Adjuster Licensing (Fl)
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?
$0
Sam, who has a typical HO-3 policy, is forced to evacuate his home by civil authorities due to rising flood waters in his neighborhood. It takes a month before Sam is allowed to come back to his home. During this time, he has spent $3,000 in hotel expenses, on top of his monthly mortgage payment of $850. When he files a claim, how much will Sam receive under Coverage D - Loss of Use?
$0
When a severe flood is imminent, Erica goes out and spends $600 on sandbags, $200 on plastic sheeting and lumber, and $500 on a pump. Then she works for 8 hours, applying the protective measures to her home. After the flood passes, Erica files a claim for these expenses. Assuming the federal minimum wage at that time is $10 per hour, how much will her flood policy indemnify her?
$1,000
Melanie owns a set of 3 antique crystal vases that is worth $2,800, but during her most recent move, one of the vases was broken. Melanie and her insurer have been unable to find a replacement vase to complete the set and bring it back to its original value. Without the broken vase, the remainder of the set is only worth $1,000. What should Melanie receive from the insurer under the Pair and Set provision of her Personal Articles Floater?
$1,800
Bill carries $10,000 in PIP coverage with a $500 deductible. One day, he accidentally crashes into a car stopped at a red light. The driver of the stopped car is miraculously free from injury, but Bill's medical bills from the collision come to $14,000. How much will Bill's PIP pay for his injuries?
$10,000
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?
$10,000 - ACV pays at current market value minus depreciation
Both Steve and his wife, Arlene, carry DP-2 policies on their $135,000 home. Steve's policy has a limit of $108,000 and Arlene's has a $27,000 limit, and both policies pay on a pro rata basis. After a hailstorm causes $13,000 in damage to their roof, how much of the damage will be covered by Steve's policy (ignoring any deductible)?
$10,400
Acme Construction, Inc. has one contractor and one receptionist. The contractor makes $25/hr, and the receptionist makes $10/hr. The contractor worked exactly 8 hours in 2010, so he made $200. The receptionist worked 10 hours, so she made $100. Therefore, Acme's entire payroll for 2010 was $300. Assume that, for every $100 of payroll, the WC rate for contractors is $50 and the rate for receptionists is $5. How much did Acme owe in WC premiums?
$105
A flood inundates Howard's property, causing $100,000 of damage to the dwelling and $25,000 of damage to the detached garage. If Howard has a Dwelling Form flood policy with a $150,000 limit, how much will the policy pay for the damage to Howard's home and detached garage combined? (Ignore deductible amounts.)
$115,000
Jacob is severely injured at work and receives $600 per week in Temporary Total Disability benefits under his Workers' Compensation insurance for 8 weeks. After 8 weeks, Jacob dies from his injury. What is the highest total amount that his dependents could receive in Death benefits?
$145,200
Sherrie's roof and fence are damaged in a violent windstorm. Sherrie has a typical HO-3 policy with a $150,000 limit for Coverage A - Dwelling. Assuming she has no endorsements, how much coverage does she have available for the damage to her fence?
$15,000
In Florida, every driver must have $10,000 in property damage liability coverage and $10,000 in PIP in order to operate a motor vehicle. If the driver is in a wreck and is found to be at fault, how much liability coverage must the driver have for total bodily injury per accident?
$20,000
Mark is driving along and looking for an address on the East side of Walker Street. As he squints to see the numbers posted on the buildings, he plows into the back of a car waiting at a stoplight. Both the driver and the passenger of the struck car are injured. The driver suffers $70,000 in bodily injury, the passenger suffers $65,000 in bodily injury, and the vehicle Mark hit sustains $30,000 in damage. Mark has liability coverage with split limits of 50/100/25, and both injured people carry the minimum PIP for Florida. How much will Mark be responsible for out-of-pocket after this accident?
$20,000
During a strong storm, Missy's grain drill was mangled by a tornado, which rendered it useless. Before the damage, the grain drill was worth $25,000, but it would cost $45,000 to buy a new one today. Missy's farm policy has a replacement cost endorsement, and the grain drill is scheduled on a Mobile Agricultural Machinery and Equipment form with a $36,000 limit. Missy replaces her grain drill with one she found on sale for $40,000. How much total indemnification will she receive?
$36,000
Grace purchased a recliner from XYZ Furniture. After getting it home, she decided to try out the new chair. While leaning back, the chair breaks and Grace injures her neck. She sues XYZ Furniture and is awarded $300,000. The costs for the legal defense come to $45,000. XYZ Furniture's CGL policy has a Products-Completed Operations Aggregate limit of $750,000, with a per occurrence limit of $250,000. How much will XYZ Furniture have to pay out-of-pocket for this claim?
$50,000
How much of a limit is included for Credit Card Fraud or Forgery, an additional coverage in a homeowners policy?
$500
What is the standard deductible on an Equipment Breakdown Protection Coverage Form?
$500
Jennifer's PAP has a Comprehensive deductible of $100. Jennifer lets her sister Tina borrow her car, and Tina hits a llama worth $500. The llama's owner files a claim for the loss of his llama. How will that claim be settled?
$500 paid under Jennifer's liability coverage
Stan built a porch for his home three years ago at a cost of $10,000. The value of the porch has depreciated by $6,000, and it would cost $12,000 to replace it today. After Stan's porch burnt down during a BBQ today, how much would a Standard Fire Policy indemnify Stan for his porch?
$6,000
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 most likely resulted from the earlier accident with the exercise bike. Which of the following CGL policies would cover Ryan's claim filed January 25, 2011?
A claims-made policy from Jan 31 2010 -Jan 31 2011 with a retroactive date of Jan 1 2008
Under the Longshore and Harbor Workers' Compensation Act, how much would the surviving spouse of a deceased worker receive in benefits?
50% of the deceased worker's Average Weekly Wage
A Discovery Form Commercial Crime policy can apply to losses discovered during the policy period, as well as up to how many days after its expiration date?
60
What is the current minimum amount of liability coverage required by the state of Florida for a driver who is found to be at fault in an accident?
10/20/10
If a Florida HO policy has only been in effect for 45 days, the insurer must notify the policyholder at least ____ days before cancelling it for non-payment of premiums, or at least ____ days before cancelling it for any other approved reason.
10; 20
Under the Earthquake and Volcanic Eruption endorsement in a commercial property policy, what is the time span within which multiple earthquake or volcanic events are considered a "single occurrence" for coverage purposes?
168 hours (7 days)
Which of the following is NOT one of the differences between a BAP and a truckers policy?
A BAP uses coverage symbols to designate covered autos.
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?
Bailee Coverage
Ken is getting his certification to adjust large commercial claims for the NFIP. Which of the following is NOT required of Ken in order to qualify for this certification?
Be able to accurately adjust RCBAP losses of $1,000,000 or more.
Bob has a home in Florida with full replacement cost insurance coverage. After a severe hurricane levels his home, the property is declared a total loss. Bob is so discouraged that he takes several months to decide whether it is worth it to rebuild. Which of the following statements is TRUE?
Bob's insurer must pay the full replacement cost of the property without waiting for proof that Bob has rebuilt his home.
Bobby just purchased an insurance policy for his home from XYZ Insurance. Which of the following would be a reason this policy may not be legally binding?
Bobby has been diagnosed as mentally incompetent.
Which of the following would NOT be covered under Errors and Omissions insurance?
Bodily injury claim
Bonnie's PAP includes Comprehensive coverage. Which of the following losses could this coverage pay for?
Bonnie's car catches fire.
Which of the following is NOT excluded from coverage under a Mechanical Breakdown Insurance policy?
Breakdown due to the cracking of an engine block
In a DP-2 Broad Form, which of the following would be covered under the peril of Theft?
Broken windows caused by a burglar breaking in.
What is the most common type of Time Element Insurance?
Business Interruption Insurance
Jim is an insurance adjuster working a theft claim. As part of his investigation, Jim might want to do all of the following, EXCEPT:
C. look for ways to lower the settlement for the claimant.
Which of the following endorsements is mandatory for all Florida residential property policies?
Catastrophic ground cover collapse
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?
Collision Coverage
Which of the following is NOT one of the requirements that adjusters must meet in order to handle NFIP claims?
Complete NFIP continuing education every three years
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?
Completed Operations Liability
A dryer fire scorches the interior of Bill's home, forcing him to move out while repairs are made. In addition to paying for temporary housing, he also loses the rental income he received from his roommate Frank. Which two Dwelling policy coverages could help Bill with the lost rental income AND his additional living expenses?
Coverage D & Coverage E
In Florida, what are the basic limits of liability for Coverage E and Coverage F in a homeowners policy?
Coverage E: $100,000 per occurrence; Coverage F: $1,000 per person
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?
DEC Construction
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?
Dr. Adams' insurer must seek her consent before settling the claim.
Which of the following statements about Electronic Data Processing (EDP) insurance coverage is FALSE?
EDP excludes coverage for all "intangible" electronic data.
David just opened his own consulting business, and has taken on several new clients. He's having difficulty managing his schedule on top of all the other responsibilities related to owning his own business, so he hires Tina via contract to work as his full-time office manager for $15 per hour. According to the definitions in David's Commercial General Liability policy, which of the following best describes Tina?
Employee
Which Business Auto Policy endorsement covers employees while using their personal cars for business purposes?
Employee as Additional Insured
Which of the following is NOT considered "covered equipment" under an Equipment Breakdown Protection Coverage Form?
Equipment that is buried in the ground
Which of the following statements about the principle of estoppel is TRUE?
Estoppel protects the insured party from an insurer who initially approves coverage, but then later denies coverage after the insured pays for repairs.
When one of Frank's ovens breaks down at his wholesale bakery, it causes a dip in production that drastically affects the bottom line of the business. Luckily for Frank, he has an Equipment Breakdown Protection Coverage Form that can help cover the cost of repairing the expensive oven. Which policy coverage can help pay for costs associated with making temporary repairs and speeding up the permanent repairs?
Expediting Expenses
Martin regularly travels much of the state for work, so his employer has given him a company car. Which endorsement to Martin's PAP would provide him with liability coverage for the company car?
Extended Non-Owner
Jane owns an aquarium supplies store and purchases a Business Owners Policy to protect her assets. Which of the following protections can Jane expect from her standard BOP with no endorsements?
Extra expense coverage
When a company collects a consumer's personal and financial information, the methods for that collection, as well as the ways in which the information is used and shared, are all regulated by the:
Fair Credit Reporting Act (FCRA).
Randy owns a clothing store. One day, he notices a shady character with a backpack who is hanging around acting nervous. Randy becomes suspicious and approaches the young man. As the boy makes an effort to avoid him, Randy grabs his arm and detains him until the police arrive. Not finding any stolen merchandise, the police let the boy go. Two weeks later Randy is notified that he will be sued for violation of the young man's civil rights. This is an example of what type of personal injury covered under Randy's Commercial General Liability policy?
False Arrest, Detention, or Imprisonment.
RWW Insurance creates a radio promotion where they advertise that they will insure any car for $200 a year. They don't actually offer such a plan, but they figure they will be able to sell hundreds of policies to people who show up looking for the bargain. What type of unfair insurance trade practice does this behavior exemplify?
False information and advertising
Farmer Scott owns a farm and raises goats, producing a lot of manure. Occasionally, after a strong rain, some of the waste washes into a nearby river. Which insurance coverage can protect Scott from any liability caused by the goat waste runoff?
Farm Pollution Liability
Which Farm policy would cover animal waste overflow and chemical spills?
Farm Pollution Liability
An explosion takes place at Acme manufacturing plant. Four employees are injured. Gina broke her leg and has third degree burns on 10% of her body. George's left leg is hurt so seriously that it later needs to be amputated. Taylor is permanently blind in one eye, and Jason has third degree burns on 15% of his body. Which of these employees is eligible for Permanent Total disability benefits?
George
Bill is going to switch employers, and therefore switch healthcare providers. Which federal law ensures that he won't be denied coverage when he switches health plans?
HIPAA
The set of patient privacy rules that all health care providers, insurance companies, physicians offices, hospitals, and pharmacies must follow is called the _____________.
HIPAA - Health Insurance Portability and Accountability Act
Anton is purchasing homeowner's insurance for his new house. He wants to make sure his policy offers the BEST coverage available. Which policy should Anton choose?
HO-5
Which of the following homeowners policies provide coverage on an open-peril basis for personal property without endorsement?
HO-5
Hank has collision coverage with a $2,000 deductible on his 2010 truck. One dark, rainy night, Hank's truck slips off the road and rolls over down the embankment. The truck sustains $45,000 in damages, but the actual cash value of the vehicle is only $25,000. Which of the following statements is TRUE?
Hank will be indemnified by his insurer for $23,000.
Which of the following claims may be covered under an Equipment Breakdown Protection Coverage Form?
Hazardous material remediation was needed after a mechanical breakdown of the exhaust system's turbine caused ammonia to be released into the factory, contaminating the entire area.
In an Aviation policy, which of the following is only covered through an endorsement?
Hi-jacking
Which of the following statements best explains why residual market insurance programs exist?
High-risk consumers need insurance, yet no private insurer wants to issue high-risk policies.
Loggers, roofers, and coal miners would fall into which of the following categories?
High-risk employees
Bill's new home is in the final stages of construction, and he has purchased an HO-2 policy to insure his financial interest in the property. This morning, Bill's contractor calls to tell him that an electrical fire has destroyed his new kitchen, and all of the crown molding that was supposed to be installed today has been stolen. It will be $15,000 to rebuild the kitchen and another $4,200 to replace the trim. How will Bill's insurer respond when he files a claim?
His insurer will pay $15,000 to rebuild the kitchen and nothing for the stolen trim.
Maria was in the hospital for five days, recovering from a stroke. The bill she received for her hospital stay broke down the charges for room, lab fees, meals, and nursing care. However, her insurer paid a flat daily rate and she was left responsible for paying the remaining charges. What type of insurance does Maria have?
Hospital Indemnity insurance
Under which law is an insurer required to explain its reasons for denying coverage?
IIPPA
Which of the following is NOT a form of insurance fraud?
Increasing your insurance coverage when you think a loss is likely.
This agent is self-employed and able to offer insurance products from more than one company at a time.
Independent Sales Agent
The coverage limit in Bob's commercial property policy goes up 2% every time the policy renews. Which optional coverage might Bob have included as part of his insurance package?
Inflation Guard
One morning, Jill arrives to open the bank, only to find the door already unlocked. Upon entering the bank, she sees the vault door has been blown open and a large amount of money has been burned when an explosive charge went off. Which commercial crime insurance coverage might cover the loss?
Inside the Premises: Theft of Money and Securities
Which of the following best describes inland marine insurance?
Insurance designed to protect property being transported on land and property related to transportation
Which of the following statements does NOT apply to the Standard Fire Policy?
It automatically covers wind and vandalism.
Which of the following is TRUE about workers' compensation insurance?
It benefits both the employee and the employer.
Which of the following is TRUE of the vacancy condition in a typical insurance policy?
It establishes the parameters for considering a building vacant for the purpose of coverage.
Which of the following statements about the Standard Flood Insurance Policy is FALSE?
It is subject to state courts.
Which of the following statements about Crop-Hail insurance is FALSE?
It is subsidized by the FCIC.
Which of the following statements about a moral hazard is FALSE?
It is the result of an unconscious behavior.
Which statement about the Federal Employers Liability Act is TRUE?
It protects only interstate railroad workers and their families.
When discussing farm insurance, which of the following most accurately describes "scheduled property"?
Itemized property
Which of the following statements about MPCI insurance is FALSE?
Its coverage applies per acre, not per "unit."
ABC Roofing has two CGL policies that cover the same losses. Both policies are occurrence forms, thus pay out on a pro rata basis. The first policy is through KLM Insurance and has a limit of $300,000. The second is through XYZ Mutual, with a limit of $600,000. One day, ABC Roofing suffers an occurrence resulting in a $150,000 covered loss. How will this loss be indemnified?
KLM Insurance will pay $50,000; XYZ Mutual will pay $100,000
Knightley Insurance Co. decides not to renew Emma's homeowners policy, which she has had for 6 years. Which of these statements is TRUE?
Knightley Insurance must notify Emma of the non-renewal at least 120 days before her policy expires.
When the high-pressure feeder malfunctioned at the ACME Paper Mill, the resulting explosion severely damaged the mill and shut down operations for almost two months. Once the repairs are finished, the city inspector comes out to inspect the work and finds that the repaired scrubber needs to be replaced in order to meet current industry safety standards. Which coverage could help ACME with this added expense?
Law and Ordinance Coverage
After Tony, the owner of XYZ Cleaners, accidentally starts a fire, XYZ Cleaners burns to the ground, taking all the garments with it. Afterwards, Tony has to rent a new building and purchase new equipment and supplies. He is also responsible for all the clothing that was in his care. Which type of coverage in his commercial property policy could help Tony with the cost of paying for his customers' destroyed clothing?
Legal Liability Coverage
Phil runs a locomotive repair business, which is insured under a commercial property policy. One night, some blasting powder is accidentally ignited and blows a crowbar through one of the engines. No one is hurt, but the locomotive is severely damaged. Which coverage option may help cover the cost of repairing the engine from this unfortunate event?
Legal Liability Coverage
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?
Lemon Insurance must notify Hugh at least 45 days before the policy expires.
Which of the following is NOT one of the requirements that a "Fast Food Restaurant" business must meet in order to qualify for a BOP?
Liquor must not account for more than 25% of total annual sales.
Bob's home was severely damaged by a thunderstorm and he claims it will cost $74,000 to repair. His insurer has investigated the claim, found the repairs could be done for $49,000, and has offered Bob this amount of indemnification. Negotiation between Bob and his insurer seems to be failing. Due to the unpredictability of the result, which of the following options should be avoided by the insurer if possible?
Litigation
Logan has a small plane that he enjoys flying on the weekends, but he never takes friends or passengers with him. Which of the following is TRUE?
Logan should buy Bodily Injury Excluding Passengers and Property Damage Liability, but he doesn't need to spend the money on Passenger Bodily Injury Liability.
During a routine tooth extraction, Dr. Dentem administers too much laughing gas and causes brain damage to his client. The family sues Dr. Dentem for failing to follow procedure. Which kind of insurance would cover the cost of the lawsuit?
Malpractice Insurance
Mark is on vacation in Italy when his luggage is stolen, including a $2,000 laptop, a $500 suitcase, and $400 in clothes. Mark has an HO-3 homeowners policy. Excluding any applicable deductible, which of the following statements is TRUE?
Mark's homeowners policy will cover $2,400 of this loss.
When Zach purposefully burned down Matt's restaurant, Matt's insurer paid the claim and then went after Zach for the damages. Matt is furious about what Zach did and wants to sue him as well. Why is it NOT possible for Matt to sue Zach?
Matt has already received indemnification from his insurer.
Matthew works for Barry John Coal Company. One day, when all the work trucks are busy, Matthew's boss asks him to use his own truck to deliver a load of coal to a customer. On the way, Matt gets distracted looking at directions and swerves into oncoming traffic, causing a serious accident. Why might Matt's PAP liability insurer deny coverage for the damage Matt caused?
Matt's accident occurred during employment-related activities, so it will be covered by the employer's liability policy.
Nick's home suffered major damage during a tornado. His contractor says it will cost $85,000 to complete repairs, but the adjuster's estimate gives a total of $63,000. Nick and his insurer have tried to reach an agreement, but have failed to do so. Both parties are now wanting a third party to facilitate their negotiations, but only in an advisory role. Which of the following is the best option in this case?
Mediation
Which of the following losses may qualify for coverage under Coverage F - Medical Payments?
Mike breaks his ankle when he trips and falls down the stairs heading to the basement apartment that he rents from Wilma.
Stan has a personal auto policy to cover his two vehicles, but he recently purchased a custom built motorcycle as well. Which type of endorsement will Stan need to cover the motorcycle?
Miscellaneous Vehicle Endorsement
Stu has a collection of rare comic books. He wants to purchase theft insurance for his collection, separate from his home and other property. What term most accurately describes the type of policy Stu would purchase?
Monoline Policy
Which policy is used as an alternative to the Trucker's Policy to cover companies that offer transportation services to the public on a regular basis, rather than for hire?
Motor Carrier policy
Walter works for a shipping company, delivering packages and picking up orders. He lives very close to work and the grocery store is only a few blocks away, so he can live conveniently without owning a car. However, he would like to have some Personal Injury Protection, just in case he ever gets injured in an accident. Which BAP endorsement could his employer use to give him this coverage?
Named Individuals Broadened PIP
Dr. Jones' current occurrence malpractice policy is in effect from July 1, 2005 through July 1, 2006. Which lawsuit would trigger this malpractice insurance policy?
A man sues Dr. Jones on July 26, 2009 for a damaging knee surgery performed on March 3, 2006.
Adam is shopping for a car in a local automobile dealership. While visiting the showroom, he trips over a rug that has folded over and breaks his arm in the fall. Which of the following is true?
Adam may file a third party claim with the dealership's insurance company.
During catastrophes, which of the following is TRUE?
Adjusters licensed in other states can act as emergency adjusters in Florida.
A man wanders onto the runway of a small airport and is injured by a taxiing plane. Which insurance policy would pay for his injuries?
Airport Liability insurance
All of the following are types of Cargo Coverage in Ocean Marine insurance, EXCEPT:
All Risk Form.
Which of the following statements is NOT true of an insurance adjuster?
An insurance adjuster receives her authority to sell products on behalf of the insurer through a written contract.
A fiduciary agent must regularly report to the principal. Which of the following is the BEST example of a principal in the context of insurance?
An insurer that employs an insurance adjuster to investigate damage claims.
In the Business Auto Policy, what does the symbol #2 mean?
Any Owned Vehicle
In order to adjust claims for the NFIP, adjusters must meet several requirements. Which of the following is NOT one of these requirements?
Attend an NFIP claims presentation every 3 months
According to Lonnie's health insurance policy, she is responsible for paying 15% of all of her medical costs. This percentage is Lonnie's:
coinsurance payment.
When Louise goes online and fills out phony applications with XYZ Auto Insurance in order to print the temporary insurance cards and sell them for a profit on the black market, she is:
committing hard fraud.
Dr. Nelson routinely schedules her patients for lab tests that they don't need so she can charge their insurers for more money. Dr. Nelson is:
committing health insurance fraud.
States that allow private insurers to offer workers' comp coverage as an alternative to the state workers' comp fund are called:
competitive.
States that require all businesses to purchase workers' compensation insurance are called:
compulsory.
In a BOP, the purpose of Supplementary Payments in conjunction with liability coverage is to:
cover costs associated with defending and investigating a claim against the insured.
Jane has a small business and has a Business Owners Policy. To save money, Jane has insured her business at 60% coinsurance. When a fire erupts inside of the store, destroying most of Jane's merchandise, her insurer:
covers the structure and contents on an ACV basis.
Kirk is adjusting an auto liability claim submitted by Christine, who has retained an attorney to represent her in the claim. Kirk should:
deal directly with the attorney, not Christine.
Phil heads over to visit his friend Josh, who is sick with the flu. While at the house, Josh fails to cover his mouth when he coughs and Phil ends up contacting the flu. Phil files a claim with Josh's insurer for medical expenses and lost income while Phil is out sick from work. The insurer denies the claim because:
disease transmitted from the insured to a third party is excluded.
A large corporation owns a small hunting cabin in the woods, that it uses for occasional weekend getaways. The corporation can insure the cabin against property damage with a:
dwelling policy.
A captive insurance company:
exists solely to provide insurance for its parent company.
A stand alone excess liability policy:
follows a base policy, but may have different exclusions and limitations.
Ricky was watching a baseball game at XYZ Stadium, when the railing on which he was leaning gave way and he fell two stories. As a result of his fall, Ricky broke his back and is now paralyzed from the waist down. Ricky sued the owners of XYZ Stadium and was awarded $150,000 to cover his medical bills and $2.5 million in __________ because of the permanent nature of his injury.
general damages
A kickback involves:
giving someone compensation in order to gain favorable treatment in an insurance transaction.
UM/UIM coverage excludes:
government vehicles.
Risk retention groups do NOT:
have the support of state Guaranty Funds.
Strict liability:
holds a person liable for his actions regardless of how much care he demonstrates.
Bill holds a hull policy for his cargo ship which sails between China and the United States, transporting wooden toys. On voyage (i) his vessel is damaged by pirates. On voyage (ii) the vessel is damaged by striking employees. On voyage (iii) the vessel is destroyed when it strays into a war zone and is struck by a missile. Bill's losses will be covered by his hull coverage for which of these voyages?
i. only
A plane was damaged while on its takeoff run down the airport runway. By policy definition, this damage is considered to have occurred while the aircraft was:
in flight.
Herb owns a processing plant outside of town that services all the local farmers. He's been using over-the-road transportation but wants to streamline his business by using the railroads. He contacts ABC Railway Transport and the two come to an agreement: ABC Railway will run a sidetrack onto Herb's business premises, if Herb agrees not to hold ABC Railway responsible for certain liabilities that could result from the sidetrack's use. This agreement would fall under __________ in Herb's Commercial General Liability policy.
insured contracts
Residual market insurance programs are funded by:
insurers and their policyholders.
Citizens Insurance:
is available to certain people who are not residents of Florida.
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:
issue an answer for the policyholder
Medical payments coverage in a Farm policy includes all of the following EXCEPT:
libel or slander.
In dwelling policies, Coverage D pays for:
lost rental income.
States that have special legislation that requires workers' compensation coverage to be provided exclusively by the state's workers' comp program are:
monopolistic.
For loss settlement purposes, most homeowners policies:
pay for damages to personal property at actual cash value, and damages to structures at replacement cost.
In a Personal Auto Policy, deductibles are applied on a/an ________ basis.
per claim
Once a claimant files a complaint to the court, the claimant will become the:
plaintiff.
In a BOP, all of the following losses are excluded from liability coverage, EXCEPT:
property damage to premises rented by the insured.
As an adjuster for KLM Insurance, Chrystal has the important role of fiduciary agent. While acting in this capacity, Chrystal's primary responsibility is to:
protect the financial and property interests of KLM Insurance.
A Florida company that is assigned to "Tier 2" for coverage under FWCJUA must pay:
rates that are 50% higher than voluntary market rates.
Josephine has purchased a Business Owners Policy. She insures both the real and personal property at 80% under the policy. Assuming no endorsements apply, the losses will be adjusted on a(n) _______________ basis.
replacement cost
The Employee Retirement Income Security Act (ERISA):
requires that every fiduciary of an employee benefit plan and every person who handles funds or other property of those plans must be bonded.
Disability payments through workers' compensation insurance are primarily based on:
the employee's average weekly wage.
A Reservation of Rights letter is sent by:
the insurance company.
In a Commercial Crime policy, a "messenger" is defined as:
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.
All of the following are true about mediation, except:
the mediator's decision is legally binding.
In the case of condominiums:
the unit owner and condo association share responsibility for insuring the property.
Adjusters are required to give claimants:
their business address and phone number.
Mark has an ocean marine insurance policy with cargo coverage. The type and value of his cargo varies from one shipment to the next, so rather than having a set value for this coverage, the amount of his settlement is only determined after a covered loss. Mark's cargo coverage is written on a/an ________ basis.
unvalued
An insurance contract is an agreement between two parties where each side promises to be truthful, factual, and honest about their respective positions. Therefore, an insurance contract is said to be a contract of:
utmost good faith.
Helen's business is growing rapidly, so she decided to add an annex onto her office and hire another worker. While under construction, a storm blows down most of the annex structure, forcing Helen to restart from scratch. Her commercial policy provides insurance coverage equal to 75% of the property value, despite the fact that her policy requires 80% coverage to be fully insured. Which coverage extension could help Helen rebuild at replacement cost?
None - Extensions are only available if the policyholder maintains the minimum level of insurance of 80% to value
Surestep Insurance Co. calculates that it needs to charge Elwood a higher premium for his auto policy. Which of the following statements is TRUE?
Once Elwood receives notice of this change from his insurer, he may keep his policy in force by paying the extra premium within 10 days.
When is someone considered a passenger, and thus covered under Passenger Bodily Injury Liability?
Once she begins to board the plane
Babette crosses the street and is struck by a car, causing her to sustain injuries in the amount of $45,000. The driver has minimum coverage. Which coverage section of Babette's auto policy could help pay for her medical costs?
Part B: Medical Payments
In Ocean Marine insurance, this clause appropriates the loss to one company, rather than spreading the loss among all cargo owners.
Particular Average
Which of the following would be considered an Instrumentality of Transportation and Communication?
Pipeline
Which of the following is NOT considered an "out-of-pocket expense" in health insurance?
Policy premiums
When Acme Paper Mill was struck by lightning, the resulting damage included a burst waste pipe, which began leaking chemical-laden waste water into the county aquifer. Acme Paper Mill discovered the leak 2 weeks later and reported it to their insurer immediately. Which additional coverage could help Acme with the expense of cleaning up the contaminated water?
Pollutant Cleanup and Removal Insurance
Which of the following may be covered under a DP-3?
Power failure on the premises
Sarah suffers acute back pain. Not satisfied with the specialists in her own network, Sarah elects to see a back specialist outside the network established by her healthcare provider. Her healthcare provider pays the amount that the same appointment would reasonably have cost with an in-network specialist, and Sarah has to pay the additional costs out of her own pocket. Which type of healthcare provider does Sarah belong to?
Preferred Provider Organization
Which of the following statements regarding primary care physicians is FALSE?
Preferred Provider Organizations do not allow policyholders to choose a primary care physician.
What is the last step in the claim settlement process?
Preparing the final adjustment reports
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:
Protective Safeguard endorsement.
Which of the following people committed soft fraud?
Rafael accidentally slipped on a wet floor at the supermarket. Although his only injury was a sprained ankle, he claimed he had back and neck pain when he sued the supermarket in an effort to get more money in the settlement.
Which of the following would be most likely to purchase an Errors and Omissions policy?
Real Estate Agent
Which of the following is NOT a risk management technique?
Risk equality
Which of the following would NOT be covered under the Comprehensive section of a PAP?
Rollover
Ron's truck experiences a mechanical breakdown and he has it towed to an auto repair facility. Upon further examination of Ron's claim, his Mechanical Breakdown Insurance provider denies coverage. Which of the following would be a valid reason for this denial?
Ron had been hauling a large boat, which overloaded the vehicle and caused the breakdown.
Which endorsement to the Commercial Crime policy would protect a bank against its legal liability for burglary, robbery, destruction, or damage to customers' belongings kept in safe deposit at the bank?
Safe Depository
James is in the consulting business and frequently flies from city to city to meet clients and help them improve their business practices. Most cities have adequate public transit, but sometimes it's easier to rent a car. Which coverage symbol would specifically pertain to rental cars on James' Business Auto Policy?
Symbol 8
An insurance adjuster acts as a fiduciary agent for her employer. Which of the following statements is FALSE about the adjuster's role as fiduciary agent?
The adjuster may not give the claimant materials showing how he came up with a settlement amount.
In which of the following situations is an insurer justified in waiting more than 90 days after receiving proof of loss forms to pay a claim?
The claimant has been unwilling to cooperate in the settlement process.
According to the "Definitions" section of a Personal Auto Policy, which of the following would NOT qualify as a "family member"?
The insured's ex-wife who moved out of the house 4 months ago
Jared recently purchased a 25 foot watercraft with a 250 horsepower motor. While cruising on the lake, he accidentally runs into Gary's boat, causing $2,500 in damage to Gary's hull. How will Jared's insurer respond when Gary files a claim against Jared's homeowners policy for the damage he caused?
The insurer will deny the claim because Jared's boat is excluded from his liability coverage.
After a rain storm, Nancy realizes that she left her bedroom windows open the entire time. Now there is extensive water damage to her area rug and furniture, and the laptop that had been sitting on her desk is ruined. Nancy has a Broad Form homeowners policy, so she calls her insurance company and files a claim. What is the likely result of Nancy's claim?
The insurer will not cover any of the damage, since Nancy left the windows open.
Which characteristic would prohibit a convenience store/gas station from purchasing a BOP?
The operation of a car wash
Which statement BEST describes the additional coverages available for both commercial and residential policies?
They add coverage for very specific losses or expenses.
Which of the following is NOT a purpose of insurance regulation?
To prohibit insurance-rating
Which of the following statements about Mechanical Breakdown Insurance is FALSE?
Towing and roadside assistance are covered once a covered breakdown has occurred.
Randy runs a business where he takes on the possessions of others and transports them from one location to another in exchange for a fee. What type of occupation does Randy have?
Trucker
Which of the following is similar to a Business Auto Policy, but adds several policy provisions and protections specific to the trucking industry?
Truckers policy
When a faulty electrode in a children's toy is recalled by ABC Toymakers Inc., it is a costly endeavor. Especially since ABC Toymakers Inc.'s base insurance policy doesn't cover product recalls. Which excess liability coverage could help pay for losses associated with the recall?
Umbrella Policy
John and Lucy both apply for policies with Acme Insurance at the same time. They are exposed to similar hazards and would present essentially the same amount of risk to Acme Insurance. Acme Insurance offers Lucy a premium policy at excellent rates, but restricts John to a very limited policy with high premiums. Acme Insurance may be guilty of:
Unfair discrimination.
Lance runs a staffing service in which his main job is transporting workers to and from various jobsites. His van can carry up to 12 people at a time, and he is worried about getting hit by a driver who does not have enough liability insurance to cover all of his passengers. Which additional coverage could help pay for injuries to his passengers if this were to happen?
Uninsured/Underinsured Motorist Coverage
In a dwelling policy, how much will the Fire Department Service Charge coverage pay?
Up to $500 if the fire department charges for responding to a covered peril
Which of the following perils is excluded from coverage in a National Flood Insurance Program policy?
Water-main breakage
Jane's shed burns to the ground during a tornado, when the high winds break a wall of the shed, knocking over a lantern inside. What is the proximate cause of the loss?
Wind
Susan is insured with a homeowners policy. After someone destroyed her late husband's gravestone with a vehicle, Susan filed a claim against her homeowners policy. Which of the following statements is TRUE?
With Grave Marker coverage, Susan can receive a maximum of $5,000 to pay for the damaged gravestone.
After an insurance claim has been filed in Florida, how soon must the insurer respond to the claim?
Within 14 days
Phil owns a public pool. One day, Phil has an altercation with a woman visiting the pool. Phil doesn't like the way she looks, so he tells her that she has to leave the premises right away. The woman takes Phil to court for violating her civil rights. This is an example of what type of personal injury covered under Phil's Commercial General Liability policy?
Wrongful Eviction
Which of the following states takes a "monopolistic" approach to workers' compensation insurance?
Wyoming
Which of the following insurers is NOT engaging in an Unfair Claims Settlement Practice?
XYZ Insurance Company owns its own auto repair shop and sends policyholders' cars there to be repaired.
Kate has a Personal Auto Policy through XYZ Insurance. In which of the following scenarios would XYZ Insurance NOT be allowed immediately to increase Kate's policy premium?
XYZ Insurance expands coverage for all policies - a change which automatically applies to Kate's policy, as well.
XYZ Insurance is a private insurer that sells flood insurance policies. Which of the following statements is FALSE?
XYZ Insurance participates in the NFIP Direct Program.
Sally has an HO-3 policy on her $150,000 home in the country. One day, a bear breaks down Sally's back door to get into her kitchen for a snack. When Sally comes home to find the damage, she files a claim with her insurance company. Will the damage to Sally's home be covered, and why or why not?
Yes. The HO-3 is an open-peril policy, without an exclusion for wildlife.
SureTrust Insurance was founded and operates in Texas. In Texas, SureTrust is considered:
a domestic insurer.
A dwelling policy would NOT be appropriate for:
a motorhome owned by an individual.
Participation in the Florida Automobile Joint Underwriting Association is mandatory for:
all insurers who can sell auto insurance in Florida.
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:
an "object."
In order to set a yield guarantee for Maren's policy, Maren's agent will need a record of the last four years of her crop yields. This record is called:
an Actual Production History.
Thomas Building is asked by the local youth center to build a gym for the local community. As a condition of their contract, Thomas Building must secure a surety bond. Thomas Building finds ABC Surety Bonding and works out a suretyship for the project. Thomas Building gets Williams Construction Finance to co-sign on the bond, as required by ABC Surety Bonding. William's Construction Finance would be called:
an indemnitor.
Driving home after a 14-hour shift, Sam falls asleep at the wheel and plows into Sandra's home, causing extensive damage to the East wall and roof. As a result, Sandra and her family must move into a hotel until the repairs are completed. The cost of staying in a hotel is:
an indirect loss.
Liability coverage in a BOP is provided on:
an occurrence basis, only.
While a claim remains open, an insurer may require the adjuster to submit an interim report:
at regular set intervals, which lists any new or important information about the claim.
In a garagekeepers policy, PIP coverage is:
available with an endorsement.
An injured employee's PPI rating (or Impairment rating) is NOT:
awarded before the employee reaches his Maximum Medical Improvement.
Which settlement option is usually reserved for the largest claims?
Structured settlement
Sally throws a cigarette butt into Neal's dumpster, starting a fire on Neal's property that costs him $10,000. Neal files a claim with his insurer. The insurer pays Neal and then demands $10,000 from Sally to pay for the loss she caused. What gives the insurer the right to collect payment from Sally?
Subrogation
Which of the following conditions is frequently included in Mechanical Breakdown Insurance policies?
Subrogation
Scott lived in a mobile home before it was completely destroyed in a recent flood. The mobile home is large enough to qualify for a special loss settlement under his flood policy, which has a limit of $28,000. Before the flood, the mobile home was worth $15,000, but it would cost $25,700 to buy a new one today. How much indemnification will Scott receive for this loss?
$22,500
Wilson is a Florida resident who maintains a liability policy with limits of 10/20/10. Recently, he was visiting a friend in Georgia when he ran a red light and hit a BMW, causing $30,000 in property damage. The minimum liability requirement in Georgia is 25/50/25. How much will Wilson's liability insurance pay in this situation?
$25,000
A processing and servicing company would qualify for a BOP only if they have less than _____ in annual revenues.
$3 million
Stephanie owns a house that she rents out for $2,500 a month. A massive kitchen fire forces her tenants to move out while the interior is overhauled. After two months, the repairs are complete, and Stephanie contacts her tenants, only to find that they've found a new place to live. It takes Stephanie another month and a half to find new tenants. Assuming that Stephanie had a $100,000 DP-2 policy, what is the maximum amount she could receive for lost rental income under Coverage D?
$5,000
Sam's Ocean Marine hull policy has a franchise deductible of $50,000. When Sam's ship suffers $75,000 in damage after being overtaken by pirates, how much indemnification can Sam expect to get from his insurer?
$75,000
Luke has been a resident Florida insurance adjuster for the past seven years. In order to keep his appointment, he must complete ________ hours of continuing education every _____ years.
20; 2
What requirements must Wholesalers and Distributors meet in order to be eligible for a BOP?
25% or less of floor space is available to the general public, and less than 25% of gross income may come from retail sales.
The insured carries a BOP policy with protective systems such as a sprinkler system. If the system becomes inoperative, the insured must advise the insurance company of the problem within _______ if the system cannot be restored to working order.
48 hours
Which of the following best describes a Fraternal Benefit Society?
A fraternal benefit society is a social organization based around common interests and beliefs.
Which of the following is NOT considered a covered theft in a Commercial Crime policy?
A periodic assessment of inventory reveals that 4% of a store's inventory is inexplicably missing.
What is a reserve, in insurance terms?
A pool of collected premiums that the insurer sets aside to pay claims
Jones' Auto in Dallas, Texas buys 50 cars from ABC Auto in Tokyo, Japan. They sign a contract whereby Jones' Auto assumes the risk of any damages to the cars until they are delivered. What term of sale have they agreed to?
Cost and Freight
Anna's Rare Books in Birmingham needs to ship three F.Scott Fitzgerald first editions to a customer in Mobile. The combined value of the books is over $400,000. What type of Inland Marine insurance policy should Anna's Rare Books buy to cover this shipment?
A trip transit policy
Which of the following is NOT eligible for Dwelling coverage?
An 8-unit apartment building in which the owner resides
Which of the following statements is NOT true of endorsements?
An endorsed policy will always provide more coverage than an unendorsed policy.
On January 27, 2004, Ryan was using an exercise bike from NusquamCycle when the chain broke, causing him to fall and bruise his knee. Seven 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 was probably caused by his bruise from the exercise bike. Assuming NusquamCycle is no longer in business, which CGL policy would cover Ryan's claim filed on January 25, 2011?
Claims-Made policy from Jan 1 2003-Jan 1 2004 with a supplemental extended tail
Robert applies for an auto loan from his local bank. He meets with a loan officer, who goes over Robert's paperwork. The loan officer tells Robert: "I'll give you a loan as long as you insure the car with ABC Insurance." This is an example of:
Coercion
John, a contractor, just purchased a new backhoe and wants to get an insurance policy to cover it. He's looking for a policy that will provide coverage not only on the job site, but also while transporting it back and forth between sites. What type of inland marine insurance policy would likely fit John's needs?
Contractor's Equipment floater
Honey's Bakery is a local coffee shop run by two sisters. In a rush to leave one afternoon, their new employee forgets to turn off the gas stove. The leaking gas causes an explosion, destroying the kitchen. Which condition in their commercial property policy could help the sisters cover the cost of the damage?
Control of Property
Which of the following does NOT fall under the classification of "small grains"?
Corn
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?
Direct Excess Coverage
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 split the cost of the loss with Jim's own insurer without placing blame on ABC Garage?
Direct Primary Coverage
This agent is a salaried employee who sells insurance products for only one insurer.
Direct Writer
This provision in Ocean Marine insurance obligates insurers of various interests to share the cost of losses associated with a captain's decision to voluntarily sacrifice a part of the ship or its cargo.
General Average
Farmer Jane had an MPCI policy in place when her wheat field was ruined by a hail storm. Jane promptly plowed up the wheat and planted a cover crop. Two days later she filed a claim with her insurer. The claim was denied. What might be the reason for the denial?
Jane did not leave samples of the destroyed crop for the adjuster to examine.
Nick has a comprehensive individual health insurance policy that he purchased through an HMO, and Charity has a PPO plan through her employer. Which of the following statements is TRUE?
Nick was assigned a primary care physician who must coordinate his health care within a network, but Charity may choose a primary physician outside the network.
The DP-3 is known as the:
Special Form.
Florida Insurance Code states the qualifications required to become a licensed insurance adjuster in the state of Florida. Which of the following is NOT one of the requirements for applicants?
Spend 20 hours in the field working with a licensed insurance adjuster
Which of the following is an example of how some insurers are fighting back against insurance fraud?
Starting fraud busting units staffed with former detectives and police officers
Which of the following is NOT a rating factor for a personal auto liability policy?
The condition of the vehicle
Law and Ordinance, also known as Code Upgrade Coverage, covers which of the following expenses?
The cost of repairs or upgrades done to meet new building codes
With respect to Inland Marine insurance, a "Block" policy (such as a Jewelers Block policy, or a Furriers Block policy) is an example of:
a Commercial Floater.
Under which circumstance would it be legal for an insurer to charge one insured more than another insured for the same coverage?
When the insured is statistically more likely to experience a loss
When is a self-insured retention applied in an umbrella policy?
When the umbrella policy covers a loss that is excluded by primary policies
A plane was damaged while being towed by another vehicle. By policy definition, this damage is considered to have occurred while the aircraft was:
not in motion.
