Electrical wiring
b. Furniture
The function of the Standard Mortgage clause in a property insurance policy is all of the following, EXCEPT: a. Protects the rights (insurable interest) of the mortgagee, even if an insured intentionally causes a loss to the mortgaged property. b. Guarantees that the insured will make the mortgage payments on time. c. Allows the mortgagee to pay the premium if the insured refuses to do so. d. Allows the mortgagee to submit a proof of loss if the insured refuses to do so.
b. Guarantees that the insured will make the mortgage payments on time.
A Texas employer who chooses NOT to provide workers' compensation coverage: I. Loses civil immunity. II. May be sued for damages when an employee is injured in the of employment. III. Will have to pay a fee of $500. a. I only b. I and II only c. II and III only d. I, II, and III
b. I and II only
All of the following would be covered under Part B - Medical Payments of the personal auto form, EXCEPT: a. Injuries sustained by the insured's mother when a tree falls on the automobile while she is sitting inside the automobile while it is parked in the driveway. b. Injuries sustained by an elderly man riding in the insured vehicle after having paid the insured to take him to the grocery store. c. Injuries sustained by the insured when using his father's pickup truck to pick up furniture he recently purchased. d. Injuries sustained by a neighbor who carpools with the insured and who, while getting into the insured's car, slips, falls, and injures her knee.
b. Injuries sustained by an elderly man riding in the insured vehicle after having paid the insured to take him to the grocery store.
Teri is a Texas adjuster who has had her license suspended by the Commissioner. What is the maximum length of time Teri's license can be suspended according to the Texas insurance code? a. Six months. b. One year. c. Nine months. d. Three months.
b. One year.
A large tree has fallen into Paul's yard caused by wind. The claims service representative (CSR) advises Paul to call a contractor to remove the tree and send the bill to the insurance company. The bill is $1,200. However, the policy coverage for the debris removal of a tree that has fallen by wind, is only $500 unless the tree hits the house, which was not the case. What should the adjuster do? a. Pay only $500. b. Pay the $1,200. c. Pay the $1,200, but then explain the policy provisions and ask to insured to reimburse the insurer for the difference. d. Negotiate.
b. Pay the $1,200. The consumer relied on the statements of the claims representative so the insurance company would be estopped from denying the claim. The insurer had already waived its right to deny full payment of the claim because of the statements of the claims representative. Therefore, the $1,200 should be paid.
The Equipment Breakdown policy (formerly called Boiler & Machinery) provides for replacement cost coverage in case of a covered claim. Under what conditions would the insurer only pay actual cash value in case of a loss? a. Only if the policy is endorsed to provide ACV coverage b. The policy pays replacement only if the repairs are made within twenty four months of the accident. c. The policy will pay replacement cost as long as the repairs are expedited regardless of a time limit. d. The policy always provides replacement cost coverage in case of a covered claim.
b. The policy pays replacement only if the repairs are made within twenty four months of the accident.
Under the DP-3 special form, which of the following would be covered? a. Earthquake. b. Theft of outside lighting attached to the building. c. Vandalism in a building vacant for 89 days. d. Frozen plumbing in a dwelling with a disconnected furnace.
b. Theft of outside lighting attached to the building.
The maximum payable for damage or loss to signs attached to the building covered under an ISO standardized Businessowners policy is: a. $2,500 b. The building limit since it's attached to the building. c. $1,000 d. $5,000
c. $1,000
An insured, covered under an ISO standardized Businessowners Policy, has sustained a fire loss to his building. Due to changes in the building codes it's going to cost $20,000 more to make the repairs. How much, if any, will the BOP pay for these extra costs? a. $5,000 b. Nothing c. $10,000 d. $20,000
c. $10,000
A Businessowners policy has a $500,000 occurrence limit for liability, and a $1,000,000 aggregate limit. If claims for $600,000 and $400,000 have been filed in two separate incidents, how much coverage remains, if any, for future claims submitted during the policy term? a. $500,000 b. $0 c. $100,000 d. $1,000,000
c. $100,000
Calculate the Supplemental Income Benefit (SIBs) for Sandra, an injured worker in Texas. Sandra has been given an IR of 20% and has been actively seeking a new job. She has not accepted a lump-sum payment for her injuries and she has returned to work in a modified position. Sandra's AWW before her injury was $522.00. Her weekly wages after the injury in her modified position are $214.00. a. $385.00 b. $203.60 c. $162.88 d. $736.00
c. $162.88
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? a. 3 months from the date she passed her state licensing exam. b. 6 months from the date she completed her prelicensing course. c. 12 months from the date she passed her state licensing exam. d. 9 months from the date she completed her prelicensing course.
c. 12 months from the date she passed her state licensing exam.
Which of the following bests describes the process of mediation? a. A summons to give testimony b. Estoppel because of certain acts of others c. Both parties present their dispute to a person usually in the legal profession; nothing is binding on either party d. All parties submit their differences to a disinterested third party; the result is binding on both parties
c. Both parties present their dispute to a person usually in the legal profession; nothing is binding on either party
Which of the following is a covered water peril under property insurance policies? a. A backup of a sewer b. A tidal spray c. Breakage of pipes d. Flood
c. Breakage of pipes
In a liability situation, 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: a. Pro-rata liability. b. Primary and excess liability. c. Contribution by equal shares. d. Other insurance clause.
c. Contribution by equal shares.
"Additional Coverages" in a Homeowner Policy would cover: a. The dwelling. b. Other structures. c. Debris removal. d. Materials and supplies.
c. Debris removal.
Which of the following is not considered to be an unfair claims settlement practice? a. Attempting to settle a claim on the basis of an application which was altered without the knowledge of the insured b. Making a claims payment and omitting the coverage under which payment is being made c. Denying a claim that is not covered by the policy. d. Stating to claimants that it always appeals arbitration awards for the purpose of compelling them to accept lower settlements
c. Denying a claim that is not covered by the policy.
Which of the following are are essential if a salvage award is to be made? I. The property involved must be in peril from some hazard. II. The salvage service must be voluntary. III. The effort must be successful. a. I and III only b. I and II only c. I, II and III d. II and III only
c. I, II and III
Which of the following statements is TRUE regarding the automatic fines assessed by the Texas Department on licensees who do not comply with the continuing education requirement? a. All automatic fines assessed must be paid by check or money order payable to the Texas Guaranty Fund. b. All automatic fines assessed must be within 45 days after the fine was issued. c. If a licensee fails to obtain the required number of continuing education hours for their license type, an automatic fine of $50 per credit hour not completed will be assessed. d. If the licensee would like to contest the automatic fine, they must make a written request for a contested case hearing within 45 days after the fine was issued.
c. If a licensee fails to obtain the required number of continuing education hours for their license type, an automatic fine of $50 per credit hour not completed will be assessed.
In claims settlement, an open-ended release: a. Refers to all releases. b. Is a release involving an attorney. c. Is a conditional, or partial release. d. Refers to a release where all claims expenses are paid.
c. Is a conditional, or partial release.
The insured is operating his boat on a fresh water lake and runs over a water skier. What coverage would apply to this claim under the boatowners policy? a. The claim is not covered b. The hull insurance c. Liability coverage d. Medical payments
c. Liability coverage
Mikela is walking from her car, across a dark parking lot, to her apartment one evening after work. Suddenly, a masked man jumps out from between two cars and holds a gun to Mikela's head. The man tells Mikela that he will kill her if she does not give him her purse. Mikela has just experienced a: a. Larceny b. Theft c. Robbery d. Burglary
c. Robbery
Which of the following best describes "no release or walk-away" release? a. A form of advanced payment to the claimant. b. A structured settlement. c. The bills are paid and no attempt to obtain a separate release is made. d. The insurer agrees to waive its right to subrogation against a third party who caused the damage.
c. The bills are paid and no attempt to obtain a separate release is made.
A fire starts in the rear of Paws & Such Veterinary Care. Four cats belonging to clients as well as the owner's dog are treated for smoke inhalation. What if any is covered by the BOP for the clinic? a. All the animal injuries are covered as they were in the building at the time b. Nothing is covered as animals are excluded c. The cats belonging to clients are covered but not the owner's dog d. The owner's dog is covered but the cats are excluded
c. The cats belonging to clients are covered but not the owner's dog
Axel Jamison contacts an insurance agent to purchase a Homeowners policy. The agent advises Axel that he will stop by later that day to inspect the home and take the policy application. Before the agent arrives, Axel hides his collection of venomous snakes and does not disclose them on his policy application. The Homeowners policy, with personal liability coverage is issued later that week, and the next day a snake escapes and bites a neighbor. How will the adjuster handle this claim? a. The claim will be paid because the policy provides personal liability coverage. b. The claim will be denied based upon soft fraud. c. The claim will be denied because Axel is guilty of concealment. d. A reservations of rights letter will be issued to the insured while the adjuster continues the claims investigation.
c. The claim will be denied because Axel is guilty of concealment.
Texas workers' compensation regulations consider an employee to be "intoxicated" in all of the following circumstances, EXCEPT: a. The employee was under the influence of alcohol. b. The employee was abusing glue or aerosol paint. c. The employee was under the influence of a drug that was prescribed by their doctor and taken in accordance with the instructions. d. The employee was abusing a controlled substance.
c. The employee was under the influence of a drug that was prescribed by their doctor and taken in accordance with the instructions.
Under the HO-4, which of the following are covered? a. The house. b. A detached garage. c. The insured's contents and personal liability. d. Excess jewelry coverage.
c. The insured's contents and personal liability.
Section II of the homeowner policy covers bodily injuries to all of the following, EXCEPT: a. To a guest who is visiting the residence premises b. To a letter carrier who is bitten by the insured's dog c. To an insured who is gardening in the back yard d. To a trespasser who trips over a rake in the insured's yard
c. To an insured who is gardening in the back yard
An insured has his home covered under Dwelling policies with three different insurance companies. Company A provides 50% of the coverage, Company B provides 45% of the coverage, and Company C provides 5% of the coverage. When settling a claim for $10,000 worth of damage to the dwelling, what will Company C pay? a. $10,000 b. $1,000 c. $4,500 d. $500
d. $500
Under a standard Equipment Breakdown policy, the full replacement cost will be paid on the claim, if the equipment is repaired within what time period following the loss? a. 6 months b. 12 months c. 18 months d. 24 months
d. 24 months
The ISO standardized Businessowners policy provide removal coverage when property is removed from the premises to protect it from loss. The coverage will apply at other locations for up to: a. 10 days. b. 20 days. c. 60 days. d. 30 days.
d. 30 days.
Unfair claims practices include all the following, EXCEPT: a. Requesting a claimant to sign a release that extends beyond the subject matter that gave rise to the claim payment. b. Issuing checks or drafts in partial settlement of a loss or claim under a specified coverage which contain language releasing an insurer or its insured from its total liability. c. Compensating a reviewing physician on the basis of a percentage of the amount by which a claim is reduced for payment. d. Actively pursuing a full release on a claim
d. Actively pursuing a full release on a claim
The deductible on the Equipment Breakdown form can be stated in which of the following ways? a. Fixed dollar deductible b. Time deductible c. Percentage of loss deductible d. All of the responses are correct
d. All of the responses are correct
Which of the following losses to perishable stock would be covered by the commercial property Spoilage Endorsement? a. Power Outage b. Mechanical Breakdown or Contamination c. Changes in temperature, humidity, or contamination resulting from a power outage on or off the premises d. All of the responses are correct
d. All of the responses are correct
Which of the following individuals is most likely to have a valid Workers Compensation claim? a. A retiree injured while visiting his former workplace. b. An employee who suffers a diabetic coma from failure to take prescribed medicine. c. A sole proprietor injured in an auto accident while driving to a friend's house. d. An employee injured while performing an operation for which he had not received training.
d. An employee injured while performing an operation for which he had not received training.
The crew of a ship is guilty of fraud with the intention of reaping gains at the expense of the owner. In ocean marine coverage, what is this called? a. Perils of the sea b. Jettison c. General average d. Barratry
d. Barratry
All of the following items have a built in limit (maximum) of coverage if the cause of loss is theft, EXCEPT: a. Patterns b. Furs c. Jewelry d. Computers
d. Computers
Which of the following is the provision in a liability policy that allows an insured to report incidents or circumstances that result in claims being filed in the future? a. Defense Within Limits provision. b. Other Insurance provision. c. Supplementary Payments provision. d. Discovery provision.
d. Discovery provision.
When an insured suffers a property loss, he or she is obligated by the terms of the policy to do all of the following, EXCEPT: a. Separate the damaged from the undamaged property. b. Mitigate the loss. c. Produce books and records relevant to the claim. d. Hire a public adjuster to represent them in the claims process.
d. Hire a public adjuster to represent them in the claims process.
All of the following are duties that a Texas insurer must perform within 15 days after receipt of the claim, EXCEPT: a. Acknowledge receipt of the claim. b. Commence an investigation of the claim. c. Request from the claimant all items, statements, and forms that the insurer reasonably believes, at the time, will be required from the claimant. d. Schedule a hearing to dispute the claim, if necessary.
d. Schedule a hearing to dispute the claim, if necessary.
All of the following would be considered an insured under the standard Homeowners forms, EXCEPT: a. You and residents of your household who are relatives b. Other persons under age 21 in the care of you or relatives residing with you c. A college student who is 24 or younger, is your relative and lived with your prior to college d. The named insured's ex-husband who lives across town.
d. The named insured's ex-husband who lives across town.
Which of the following statements is true regarding controlled forms? a. These forms are very flexible and can be manuscripted to meet the needs of individual insured's. b. These forms are always issued by state insurance departments. c. Conditions and rates for these forms are determined solely on the basis of underwriting judgment. d. These forms are usually issued according to published rules and rates.
d. These forms are usually issued according to published rules and rates.
Which of the following factors is the most crucial in distinguishing between an employee-employer relationship and an independent contractor relationship? a. The number of hours a worker spends doing the job for the employer. b. The place at which the work is performed. c. Whether the worker used his or her own "tools of the trade" to complete work for the employer. d. Whether the employer controls the manner in which the work is performed.
d. Whether the employer controls the manner in which the work is performed.
