Adjuster Test Questions

Agent

In North Carolina, which of the following licenses requires a criminal history background check?

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

In a Commercial Crime policy, a "messenger" is defined as

Broken windows caused by a burglar breaking in

In a DP-2 Broad Form, which of the following would be covered under the peril of Theft?

25% of Coverage C (or maximum $10,000)

In a North Carolina HO Policy, what is the special limit of coverage for theft of silver, gold, or pewterware?

Roll bars that cost $650

In a North Carolina auto policy, which of the following could be covered under Part D - Damage to Your Auto?

per claim

In a Personal Auto Policy, deductibles are applied on a/an ________ basis

the named insured's 26-year-old son who lives at home

In a Personal Auto Policy, the term "family member" would include

3 years after the accident

In a Personal Watercraft Policy, coverage for necessary medical expenses incurred in a covered accident extends to claims filed up to

damage to the covered craft caused by an uninsured operator of another watercraft

In a Personal Watercraft policy, Part C would cover

Part A - Liability

In a Personal Watercraft policy, coverage for property damage and bodily injury caused by the covered craft would be found in

Part A - Liability.

In a Personal Watercraft policy, coverage for property damage and bodily injury caused by the covered craft would be found in:

the court decides the legal rights of both parties

In a declaratory judgment action

available with an endorsement

In a garagekeepers policy, PIP coverage is

Detached garages

In a homeowners policy, Coverage B - Other Structures provides insurance for which of the following?

A work authorization

In addition to having a license, insurance agents in North Carolina must have an appointment. What is this "appointment"?

the insuring agreement

In an insurance policy, the summary of what the insurer will do in the event of a covered loss is called

lost rental income

In dwelling policies, Coverage D pays for

Attend an NFIP claims presentation every 3 months

In order to adjust claims for the NFIP, adjusters must meet several requirements. Which of the following is NOT one of these requirements?

exclusions

In the Standard Fire Policy, "intentional losses" and "extreme perils that cause catastrophic damage to a large number of policyholders" would be considered examples of

the unit owner and condo association share responsibility for insuring the property

In the case of condominiums

She has to pay a fee to retrieve relevant court documents

In which case would the insured be indemnified by her auto liability coverage?

Conditions

In which section of an insurance policy might you find the following statement? "Damage to insured property must be reported within 15 days of the damaging occurrence."

The business owner must sign a waiver. (possibly)

Which of the following is required in order for coverage to apply under the Business Pursuits endorsement?

The insured must not be an owner or partner in the business

Which of the following is required in order for coverage to apply under the Business Pursuits endorsement?

The insured must not be an owner or partner in the business.

Which of the following is required in order for coverage to apply under the Business Pursuits endorsement?

Truckers policy

Which of the following is similar to a Business Auto Policy, but adds several policy provisions and protections specific to the trucking industry?

Kevin accidentally shoots himself in the foot with a nail gun while he is helping Joe build a deck in Joe's backyard

Which of the following losses may qualify for coverage under Coverage F - Medical Payments?

Several pieces of china and crystal purchased online were broken in transit on the way to the buyer. (possibly)

Which of the following losses would be excluded from coverage under a Personal Articles Floater?

Power failure on the premises

Which of the following may be covered under a DP-3?

Equipment built to operate under internal pressure or vacuum

Which of the following may be covered under an Equipment Breakdown Protection Coverage Form?

Water-main breakage

Which of the following perils is excluded from coverage in a National Flood Insurance Program policy?

Lawyer

Which of the following professionals would be most likely to purchase malpractice insurance?

Indemnification

Which of the following refers to being restored to the financial condition you were in before a loss?

This coverage can pay up to 10% of the Coverage A limit to remove the debris of a covered structure that is damaged by a covered peril.

Which of the following statements about Debris Removal coverage in a North Carolina HO policy is FALSE?

Maintaining property values allows your neighbor to have an insurable interest in your house

Which of the following statements about insurable interest is FALSE?

It is no longer used in its original format

Which of the following statements about the Standard Fire Policy is TRUE?

It is subject to state courts

Which of the following statements about the Standard Flood Insurance Policy is FALSE?

Apologizing for minor mistakes can weaken the adjuster's power in the negotiations.

Which of the following statements about the negotiation process is FALSE?

It was the first multi-line policy, combining both Physical Damage and Liability coverages.

Which of the following statements about the original Standard Fire Policy is FALSE?

Under replacement cost valuation, insurers may safeguard the principle of indemnity by requiring policyholders to replace insured items before making full reparations

Which of the following statements applies to replacement cost valuation?

High-risk consumers need insurance, yet no private insurer wants to issue high-risk policies.

Which of the following statements best explains why residual market insurance programs exist?

It automatically covers wind and vandalism

Which of the following statements does NOT apply to the Standard Fire Policy?

An insurance adjuster receives her authority to sell products on behalf of the insurer through a written contract.

Which of the following statements is NOT true of an insurance adjuster?

An endorsed policy will always provide more coverage than an unendorsed policy

Which of the following statements is NOT true of endorsements?

If the plaintiff if found to be at all negligent, she will receive no settlement

Which of the following statements is TRUE of a claim dispute litigated in a state that follows the doctrine of Contributory Negligence?

Actual cash value is always most beneficial to a policyholder.

Which of the following statements regarding actual cash value is FALSE?

All employees are bonded for the same aggregate amount.

Which of the following statements regarding scheduled fidelity bonds is FALSE?

The color of the vehicle

Which of the following would NOT affect the rating for comprehensive and collision coverage on a vehicle?

Bodily injury claim

Which of the following would NOT be covered under Errors and Omissions insurance?

Damage the insured causes to his own garage

Which of the following would NOT be covered under Part A of a Personal Auto Policy?

Angela's speedboat while she is cruising about 18 miles off the coast of Florida

Which of the following would NOT be covered under a Personal Watercraft Policy?

Rollover

Which of the following would NOT be covered under the Comprehensive section of a PAP?

Pipeline

Which of the following would be considered an Instrumentality of Transportation and Communication?

A football stadium

Which of the following would be considered an insurable risk?

Gas Furnace Basement

Which of the following would be covered under Coverage A in a dwelling policy?

Losses caused by attempted theft

Which of the following would be covered under the peril of "theft" in an homeowners policy?

Real Estate Agent

Which of the following would be most likely to purchase an Errors and Omissions policy?

The insured's duty after a loss

Which of the following would you find in the Conditions section of an insurance policy?

Lightning

Which of these perils is NOT excluded from coverage in a homeowners policy?

Flood insurance is always backed by the National Flood Insurance Program.

Which of these statements is true?

Preliminary report

Which one of the adjuster's reports usually includes the initial claim reserve amount?

Motor Carrier 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?

Exclusions

Which section of an insurance policy is designed to OMIT certain risks from coverage?

Excess liability insurance that can also provide additional coverages not provided by the base policy

Which statement BEST describes Umbrella coverage?

Excess liability insurance that "follows" the base policy, but includes its own set of limitations and exclusions

Which statement BEST describes a stand alone excess liability policy?

They have a $500 deductible.

Which statement about Personal Article Floaters is FALSE?

It provides federal government insurance for civilian employees

Which statement about the Federal Employees Compensation Act is TRUE?

It protects only interstate railroad workers and their families.

Which statement about the Federal Employers Liability Act is TRUE?

Misrepresentation

Which unfair claims settlement practice involves an adjuster making false statements about policy coverage in order to reduce the settlement?

$0

While making a right-hand turn from the right lane, Ben is sideswiped by Roxanne, totaling the car he bought new 12 years ago for $15,000. Roxanne is judged to be at fault. She has an auto policy with limits of 50/100/25 and a $500 deductible on her collision coverage. Assuming Ben's car depreciates at a rate of $1,100 a year, how much will Roxanne have to pay out of pocket when Ben files a claim against her insurer for the damages?

Any owned vehicle

In the Business Auto Policy, what does the symbol #2 mean?

customers

A CGL can provide liability insurance coverage for all of the following persons, EXCEPT

60

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?

90 days

A North Carolina Adjuster Learner's Permit is good for how long?

A shared expense pool

A North Carolina motor vehicle liability policy CAN cover medical payments for someone injured while occupying a covered auto being used for

the insurance company.

A Reservation of Rights letter is sent by:

common law

A ___________ is a law set forth by a governing body such as a state or city.

statutory law

A ___________ is a law set forth by a governing body such as a state or city.

Coverage D & Coverage E

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?

a motorhome owned by an individual

A dwelling policy would NOT be appropriate for

a commercial package policy.

A farm insurance policy may include all of the following EXCEPT:

$115,000

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.)

dwelling policy

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:

concealment

A lightning strike causes one of the storage buildings on John's farm to burn to the ground, aided by the fuel tanks he kept in the building. John knows he wasn't supposed to store any fuel in the building, so he keeps that piece of information to himself when he files a claim. John's insurer may deny his claim based on his

an unexpected event that causes loss

An "occurrence" is defined as

An open line of communication

An adjuster has a duty to provide which of the following to the claimant?

protect the insurer from the claim

An insurance adjuster will do all of the following regarding a claim EXCEPT

A flood zone

An insurance company may consider each of the following a risk, EXCEPT:

Property Damage

An insured may only add Utility Interruption coverage to her Equipment Breakdown policy if at least one of three other coverages are also present. Which of the following is NOT one of these other coverages?

require an insured to submit a preliminary loss report and then a proof of loss form before moving forward on the claim

An insurer may not

Claim file

As an insurance adjuster, Heather is responsible for updating and maintaining an accurate record of all the information pertinent to an individual's insurance claim, including copies of all written documentation, photos and property sketches, witness statements, and copies of medical bills. What is this record called?

ompleted Operations: $600,000; General Aggregate: $600,000

Assuming Ernie holds a BOP with a Selected Per Occurrence limit of $300,000, what would Ernie's Completed Operations and General Aggregate limits equal?

HIPAA

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?

$800

Brenda is injured at work and qualifies for Temporary Total income benefits through workers compensation insurance. Over the past 52 weeks, her average income has been $1200 per week. The State Average Weekly Wage is $800. How much will Brenda receive per week (for the first year)?

Collision Coverage

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?

Coverage A - $61,000; Coverage E - $1,450

Cameron is fully insured by a DP-2 on his $130,000 home. His monthly mortgage payment is $775 per month, and he usually pays $400 per month in groceries. When a kitchen fire damages his house, causing $61,000 in damage, he forced to move out for a month while the repairs can be made. Cameron's hotel bill for the month comes to $1,250 and he spends $600 eating at restaurants. Based only on this information, how much indemnification can Cameron expect to receive for this claim?

fish, pets

Coverage C - Personal Property of a homeowners policy typically excludes

$15,000

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

Occurrence Policy

Craig is just starting out with his business. He needs an insurance policy to cover his liability against any unknown defects within his products. Of the four types of CGL policies listed below, which offers the best coverage for Craig's business, regardless of when a claim is filed?

The two appraisers

In appraisal, who chooses the umpire?

The contents must be located in a fully enclosed building

In order for the contents of a home to qualify for flood insurance protection, which of the following conditions must be met

DEC Construction (probably)

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?

Employee

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?

a Medical Payments/PIP endorsement

Francis has many employees who go out and market his product in the streets on a daily basis. This "go get 'em" approach seems to work well for business, but it does increase the risk of an auto accident. To curb the financial risk of a hospital stay resulting from an accident, Francis adds _____________ to his BAP.

Basic form

Francis owns a small shoe store. Since his business isn't particularly risky, he has a commercial property policy that provides named-peril coverage to his building and personal property, without any additional coverages. Which Causes of Loss form does Francis have attached to his coverage form?

Hank will be indemnified by his insurer for $23,000

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?

property being transported

Inland Marine insurance protects:

10 Business days

Insurance licensees in North Carolina must report a change of address within

$4,500 Probably

Jane has a $150,000 homeowners policy with a 3% percentage deductible. One night, an oven fire destroys her kitchen, causing $50,000 in damage. How much of the damage falls under Jane's responsibility?

covers the structure and contents on an ACV basis. (maybe)

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:

Policy X will pay $50,000 and Policy Z will pay $12,000

Jim has two policies that cover the same risk, but they respond differently: Policy X is primary and Policy Z is excess. Policy X has a limit of $50,000 and Policy Z has a limit of $25,000. When Jim suffers an insured loss totaling $62,000, how will each policy respond?

$1,900

Kevin has a homeowners policy with replacement cost valuation and a coverage limit of $90,000 for his personal property. Three years ago, Kevin purchased a sofa and loveseat for $1,000 and $500 respectively. Both pieces of furniture depreciate at $100 per year. A house fire damaged many of Kevin's belongings, including the sofa and loveseat, which now cost $1,200 and $700 to purchase today. Ignoring any deductibles, how much will Kevin's insurer give him for the damaged sofa and loveseat?

Agreed value policy

Kevin plays in a brass band using two rare antique Alexander tubas. Since they are no longer produced, the value of the tubas is difficult to determine. Which type of policy would best indemnify Kevin in the event that his tubas were ever damaged, lost, or stolen?

Lemon Insurance must keep a record of this termination for 3 years. (maybe)

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 keep a record of this termination for 3 years.p

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?

High-risk employees

Loggers, roofers, and coal miners would fall into which of the following categories?

A bandsaw permanently affixed to the floor

Lucille owns her own woodworking business, building custom items such as dressers, wooden trunks, and mantelpieces. A fire destroys her entire operation and Lucille files a claim with her insurer. Which of the following would be covered under Coverage A of the Building and Personal Property Coverage Form in her commercial property policy?

morale hazard

Lucy has insurance on an expensive necklace she likes to wear to work every day. After work, she takes it off and leaves it in her car's cupholder so she can put it back on in the morning on her way to work. Lucy's behavior would be considered a

Non-Owner Coverage

Mark is a college student and frequently needs to either rent a car or borrow his friend's car. Although he doesn't own a car of his own, he wants to buy himself some liability coverage that would apply whenever he drives someone else's car. Which coverage should Mark get?

Matt's accident occurred during employment-related activities, so it will be covered by the employer's liability policy

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?

Disease transmitted from the insured to a third party is excluded

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

Trucker

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?

Yes. The HO-3 is an open-peril policy, without an exclusion for wildlife

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?

Subrogation

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?

By accepting payment from ABC Insurance, Sam subrogated a portion of his rights against Nicole to ABC Insurance.

Sam suffers $6,000 in injuries when Nicole runs a red light and crashes her uninsured car into Sam's. Sam's own insurance company, ABC Insurance, immediately pays him $5,000 for his injuries. Sam then ponders whether to file a $6,000 lawsuit against Nicole. Why can't Sam sue Nicole for the full amount of his injuries?

$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?

$22,500

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?

the insurer has the right to settle liability cases out of court

The insuring agreement for Part A-Liability in a personal auto policy states that

comparing claimant's losses to promises made in insurance policy

The job of the adjuster can best be described as

A driver's tendency to text while driving

Which of the following is a hazard?

the principal will not perform certain acts

The purpose of a fidelity bond is to guarantee that

HIPAA - Health Insurance Portability and Accountability Act

The set of patient privacy rules that all health care providers, insurance companies, physicians offices, hospitals, and pharmacies must follow is called the _____________.

government vehicles

UM/UIM coverage excludes:

168 hours (7 days)

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?

on an agreed value basis

Under the Scheduled Personal Property endorsement, a loss to a scheduled piece of fine art would be paid

When the insured is statistically more likely to experience a loss

Under which circumstance would it be legal for an insurer to charge one insured more than another insured for the same coverage?

If the policyholder gets a DUI conviction.

Under which circumstances may an insurer cancel a policy after 60 days with sufficient notice?

IIPPA

Under which law is an insurer required to explain its reasons for denying coverage?

is required in every motor vehicle liability policy in North Carolina

Uninsured Motor Vehicle coverage

An Unfair Claims Settlement Practice

What is it called when an insurer makes a habit of delaying payment on legitimate claims?

$300,000

While Andrea was grocery shopping in BB Mart, the large Dairy sign fell off the wall and landed on her. Because of her extensive injuries, Andrea sued BB Mart and was awarded $375,000 in damages. BB Mart's Commercial General Liability policy has a general aggregate limit of $1,000,000 and a per occurrence limit of $300,000. What is the per occurrence limit after this claim is settled?

at regular set intervals, which lists any new or important information about the claim.

While a claim remains open, an insurer may require the adjuster to submit an interim report:

Submitting a formal request to settle the damages with Roxanne's insurer

While driving, Ben was struck by another driver, Roxanne. Ben then filed a claim with Roxanne's insurer. In essence, what was Ben doing when he filed this claim?

Punitive damages

What is one thing that an adjuster is not able to negotiate about?

30/60/25

What is the minimum amount of liability coverage that all North Carolina drivers are required to have?

Business Interruption Insurance

What is the most common type of Time Element Insurance?

$500

What is the standard deductible on an Equipment Breakdown Coverage Form

Pollutant Cleanup and Removal Insurance

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?

the total amount left on the loan - $155,000.

When Emma is found guilty of arson for burning down her $175,000 home, her insurance policy is voided and she receives no indemnification for the loss. Emma still had $155,000 left on her mortgage at the time of the fire. Under the mortgagee clause, Emma's mortgage lender can recoup:

Fiduciary Bond (Probably)

When Phyllis passed away, she left an inheritance for her three children, including ten ounces of gold for each of them. To execute her will, her lawyer hires another attorney, Williams, to oversee the careful distribution of the gold. The court requires a bond to assure Williams will conduct himself honestly. Which type of bond has the court required?

Matt has already received indemnification from his insurer

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?

Coverage A

When a fire breaks out inside XYZ Printing, it damages the building structure, and two of the printing presses, which were bolted to the floor. What coverage within the BOP policy would cover the printing presses?

Paul should apply 5% to his garage and the remainder to the home

When a flood inundates Paul's property, it causes $190,000 in damage to his home and $18,000 in damage to his detached garage. Paul has a Dwelling Form flood policy with a $200,000 limit. How much coverage should Paul use for his garage if he wants to have enough coverage to repair his home completely?

$1,000

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?

This is an unfair claims settlement practice

When an insurer requests both a preliminary claim report and formal proof of loss forms

Expediting Expenses

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?

for non-payment of premium with at least 15 days' notice

According to North Carolina law, an insurer may cancel an insured's automobile policy

for non-payment of premium with at least 15 days' notice.

According to North Carolina law, an insurer may cancel an insured's automobile policy:

$80,000

A fire in Sarah's factory causes her to shut the factory doors for 50 days. To limit her loss of income and keep production going, Sarah spends $125,000 renting equipment and another building. Sarah's commercial property policy doesn't have Business Income Coverage, but it does include Extra Expense Coverage. The limit on her Extra Expense coverage is $100,000 and she has Limits of Loss Payment of 40%/80%/100% during her period of restoration. How much indemnification will Sarah receive for her extra expenses?

Business Interruption Coverage

A short circuit in one of the refrigeration units in the Ice Queen ice cream shop sparked a fire that severely damaged the shop, and it had to shut down for two months while repairs were made. What type of additional coverage would indemnify the Ice Queen for the lost income during these two months?

salaried employee working for only one insurer

A staff adjuster is a

Follows a base policy, but may have different exclusions and limitations

A stand alone excess liability policy

Negotiate a settlement with the claimant

A tree falls onto Melissa's house, damaging the roof and front porch in the amount of $11,276. An adjuster for ABC Insurance finds that the peril is covered under her policy and investigates the damages. Upon investigation, the adjuster comes up with a total for damages of $9,186. Of the following options, which course of action best describes how the adjuster will move forward with the claim?

Workers' Compensation and Employers Liability

A typical workers' compensation policy combines two basic forms of coverage. They are:

45

According to North Carolina law, an insurer that chooses not to renew an insured's homeowners policy must notify the insured in writing at least ____ days before the end of the policy period.

Rachel leaves her cat in her car, with the windows cracked, while she goes into the drugstore to fill a prescription

According to the "Definitions" section of a Personal Auto Policy, which of the following is NOT "occupying" her vehicle?

The insured's ex-wife who moved out of the house 4 months ago

According to the "Definitions" section of a Personal Auto Policy, which of the following would NOT qualify as a "family member"?

The mortgagee may change the coverage amount.

According to the Mortgagee Clause, what is NOT one of the rights of the mortgagee?

31%, 60

According to the commercial property policy, a commercial building is considered vacant if less than __ of the available square footage is occupied for __ consecutive days

an "object."

Acme Bottling Co. makes bottles for a large food manufacturer. Acme has dozens of machines, including conveyors, fillers, and cappers, to name a few. Acme Bottling Co. has a Boiler & Machinery insurance policy to protect its financial investment in these machines. On their policy, each of their machines would be referred to as

$105

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?

Adam may file a third party claim with the dealership's insurance company.

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?

pay for damages to personal property at actual cash value, and damages to structures at replacement cost.

For loss settlement purposes, most homeowners policies:

$178,000

Adjuster Andy is trying to determine a final settlement amount for Stacy's claim. Stacy's house was destroyed in a fire and it will cost $185,000 to rebuild it. Stacy's homeowners policy has a limit of $178,000 and a $1,800 deductible. Typically, how much would Adjuster Andy calculate Stacy's final settlement amount to be?

Legal Liability 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?

increased repair costs due to laws or codes

After a loss covered under a dwelling policy, Ordinance or Law coverage pays for:

The insurer will not cover any of the damage, since Nancy left the windows open

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?

Time Element Insurance

After a tornado severely damaged their building, the owners of ABC Online Marketing have to rent another building for a few months while repairs are underway. Which additional coverage would help cover the cost of renting this other building?

KLM Insurance

After her water heater leaked and damaged her hardwood floors, Clarice filed a claim with her insurer, KLM Insurance, who sent their adjuster, Bob, to inspect the loss. Clarice also hired a public adjuster, Jose, to represent her in her claim. Bob has the responsibility to report to which principal?

Insurable Interest

Agnes purchased a home ten years ago in an upcoming neighborhood for $75,000. The home's value has since tripled to $225,000! Agnes still has $25,000 left on her mortgage, but has increased her dwelling coverage to $225,000 to keep up with the home's appreciation. When it burns to the ground in a fire, her mortgage company wants to be indemnified $75,000 because the value of the home has tripled. Which policy condition protects against this claim?

Basic, Broad, and Special Forms

Alan owns a commercial landscaping business and does most of his work during the summer months. One day, he arrives at work to find an enormous hole in the middle of the yard where he stored his lawn mowers. Under which Causes of Loss form(s) would the mowers, which were consumed by the sinkhole, be covered by his commercial property policy?

the mediator's decision is legally binding

All of the following are true about mediation, except

theft of money or securities outside the insured premises in the care of a messenger (possibly)

All of the following are universal exclusions in a Commercial Crime policy, EXCEPT

mechanical failure

All of the following causes of loss are excluded from coverage in an Equipment Breakdown Protection Coverage Form, EXCEPT

bodily injury

All of the following may be covered under a Personal Injury endorsement in a homeowners policy, except

causes of loss that are not covered.

All of the following pieces of information can be found in the Conditions section of an insurance policy, EXCEPT:

Amy filed a claim in which the damage exceeded the policy limit.

All of these insureds have had their policy for at least 60 days. Which of the following is NOT a valid reason for the insurer to cancel the insured's policy?

a trip transit policy

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?

HO-5

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?

Bonnie's car catches fire.

Bonnie's PAP includes Comprehensive coverage. Which of the following losses could this coverage pay for?

Part B: Medical Payments

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?

an occurrence basis, only

Liability coverage in a BOP is provided on

His insurer will pay $15,000 to rebuild the kitchen and nothing for the stolen trim.

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 $19,200 for the entire amount of the loss (possibly)

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?

Assignment

Bob has been in the construction business a long time and is ready to retire. He sells the company to his friend Scott and then lets the insurer know that any claims against his policy should be paid to Scott from now on. The insurer informs Bob that they cannot do this due to which condition?

Litigation

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?

Bobby has been diagnosed with schizophrenia.

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?

$10,400

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)?

request an extension

If an adjuster has not completed her continuing education hours, what can she do?

the Commissioner can still impose penalties against him.

If an adjuster's license lapses while he is being investigated for violations of insurance law:

14

If an employer denies a worker compensation claim, it must notify the injured employee within __ days of receiving the claim.

30

If an insurer makes a change to an insured's policy, it must notify the insured at least ____ days prior to the effective date of the change

Chuckie is not qualified because he did not suffer any loss of wages.

Chuckie broke his ankle while waiting tables at the Grande Luxe hotel. He can no longer work as a waiter, where he was making about $750 per week, but Grande Luxe transferred him to Reservations, where he answers phones and doesn't need to walk around. At Reservations, Chuckie makes $800 per week. Chuckie is hoping that he'll qualify for Temporary Partial Disability benefits under his Workers' Comp insurance. Why will Chuckie not be qualified to receive these benefits?

the adjuster does not have authority to negotiate for punitive damages.

Cindy, a drunk driver, accidentally crashes into Nancy's house, causing $22,000 in damage. On top of that, Nancy tries to get the adjuster to add an additional $20,000 for punitive damages to punish Cindy for driving while intoxicated. However, Nancy fails in her attempts at negotiation. This is because:

$10,000 - ACV pays at current market value minus depreciation

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?

misrepresentation

Clark is filling out an application for an insurance policy. The application asks for his birth date, and Clark writes 1-24-67. His actual birthday is 1-24-63, but he likes to appear younger so he uses a different date. This would be called

Errors and Omissions Insurance (possibly)

Cliff receives a letter from the IRS, informing him that he has severely underestimated his Adjusted Gross Income for the past year. Cliff was oblivious to this fact because XYZ Accounting has filed his taxes for him for the past 15 years. Now, Cliff owes $15,000 in back taxes. He sues XYZ Accounting for this mistake. Which of the following would cover the cost of the lawsuit for XYZ Accounting?

the Commissioner of Insurance

If an insurer routinely uses unfair practices in dealing with its claimants, the insurer will likely be investigated by

imprison the licensee for up to one year

If the Commissioner suspects a licensee has violated state insurance laws, the Commissioner may do any of the following, EXCEPT

The insurer has paid $3,500 under her Medical Payments coverage before arriving at a settlement figure for property damage.

Dora is in the middle of negotiating a complicated auto claim with her insurer. Which of the following actions that the insurer has taken is an acceptable practice?

Sarah's policy will not cover this loss.

During a recent flood, water backed up through the sewers and caused $10,000 in damage to Sarah's house. Sarah's homeowners policy includes the endorsement for Water Back Up and Sump Discharge or Overflow. Which of the following statements is TRUE?

$0

During a severe windstorm, a large tree in Jeff's yard was blown down and two large bushes were ripped from the ground. Jeff has an HO-3. What is the maximum amount that Jeff can receive for the replacement of the tree and bushes that were damaged by the windstorm?

a direct loss

During a storm, lightning strikes a tree in Harry's yard and starts a fire that spreads to his shed where he keeps all his equipment for his landscaping business. In addition to the shed, Harry has to purchase all new equipment to stay in business. The cost to replace the equipment would be considered

the policy's coverage is non-negotiable.

During a terrible storm, Theresa's home suffers $200,000 in damage. $60,000 of this damage was caused by flooding, which is specifically excluded from Theresa's policy. She attempts to persuade her adjuster to cover at least half of the flood damage, but her efforts are to no avail. This is because:

property, and liability with an endorsement

Dwelling policies cover

a fraternal benefit society.

Edward is a member of the Knights of Columbus, a religious group dedicated to voluntary service to the benefit of society. He also recently purchased a $100,000 life insurance policy from the organization. This was possible because the Knights of Columbus is:

Class H felony

Embezzlement of less than $100,000 is a

Class C felony

Embezzlement of more than $100,000 is a

$50 fine

Eric lives in North Carolina, but he does not have any motor vehicle liability insurance. When he is pulled over for a routine traffic stop and caught driving without insurance for the first time, he goes out the next day and buys coverage that meets all the state requirements. What will most likely be Eric's penalty?

Farm Product Liability insurance

Farmer Bob would like to sell his recent harvest of lettuce to a local wholesaler. The wholesaler agrees, but only if Bob can prove he has insurance protection in the event that his lettuce causes people to become ill. What type of insurance does Bob need in this situation?

Farm Pollution Liability

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?

When he files a claim proving he met the 80% co-insurance requirement (possibly)

Farmer Steve barely escapes a massive tornado, but the storm does completely destroy one of the barns on his property. Luckily, Steve has an insurance policy on his barn with a replacement cost endorsement, and the barn was fully insured. At the time of the loss, the actual cash value of the barn was $65,000, and its replacement cost is currently $85,000. When will Steve receive full indemnification for his losses on the barn?

Flora will file a first-party claim for the damage to her car, and Cam will file a third-party claim for the damage to his billboard

Flora is driving in the rain when she skids off the road and slams into Cam's billboard, totaling her car and causing $2,000 in damage to the billboard. Flora has an auto policy with ABC Insurance, and both Cam and Flora submit claims against this policy for their damages. Which of the following is TRUE

Stock insurer

Frank purchases an automobile policy from a publicly-traded XYZ insurance. He pays regular monthly premiums, and also purchases stock in XYZ and receives dividends when the company turns a profit. From which type of company has Frank purchased insurance?

None

Gail's restaurant is doing more business than ever, so Gail decides to add more dining space. Three weeks into the project, a hurricane blows through town, reducing the new construction to rubble. Gail maintains commercial property insurance coverage valued at 70% of her property's replacement cost, although her policy says she must maintain at least 80% to be fully insured. Which coverage on her policy could pay to rebuild her restaurant at replacement cost?

Umbrella Coverage

Generally speaking, which of the following has the broadest coverage?

$50,000

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?

$0 (possibly)

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 $70,000. Assuming XYZ Furniture's CGL has a Products-Completed Operations limit of $500,000 with a per occurrence limit of $75,000, how much out-of-pocket expense will XYZ Furniture incur if the court costs total $85,000?

$10,000

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 $70,000. Assuming XYZ Furniture's CGL has a Products-Completed Operations limit of $500,000 with a per occurrence limit of $75,000, how much out-of-pocket expense will XYZ Furniture incur if the court costs total $85,000?

Money Orders and Counterfeit Paper Currency

Grant works at ABC Convenience. One day, a man pulls up in an expensive car and pays cash for his gas with a hundred dollar bill. Grant accepts the bill without checking its validity. When Grant's manager checks the bill later, he discovers it is a fake. Which commercial crime coverage could protect ABC Convenience from financial loss associated with accepting the fake hundred dollar bill?

The principle of indemnity

Greg plays trombone in his school band during football games. During a rally song in the stands one day, Greg annoys one of the opposing team's fans, who grabs his $400 trombone and hurls it down the bleachers, completely destroying it. Greg's insurance pays him $400 to replace the trombone, but then the opposing team's coach also offers to replace the instrument, at whatever the cost. So Greg orders a new $3,200 trombone and has the opposing team's athletic department absorb the cost. Which principle has Greg violated?

Over-confident or arrogant

Having a positive attitude can help an adjuster during negotiations. Which of the following aspects of an adjuster's attitude can hinder negotiations?

None - Extensions are only available if the policyholder maintains the minimum level of insurance of 80% to value

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?

premises liability (maybe)

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.

24 hours every two years

How many hours of continuing education does North Carolina require for adjusters?

$500

How much of a limit is included for Credit Card Fraud or Forgery, an additional coverage in a homeowners policy?

it is important to investigate for fraud

If a claimant has a history of similar claims, that could mean

Deliver her license to the Commissioner within 30 days after moving

If a licensed adjuster is moving out of North Caroline, what must she do?

1-6 months; 1 year

If a licensee does not follow the Commissioner's rules about recording and reporting insurance transactions, he could have his license suspended or revoked for ______ for a first offense, or _____ for a second offense

10 business days

If a licensee is convicted of a crime, he must report it to the Commissioner within

Commissioner of Insurance

If a resident of North Carolina has questions about an insurance contract, who is ultimately responsible for answering them?

any appointment she has will also be revoked.

If an adjuster has her license revoked:

Photographer's equipment

Which of the following is eligible for coverage under the Personal Property Replacement Cost endorsement in a homeowners policy?

Fiduciary bond

Jack has been appointed to manage Margaret's financial estate, but Margaret requires Jack to be bonded. What kind of bond might Jack seek?

a fiduciary bond

Jack has been appointed to manage Margaret's financial estate, but Margaret requires Jack to be bonded. What kind of bond might Jack seek?

a joint tortfeasor

James and Eric want to play a prank on Bob for Halloween. They dress up like headless horsemen and throw ignited Jack O'Lanterns at his house. Unfortunately, one of the inflamed pumpkins catches the porch on fire, causing $3,500 in damages. Bob doesn't find this tomfoolery very entertaining and sues both James and Eric for the cost of the repairs. In court, James and Eric would be

Symbol 8

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?

$2,000

James is walking down the street when Andrea, an uninsured motorist, strikes him with her car. James suffers $12,000 in injuries from the accident. He has personal injury protection of $10,000 from his own automobile insurance policy, which immediately pays him the full amount. By accepting $10,000 from his own insurance company, James has waived the right to sue Andrea for more than _____ for personal injury.

Harry's insurer is trying to influence settlement under one portion of the policy by withholding coverage under another portion of the policy.

Jane is involved in an auto accident and the other party, Harry, is judged to be at fault. She suffers roughly $8,000 in damage to her car and $22,000 in personal injury. She contacts Harry's insurer and, 6 days later, she is told that they won't be able to indemnify her for her car until she agrees to accept $14,000 for her personal injury portion of the claim. In what way is Harry's insurer acting unfairly?

Risk reduction

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

The insurer will deny the claim because Jared's boat is excluded from his liability coverage.

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?

$500 paid under Jennifer's liability coverage

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?

$2,550

Jeremy owns a business with several machines covered under an Equipment Breakdown Protection Coverage Form with a $500,000 limit. He has three deductibles on his policy: 1) a percentage deductible of 3% per loss, 2) a minimum deductible of $500, and 3) a maximum deductible of $10,000. After experiencing a covered loss of $85,000, how much will Jeremy have to pay out of his own pocket for the loss?

$250,000

Jerome was shopping at ABC Imports when a light fixture fell from the ceiling and hit him on the head. Jerome's injuries resulted in an extended hospital stay, so he sued ABC Imports and was awarded $400,000. Assuming ABC Imports carries a CGL with a General Aggregate of $750,000 and a per occurrence limit of $250,000, what is the maximum that ABC's insurer will pay for Jerome's injuries?

Express Authority

Jerry is an adjuster and has signed a contract with ABC Insurance to adjust claims in an area recently devastated by a hurricane. Jerry receives the claims from ABC Insurance, completes the inspections, and settles claims on behalf of ABC Insurance according to his contract. What type of authority has ABC Insurance given Jerry?

$5,000

Jerry is using an expensive video recorder near the family pool when he slips and falls in, destroying the camera. Jerry bought the camera three years ago for $4,000, and it depreciates at $500 per year. A new, similar camera costs $5,000 today. Assuming the loss is covered, if Jerry had a replacement cost policy, how much would Jerry's insurer indemnify Jerry for the destroyed camera?

$10,000

Jesse's home is worth $200,000 and he has a homeowners policy with a $160,000 limit. After a covered loss, Jesse is left with a total of $10,000 in damages. Assuming the insurer requires the standard 80% level of insurance for coinsurance purposes, and ignoring any deductibles, how much will Jesse receive in indemnification?

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 cover any part of the loss that Jim's policy does not cover?

negligence

Jim is out turkey hunting on a private ranch when he hears some movement in the brush. Assuming it's a turkey, Jim raises his shotgun and fires. Unfortunately for Jim, he has not taken a turkey, but has severely injured one of the landowner's calves instead. Jim is responsible for the cost of the calf because he acted with:

Unfair discrimination

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:

Although John's house was still covered under an HO-3, the damage would not be covered because he didn't shut off the water supply

John moved out of his house and put it up for sale three months ago. While he was waiting for the house to sell, John's plumbing pipes froze and burst in the icy temperatures, which eventually led to water damaging the cabinetry and hardwood floors. Which of the following statements would most likely be TRUE?

Defamation

John works for ABC Insurance. He is paid on a commission basis and needs to meet certain sales goals in order to draw a reasonable salary. To help in this endeavor, John regularly tells potential clients that XYZ Insurance and Integritas Insurance often fail to pay claims, and that they charge unreasonably high premiums. In speaking falsely of his competition, John has indulged in which unethical practice?

XYZ Insurance expands coverage for all policies - a change which automatically applies to Kate's policy, as well

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?

$25,000

Kelly took her eyes off the road and ended up smashing into the back of a passenger van. All five passengers were injured, and each one ended up with $25,000 in medical costs. Assuming Kelly has liability coverage with limits of 50/100/50, how much will she have to pay out of pocket?

Kendra's insurer is legally allowed to cancel her policy for any reason

Kendra's homeowners policy has been in effect for just 45 days, but she just received a notice of cancellation from her insurer. Which of the following is TRUE?

$2,000

Lightning strikes one of Christy's trees in her backyard and starts a fire that spreads to two other trees before firefighters are able to put it out. The fire department charges her $600 for responding to her call. Christy's DP-2 policy has a Coverage A limit of $95,000. What is the maximum amount of indemnification that Christy can expect to receive for this loss (ignoring any deductible)?

$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 $60,000 in bodily injury, the passenger suffers $55,000 in bodily injury, and the vehicle Mark hit sustains $30,000 in damage. Mark has liability coverage with split limits of 50/100/25. How much will Mark be responsible for out-of-pocket after this accident?

Mark's homeowners policy will cover $2,400 of this loss

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?

$5,000

Marlene has been living in her $120,000 home for 31 years. Because she has paid off the mortgage, she decides to save some money on her monthly insurance premiums by reducing her homeowners coverage to $40,000. After a severe hailstorm totals her roof, her adjuster estimates the damage at $12,000. Assuming the insurer imposes the standard coinsurance penalty, and ignoring the deductible, how much will Marlene receive in the settlement?

Extended Non-Owner

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?

A kickback

Martin works as an accountant for Smith Manufacturing. Smith Manufacturing has tasked Martin with finding an insurance provider to meet the company's needs, so Martin interviews several insurers. At the end of one interview with PRO Insurance, the insurance representative hands Martin an envelope containing $5,000 in cash, on the condition that Smith Manufacturing selects PRO Insurance as its insurance provider. What would we call the $5,000 in cash?

Joe's

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

$1,800

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?

$12,000

Melanie's $300,000 home suffers $90,000 in damage from a fire. The adjuster finds the home's value since 2008 has depreciated 25%, making the ACV loss $67,500. Although Melanie's policy covers repairs at their replacement cost, she receives $67,500 at the time of loss. Repairs to her home end up totaling $79,500. How much, if any, further indemnification may Melanie receive from the loss?

Scheduled Personal Property

Monica's husband, Sam, likes to buy her expensive jewelry, and she has amassed quite the collection over the years. What endorsement would Monica and Sam need to add to their homeowners policy to fully cover Monica's jewelry collection?

$5000

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

$50,000

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

Any necessary increase in living expenses caused by the loss, up to the limit stated on the declarations page

North Carolina Manufactured-Homeowners insurance policies include Loss of Use coverage to pay for the insured's increased expenses when the home becomes uninhabitable because of a covered loss. How much can the MH (F) form pay under this coverage?

$30,000

North Carolina drivers are required to carry at least _____ in auto liability coverage for bodily injury or death to one person per accident

Claims-Made policy from Jan 1 2003-Jan 1 2004 with a supplemental extended tail

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?

A claims-made policy from Jan 31 2010 -Jan 31 2011 with a retroactive date of Jan 1 2008

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?

an excess liability policy pays only after the base policy's limit has been exhausted

One day, a customer at Jim's Tire Sales was severely injured when a rack of tires collapsed and fell on her. Later, the customer filed a lawsuit against Jim for $750,000. Jim has a commercial general liability policy, but the limit for this type of loss is only $500,000. Not wanting to use his entire limit on this one claim, Jim tries to use his excess liability policy first, which has a limit of $1,000,000, so he can retain most of the aggregate limit in his base policy. Unfortunately for Jim, this is not possible because

Inside the Premises: Theft of Money and Securities

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?

False information and advertising

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?

Rachel is providing representations

Rachel is filling out an application for a homeowners policy. She is truthfully answering the questions regarding her home's location, size, age, etc. Which of the following is a true statement?

False Arrest, Detention, or Imprisonment

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?

High-risk consumers

Residual market insurance programs are primarily designed to meet the needs of which type of consumer?

general damages

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

$15,000

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

Risk Transference

Six Stars Development Company has just been offered a great deal on a bulk purchase of dishwashers from a new company called Clean Machines. They've never purchased appliances from Clean Machines, so they're hesitant to make such a large purchase. Finally, Clean Machines offers to provide 10-year warranties for each of the dishwashers. This is an example of:

The name of the insured party

Which of the following is found in the declarations page of an insurance policy?

A woman files an insurance claim when she is injured by an employee at a local bar

Which of the following is most likely a third party claim?

Janie loses a month of rental income when her tenant must move out while repairs are made to the home.

When record-breaking rainfall causes severe flooding in Janie's home town, Janie's rental property suffers extensive damage. Which of the following is an indirect loss?

A woman files an insurance claim when she is injured by an employee at a local bar.

Which of the following is most likely a third party claim?

the North Carolina Department of Correction

When suspending, revoking, or denying the renewal of someone's insurance license, the Commissioner will notify all of the following, EXCEPT

Remain objective

When taking recorded witness statements, the adjuster should.:

Filing a claim

Which of the following is not an adjuster's duty in the claims process

A periodic assessment of inventory reveals that 4% of a store's inventory is inexplicably missing.

Which of the following is NOT considered a covered theft in a Commercial Crime policy?

$85,000

Sue decides to get a valued insurance policy on her antique car. She and her insurance company agree to a value of $85,000. Three years later, the car is destroyed when a tree falls on it in a parking lot. The car depreciates at $2,000 a year, and its replacement cost is $100,000. Ignoring any deductible, how much can Sue expect her insurer to indemnify her?

A domestic insurer

SureTrust Insurance was founded and operates in Texas. In Texas, SureTrust is considered:

With Grave Marker coverage, Susan can receive a maximum of $5,000 to pay for the damaged gravestone

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

$0 (possibly, due to age and DP-1 being settled at ACV)

Tamara is fully insured by a DP-1 on her $175,000 home. When a portion of Tamara's attached garage burns in a small fire, the adjuster estimates it will take $8,000 to repair the damage. However, based on the age of the structure, the adjuster writes Tamara a check for $5,500. Once repairs are completed, Tamara submits proof and receives how much more from her insurer?

Seek the assistance of an adjuster

Which of the following is not the responsibility of the claimant?

Seek the assistance of an adjuster (maybe)

Which of the following is not the responsibility of the claimant?

Liquor must not account for more than 25% of total annual sales

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?

Complete NFIP continuing education every three years

Which of the following is NOT one of the requirements that adjusters must meet in order to handle NFIP claims?

PIP is usually secondary coverage

Which of the following is NOT true of Personal Injury Protection?

12 months, 1 year (maybe)

The BOP provides loss of income on an "actual loss" sustained basis for up to:

Special Form

The DP-3 is known as the:

requires that every fiduciary of an employee benefit plan and every person who handles funds or other property of those plans must be bonded

The Employee Retirement Income Security Act (ERISA)

states that any change to a policy form that broadens coverage without increasing the premium will automatically apply to existing policies.

The Liberalization Clause in an insurance policy:

30/60/25

The NCRF provides auto insurance to high-risk drivers in North Carolina, with liability limits of at least

provides flood insurance for individuals in communities complying with NFIP standards.

The National Flood Insurance Program:

$750,000

The North Carolina Joint Underwriting Association offers residential policies with a building coverage limit of up to _____________.

a specified amount of coverage under Coverages B and C for business purposes

The Permitted Incidental Occupancies endorsement to a homeowners policy provides:

coverage applies to each insured separately, as if no other insured existed

The Severability of Interests condition states that

165 Line

The Standard Fire Policy is also known by a nickname: The "___ " Policy

covers water damage if it results from a mechanical breakdown of sump pump equipment (Maybe third try)

The Water Backup and Sump Discharge or Overflow endorsement

both physical damage and liability exposure.

The Watercraft Policy covers:

sell standardized NFIP policies

The Write Your Own program allows private insurers to

It requires the insurer to settle the claim, in whichever manner it chooses, within 30 days of receiving notice of the claim

Which of the following is NOT true of the Company's Options provision in the standard fire policy?

It's also called an "advance payment settlement."

Which of the following is NOT true of the no-release settlement?

Using sarcasm in response to the claimant's anger

Which of the following is NOT useful in moving the negotiation process forward toward a successful resolution?

It benefits both the employee and empoyer

Which of the following is TRUE about worker's compensation insurance?

A business owners policy offers liability protection

Which of the following is TRUE concerning a Business Owners Policy?

$6,000

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?

Miscellaneous Vehicle Endorsement

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?

States that allow private insurers to offer workers' comp coverage as an alternative to the state workers' comp fund are called

States that allow private insurers to offer workers' comp coverage as an alternative to the state workers' comp fund are called

$5,000

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?

the ring is a pure risk

Steve has just purchased a wedding ring for his new bride. If something were to happen to the ring, he'd be out a lot of money, so he purchases an insurance policy. He is able to do this because:

Janet failed to make a reasonable effort to protect the property from further damages.

Strong winds have torn a hole in Janet's roof. On top of that, heavy rain is expected in her area in the next few days. Figuring it would simply be too much effort to put a tarp over the hole in her roof, Janet elects to do nothing. The rains come and destroy several of her possessions inside her home. Janet files a claim with her insurer for the losses, but it comes back denied. This is because:

Monoline policy (maybe)

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?

It establishes the parameters for considering a building vacant for the purpose of coverage.

Which of the following is TRUE of the vacancy condition in a typical insurance policy?

Binders

There are several terms that are often interchangeable with "endorsements." Which of the following is NOT one of these terms?

Independent Sales Agent

This agent is self-employed and able to offer insurance products from more than one company at a time

Lay-up Period

This policy provision in a Personal Watercraft Policy states that coverage does not exist at certain times when a watercraft is not in use, such as during winter months

$1,500

Tim's $2,500 boat trailer was stolen from his driveway. Ignoring any deductibles, how much can Tim receive for his stolen trailer when he files a claim against his homeowners policy?

Employee theft: scheduled positions

Tim, taking advantage of the economic downturn, started a business buying gold and silver from people who needed cash. Tim and one employee negotiated deals with sellers in the front of the shop, while another employee worked in the back of the shop, where she counted the money and kept the books. Which commercial crime coverage would protect Tim from losses resulting from theft, specifically by either his current money counter or any other money counter he may employee after her?

Policy X will pay $60,000 and Policy Y will pay $15,000

Tina has two policies (Policy X and Policy Y) that cover the same risk on a pro rata basis. Policy X has a limit of $100,000 and Policy Y has a limit of $25,000. When Tina suffers a loss totaling $75,000, how will the two policies respond?

Completed Operations Liability

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?

the property is abandoned

Veronica owns a pottery business and is insured under a commercial property policy. She was in the process of building an extra structure for the sole purpose of kiln firing her pottery, but after 40 days of waiting for it to be completed, she moved her business to a new location without any intention of moving back. Her Builder's Risk Coverage Form was terminated because:

Move to dispute resolution

When the dollar amount difference between an adjuster and a claimant is very large, the adjuster should

Employee as Additional Insured

Which Business Auto Policy endorsement covers employees while using their personal cars for business purposes

Standard Form 25

Which financial institution bond is designed for all types of insurance companies?

Form 17

Which form does a NC employer need to post in the workplace if it carries workers compensation insurance, or is self-insured?

The final settlement amount

Which item would NOT belong in an adjuster's initial report on a claim?

Any compensation given as a reward for favorable treatment in an insurance transaction or interaction

Which of the following BEST describes a "kickback"?

Losses are paid at actual cash value. (maybe)

Which of the following BEST describes how covered losses are settled under a typical Equipment Breakdown Protection Coverage Form?

Usually a "last resort" form of insurance

Which of the following BEST describes the insurance provided by residual market insurance programs?

After a loss, the insured should be restored to his approximate financial condition before the loss.

Which of the following best defines the principle of indemnity?

A fraternal benefit society is a social organization based around common interests and beliefs.

Which of the following best describes a Fraternal Benefit Society?

Insurance designed to protect property being transported on land and property related to transportation

Which of the following best describes inland marine insurance?

Either insurers or claimants

Which of the following best describes who adjusters can work for?

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.

Which of the following claims may be covered under an Equipment Breakdown Protection Coverage Form?

The claimant asks for $37,795; the insurer offers $31,000.

Which of the following claims might best be settled through negotiations?

Jim, who regularly eats at Big Ed's Steak House because it's his favorite restaurant

Which of the following does NOT have an insurable interest in Big Ed's Steak House, a local restaurant?

Jim, who regularly eats at Big Ed's Steak House because it's his favorite restaurant.

Which of the following does NOT have an insurable interest in Big Ed's Steak House, a local restaurant?

premium

Which of the following factors holds the LEAST relevance when an adjuster is evaluating an insurance claim?

HO-5

Which of the following homeowners policies provide coverage on an open-peril basis for personal property without endorsement?

A man slips inside a grocery store and injures himself.

Which of the following incidents would a liability insurance policy cover?

Customer

Which of the following individuals is NOT considered a "custodian" in commercial crime insurance?

Personal Injury Protection

Which of the following insurance protections is NOT offered by a garagekeeper's insurance policy?

Usually Actual Cost Valuation

Which of the following is NOT a feature of a typical Business Owners Policy?

To prohibit insurance-rating

Which of the following is NOT a purpose of insurance regulation?

The condition of the vehicle

Which of the following is NOT a rating factor for a personal auto liability policy?

To reduce your insurance costs

Which of the following is NOT a reason to purchase umbrella liability coverage?

Denying a claim when the insured has violated a policy condition

Which of the following is NOT an Unfair Claims Settlement Practice in the state of North Carolina?

An insured caused an accident that resulted in $30,000 in bodily injury to a third party

Which of the following is NOT an allowable reason for a North Carolina insurer to cancel a motor vehicle liability policy after it has been in effect for more than 60 days?

Equipment that is buried in the ground

Which of the following is NOT considered "covered equipment" under an Equipment Breakdown Protection Coverage Form?

The mental anguish associated with never fully recovering

While shopping at Acme, Mark slips and falls on a wet floor, knocking over some shelves, smashing a window, and injuring his knee. The medical costs for Mark's knee surgery total $8,000, and he will live the rest of his life with a limp since his knee may never fully heal. Which of these costs will be most difficult for Acme's insurer and Mark to negotiate?

An owner of a house in which he does not live, but rents to a tenant

Who is NOT eligible for a homeowners policy?

Agents with a long-term medical disability

Who of the following is permitted to request a waiver from continuing education requirements?

EPA fines and penalties have increased.

Why has Pollutant Cleanup and Removal coverage become more popular recently?

implied authority

William is wearing an ABC Insurance jacket and has an ABC Insurance sign over his rented office. The walk-in customer could reasonably believe that he has the authority to write an insurance contract because of his

Commercial Floater (possibly)

With respect to Inland Marine insurance, a "Block" policy (such as a Jewelers Block policy, or a Furriers Block policy) is an example of:

lost vacation time

Workers' compensation insurance can provide compensation for all of the following, EXCEPT

XYZ Insurance receives expense allowances from the federal government. (possibly)

XYZ insurance is a private insurer that sells flood insurance policies. Which of the following statements is FALSE?

A re-insurer

Xavier owns a small insurance company. Recently the company won a bid to insure a new housing development in Omaha, NE. His company can handle any claims that arise, but if a series of tornados were to tear through the area and destroy the entire development, Xavier's company would suffer financially. Which type of insurer could help Xavier's company protect itself the most from this potential loss?