Pennsylvania Public Adjuster Examination--Series 16-19 Set 2

In case of a loss, how many days notice does the insured have after notification of a claim to submit the claim to the underwriters of the ocean marine coverage? A. 180 days. B. 90 days. C. 60 days. D. 120 days.

A. 180 days.

The liberalization clause of a Businessowners policy automatically applies favorable expansions of coverage, for which a premium is not charged if the changes are made during the policy period or within ______ prior to the effective date of the policy. A. 45 days B. Six months C. Three months D. 30 days

A. A liberalization condition states that the insurer will automatically and immediately apply to the policy any revisions made during the policy period or within 45 days prior to the effective or renewal date if those revisions broaden the coverage without additional premium.

A written inquiry issued by the Pennsylvania Insurance Department to a licensee requires a response within: A. 30 days. B. 10 days. C. 10 working days. D. 15 days.

A. A licensee is required to provide a written response to the Department within 30 days of receipt of a written inquiry from the Department.

Copies of any and all advertisements in Pennsylvania by an insurer must be retained by the insurer and available to the Insurance Department for a period of: A. 4 years. B. 2 years. C. 3 years. D. 5 years.

A. All advertisements must be kept by the insurer for four years or until the next regularly scheduled statutory exam whichever occurs first.

Who signs the Declarations page on an Equipment Breakdown policy? A. An Authorized Representative B. The Named Insured C. Two officers of the company D. An Authorized Inspector

A. An authorized representative of the company signs the policy Declarations page. This would be the agent.

Coverage F under the farm forms covers which of the following? A. Unscheduled personal property B. Scheduled personal property C. Scheduled real property coverage D. Blanket real property coverage

A. Coverage F covers unscheduled personal property on a blanket basis. One limit for all business personal property is stated. The items are not scheduled as they are under Coverage E.

Which section of the Commercial Package Policy varies based on the lines of coverage included? A. Coverage Part. B. Common Policy Conditions. C. Common Policy Declarations. D. None of the responses listed are correct.

A. Each line of insurance that is eligible for the Commercial Package Policy has its own coverage part consisting of a variety of mandatory and optional forms that are used to provide the coverage desired.

Coverage for earthquakes and volcanic eruptions may be attached to Commercial Property Insurance. When the Earthquake Cause of Loss Form is attached, a series of earthquakes or volcanic eruptions will be treated as a single event whenever the series of shocks or eruptions occurs within a: A. 168-hour period. B. 24-hour period. C. 48-hour period. D. 96-hour period.

A. Even though all the Commercial Cause of Loss Forms cover volcanic action, the earth movement is not covered. Earthquake insurance must be purchased as a separate endorsement. The form defines an earthquake as a single event for a 168-hour limit.

Mr. Vickers lives close to a river that has, on occasion, flooded. On Friday morning he is watching the weather station and notes that there is a flood warning in his area. He calls his agent and asks the agent to bind flood coverage immediately. Which of the following is true? A. The application for coverage requires a 30-day waiting period before coverage applies. B. The agent can bind the coverage immediately. C. There is a seven-day waiting period before the agent can bind coverage. D. The agent can bind the coverage in 14 days.

A. Flood insurance requires a 30-day waiting period. The exception to this rule is when the insured is required to provide coverage required by a mortgagee.

Under what circumstances may an adjuster contact a claimant who is represented by an attorney? A. If permission is granted by the attorney. B. If permission is granted by the claimant. C. If permission is granted by the insurance company. D. If permission is granted by the court.

A. Permission to contact a claimant represented by an attorney must be granted by the attorney representing the claimant.

The program trigger in 2016 under the Terrorism Risk Insurance Act covered property and casualty losses that exceeded ______ in the aggregate. In 2017, the program will cover losses that exceed _____ in the aggregate. A. $120 million,/ $140 million B. $100 million / $120 million C. $140 million / $160 million D. $90 million / $100 million

A. The Act covers losses from a certified terrorism act that exceed $120,000,000 (the trigger) in the aggregate for 2016. The Act has was further amended and extended. The trigger remains the same, but will increase each year by $20 million starting in 2016. Please refer to your testing vendor outline to determine if it is testing on the previous amendment or if it is testing on the 2015 extension of the Act.

The Terrorism Risk Insurance Program Reauthorization Act of 2015 covers all of the following, EXCEPT: A. Crop Insurance. B. Property Insurance. C. Workers Compensation. D. Directors and Officers Liability Insurance.

A. The Act does not apply to crop insurance. In 2015, further exclusions were applied to commercial auto, surety, burglary and theft.

Which of the following are additional coverages under a Businessowners policy with the named peril form attached? I. Debris removal. II. Pollutant cleanup and removal. III. Exterior glass. IV. Collapse. A. I, II, and III only B. I and II only C. III and IV only D. I, II, III and IV

A. The BOP is issued on an "open peril" basis, and the "open peril" form includes "collapse" as an additional coverage. This question is about a BOP with the named peril endorsement attached. When you attach the named peril endorsement IT REMOVES THE COVERAGE OF COLLAPSE.

The DP-3 dwelling form provides: A. Open peril coverage on structures and broad form peril coverage on contents. B. Broad form peril coverage on buildings and contents. C. Basic peril coverage only. D. Fire, lightning, extended coverage and vandalism & malicious mischief coverage only.

A. The DP-3 provides open peril coverage on structures and broad form peril coverage on contents. The other forms are named peril forms and are not as broad as the open peril form.

What is the purpose of the "sue and labor clause" in ocean marine insurance? A. Pertains to protecting the ship and other property from further damage. B. Affects the benefits payable to injured crew members. C. Provides defense costs from suits from passengers. D. A clause in a labor contract with the crewmembers.

A. The clause provides that in the event of a loss, the insured must immediately take all reasonable steps to minimize the loss and protect the property from further loss. Failure to do so may invalidate the coverage or reduce the amount of any claims.

Compensation payable for the delaying a vessel carrying freight: A. Is called demurrage. B. Not payable under an ocean marine contract C. Not subject to any deductible to negotiation. D. Limit is predetermined prior to the voyage.

A. The compensation payable for delaying a vessel carrying freight as by failing to load/unload cargo is called demurrage.

What type of coverage would a heating and cooling contractor need when work has been done on a newly renovated building but not yet accepted by the owner? A. An Installation Floater B. A Builder's Risk Policy C. A Bailee Form of Coverage D. A Transportation Floater

A. The contractor would need an installation floater that provides property coverages for work performed until accepted by the owner.

Which of the following statements is FALSE regarding a released bill of lading? A. The carrier agrees to over insure the cargo so that the shipper will be compensated for all losses. B. The common carrier may limit its liability by using this type of contract. C. The document serves as a receipt from the carrier to the shipper of the goods. D. No stated value is listed on a released bill of lading.

A. The definition of a released bill of lading is "A bill of lading on which no stated value has been indicated, thereby limiting the carrier's liability to statutory amounts or to the specified rate per pound of merchandise shipped."

Under a dwelling policy what is the maximum that would be paid for one month for additional living expenses if Coverage A was $75,000? A. $1,250 B. $500 C. $1,000 D. $750

A. The form provides 20% of Coverage A for additional living expense under the DP-2 and DP-3. Therefore, $75,000 X 20% = $15,000. This amount divided by 12 months = $1,250/month.

If Commercial Property coverage is written on the Building and Personal Property coverage form and a loss occurs, the insured must furnish a signed statement of loss within: A. 60 days after the request of the insurer. B. 30 days after the request of the insurer. C. 45 days after the request of the insurer. D. 75 days after the request of the insurer.

A. The form requires that the insured provide a signed proof of loss within 60 days after the request of the insurer. This is standard in the insurance industry.

Under the livestock coverage form, how must livestock be covered? A. 80% to value. B. 90% to value C. Replacement Cost Basis D. 100% of market value

A. The livestock form requires that the livestock must be insured at least 80% to value.

The focus of Equipment Breakdown coverage is: A. Prevention of loss B. Protection from loss C. To provide extra coverage over the property policy D. To reinforce the explosion and fire perils

A. The main focus of this coverage is to prevent loss rather than protection from loss. Proper maintenance of the equipment is required and inspections will be performed to help prevent losses.

Cause of loss forms refer to what type of coverage under a farm policy? A. Property B. Casualty C. Scheduled D. Mobile equipment floater

A. There are three causes of loss provisions in the property coverage under a farm policy - basic, broad and special. The insured chooses which provision is to apply and pays the premium accordingly. Obviously, the special is the broadest coverage.

What is the purpose of the Nationwide Definition for inland marine exposures outlined in specific detail: A. The coverage that marine insurers could write. B. The classes of property not eligible for inland marine coverage. C. What types of insurance companies could issue inland marine policies. D. The role of the National Association of Insurance Commissioners.

A. This defines the types of coverage that inland marine insurers could provide.

Coverage under the National Flood Insurance Program may be written: A. Only in participating communities. B. For any property located in the United States. C. For any property located in flood prone areas. D. Only in participating states.

A. To be a participating community, FEMA guidelines must be accepted. Once accepted, the community can first be covered under the emergency flood program, then the regular flood program.

Which of the following commercial risks would be covered for vandalism? A. A commercial building that has been vacant for 20 days B. A commercial building that has been vacant for 65 days C. A commercial building that has been vacant for 90 days D. A commercial building that has been vacant for 120 days

A. Under a commercial property policy or dwelling policy (the DP forms) the coverage for vandalism ceases after 60 days of vacancy.

A homeowner with personal property insured for $60,000 had a fire which destroyed everything. The total value of the personal property at the time of the loss was only $50,000. What principle would be violated if her insurer paid her more than $50,000? A. Indemnity B. Negligence C. Liability D. Other Insurance

A. Under the principle of indemnity, insurance should not pay for more than the actual loss sustained by the insured, even if the policy limit is higher than the loss amount or if there is more than one policy applying to the loss.

Under the dwelling insurance program, an endorsement may be attached to the policy to cover dwellings during the course of construction. The insurance company must be advised when construction is completed, and within ____ after the insured takes occupancy of the dwelling. A. 30 days B. 45 days C. 60 days D. 90 days

A. When the intended occupant of a dwelling under construction is the named insured, the dwelling under construction endorsement is attached to the dwelling policy to provide coverage. The insurance company must be advised when construction is completed and within 30 days after the insured takes occupancy of the dwelling.

The Common Policy Conditions apply to which coverage parts of a Commercial Package Policy? A. All parts of the policy. B. The property insurance coverages. C. The optional insurance coverages. D. The liability insurance coverages.

A. With a Commercial Package Policy, the Common Policy Conditions apply to all of the coverage parts.

Which of the following is true regarding advertising of the benefits of the Pennsylvania Property & Casualty Guaranty Association? A. Advertisements are permitted but only in the Commonwealth of Pennsylvania. B. Advertisements regarding the Guaranty Association are not permitted. C. Advertisements are permitted by domestic insurers only. D. Advertisements are permitted only if approved by the Commissioner.

B. Advertisements regarding the Association are not permitted under any circumstances.

Aircraft hull insurance will provide coverage for which of the following? A. Damage to or loss of the aircraft hull, fuselage, and personal injury caused. B. Damage to or loss of the aircraft hull or fuselage. C. Damage to or loss of the aircraft hull, fuselage, and medical payments. D. Damage to or loss of the aircraft hull, fuselage, and property damage to others.

B. Aircraft hull insurance indemnifies the policyholder for damage to or loss of the aircraft hull or fuselage. These policies are similar to auto policies in terms of coverage's offered.

Coverage E under the farm forms covers which of the following? A. Unscheduled personal property B. Scheduled personal property C. Scheduled real property coverage D. Blanket real property coverage

B. Coverage E covers scheduled farm personal property. Each item to be covered is listed and an amount of insurance is stated.

Which of the following would NOT constitute grounds for fines, suspensions or the revocation of a Pennsylvania public adjuster license? A. Soliciting business during the progress of a loss-producing occurrence such as a fire, tornado, severe storm or other catastrophe B. Language in a public adjuster contract that prohibits the insured from communicating with his insurer after a contract has been signed C. Notifying the insured's insurer within two calendar days of entering into a contract D. Failing to comply with an administrative or court order imposing a child support obligation

B. It is a requirement that the adjuster notify the insurer within two calendar days of the execution of a contract.

A public adjuster contract is only authorized by which of the following? A. When authorized by the insurer B. When authorized by the insured for claims against their own insurer C. When authorized by both the insured and the insurer D. When authorized by the insured and the Insurance Department

B. The contract must be authorized by the insured and only for claims against his own insurer.

Which of the following time periods is ordinary payroll coverage limited to in case of a business income loss under the BOP? A. 30 days B. 60 days C. 90 days D. 180 days

B. The insurance company pays for only the loss of business income sustained during the restoration period that takes place within 12 consecutive months after the date of the covered loss or damage. However, it pays for ordinary payroll expenses for only 60 days after the date of loss unless a higher number of days is on the declarations.

The limit under the ISO Standardized Homeowners policy, the additional coverage for "credit card, electronic fund transfer card or access device, forgery and counterfeit money" is: A. $250 B. $500 C. $1,000 D. $1,500

B. The standardized ISO Homeowners policies provide $500 of additional coverage for "credit card, electronic fund transfer card or access device, forgery and counterfeit money". Some states' statutory forms may increase this coverage, but you are required to know the limits of coverage for both standardized and statutory forms for your state licensing exam.

Under which of the following claims settlements are the claim invoices presented and paid with no attempt to obtain a separate release? A. A partial release. B. A walk-away release. C. An open-end release. D. Structured settlement.

B. Under a "walk-away" release, the bills presented are paid with no attempt to obtain a separate release, although the wording on the draft or check may also serve as a form of release. After a certain amount of time has passed with no further contact with the claimant, the file is considered closed.

A licensee in transacting insurance business in Pennsylvania may only use which of the following names? A. An assumed name B. The name that appears on their license C. A fictitious name D. Any name chosen by the licensee that is not an infringement of others

B. Unless approved by the department prior to use, the licensee can only use the name on their license.

Which of the following terms means "through another person?" A. Strict B. Vicarious C. Indemnity D. Subrogation

B. Vicarious means "through or in place of another person." There are times when a person may be held responsible for the negligent acts of another person. This is known as vicarious liability.

An insured has a property loss in Pennsylvania and after waiting 10 days has removed and disposed of the damaged property to begin repairs. The company denies the claim on the basis that the insured did not allow the insurer to inspect the damage. When can an insurer deny a claim on this basis? A. When the insured did not ask permission to remove the damaged property B. When the insurer has proof that it requested the insured to display the damaged property prior to its removal C. When the property was removed before receipt of a Fire Marshal's report on the cause of the loss D. Never, under any circumstances, unless fraud is suspected

B. When the insurer has proof that it requested the insured to display the damaged property prior to its removal

The insured owns a four family dwelling insured on a HO-5 Form. The dwelling is insured for $500,000. What is the percentage of Coverage A for contents? A. 50% B. 20% C. 25% D. 30%

C. A four family dwelling is covered for 25% of Coverage A for contents. A three family dwelling is covered for 30% and a one or two family dwelling is covered for 50% of the Coverage A limit.

Under Coverage C -- Business Personal Property is covered for: A. $2,500 on and off the premises B. $2,500 off the premises and $500 on the premises C. $2,500 on the premises and $1,500 off the premises D. $2,500 anywhere in the world

C. Business personal property is covered for $2,500 for losses on the premises and $1,500 off the premises.

Medical payments coverage of a boat owners policy covers all necessary medical expenses incurred by a covered person up to ______ following a covered accident. A. 1 year B. 2 years C. 3 years D. 4 years

C. Coverage C (Medical Expense) of the boatowners policy covers all necessary medical expenses incurred by a covered person up to three years following a covered accident.

The Extended Business Income provision covers the first 60 days after the loss for reimbursement of earnings for the insured business: A. Immediately after the loss has occurred. B. After a waiting period of 72 hours. C. After the repairs have been made to the insured property. D. Only applies if the insured is forced to relocate.

C. Extended Business Income pays for any additional loss of business after the property is actually repaired and operations are resumed, with reasonable speed, until the operation generates the business income amount that would have existed had no loss occurred. This coverage is usually limited to 60 days. An endorsement can be used to extend the period of time and an additional premium is charged.

With Commercial Property Insurance, replacement cost coverage may be written for: A. Buildings and personal property of the insured. B. Buildings only. C. Buildings, personal property of the insured, and property of others. D. Any property which may be insured.

C. Replacement cost coverage for building, contents and personal property of others is optional. However, if the insured chooses this option, coverage equal to at least 80% of the replacement cost value must be carried.

An unendorsed ISO standard Businessowners policy would provide which of the following property coverages? A. Named peril coverage B. Broad form perils C. Open peril coverage D. Limited broad peril coverage

C. The BOP forms provides "open peril" coverage on the property. There is an endorsement that is used to convert the coverage to "named peril" coverage, if more restrictive coverage is desired. Therefore, an unendorsed BOP provides "open peril" coverage.

How is property covered under an unendorsed BOP form? A. Coverage is written on a named peril basis B. Coverage is written on a broad peril form C. Coverage is written on an open peril basis D. Coverage is written on a basic peril bases

C. The forms were revised to provide open peril coverage on buildings and contents. Coverage can be amended to named peril basic coverage by endorsement.

All licensees are required to notify the insurance department of any change in address within ____ of such change. A. 10 days B. 45 days C. 30 days D. 6 months

C. The licensee must advise the insurance department within 30 days of the change.

The purpose of expediting expenses under the Equipment Breakdown policy is: A. To pay moving expenses B. To pay the cost of removal C. To pay for repairs or replacement in a timely manner D. To reimburse the insured for loss of use

C. The purpose is to pay those expenses necessary to repair or replace the damaged equipment as quickly as reasonable.

A common carrier has signed a contract to deliver goods of the seller. The goods are to be shipped "Free on Board Destination". When does the responsibility of the seller end? A. When they are picked up by the carrier. B. When the goods to be shipped are placed on the loading dock of the seller. C. Not until the goods are delivered to the buyer in accordance with the contract terms. D. When the buyer confirms the purchase of transportation coverage.

C. The title to the property in transit remains with the shipper until it arrives at the buyer's destination point and has been accepted by the buyer. These clauses in the cargo policy will determine where the responsibility lies for damage to cargo in transit. These clauses are usually contained in the Bill of Lading which is the contract between the shipper (seller) and the buyer (purchaser) of the goods or the contract to transport the goods with the carrier.

A licensee failing to provide a response to the Pennsylvania Department of Insurance within 30 days of receipt of a written inquiry, may be assessed an administrative fine of: A. $5,000. B. $10,000. C. Up to $250 per day. D. No more than $100 per day.

D. A licensee who fails to provide a written response to the Department within 30 days of receipt of a written inquiry from the Department, or who fails to remit valid payment for all fees owed to the Department must, after notice from the Department specifying the violation and advising of corrective action to be taken, correct the violation within 15 days of receipt of the notice. If a licensee fails to correct the violation within 15 days of receiving notice, the Department may assess an administrative fine of no more than $100 per day per violation.

The current version of the nationwide definition recognizes six broad classes of property as eligible for marine coverage. These eligible classes include all of the following, EXCEPT: A. Domestic shipments. B. Imports and exports. C. Instrumentalities of Transportation and Communication D. Business personal property.

D. Business personal property is not a "class" or category of business mentioned in the definition specifically. Obviously this type of property can be covered under the commercial property forms or the BOP.

The additional coverage under the Commercial Property policy for electronic data provides $2,500 for the cost of replacing and restoring lost information contained on electronic media. Which of the following types of electronic data is NOT included in this additional coverage? A. Data controlling the building elevator B. Data controlling the heating, ventilation, lighting and air conditioning systems C. Data controlling the building security system D. None of these items are subject to this limit

D. None of these items are subject to the $2,500 annual aggregate limitation and therefore, covered up to the full cost to restore these items up to the building limit.

Before transacting business in Pennsylvania, a public adjuster is required to execute a bond for the minimum sum of ____________. A. $10,000 B. $25,000 C. $50,000 D. $20,000

D. Public Adjuster's Bond - Each person, partnership, association or corporation receiving a public adjuster's license must, before transacting any business, execute and deliver to the Insurance Commissioner a bond in the minimum amount of $20,000 with such sureties as the Insurance Commissioner may approve.

Emma carries Commercial Property insurance to cover her commercial building, her personal property and the property belonging to others in her care, custody and control. Emma's insurance agent tells her that in case of a loss where she is negligent, the owner of the property belonging to others may want their property covered on a replacement cost basis. What coverage must Emma purchase to be properly covered? A. She will need to purchase a "Bailee" policy, because her Commercial Property policy will not cover the personal property of others. B. It is not necessary for her to purchase any additional coverage because the Commercial Property form automatically covers the property of customers on a replacement cost basis. C. It is not necessary for her to purchase any additional coverage because the Commercial Property form automatically covers the property of others on an unlimited basis. D. She will need to carry a sufficient coverage limit to cover the amount of the personal property of others that she has on the premises, and then purchase additional replacement cost coverage for the customer's property.

D. She will need to carry a sufficient coverage limit to cover the amount of the personal property of others that she has on the premises, and then purchase additional replacement cost coverage for the customer's property.

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. Though typically "insured" refers to the policyholder and his or her spouse, relatives by blood, marriage or adoption who reside in the named insured's household are also covered. Also included are wards or foster children under the age of 21 as well as resident relatives who are attending college away from home and are under 24 years of age.

Paul had his roof inspected by a local contractor, after a strong storm with high winds and hail, passed through his neighborhood. The contractor found damage to the roof and gave Paul an estimate of $9,850 to replace it. Paul filed a claim with his insurance company, and the company promptly sent an adjuster to inspect the roof. The adjuster's estimate to repair the roof came to $9,650. How will the adjuster likely attempt to settle this claim?

Even though the difference in the two amounts is small, it is the responsibility of an adjuster to negotiate the settlement, keeping in mind their fiduciary responsibilities to the insurer.