Adjuster Pro: Indiana Adjuster's License - Practice Exam

*Jane has a $150,000 homeowners policy with a 3% percentage deductible. One night, an oven fire destroys her kitchen, causing $50,000 in damage. How much of the damage falls under Jane's responsibility? A. $4,500 B. $15,000 C. $3,600 D. $1,500

A

*Lemon Insurance Co. decides not to renew Hugh's Personal Auto policy, which is set to expire on May 31. Which of the following statements is true? A. Lemon Insurance must notify Hugh at least 10 days before the policy expires. B. Hugh's policy will be effective until 12:00 AM on June 1. C. Lemon Insurance must notify Hugh at least 45 days before the policy expires. D. Hugh's policy will be effective until 12:01 AM on May 31.

A

All of the following are typical exclusions in an insurance policy, except: A. Explosion B. flooding C. Nuclear hazards D. earthquakes

A

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

A

Jared hopes to purchase a new insurance policy for his car, but he has an extremely poor driving record. The insurance company decides to issue Jared an insurance policy, but charges him a premium much higher than the average driver. The insurance company is practicing: A. risk retention. B. risk avoidance. C. risk reduction. D. risk transference.

A

Jimmy owns a pawn shop which brings with it a certain amount of risk. He decides to hire a security guard, and install a surveillance system and an alarm system to reduce his monthly premiums on his commercial property policy through the: A. Protective Safeguard endorsement. B. Protective Guardian endorsement. C. Security, Surveillance and Alarm endorsement. D. Risk Reduction endorsement.

A

John moved out of his house and put it up for sale three months ago. While he was waiting for the house to sell, John's plumbing pipes froze and burst in the icy temperatures, which eventually led to water damaging the cabinetry and hardwood floors. Which of the following statements would most likely be TRUE? A. Although John's house was still covered under an HO-3, the damage would not be covered because he didn't shut off the water supply. B. Because John's house was still covered under an HO-3, the damage would be covered. Your Answer C. Although John's house was still covered under an HO-3, the surface water resulting from the damaged pipes is not a covered peril. D. Freezing is not a covered peril in an HO-3, so this loss would not be covered.

A

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

A

Which of the following statements about Crop-Hail insurance is FALSE? A. It is subsidized by the FCIC. B. It is rated on an acreage basis. C. It is generally available from private insurers. D. It covers for damage due to hail, but also fire, lightning, wind, and others.

A

Which of the following statements about Indiana's approach to Workers' Comp insurance is true? A. WC is compulsory, and Indiana has no state WC fund. B. WC is elective, and Indiana has no state WC fund. C. WC is elective, and Indiana has a competitive state WC fund. D. WC is compulsory, and Indiana has a monopolistic state WC fund.

A

Which of the following would NOT be covered under the Comprehensive section of a PAP? A. Rollover B. Fire C. Flood D. Theft

A

Which statement about the Federal Employers Liability Act is TRUE? A. It protects only interstate railroad workers and their families. B. It protects injured seamen by allowing them to sue for damages and to choose a jury trial. C. It provides federal government insurance for civilian employees. D. It provides benefits in the form of monthly payments and medical coverage to coal miners.

A

there are several terms that are interchangeable with "endorsements." Which of the following is not? A. Binders B. Attachments C. Addendums D. Riders

A

*Dr. Adams is in the middle of a malpractice lawsuit. Her insurer decides it will be more cost effective to simply settle the suit rather than draw the process out over several months. Assuming Dr. Adams holds a Professional Liability Policy, which of the following statements is TRUE in regards to settling the claim? A. The insurer has the right to settle the claim anyway it finds advantageous to its interests. B. An umpire must be employed to settle the claim through arbitration. C. Dr. Adams' insurer must seek her consent before settling the claim. D. Dr. Adams must pay all her own legal expenses.

B

A fire burns down Jenny's Hardware, leaving virtually nothing salvageable. Which of the following items would NOT be covered under Coverage A of the Building and Personal Property Coverage Form in her commercial property policy? A. The heating and air conditioning system B. An employee's laptop which she uses for work C. The brand new flooring Jenny had installed a month ago D. The lumber storage shed, listed on the dec page

B

Barbara has been negotiating a property claim with a claimant for a few hours now. She has displayed her assessments, gone over the policy, and offered a fair settlement amount within the policy limits. However, the claimant has dismissed it completely without any counter-offer. The most appropriate next step is for Barbara to: A. submit her backup offer. B. enter into arbitration. C. remain silent. D. tell a joke to lighten the mood.

B

Chandler is a photographer who is taking pictures at a reenactment of the Battle of Gettysburg, when Harper (Union Cavalry) crashes through the brush and into Chandler, breaking both his arms and his camera. In court, Chandler demands payment not only for his medical bills and broken camera, but for future lost business; now that he is unable to take pictures for the next 6 months, his clients are moving on and entering into contracts with other photographers. When Chandler speaks of this total amount of all damages that have resulted and will result from Harper's mistake, he is referring to: A. punitive damages. B. diminution of value. C. joint tortfeasors. D. reservation of rights.

B

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

B

During a severe windstorm, a large tree in Jeff's yard was blown down and two large bushes were ripped from the ground. Jeff has an HO-3. What is the maximum amount that Jeff can receive for the replacement of the tree and bushes that were damaged by the windstorm? A. $500 B. $0 C. $1,000 D. $1,500 Your Answer

B

Frank owns a bakery specializing in authentic French bread. He uses two specialty ovens for his daily production of French bread. If one of these giant ovens were to break down, it would cost Frank's bakery a lot of money to repair, not to mention the loss of revenue caused by lower production. On his Equipment Breakdown Protection Form, each of Frank's ovens would be considered: A. a "peril." B. an "object." C. a "machine." D. a "liability."

B

Generally speaking, which of the following has the broadest coverage? A. Stand alone excess liability B. Umbrella coverage C. Stand alone umbrella liability D. Follow form excess liability

B

When taking recorded witness statements, the adjuster should: A. ask leading questions to get to the truth. B. remain objective. C. discuss a possible settlement. D. show sympathy for the situation.

B

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

B

*Every workers' comp insurance company that operates in Indiana must: A. join the Indiana Life and Health Insurance Guaranty Association. Your Answer B. become a Lloyd's plan insurer. C. become a member of the Indiana Insurance Guaranty Association. D. have a physical office with a minimum of 2,500 square feet.

C

*Having insurance is required by Indiana law in order to drive your car on public roads. In which of the following scenarios would you NOT need to have insurance on your vehicle? A. Getting license plates for your vehicle B. Registering your vehicle with the state C. Using your vehicle seasonally for agricultural purposes D. Driving to a dealership to trade in your vehicle

C

*Which of these is a prohibited unfair practice? A. Paying undisputed settlements under one portion of a claim before the entire claim has been settled B. Appealing arbitration awards C. Requiring an insured to submit formal proof of loss forms and then subsequent verification before moving forward on the claim D. Consulting with the insured before instructing a body shop to conduct repairs on the insured's vehicle

C

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

C

Craig has an HO-3 policy covering his primary residence with a Coverage A limit of $250,000, Coverage B limit of $25,000, and a Coverage C limit of $150,000. Craig also has a cabin on the lake, which was burglarized. The thieves stole much of the cabin's contents, for a total loss of $18,500. Ignoring any deductibles, how much will Craig's HO-3 policy pay for this claim? A. $2,500 B. $0 C. $15,000 D. $18,500

C

DEC Construction was hired to completely renovate Randall's department store. DEC Construction is in charge of the project, but hires Mac Electric (an independent contractor) to complete the electrical portion of the job and requires Mac to buy Owners & Contractors Protective Liability coverage as a condition of the contract. Who would be listed as the named insured(s) for this coverage? A. Randall's B. DEC Construction and Mac Electric C. Mac Electric D. DEC Construction

C

In Indiana, workers' compensation insurance can cover funeral expenses, up to: A. $4000 B. $3000 C. $7500 D. $4500

C

In a Commercial Crime policy, a "messenger" is defined as: A. the insured, a business partner, or an employee who has care or custody of insured property inside the premises, excluding anyone acting as a watchperson or janitor. B. someone hired by the insured to have no other duty but to transport insured property from the premises to another location. C. the insured or relative of the insured, a business partner, or an employee who has care and custody of insured property while outside the premises. D. someone hired by the insured to have no other duty but to maintain care and custody of insured property inside the premises. Your Answer

C

Jim drops his car off at ABC Garage to have his exhaust system repaired and takes the train to work. When he returns, he finds that his car has been vandalized. Jim has comprehensive coverage, but feels the garage is responsible for the damage since Jim entrusted the car to ABC Garage. Which coverage type under ABC's garagekeepers policy would cover any part of the loss that Jim's policy does not cover? A. Direct Primary Coverage B. Excess Comprehensive Coverage C. Direct Excess Coverage D. General Liability Coverage

C

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

C

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

C

Which of the following homeowners policies provide coverage on an open-peril basis for personal property without endorsement? A. HO-3 and HO-5 B. HO-2 and HO-3 C. HO-5 D. HO-8

C

Which of the following may be covered under an Equipment Breakdown Protection Coverage Form? A. Self-propelled equipment B. Dragline, excavation, and construction equipment C. Equipment built to operate under internal pressure or vacuum D. Equipment used solely for therapeutic or surgical purposes

C

Which of the following statements about MPCI is FALSE? A. MPCI is a form of crop-revenue insurance. B. MPCI is subsidized by the FCIC and regulated by the USDA. C. The government makes insurers make MPCI available to any farmer, but crop-hail insurers can be selective about who they insure. D. Coverage is for a percentage of the actual production history (APH) of the farm.

C

A dwelling policy would NOT be appropriate for: A. a duplex owned by an individual. B. a single-family home wholly rented out. C. a four-plex owned by a corporation. D. a motorhome owned by an individual.

D

All of the following are true about mediation, except: A. the mediator is a neutral third party. B. either party may walk away. C. settlement is only legally binding if both parties agree to it. D. the mediator's decision is legally binding.

D

All of the following pieces of information can be found in the Conditions section of an insurance policy, EXCEPT: A. anything the insured must do for coverage to remain in effect. B. what the insured must do in the event of a lawsuit. C. the insured's duties after a loss. D. causes of loss that are not covered.

D

Clara plays the harp in an orchestra. Her harp cost $12,000, and she had it for 5 years before it was stolen from her locker at a symphony hall. She recently found out a new harp will cost $15,000. Assuming her harp depreciated at $1,000 a year, how much will an actual cash value policy indemnify Clara? A. $7,000- ACV pays the original amount paid minus depreciation B. $12,000- ACV pays the original amount paid for the item C. $15,000 - ACV pays the current market value D. $10,000 - ACV pays at current market value minus depreciation

D

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

D

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

D

On January 27, 2008, Ryan was using an exercise bike purchased from NusquamCycle when the chain broke, causing him to fall and severely bruise his knee. It seemed to heal just fine, but three years later, on January 25, 2011, Ryan's knee gave out while jogging. His doctor told him that he'll need surgery and that this deterioration resulted from the earlier accident with the exercise bike. Which of the following CGL policies may cover Ryan's claim filed January 25, 2011? A. An occurrence policy from Jan 31 2011-Jan 31 2013 B. An occurrence policy from Feb 28 2008-Feb 28 2010 C. A claims-made policy from Jan 31 2008-Jan 31 2010 D. A claims-made policy from Jan 31 2009-Jan 31 2011

D

Wendy hires Jim to build an addition to her house. Jim takes the job and finishes it in good time. Unfortunately, as Wendy is walking across the threshold of the new addition, a floorboard gives way and Wendy falls into the crawl-space below, injuring her leg and back. Which commercial general liability coverage could help cover the cost of Wendy's injuries? A. Premises Liability B. Insured Contracts Liability C. Product Liability D. Completed Operations Liability

D

What is the vacancy condition in a typical insurance policy? A. states that a dwelling vacant for more than 15 days is not insurable B. states the insurance policy will terminate if the insured building is vacated C. in commercial policies, states that a building is vacant if more than 31% of the building is unoccupied D. it establishes the parameters for considering a building vacant for the purpose of coverage

D

When the dollar amount difference between an adjuster and a claimant is very large, the adjuster should: A. consult a more experienced adjuster. B. negotiate to decrease the difference between the two. C. move to dispute resolution. D. begin the investigation over to see what has been missed.

D

Which of the following BEST describes how covered losses are settled under a typical Equipment Breakdown Protection Coverage Form? A. Losses are normally paid at actual cash value, but an insured may change this with a Replacement Cost endorsement. B. Losses are paid at actual cash value. C. Losses are paid at replacement cost if the replacement or repair occurs within 12 months of the accident. D. Losses are normally paid at replacement cost, but an insured may change this with an Actual Cash Value endorsement.

D

Which of the following is NOT considered a covered theft in a Commercial Crime policy? A. A customer dashes out of the store with a bag full of goods. B. The delivery man secretly withholds a package of goods for his own use after having them signed for. C. Three employees are discovered siphoning cash from the register at regular intervals. D. A periodic assessment of inventory reveals that 4% of a store's inventory is inexplicably missing.

D

Which statement about Personal Article Floaters is FALSE? A. They pay the least of the following for damaged property: actual cash value; the cost to repair or replace; or the coverage limits. B. Coverage is worldwide. C. They cover property on an open-peril basis. D. They have a $500 deductible.

D

Who is NOT eligible for a homeowners policy? A. An owner of a home under construction B. A person who owns and lives in his house C. A tenant who rents a home or apartment D. An owner of a house in which he does not live, but rents to a tenant

D