Georgia Adjuster Exam

They are automatically provided with replacement cost coverage or the maximum allowed under the regular flood insurance program

This is a true statement regarding single dwellings that are insured to at least 80% of the replacement value?

Abandonment

The property condition that precludes the insured from simply turning over damaged property to the insurer and claiming a total loss is called . Until the insurer has determined that the loss is total, the insured must protect the property from further loss.

$250,000

The regular National Flood Insurance Program would insure an eligible single-family dwelling for up to It is written for the value of the dwelling up to $250,000 on a replacement cost basis

Coverage applies only to the extent that the underinsured motorists limits exceed the bodily injury limits carried by the operator of the other vehicle

The true statement concerning underinsured motorists coverage under a personal auto policy

Special and General

The two types of compensatory damages

Tort

The wrongful act or the violation of someone's rights that lead to legal liability

On the date construction starts

When does the coverage begin under the builders risk form?

Transfer of rights and duties under the policy

Which common policy condition prohibits the insured from changing the rights or duties as defined under the policy to any other person or entity without the written consent of the insurance company? Under the "transfer of rights and duties under the policy" condition, the insured cannot transfer any rights or duties under the policy to any other person or organization without the written consent of the insurance company

Replacement cost

Which method of loss valuation is contrary to the basic concept of indemnity? Which of the following property clauses allows the extension of a major coverage, applying to specific losses not already insured?

Vandalism

Which of the following is NOT one of the available additional coverages in the builders risk form? The 4 additional coverages offered by the builders risk form are debris removal, fire department service charge, pollutant cleanup and removal, and preservation of property.

Breakage of glass

Which of the following other coverages is NOT included in the basic form dwelling policy. Breakage of glass is included in the DP-2 and DP-3 only.

Consideration

** Something of value one party gives to another. --The consideration on the part of the insured is the payment of premium and the representations made in the policy. ** When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following? -Consideration is something of value that each party gives to the other. The consideration on the part of the insured is the payment of premium and the representations made in the application.

May be written on a reporting form or the completed value of the structure

A correct statement for a Builder's Risk Coverage Form. Builder's Risk Insurance is a property insurance form that provides direct damage coverage on structures while they are under construction. Coverage may be written on a completed value form (req 100% coinsurance) or reporting form (values are reported as completed)

Intentional Tort

A deliberate act that causes harm to another person, regardless of whether the harm is intended is called a(n)

Umbrella liability policy

A liability that provides increased limits and expanded coverage over underlying casualty coverages is called . It also expands the coverage by covering exposures that are excluded in underlying policies if they are not likewise excluded by the umbrella

The insured's automobile is used to carry passengers for hire

A personal automobile policy MAY be cancelled by the insurer for the following reason

$5000

A premium discount is the term that describes when an insured owes a total standard premium greater than .

Jewelers Block Coverage

A situation where a jewelers block would cover a loss. Property covered in transit by registered mail (precious and semi-precious stones, metals available for sale, jewelry sold but not delivered, raw materials to be used to create jewelry ) ex: A jeweler fixes a necklace and sends it by registered mail to the owner. When the necklace arrives it has been damaged.

Valued policy

A type of policy that is used to provide a specific amount of replacement cost for a given risk after it has been destroyed is called a(n)

Costs the insured incurred in hiring their own attorney

All of the following are supplemental payments found in liability policies EXCEPT Pays the company's expenses, will not pay expenses incurred by the insured unless incurred at the insurer's request.

Newly Acquired or Constructed Property

All of the following coverages are included in the BOP standard form without requesting coverage extensions, EXCEPT Newly Acquired or Constructed Property is a coverage extension available under the BOP. The BOP extension applies to personal property at those premises with a limit of $100,000 at each location, and newly acquired or constructed buildings up to $250,000.

Mental health counseling.

All of the following would be covered under the medical expense coverage of a businessowners policy EXCEPT This coverage includes accidental bodily injury only; it does not cover any counseling.

Only to individuals

An agent license can be issued

Utility Services- Direct Damage

An endorsement added to a business owner's policy that provides coverage for direct damages caused by utility service disruption stemming from a covered peril

Beneficiary's consent

An insurance contract must contain all of the following to be considered legally binding EXCEPT Offer and Acceptance, Consideration, Beneficiary's Consent, Competent Parties The essential elements of a legal contract are Offer and Acceptance, Consideration, Competent Parties, Legal Purpose

15%

An insured must get advanced warning if the premiums will be increased by more than Written notice of an increase in premiums that exceed this amount of the current policy's premium must be delivered or mailed to the insured at least 45 days before the effective date of the change

All of the expense up to the Coverage D limit

An insured works outside the home. The insured's sister lives with him and cares for his 4 children. When his home is severely damaged by fire, they move into an apartment while repairs are being made. The largest apartment available in the area has 2 bedrooms, so the insured's sister stays at a motel while the repairs are made. How much will the HO-3 pay for their additional living expense? Coverage D will pay the expenses incurred to maintain the same lifestyle as before the loss.

Consequential also known as Indirect Loss

An insured's business is damaged because of a fire and he is forced to close business temporarily for repairs. As a result the insured lost income. What type of loss is this?

Authorized Insurer

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered to be

Conditions

Because an insurance policy is legal contract, it must conform to the state laws governing contracts which require all the following statements except Legal purpose, Consideration, Conditions, Offer and Acceptance

Fiduciary bonds

Bonds for administrators and trustees are are examples of this position of trust

Watercraft

Both the broad theft and limited theft endorsements on the dwelling program exclude all of the following types of property, EXCEPT Canoes have limited coverage

A symbol

Business Auto Coverage applies only to those autos which are identified as "covered autos" in the declarations of the policy. Covered autos are identified by

The concept of strict liability

Commonly applied in product liability cases. The business is then liable for defective products, regardless of fault or negligence NOT TRUE STMT It is imposed on defendants engaged in hazardous activities.

Inherent, Claims related , Repair related

Diminution Value (DV) could be

4 essential elements of negligence: Duty, Breach, Injury, and Unbroken chain. Libel is a type of intentional tort.

Elements of negligence

Fair Access to Insurance Requirements

FAIR Plans are state insurance pools that provide property insurance to high risks areas, such as neighborhoods that have deteriorated or are in urban decay. What does the acronym FAIR stand for?

The uncertainty or chance of loss.

For the purpose of insurance, risk is defined as the chance of loss occurring, is the basic reason for buying insurance.

Full replacement of property at its current cost, new and without reduction for depreciation

Full replacement cost is defined as It does not consider depreciation if the proper amount of insurance is maintained. These policies require that the amount of insurance written be 80% or more of the replacement cost of the property at the time of loss

Permitted incidental occupancies

Homeowner endorsement that covers liability exposures arising from an incidental business conducted within a building on the residence premises

$100,000

If a liability policy had split limits of 100/300/100, what is the maximum amount that would be payable in the event of injury to a single person? The first limit shown is the most the policy will pay for bodily injury to any one person

A change in the risk that substantially increases the hazard insured against

If a policy has been in affect for at least 60 days or is due for renewal, a cancellation may only be affected for this reason

Self-insured retention.

In a Personal Umbrella, the amount paid by the insured for certain losses not covered under the primary coverage is called In casualty insurance, the portion of a claim not paid by insurance is called a retention. In property insurance, it is called a deductible. If the underlying limits are not maintained, this becomes the insured's responsibility

Coverage by endorsement

In dwelling policies, automatic increase in insurance is An endorsement that may be added to a DP to increase the amt of insurance by an annual percentage to offset the affects of inflation. It requires an additional premium

The loss must have begun while the policy was in force

In order for an insurance policy that is written on an occurrence basis to respond to damages resulting from a covered loss ___

Provided automatically in the policy.

In the BOP, Business Income Coverage is Business Income Coverage is an additional coverage in the policy, making it automatically included.

Uninsured Motorist Coverage (BI/PD) and UM under Part A of a Personal Auto Policy

In the Personal Auto Policy, owned trailers being owned by an insured auto are automatically covered for

A specific time (usually 60 days, time may vary)

In the event of a loss covered by the policy, the named insured is required to submit to the insurer a signed sworn proof of loss within

Loss

Insurance is a contract by which one seeks to protect another from

48 hours

Jean owns a craft store. The protective safeguards endorsement of her BOP requires the store to have a functional automatic sprinkler system. A winter storm freezes the pipes to the sprinkler system, causing the system to shut down. How many hours does Jean have to restore the system before she must notify her insurer? If the automatic sprinkler system is shut down due to breakage, leakage, freezing, or opening of the sprinkler heads, the insured has 48 hours to restore the system before he or she must notify the insurer.

It must be valued at an amount under the maximum value amount set by the state

NOT one of the 3 requirements for property to be eligible for FAIR plan coverage? Property eligible for FAIR plan coverage must be located in a specific area defined by the state, must be considered insurable based on reasonable underwriting standards, and must not have been able to purchase coverage through the normal insurance market.

Provides errors and omissions coverage for an agency

Not a true statement of Personal Umbrella Liability Policies? Personal Umbrella policies cover the personal exposure of the insured. Errors and omissions coverage is only provided in a professional liability policy.

Garagekeepers Liability

Physical damage coverage on customers' autos while in care, custody and control of the garage operation.

WYO Program (Write Your Own)

Program made up of private insurers that write and service National Flood Insurance policies on a no risk-bearing basis through a special arrangement with the Federal Insurance Admin. WYO retains part of the flood insurance premium to pay for commissions and administrative costs. The remaining premiums, plus investment, are used to cover losses.

US Longshore and Harbor Workers Compensation Act

Shipbuilders and repairers are covered by A federal law offering workers compensation benefits to workers who are injured on navigable who are normally not covered by state workers compensation laws.

Do not allow private insurers to be licensed to write workers compensation coverage

States with monopolistic state workers compensation funds...Under the monopolistic state fund program, no private insurer is allowed to market competitive programs in the state. In such states, workers compensation is available to all employers, but employer's liability coverage may or may not be offered.

Open peril coverage on the dwelling and broad form coverage on personal property.

The HO-3 homeowners policy provides The open peril coverage applies to property insured under Coverages A and B only.

Named Peril

The Livestock coverage form covers losses resulting in the death or necessary destruction of livestock on what basis? The Livestock Coverage form is a named peril coverage insuring losses resulting in death or necessary destruction of livestock caused by the basic causes of loss (except vehicles).

Completing a loss report

The adjuster's first step in determining if the insured is totally or partially liable

The All-Risks Ground and Flight Aircraft Hull

The broadest form of hull coverage and provides all-risks coverage on the aircraft both while it's on the ground and while it in flight

Commercial Building and Business Personal Property Coverage Form, Basic causes of loss.

The causes of loss found in the Standard Form Businessowners policy are identical to the causes of loss found in

Pure risk and Speculative risk

The classification of risk of loss. Pure risk is the probability of loss with no chance for gain. Generally insurable. Speculative risks involve uncertainty as whether the final outcome will be gain or loss. Generally uninsurable.

Utility service - direct damage

The damage coverage would pay for the loss of the a product that is damaged and can't be sold

DP-1

The dwelling policy that insures a structure on an Actual Cash Basis

Sinkhole collapse endorsement

The endorsement that provides coverage for losses arising from sudden collapse of earth arising from underground limestone created by the reaction of water on rock formations is a(n)

Insuring clause, Exclusions, Conditions

The essential parts of an insurance policy

Policy form, Policy exclusions, Numbers of any attached forms or endorsements

The following are necessary in order for a claims adjuster to determine coverage for a particular loss

Symbol 5

The following symbol is available to an insured with vehicles subject to no-fault coverage

Burglary

The forced entry into the premises of another person with felonious intent

Indemnity

The insurance principle that states if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost.

Combined Single

The insured crashes into a porch and the person sitting on the porch. The person on the porch is injured. The insured's insurance policy has a limit set at $500,000. This amount applies to the total of damages for any bodily injury and property damage resulting from one accident. Which type of limit of liability does the insured have? This single dollar limit of liability applying to the total of damages for bodily injury and property damage combined resulting from one accident or occurrence

Pair and Set Clause

The loss settlement based on the reasonable and fair portion that the lost or damaged part bears to the total value of the set In the event of a loss to only part of a pair or set, losses will be settled either by repairing or replacing the damaged part or by paying the difference between the actual cash value before and after the loss. Provides the insurer a method of settling a loss when only a part of the insured pair or set is damaged. The insurer will pay for the loss or damage to an insured item, plus the amount that the loss of one item detracts from the value of undamaged item(s) of the pair or set.

Aggregate limit of liability

The maximum limit of coverage available under a liability policy during a policy year regardless of the number of clams that may be made or the number of accidents that may occur

Pro rata liability

The other insurance provision that limits the liability of the insurer to a portion of the loss no greater than the amount the insurer bears to all the insurance covering the property is called...to preserve the principle of indemnity

Replacements for the boat listed in the Declarations are automatically covered, if the insured notifies the insurer within 60 days and pays the additional premium.

True statement regarding a boatowners policy are true EXCEPT Automatic coverage is provided on replacements for the boat listed in the declarations provided the insured notifies the insurer within 45 days of purchase and pays any additional premium required.

The coinsurance formula will be applied to total losses

True statements concerning coinsurance in the event of a total loss.The coinsurance clause does not operate and the face amount of the policy is paid. Encourage insurance to value EXCEPT

Excluded unless a limit of insurance is shown in the Declarations for Employee Theft coverage

Under the Commercial Crime coverage part, loss resulting from employee theft is Employee Theft covers losses resulting from the theft of covered property by employees. Property covered under this form includes money, securities, and property other than money or securities.

$5000

Under the commercial crime coverage inside the premises - robbery or safe burglary of other property, what is the special per occurrence limit that applies to loss or damage to precious metals, precious and semiprecious stones, pearls, furs, manuscripts, drawings, or records? A special limit of $5,000 per occurrence applies to loss or damage to precious metals, precious and semiprecious stones, pearls, furs, manuscripts, drawings or records.

Insurance

What do individuals use to transfer their risk of loss to a larger group? Transfer financial responsibility (risk) The mechanism whereby an insured is protected against loss by a specified future contingency or peril in return for the present payment of premium. Because many other individuals with the same or similar risk of loss are paying premiums, funds are available to indemnify those who actually suffer that loss.

Coverage applies only to the extent that the underinsured motorist limits exceeds the bodily injury limits carried by the operator of the other vehicle.

What is a true statement concerning underinsured motorist coverage under a personal auto policy?

Market value when the property was first purchased

What is not a consideration when paying an inland marine claim? Cost to replace the property Market value when the property was first purchased ACV on date of loss Cost to repair or restore the property

$10,000 for all expenses incurred during a 12-month period

What is the maximum an insurer will pay under the equipment dealers cleanup and removal extension of an inland marine policy?

To fill the gap left by private insurers in flood coverage

What is the purpose of NFIP? National Flood Insurance Program. Created by the federal govt to make flood insurance available to eligible communities thru fed subsidies. Managed by FIA (Federal Insurance Association), a branch of FEMA

Absolute

What kind of liability would a person with a swimming pool have? Any conduct that is inherently dangerous imposes this liability. The claimant does not have to prove anythhing.

Additional coverage clause

What provision would pay coverage for defense expenses at no additional premium? This is a provision in an insurance policy that provides additional amount of coverage for specific loss expense,

General

What type of compensatory damages will pay for pain and suffering and disfigurement? These damages are for intangible elements that cannot be specifically measured in terms of dollars

An auto borrowed from an employee

What would not qualify as a hired auto? Hired automobiles include those that are leased, hired, rented or borrowed excluding autos that are owned by employees

the loss reimbursement will be paid to the mortgagee as their interest may appear; and, the mortgagee's rights of recovery will not be defeated by any act or neglect of the insured. The mortgagee is also given other rights, such as bringing a suit in their own name to recover damages.

When a mortgagee is named in a mortgagee clause attached to a fire or other direct damage policy

The Georgia Automobile Insurance Plan

When a policy is cancelled for a reason other than nonpayment of premium or if the policy is nonrenewed, the insurer must notify the insured of his/her possible eligibility for insurance through

The excess over the self-insured retention.

When an Umbrella Policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays Retention is the equivalent of a deductible in property insurance.

General liability written with an aggregate limit

Which of the following policies does NOT contain an automatic reinstatement provision? An aggregate limit is reduced by the payment of claims. It is possible for an insured to run out of coverage before the expiration of the policy. Aggregate limits are restored on the anniversary date of the policy

The extensions of coverage clause

Which of the following property clauses allows the extension of a major coverage, applying to specific losses not already insured? The extensions of coverage clause allows the extension of a major coverage to apply to specific type loss to property not specifically insured.

No coverage is provided for autos stored for more than 45 days at a location not shown in the declarations

Which of the following statements is true regarding physical damage coverage in a garage form? Collision coverage is provided only for dealers Autos held for sale by a dealer are listed individually in the policy No coverage is provided for autos stored for more than 45 days at a location not shown in the declarations Specific causes-of loss coverage is not available for physical damage coverage ** Collision coverage is not limited to a specific risk. Autos held for sale are covered when auto designation Symbol 31 (dealer's autos) is shown on the declaration page. The specific causes of loss coverage is available for physical damage coverage

Severability of insurance

Which policy condition in HO policies states that insurance applies separately to each insured? Severability of insurance means that the insurance applies separately to each insured. This condition does not increase the insurer's liability for any one occurrence.

An employee is caught stealing cash from the register.

Which would NOT be covered by the inside the premises - robbery or safe burglary of other property coverage? Dishonest or criminal acts of any employee or representative are specifically excluded.

All accidents at single location at same time by same cause

Which would be considered a single accident in equipment breakdown coverage? If an accident causes other accidents, all related accidents will be treated as one accident. All accidents occurring at a single location at the same time, and having the same cause, will be considered to be one accident.

Auto businesses such as auto dealers, service stations, auto repair shops

Who is does the Garage Coverage Form insure?

The owner of a car the insured borrows

Who is not an insured for liability on a BAP? A Business Auto Policy defines who is not an insured; the owner of a car the insured borrows is one of them.

The insured's business income losses due to personal injury

With respect to commercial auto policies, the Garage Coverage Form provides liability protection for all the following except The insured's business income losses due to personal injury The insured's business premises The insured's business products and work performed The insured's business autos

Second Injury Funds Program

Workers compensation statutes require employers to meet capital reserves requirements sufficient to pay any claims that arise. Employers can meet such obligations through all of the following except This is a method by which employers manage the risk associated with the hiring of "previously injured" potential employees.