NM adjusters review

A New Mexico insurer must provide _____ days' notice before cancelling a policy for non-payment of premiums and ____days' notice before cancelling a policy if there is a substantial increase in the risk being insured.

10; 30

Angie earned $600 per week restocking shelves in a warehouse before a work-related accident caused her to lose her right leg above the knee. After she reaches Maximum Medical Improvement, Angie's physician declares that her percentage of impairment is 40%. Her employer transfers her to a secretarial position, where she earns $650 per week. Which of the following statements is TRUE about Angie's Permanent Partial disability benefits?

A. Angie will receive $400 per week for up to 500 weeks.

Due to an E-coli contamination in its production facility, Company F is facing multiple lawsuits from customers who became sick after eating its product. The resulting negative press, lost revenue, and added expenses have proven too much for the small company to handle, so it has filed for bankruptcy. which of the following is true?

A. Company F's insurer will still pay the claims, up to the policy limit.

Dale just bought 30 shares of a hot new startup company online. Which of the following statements about Dale is FALSE? A. Dale has just taken a pure risk which cannot be insured. B. Dale's investment is not an insurable risk. C. Dale has just taken a speculative risk which cannot be insured. D. Dale's investment could result in a gain or a loss.

A. Dale has just taken a pure risk which cannot be insured.

When a claimant submits a claim to an insurer, the insurer has several options for responding. Which option does the insurer want to avoid? A. Having a court of law dictate the proper settlement B. Accepting the claim and paying what the claimant requests C. Rejecting the claim and refusing to pay D. Letting the claim go to arbitration

A. Having a court of law dictate the proper settlement

Which of the following is not true about Business Income from Dependent Properties, an Additional Coverage in a Business Owners Policy? A. It is also known as Extended Business Operations Interruption coverage. B. It provides coverage when a key customer suffers damage that affects the insured. C. Coverage is provided at extra charge to the insured. D. It provides coverage for lost income when a key supplier suffers damage that affects the insured.

A. It is also known as Extended Business Operations Interruption coverage.

Which of the following individuals would qualify for a New Mexico non-resident license without taking an New Mexico examination?

A. Patrick, who passed an exam for the adjuster license he holds in his resident state

Which of the following would not be covered by Coverage C- Personal Property in a homeowners policy? A. Pets B. Food C. Furniture D. Clothes

A. Pets

Which of the following is TRUE about cease and desist orders?

A. The superintendent should give the order either in person or by certified mail.

HO Home day care

Amount is based on # of children

Caitlin works as a driver for a local oil company. She picks wellsite. Then, once their shift is completed she brings them home again using the company van. Which up the field workers and drops them at the endorsement provides the best coverage for Caitlin?

B. Extended Non-Owner

A garage policy is almost identical to a BAP, but it covers which two additional hazards?

B. Premises & Operations and Products & Completed Operations

Olivia suffered third degree burns when her new espresso machine malfunctioned and sprayed her with scalding hot water and steam. She sued the manufacturer and was able to collect damages under which of the following?

Breach of product warranty

Which of the following statements about Inland marine insurance is FALSE? A. Inland marine policies are often known as "floaters." B. Inland marine insurance can provide coverage for tunnels. C. Personal articles floaters cover property on a named-peril basis only. D. An inland marine policy can provide coverage for goods shipped by train.

C. Personal articles floaters cover property on a named-peril basis only.

In which situation would Utility Service Time Element coverage apply?

C. Steve's Software Solutions loses power for two days when a bolt of lightning damages the power station. Steve experiences a significant loss of income during the outage.

Flora is driving in the rain when she skids off the road and slams into Cam's billboard, totalling her car and causing $2,000 in damage to the billboard. Flora has an auto policy with ABC Insurance. Cam files a third- party claim and ABC Insurance pays him $1,500 for the billboard. Which of the following is TRUE?

Cam may sue Flora for $500.

Which of the following businesses would not qualify for a Business Owner's Policy?

Car dealership

Lillian owns an antiques shop and Sandy works part time for her. One afternoon, while Sandy is decorating the window display, she loses her balance and falls backward off a step stool, breaking some very expensive lamps in the process. What policy condition in Lillian's commercial property policy provides evidence that this loss may be covered?

Control of Property

HO6 -Condominium Form

Covers only belongings Covers all finished surfaces of individeal unit @ACV

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. Bob's 18-year-old son who uses the car to drive to school has his driver's licnese revoked. B. Laura's insured risk has changed substantially, beyond what her insurer should have reasonably expected. C. George failed to disclose material information when he applied for his policy. D. Amy filed a claim in which the damage exceeded the policy limit.

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

A. The plan only offers minimal property coverage. B. Only those who cannot obtain property insurance in the voluntary market are able to participate. C. All insurers licensed to sell property insurance in New Mexico must participate. D. The plan covers damages caused by flood.

D. The plan covers damages caused by flood.

Ben and his family are renting a home, and they have a Homeowners 4 policy to cover their belongings. During a strong windstorm, a tree falls on the house and causes some damage. Which of the following would be covered under the HO-4 policy?

Damage to the carport Ben built last Fall at his own expense

Loss Assesment

For HO6- pays when condo association charges an assesment for loss 1000-2500 to cover ded

Building additional & alterations

For HO6/HO4 pp and improvements as long as they are part of residence

CIVIL AUTHORITY

Government vacates w/ covered peril will be covered 2 weeks max

Scheduled personal property

Jewelry, furs, collectibles

Which of these causes of loss is LEAST likely to be covered by a typical insurance policy?

Nuclear Hazard

Ordinance or Law

Pays difference between old/new code construction * pays upto 10% of cov A

Garage policy

Premises/Operations: injury or damages suffered on premises Products/Completed Services: for defective items or service

Property Removal

Provides coverage for items removed from danger Property remains covered for 30days

Reasonable repairs

Reimburses HO for expenses ro protect from further damage Example shingles cover roof

After Cindy crashes into Nancy's mailbox while driving drunk, she gets out of her car, trips over Nancy's sidewalk, falls and breaks her arm. She then sues Nancy for the medical bills related to her broken arm. They are in a state that follows the doctrine of comparative negligence. What is the likely outcome of Cindy's lawsuit against Nancy?

The amount awarded to Cindy will be reduced by the percentage of her own negligence.

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

The insurer pays the mortgage lender $76,000.

Which of the following best describes a "risk," according to the insurance definition?

The potential for a financial loss

What does it mean when we say that an adjuster has the "power to bind"?

The principal is bound to the decisions the adjuster makes.

HO theft peril

Will not cover Theft by insured Dwelling under construction/material Rented out residence premise's Off promises theft of trailer watercraft or ítems in secondary property

In a personal auto policy, the Miscellaneous Vehicle Coverage endorsement:

allows coverage to be added for motorcycles and motor homes.

During a heavy rainstorm, the water accumulation rose high enough to flow under Angie's front door and ruined her hardwood floors. In response to Angie's claim, an adjuster came out to her home and inspected the damage. The adjuster determined that the loss was covered, wrote Angie a check, and closed the claim. Later, the insurance company reviewed Angie's claim and discovered that the adjuster should have denied it because Angie's policy doesn't cover flood. However, Angie refuses to return the settlement because of the adjuster's:

apparent authority.

New Mexico's approach to Workers' Compensation insurance can be described as _____and____

compulsory; competitive

Which of the following could be covered by a homeowners policy?

homeowners A large home currently under construction

garage policy is identical to BAP

is nearly identical to the business auto policy, but it adds a general liability policy to cover the business owner for damages to customer vehicles in their care.

Liability limits in a Personal Auto Policy are applied:

per person and per accident.

Cindy falls down the stairs at Jane's house and breaks her arm, resulting in $2,500 in medical expenses. Jane's homeowner's insurance will cover the liability, but Cindy is particularly mad at Jane for not keeping her house in order and is seeking punitive damages. Jane's insurance adjuster informs the two of them that they will likely have to go to court to settle the dispute because:

punitive damages can only be determined by a court of law.

Scott is visiting his insurance agent's office and applying for auto insurance on his new car. The auto policy that the agent drafts will be based on Scott's

representations