The Public Adjuster Exam A

Mary has insured her one-family home under an HO-3 form with a Coverage A limit of $100,000. If she suffered a $100,000 loss to her covered dwelling, how much coverage would be provided under Coverage B for her unattached garage on the premises?

$10,000

A new home that cost $500,000 to build, would need which of the following coverage amounts under a Homeowners policy for the insured to receive full replacement cost coverage in the event of a $50,000 fire loss?

$400,000.

How many cubic feet are in a cubic yard?

27

Which of the following would NOT be excluded under the Commercial Property basic cause of loss form?

A fire caused by earth movement

Which of the following is TRUE regarding the DP-2 Broad Form coverage for "artificially generated electrical current"?

A fire must be the result of the artificially generated electrical current for coverage to apply.

Lightning strikes a 50-foot oak tree in an insured's yard splitting the tree in half. The tree falls hitting several small trees causing extensive damage to the trees and scattering debris in the yard. The HO-2 Homeowners Policy will pay:

A maximum of $500 per tree

A standard Homeowners policy is best described as:

A package policy that provides both property and liability insurance.

In electrical wiring terms, what is an ampere?

A unit of electrical power.

All of the following are included in the definition of "fungus" under the "Limited Coverage for Fungus, Wet Rot, Dry Rot, and Bacteria additional coverage of the Commercial Property cause of loss forms, EXCEPT:

Algae

Of the following businesses, which one is NOT eligible for coverage under a Businessowners policy?

An auto dealership with $1 million dollars in gross annual sales.

Under the Personal Articles Floater, a loss is covered when it occurs:

Anywhere in the world, except for fine arts.

Which of the following types of coverages are included in the standardized Businessowners policy?

Coverage for business personal property..

The most comprehensive coverage provided by the Dwelling forms is found on the:

DP-3

All of the following statements are TRUE regarding the extension of coverage for non-owned detached trailers under the Building & Personal Property coverage form, EXCEPT:

For coverage to apply, the trailer can only be attached to a vehicle owned by the insured.

A Commercial Package Policy (CPP) always includes: I. A single Declarations page common to all coverages. II. A single Conditions section common to all coverages. III. A single Exclusions section common to all coverages.

I and II only.

What does the phrase "free on board destination" mean?

Makes the seller responsible to the buyer until the goods have been delivered as agreed.

Marcus has two Commercial Property policies covering his warehouse. Policy A is the primary policy and has a $200,000 limit, and Policy B is an excess policy with a $100,000 limit. After a fire causes $140,000 damage to his warehouse, how will each of Marcus' policies respond (disregarding any deductible)?

Policy A will pay $93,333 and Policy B will pay $46,667.

An office building is limited in the number of stories it may contain and still be eligible for coverage under a standard Businessowners Policy. This number is:

Six stories.

Which of the following cause of loss forms provides named peril coverage?

The basic and broad forms only.

The additional coverage for collapse applies under which of the following Commercial Property cause of loss forms?

The broad and special forms.

Which of the following sections of an insurance policy contains language to assist an insurance company in managing moral and morale hazards?

The exclusions.

Following the payment of a claim, the salvaged property becomes the property of:

The insurer.

Which of the following statements is NOT true concerning the Law of Large numbers?

The size of the sample group is not relevant to the accuracy of the results.

It has been reported to the Insurance Department in a given state that Callie, a licensee in that state, has violated an insurance law. The Insurance Commissioner will hold a hearing to determine the nature of Callie's behavior. After the hearing, the Commissioner is convinced that Callie has engaged in behavior that violates insurance law. Which of the following is the next step the Commissioner will take?

Issuing a cease and desist order.

An insured is covered under a standard Businessowners Policy for replacement cost coverage and has sustained a fire loss to his building. Due to changes in the building codes in his town, it's going to cost $20,000 extra just to comply with the new building codes and make the repairs. How much, if any, will the BOP pay for these extra costs?

$10,000..

An insured has taken an inventory of his merchandise and discovers a substantial shortage of valuable stock. He submits a claim to his insurance carrier that provides his coverage under a Businessowners Policy. What coverage is provided by the BOP for the missing inventory?

No coverage would apply.

Which of the following is not available to an applicant that has been unable to procure the required $10,000 public adjuster's bond after contacting at least three approved sureties?

Obtain and file evidence of errors and omissions coverage equal to $100,000 per claim.

Blake has been planning to quit his job as a clerk in a United States Court House and open an antique store. After doing some research and finding that antiques do not sell well, he decides to abandon the plan and stay on at the court house. Blake is practicing:

Risk avoidance

The DP-1 basic form peril of "internal explosion" will cover which of the following losses?

The explosion of a furnace that the insured owns, inside the covered dwelling.

The cancellation and non-renewal provisions in property policies are two of the policy provisions that are most frequently subject to statutory amendments by the states. All of the following statements is correct regarding the cancellation and non-renewal provisions in the standardized Commercial Policy coverage form, EXCEPT:

The standardized Commercial Property forms do not contain cancellation and non-renewal provisions because they are almost always amended by statute..