Insurance Adjusting exam

How many yards of carpeting would be needed for a 12 X 12 bedroom?

16

Which of the following people does NOT have an insurable interest in an insured property?

A home owner's interest in the local town's water pipes that deliver water to his home..

Public adjusters:

Adjust first-party property loss claims

The co-payment provision under the Employment Related Practices Liability policy determines how the _____________ will be shared between the insured and the insurer.

Defense expenses.

Which of the following would not be eligible for coverage on a Livestock Coverage form?

Poultry

The policy territory of a Commercial General Liability includes:

The United States and Canada

Which of the following would NOT be covered under the specified cause of loss physical damage coverage under a Business Auto policy?

glass breakage

All of the following are reasons the federal government encouraged private insurance carriers to participate in the WYO program, EXCEPT:

to provide federal government jobs to insurance agents who would be in charge of selling the WYO policies

Physical damage to a contractor's bulldozer is best covered under which of the following?

A Commercial Inland Marine Contractors Equipment floater.

Which of the following is NOT an example of an unfair claim settlement practice?

Failing to examine a claimant under oath..

Conrad is a contractor with Builders' Risk coverage written on a reported value basis on his current construction job. He started clearing the land on May 1st, digging the basement on May 13th, pouring the foundation on May 31st, blocking the basement walls on June 5th, flooring the first floor above the basement on June 15th, and constructing the walls of the first floor on June 30th. When did Conrad's Builders' Risk policy begin providing coverage?

June 15th..

Happy Hills Hospital is covered by a "Hospital Professional Liability" policy. Which of the following "medical incidents" occurring on the premises of Happy Hills would be excluded from coverage under their professional liability policy?

Sue, a medical assistant at Happy Hills slips and falls on some water that a patient spilled. Sue's back is injured and she needs to have her medical expenses paid.

A policy provision that prescribes a method for resolving a disputed claim regarding the value of property or the amount of a property loss is known as:

The appraisal clause

All of the following are provisions of the "Inspections & Surveys" condition of a Commercial General Liability policy, EXCEPT:

The condition specifies that the insurer can be held liable for any claims arising from the recommendations they made to the insured.

Gerald owns an expensive and rare painting. He has it appraised by an art dealer and insures it for $50,000 under a Personal Articles Floater. A year later, several other rare paintings similar to Gerald's and painted by the same artist are discovered, causing the value of Gerald's painting to be reduced to $40,000. Soon after this development, the painting is destroyed in a fire at Gerald's place of business. After ruling out fraud, how will the insurance company settle the loss?

The insurance company will cover the item for the full $50,000 amount

An insured who had a $500,000 primary liability policy purchased a $1 million Umbrella liability policy with a $2,000 self-insured retention limit. Later, the insured allowed the required underlying primary policy with a limit of $500,000 to expire. A week after that, the insured became liable for a $100,000 loss that is not excluded by the provisions of either the primary underlying liability policy or the Umbrella policy. How will this loss likely be settled?

The insured will be liable for the full $100,000 loss.. Because the insured allowed the required underlying policy to expire, he is responsible for the $100,000 loss. The Umbrella policy does not recognize a reduction in the underlying limits nor the non-renewal of underlying coverage as a trigger to cover the claim.

The insured has liability coverage with a limit of $300,000 per occurrence. She purchases a $1 million Personal Umbrella to extend and broaden her coverage. The Umbrella policy includes a $10,000 retained limit. The insured becomes liable for $800,000 in damages that are excluded by the underlying liability policy, but is covered by the Umbrella policy. How would this case likely be settled?

The insured would pay $10,000 and the Umbrella policy would pay $790,000. is correct.

Samantha has renewed her Commercial Property policy, and it will take effect in 7 days. 14 days prior to Samantha signing the renewal policy, the insurer adopted a form revision that included broadened coverage, with a slight increase in premium. Samantha would like her renewal policy to include this broadened coverage. Which of the following statements is true regarding the required method for Samantha to receive the broader coverage?

The liberalization clause will not require that Samantha's renewal policy include the broadened coverage automatically because there is an additional premium to have the broadened coverage included..

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..

While in England an insured has her purse stolen and files a claim for $500 of cash, $1,000 in airline tickets, $250 for miscellaneous items and $50 for the value of the purse. How much of this loss would be covered under a DP-1 dwelling form?

0

Anyone who threatens, forces or corruptly influences, obstructs or impedes the due and proper administration of the Federal Insurance Fraud and False Statements law relating to the insurance business may be fined and/or imprisoned up to:

10 years

An insured has purchased a DP-3 policy to cover his dwelling that is valued at a replacement cost of $100,000. He insures it for $60,000 and later suffers a $30,000 fire loss. Which of the following amounts will be paid by the policy (if no deductible form is attached)?

22,500..

How many cubic feet are in a cubic yard?

27

Which of the following buildings is INELIGIBLE for coverage under the NFIP?

Container-type building

Homeowners coverage A

Dwelling policy

Section III of a Farm Property policy:

Lists the additional coverages.

The Coverage C - Uninsured Motorists coverage of a standard, unendorsed Personal Automobile policy applies to all of the following, EXCEPT:

Property damage sustained by the insured vehicle by an uninsured vehicle

An insured's property claim payment is reduced by depreciation. Why?

The loss was settled on an actual cash value basis

An insured is covered under an HO-2 form with a Coverage A limit of $125,000 and a Coverage C limit of $65,000. What amount will automatically be provided for Coverage D?

$37,500 An HO-2 form provides 30% of the Coverage A limit for Coverage D - Loss of Use. 30% of $125,000 is $37,500.

Jasper worked at a manufacturing plant in Indiana was injured on the job and later died. How much is the maximum amount that will be paid for Jasper's burial expenses?

$7,500..

Motels insured under an ISO Businessowners may not exceed how many stories?

3 stories

The Indiana Insurance Guaranty Association will pay up to ________ per covered claim.

300,000

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 consecutive months

Homeowners policies cover all of the following, EXCEPT:

A 2-family dwelling occupied by tenants who are renting the covered premises from the named insured. is correct.

Insurance policies are most often serviced by:

A CSR

Under Coverage F of a Homeowners policy, which of the following would be covered?

A neighbor who is injured while helping the insured to lay carpet.

An insurance company held its annual meeting in Florida so attendees could have an opportunity to visit tourist spots as well as spend time on company business. At the meeting, three new directors were added after the attending stockholder's votes and mailed-in proxies were counted. This insurance company is:

A stock insurance company

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..

A manufacturing company is sending two U.S. employees to Russia to discuss their products and visit a similar Russian manufacturing plant. What coverage would be needed for injuries they may incur in a work-related accident while abroad?

Add the Foreign Coverage Endorsement to the company's workers' compensation policy

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

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

Risk is best defined as:

An uncertainty of loss

The "Automatic Increase in Insurance" endorsement to a Dwelling policy provides an increase in coverage:

Annually

Under the Multi-Peril Crop Insurance program, the coverage providing the lowest level of yield protection available is:

Catastrophic Risk Protection (CAT) coverage.

Which of the following would NOT be excluded in the Coverage A - Exclusions section of the Commercial General Liability policy?

Damage from a fire caused by the insured in his rented office space..

Fred is an adjuster with Indemnify Insurance, Inc. He is authorized by the company to pay insureds or claimants up to $75,000 on Homeowners claims and up to $40,000 on health insurance claims. This is known as:

Draft authority.

Which of the following Commercial Automobile endorsements extends existing coverage to the individual scheduled and their spouse while using any non-owned auto for both business and personal use?

Drive Other Car (DOC) endorsement..

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

Exclusive agency system

Andrew Daniels has paid a premium to an insurance company for a Homeowners policy, and the policy was issued. Later, a fire occurred, and Andrew's home suffered damage. In this situation, both Andrew and his insurance company are required to perform certain duties because an insurance policy is a(n) ______ contract.

Executory.

If the Value Reporting Form Endorsement is attached to a Commercial Property policy, business personal property is covered at all of the following locations, EXCEPT:

Exhibition locations..

All of the following are eligible risks for Commercial Inland Marine insurance, EXCEPT:

Goods manufactured in the United States for export to other countries..

A lawyer is covered under a standard "Lawyers Professional Liability" form. All of the following situations would be covered by her policy, EXCEPT:

Her fiduciary activities as an administrator of a corporate employee-benefits plan..

The state licensing exam for Indiana Independent Adjusters is intended to test the knowledge of the applicant concerning all of the following, EXCEPT:

How to adjust specific types of claims.

Coal mine subsidence coverage excludes: I. Earthquake. II. Landslide. III. Collapse of sewer drains.

I, II and III.

The "period of restoration" for the Extra Expense coverage included on the Business Income form is:

Immediately following the direct physical damage

Janice's Janitorial Services carries two separate policies covering the general liability exposures of her business. The total amount of insurance coverage provided by both policies is $200,000. One of the policies excludes settlement by "equal shares" so "contribution by limits" will be the method used to settle the claim. Insurer 1: Indemnify Insurance, Inc. has a limit of $50,000. Insurer 2: Binders Keepers, Inc. has a limit of $100,000. What percentage of the claim is each insurer responsible to pay?

Insurer 1 must pay 25% and Insurer 2 must pay 50%..

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

It can apply to one or more coverage parts

Which of the following BEST DESCRIBES the function of a retroactive date in a Commercial General Liability policy?

It establishes the date when claims-made coverage begins..

Chaz takes his girlfriend to an expensive restaurant for Valentine's Day. It is raining, so he decides to have the valet park his car, saving his girlfriend from getting wet. The valet is driving the car into the restaurant's parking garage, when he clips the side of the garage entrance with the front fender of Chaz's car. The garage wall needs to be repaired as well as the fender and headlight of Chaz's car. How would Part D of Chaz's Personal Automobile respond to this loss?

It would cover the loss to Chaz's car because it is the insured automobile, but would not cover the damage to the garage.

A loss reserving method that establishes aggregate reserves for all claims for a single line of insurance is known as:

Loss ratio method

All of the following are examples of unfair claim practices, EXCEPT:

Making claim payments and stating the coverage under which payment is made..

Which of the following would be eligible for coverage of personal property "off-premises" from the covered dwelling?

Marisa who lives in a home she owns and is covered by a Dwelling policy with the Theft Coverage endorsement attached

Which of the following would be considered "economic losses" that could result in compensatory damages being awarded in a negligence case?

Medical expense and lost wages

Which of the following is not a common risk management technique?

Multiply the risk by engaging in hazardous activities

"Pam's Pampered Pets" is reviewing their workers' compensation policy and would like to confirm the states in which their employees will be covered while working. Which section of the standardized policy form should they review?

Part 3

Which of the following best describes a competitive state when it comes to workers' compensation coverage?

Private insurance companies write workers' compensation coverage, but the state also writes coverage that competes with the coverage offered by private carriers..

When the insurer pays the proportion that its limit bears to the limits of all policies, this is known as:

Pro-rata share.

Under the "supplementary payments" section for Coverages A and B of a CGL policy, which of the following is TRUE?

Provides a specific limit of $250 for the cost of bail bonds..

An element of a valid contract must involve an offer and acceptance. Sebastian completes an application for auto insurance and submits it to Indemnify Insurance Company. Who made the offer?

Sebastion

Monica, who is an Indiana resident, has received a notice that the insurance policy covering her car is being cancelled. The reason for cancellation cited on the notice is that Monica made false statements on her driver's license application. She knows this is not true. Which of the following should be Monica's next course of action according to Indiana statutes?

She must make an application to the Commissioner for a hearing on the matter not later than 10 days before the effective date of the cancellation.

Henry is furnished a company vehicle. He carries auto coverage on his owned vehicles. What coverage might Henry purchase to provide additional coverage on the furnished company vehicle?

The Extended Non-owner Coverage endorsement should be purchased. is correct.

The contract between an insurance agent/producer and an insurance company is known as:

The appointment contract..

All of the following statements are true regarding state Guaranty Associations, EXCEPT:

The fund assists insurers in gaining new insurance business by allowing them to advertise their membership in the Guaranty Association..

Which of the following is NOT an "insured" under a CGL policy?

The spouse of an executive officer in an organization

Claims investigations should be concerned with all the following, EXCEPT:

The workload of the adjuster while attempting to investigate the claim

Which of the following statements about Excess Liability insurance policies is FALSE?

They can be written to broaden the coverage of the underlying liability policy..

Dwelling policy

This coverage protects the structural components of your home from damage and covers in the event of damage to the home that impacts walls, floors, ceilings, home systems, and more Done on a full replacement cost coverage

Which of the following is NOT a "duty of the insured" after a loss?

To pay damages to any third-party claimant while waiting to be reimbursed by the insurer for the loss..

Which of the following is not a prohibited practice as specified in the NAIC Unfair Practices article?

Unfair employment practices.

Flora designs and makes custom dresses out of a small room at the back of the home she owns. She has the home covered by a Dwelling policy with the Permitted Incidental Occupancies endorsement attached. She has boxed up several dresses and stored them in the back room to be shipped out later when fire breaks out and burns them up. How much coverage will Flora's endorsed Dwelling policy provide?

Up to $10,000

Insureds who are covered under a claims-made Commercial General Liability policy have the right to claim and occurrence information. All of the following statements are TRUE regarding this information, EXCEPT:

When an insured requests this information in writing, the insurer must provide it within 60 days of the request..

All of the following are correct statements regarding the limits of liability under Part A of a Personal Auto policy, EXCEPT:

When the Part A limits are exhausted, any limits for Uninsured Motorists coverage can be used to pay the entire claim. is correct.

Every insurer with a certificate of authority in Indiana must notify the Commissioner of every new director or principal officer:

Within 30 days following election or appointment..

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

Gena purchased a policy to cover her home for personal use. Recently, she has been conducting business from the home and has hired several employees. She also has several clients per day coming to the home for business purposes. When Gena's insurer finds out about the additional exposures she has introduced into her home, they decide to take action. Which of the following actions is Gena's insurer most likely going to take?

Suspend her policy until she moves the business out of her home. is correct.

All of the following describe one of the four elements of a negligent act, EXCEPT:

The defendant entered into a legal contract with the plaintiff.

Which of the following statements regarding Commercial Auto coverage is NOT TRUE?

The definition of "trucker" and "motor carrier" are the same in both the Truckers form and the Motor Carrier form

If the Navigational Limits or Lay-Up period shown on the Declarations page of a standardized Yacht policy is breached because of something out of the control of the insured:

The insurer must be notified within 10 days after the breach and any additional premium that is due must be paid

All of the following would be considered a "non-residential building" under the National Flood Insurance Program, EXCEPT:

A condominium unit

An applicant for insurance has been advised by his insurer that something adverse appeared on his investigative consumer report. The information is in error. The applicant may:

Obtain the name of the reporting agency from the insurer and correct the error..

Damages awarded to a plaintiff in a tort action that are in excess of the cash value of the economic loss, as a punishment to the defendant and as a deterrent from similar conduct by others, is known as:

Punitive damages..

Which of the following statements is TRUE regarding the sections of a Homeowners policy?

Section I coverages vary greatly between the different HO forms..

The Homeowners policy on Dylan's $110,000 home is voided when he intentionally burns the house to the ground. Consequently, he does not receive the settlement check he was hoping to when he committed the arson, but he still has an outstanding mortgage balance of $76,000. How does this event affect the mortgage lender?

The insurer pays the mortgage lender $76,000..

The standard BOP policy will provide coverage for all of the following incidental occupancies in a covered apartment building, EXCEPT:

A contractor whose office occupies 20% of the floor area of the building..

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.

Diamonds & Tiaras, Inc. is covered by a jewelers' block policy with both the show windows and money optional coverages. Which of the following losses would NOT be covered under D & T's policy?

A diamond necklace that disappears from the show window with no sign of forced entry..

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..

All of the following statements are TRUE regarding the Dwelling insurance coverage forms, EXCEPT:

The DP-2 does not provide coverage for Vandalism & Malicious Mischief (VMM).

Cameron has his home covered under a Homeowners policy and his limit for bodily injury is $100,000. He also purchased a Personal Umbrella policy with a $1,000,000 limit of liability. Cameron is sued and a judgement was made against him for $500,000. To trigger his Umbrella policy, his Homeowners policy must pay $100,000, but he finds that the insurance company from which he purchased his Homeowners policy has become insolvent. How will the Umbrella insurer pay the claim (disregarding any retention limit)?

The Umbrella policy will not become primary when the insurer carrying the underlying insurance becomes insolvent, but will pay the $400,000 as if the underlying insurer had paid its $100,000 limit of liability

All of the following would NOT be covered under any section of the Business and Personal Property coverage form, EXCEPT:

The cost to restore electronic data that was corrupted by a covered cause of loss

A products-completed operations claim can be made against products manufacturers, wholesalers, and retailers alleging fault and legal responsibility based on all of the following, EXCEPT:

Vicarious liability. is correct.