Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correct, Exams of Nursing

Download Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correct and more Exams Nursing in PDF only on Docsity! Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correctly verified answers latest update 2024/2025 RATED A+ Which of the following best defines premium? - CORRECT ANSWERS Under an insurance contract, the insured pays a scheduled and affordable fee, called a premium. In return, the insurer promises to pay for specified losses if they occur. What are the four requirements of a legally binding contract? - CORRECT ANSWERS agreement, consideration, competent parties, and legal purpose. Melinda's home sustained $6,500 in damage when Jared ran into it with is truck. Melinda received $6,500 from her insurance company, and Jared also paid her $5,000. Melinda has now profited from this loss and is in violation of: - CORRECT ANSWERS The principle of indemnity. An insurance policy's declarations page contains all of the following, except: - CORRECT ANSWERS The declarations page is always the first page or section of an insurance policy. It gives a general overview of the policy and will include at least 8 details: the names of both parties, the insurer and the insured; the policy number; the location and description of the insured item; the value and replacement value of the insured item; the dates that policy coverage starts and ends (known as the inception and expiration dates); the amount and limit of insurance coverage; the deductibles on the policy; and the premium that the insured has to pay. All of the following pieces of information can be found in the Conditions section of an insurance policy, except: - CORRECT ANSWERS conditions section. This is where the policy establishes a set of conditions that the insured must meet in order for the policy to be valid. If the policyholder does not meet the conditions listed here, the insurer has a right to deny coverage. For example, if a jewelry store owner wants to purchase an insurance policy, the conditions section may require that a security guard be present whenever the store is open. Other conditions require a claimant to protect damaged property from further losses, and that the claimant must submit a proof of loss if the insurer requests it. The insured must also cooperate with the insurer during any investigations or lawsuits. These and other conditions are found in the conditions section of the policy. Janelle is happy with most of the coverage in her Homeowners policy, but she wants to change her coverage for personal property from ACV to Replacement Cost. She visits her local insurance agent and asks him to make this change to her policy while keeping all the other details the same. Which section of her policy would the agent use to make this change? - CORRECT ANSWERS Endorsements. often Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correctly verified answers latest update 2024/2025 RATED A+ the last section of an insurance contract. Like the definitions, this section is optional but very common. An endorsement is a provision that modifies the coverage of the original contract. It can add or subtract coverage for people, property, or causes of loss. Mark belongs to a non-profit organization that engages in charitable activities and provides Mark with death and disability insurance coverage. To what kind of organization does Mark likely belong? - CORRECT ANSWERS Fraternal Benefit Societies, or Fraternal Associations, are non-profit, mutual aid organizations that engage primarily in charitable or benevolent activities. They offer their members insuranceagainst death, disease, and disability. Members of Fraternal Benefit Societies usually share common interests, such as religion, occupation, or ethnic background. The Elks, the Masons, The Catholic Aid Association, and Sons of Norway are all examples of fraternal benefit societies. A non-profit group of people or organizations that insure each other is called a: - CORRECT ANSWERS Risk Retention Groups: Groups where the members insure each other, using their own capital to write insurance policies. A "binder" is: - CORRECT ANSWERS A binder is a statement providing immediate insurance coverage for a short period. The binder can be oral or written, and it is meant to give temporary protection until the final contract is drawn up, or until the insurer decides against issuing a written policy. Which of the following situations does NOT contain an insurable risk? - CORRECT ANSWERS risk is an item, person, or organization that has been insured. But not everything is insurable. First determine insurable risk is whether the insurer can collect enough income from premiums to cover its two major expenses: claims against policies and the operating costs. Second determining whether a risk is insurable is threefold. The insurer must be able to define the exact conditions of coverage, must know the precise dollar value of the risk, and must be able to clearly set out the terms under which a claim would be paid. insurable risk is that a loss must be unpredictable and caused by circumstances no one could reasonably prevent-a roof blown off in a tornado, a car accident, a third condition of insurable risk is that a loss must be unpredictable and caused by circumstances no one could reasonably prevent-a roof blown off in a tornado, a car accident, a theft, or a fire caused by lightning. Fourth condition of insurable risk is that the loss must cause substantial economic Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correctly verified answers latest update 2024/2025 RATED A+ storm is too minor for her insurance company to decide to replace the entire roof. So, she gets up on her roof and tears up several more shingles in the hopes of making the adjuster believe the storm caused more damage than it actually did. Which of the following statements is true? - CORRECT ANSWERS Arlene has just committed hard fraud. Hard Fraud involves deliberately planning or faking a loss, such as an accident, theft, or fire, that is covered by the insurance policy. One of the most frequently seen examples of Hard Fraud is the staging of car accidents. Ronald always drives with his windows rolled down because he loves the feeling of the wind in his hair. However, he often forgets to roll his windows up when he gets out of the car. Of course, this behavior makes it easier for thieves to steal his belongings from the car, but Ronald can't help being forgetful. Ronald's behavior would be considered a: - CORRECT ANSWERS A moral hazard is an intentional act by an insured because he has insurance. Natalie's brakes have been squealing for several months. Every time she drives her car, she's reminded that she needs to have them replaced, but she forgets all about it as soon as she gets out of the car. Natalie's brakes can be considered a: - CORRECT ANSWERS Morale hazard is a reckless, careless, and often unconscious change in behavior, often because of the comfort of insurance protection. Which of the following is an example of an indirect loss? - CORRECT ANSWERS Due to a flood, a landlord loses a month of rental income when her tenant must move out while repairs are made to the home. Indirect Loss is an economic loss that results from the direct, or physical, loss. During a storm, heavy winds blow a tree over in Norman's back yard, causing it to fall on his house and damage his roof. The wind blowing over the tree would be considered: - CORRECT ANSWERS An occurrence is simply an event or circumstance that causes loss. Adam is shopping for a car in a local automobile dealership. While visiting the showroom, Adam trips over a rug that has folded over and breaks his arm in the fall. Which of the following is true? - CORRECT ANSWERS A third-party claim is a claim filed against an insurance policy by a third-party not named on that policy Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correctly verified answers latest update 2024/2025 RATED A+ When damages or losses fall under the terms of an insurance contract: - CORRECT ANSWERS he policyholder has an immediate right to claim payment according to the terms of the policy. The claim is the first step in indemnification. An insurance claim is defined as the insured's official demand for payment from the insurer in accordance with the terms of a policy. Once a policyholder has filed a claim, he is considered a claimant. If the claimant's damages or losses fall under the terms of his insurance contract, he has an immediate right to demand payment from his insurer according to the terms of the contract. How is actual cash value calculated? - CORRECT ANSWERS Actual Cash Value is Replacement Cost minus depreciation. Darren's SUV cost him $28,500 when he bought it new five years ago, but it would cost $29,600 replace it today. The vehicle has an annual depreciation of $1,200. Darren loses control while driving too fast around a bend in the road and flips his vehicle, totaling it. Assuming Darren's auto insurance policy pays ACV, how much can he expect to receive in indemnification for this claim? - CORRECT ANSWERS $23,600 Roxanne bought her 50" TV four years ago for $2,400. During a storm, her house was struck by lightning and the current fried her TV. The TV depreciates at $400 per year and a similar TV costs $1,200 today. Assuming Roxanne's homeowners policy has a replacement cost endorsement for personal property, how much can she expect to receive in indemnification for her damaged TV? - CORRECT ANSWERS $800 Roxanne's house is struck by lightning during a thunderstorm, which results in $10,000 in covered damage to the structure and and $2,800 in covered damage to her personal property. Roxanne's homeowners policy has a fixed deductible of $1,200. How much can she expect to receive in her settlement from her insurer for this claim? - CORRECT ANSWERS $8,800 Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correctly verified answers latest update 2024/2025 RATED A+ Stephanie lets Chad borrow her truck so he can pick up materials for his home remodeling project. While backing out of the parking space at the hardware store, Chad backs into Mary's vehicle and damages her driver's side door. Which insurance policy would cover the damages caused to Mary's car? - CORRECT ANSWERS Stephanie's auto liability insurance An insured party's auto liability coverage is considered Primary on a car that the insured owns, and secondary on cars the insured does not own. So, when a car is involved in an accident, no matter who was driving it, the owner's insurance coverage will be primary and pay first. Chris and Matt are playing a friendly game of one-on-one basketball in Matt's driveway. When Chris goes up for a slam dunk, Matt accidentally trips him while attempting to block the shot. Chris lands hard and tears the ACL in his left knee. Matt's homeowners liability insurance will cover Chris' medical bills because: - CORRECT ANSWERS Matt's actions were unintentional, but negligent. Note that negligence is always an unintentional act. Sally works for XYZ Cable and is on a service call at Theo's house. While running new cable in the attic, Sally accidentally steps off the joist and falls right through Theo's ceiling, causing $1,500 in damage. Which insurance policy would pay for the damage that Sally caused? - CORRECT ANSWERS XYZ Cable's employer liability insurance Employer liability insurance protects employers from damages or bodily injury caused to their employees or by their employees while performing their duties. On July 14, 2014, Mark suffered injuries when a kitchen appliance he was using broke apart during operation. In Alabama, what is the last date Mark can file a lawsuit for his injuries? - CORRECT ANSWERS July 14, 2016 Statutes of Limitations in Alabama include: Property damage, which allows 4 years; Product liability, which allows 2 years (or one year from the date of death, if the product causes a fatality); and Defamation of Character, which allows 1 year. Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correctly verified answers latest update 2024/2025 RATED A+ Claim - The "offer of settlement" that the policyholder files with an insurer after she experiences a loss. After a hail storm passed through his neighborhood, Perry had his roof inspected by a local contractor. The contractor gave Perry an estimate of $9,850 to replace his roof, so he filed a claim with his insurer. The adjuster came up with her own estimate of $9,645 to replace Perry's roof. How will the adjuster likely respond to Perry's claim? - CORRECT ANSWERS Accept the claim, since the difference is small enough to settle in Perry's favor. After a fire destroys Gale's kitchen, she files a claim with her insurer and hires a contractor. The contractor estimates it will take $42,250 to repair the damage, but the adjuster estimates it will only take $38,340. Which of the following is the best option for the adjuster's response to Gale's claim? - CORRECT ANSWERS Negotiate a settlement amount with Gale. Sara's home was partially destroyed by a fire and she insists it will cost $97,000 to repair the damage. However, after completing his investigation, Jason determined the repairs could be done for $65,000. All attempts at negotiation have failed. Even though it's risky to go to court, why might the insurer decide to pursue that course of action? - CORRECT ANSWERS A reputation of being a "pushover" will make future negotiations more difficult. Nick's home suffered major damage during a tornado. His contractor says it will cost $85,000 to complete repairs, but the adjuster's estimate gives a total of $63,000. Nick and his insurer have tried to reach an agreement, but have failed to do so. Neither party wants to go to court, but they do want to enlist the help of a neutral third party to make a legally binding decision and resolve this matter. Which of the following is the best option in this case? - CORRECT ANSWERS Mediation Which of the following statements is true about the Standard Fire Policy? - CORRECT ANSWERS The Standard Fire Policy was typically a named peril policy, but it only protected against losses from fire and lightning. The Insuring Agreement specifies exactly what is covered under the policy and what the insurer has agreed to pay or provide in exchange for collecting premiums from the insured. This section will state the covered perils, the covered property, the amount of the premium and how it should be paid, as well as what the policyholder has to do when Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correctly verified answers latest update 2024/2025 RATED A+ a loss occurs. It also explains subrogation, mediation, lawsuits, waivers, and anything that may be addressed in the event of a loss. All of the following would be found on the Dec Page, except: - CORRECT ANSWERS Industry insiders often refer to the declarations page as the "Dec Page." It provides an overview of the entire policy, and it states the named insured, the location of the insured property, the policy period, the policy premium, coverage types, coverage limits, and any applicable endorsements. In which section of a Standard Fire Policy would one find information on specific situations that would either ensure coverage or cause the insurer to deny coverage altogether? - CORRECT ANSWERS Insuring Agreement The Insuring Agreement specifies exactly what is covered under the policy and what the insurer has agreed to pay or provide in exchange for collecting premiums from the insured. This section will state the covered perils, the covered property, the amount of the premium and how it should be paid, as well as what the policyholder has to do when a loss occurs. It also explains subrogation, mediation, lawsuits, waivers, and anything that may be addressed in the event of a loss. Homeowners policies don't provide coverage for: - CORRECT ANSWERS flood damage Who is NOT eligible for a Homeowners policy? - CORRECT ANSWERS tenants who rent homes or apartments Jared is fishing from his 22 foot cabin cruiser on Lake Conroe when he is caught in a sudden hail storm. His boat suffers extensive hail damage. When he files a hail claim against his homeowners policy, he is upset to learn that his claim is denied because: - CORRECT ANSWERS Boats cannot be covered by a homeowners policy. Michelle just purchased a homeowners policy for her new single-family home. Although she would have liked the best coverage money can buy, she could not afford the most expensive policy. She compromised with a policy that provides open-peril coverage for her house and detached garage, and named-peril coverage for her personal property. Which homeowners policy did Michelle purchase? - CORRECT ANSWERS HO-3 Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correctly verified answers latest update 2024/2025 RATED A+ The HO-3 is the most popular coverage form used today. It provides open-peril coverage for the dwelling and other structures, but named-peril coverage for personal property. In other words, there's broader coverage for the insured buildings than there is for personal property. Under the HO-3 Special Form, personal property is covered against all of the Broad Form perils. Andrew's house is struck by a bolt of lightning, which fries all four of his family's laptop computers and two cell phones that were charging. The total amount of damage comes to $3,600. Which homeowners coverage of his HO-3 policy will indemnify Andrew, and how much can he expect to receive? (Ignore the deductible.) - CORRECT ANSWERS Coverage C - Personal Property Dewayne is helping Pat restore his 1967 Mustang. While working in Pat's detached garage, Dewayne accidentally backs into a rickety storage unit, knocking it over and causing several tools and cans of paint to come crashing down on himself. Which homeowners policy coverage will pay for Dewayne's injuries? - CORRECT ANSWERS Pat's Liability coverage Dwelling policies cover: - CORRECT ANSWERS property only. When lightning strikes Brittany's home during a storm, the resulting fire completely consumes the structure before firefighters are able to put it out. Brittany is fully insured by a DP-3 policy with a limit of $245,000, every bit of which is needed to rebuild her home. In addition, she receives a bill from the fire department for $650. How much is Brittany likely to receive from her insurer in response to her claim? - CORRECT ANSWERS $245,500 Diana is insured under a DP-2 policy with the following coverage limits: Coverage A - $150,000, Coverage B - $15,000, and Coverage C - $25,000. She and her fiancé have planned a destination wedding, but their hotel catches fire shortly after their arrival. Smoke from the fire damages all of their belongings, including Diana's $4,000 wedding dress. Diana's loss totals $5,200. When she files a claim with her insurance company, ignoring any deductible, how much can she expect to receive? - CORRECT ANSWERS $5,200 Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correctly verified answers latest update 2024/2025 RATED A+ while the shop is closed. When his son is better, Tim returns to work and finds that the shop has been broken into and some of his tools are missing. Under what conditions might the insurer deny coverage? - CORRECT ANSWERS Vacancy The Vacancy condition establishes when a building is considered "vacant." A building is deemed vacant if its doors have been closed - that is, not open for business - for sixty consecutive days. A building may also be deemed vacant if less than 31% of the available square footage is occupied for a period of sixty days. For buildings deemed vacant, some types of damage are automatically suspended from coverage. These include: vandalism, sprinkler leakage, broken glass, water damage, and theft. Other damage types may be severely reduced in coverage. One night, Sally sets fire to her boyfriend Jimmy's restaurant in a fit of jealousy. Thankfully, Jimmy has Commercial Property insurance, and it covers the damages to the restaurant. Which condition makes it possible for the insurance company now to go after Sally to get back what they paid out to Jimmy? - CORRECT ANSWERS Subrogation Subrogation is the transfer of rights that allows an insurer to recover its losses. The insured also retains the right to sue for the difference, if any, between the amount of damages and the amount paid by the insurer. Sue owns a nursery that grows and sells flowers and trees. When a hurricane destroys her greenhouse and her grow lights with it, Sue leases some grow lights to use in an extra building until her greenhouse can be replaced. What commercial insurance coverage might pay for this rental? - CORRECT ANSWERS Extra expense This coverage is designed to help the insured business reduce their loss of income in the event of a covered loss. When severe damages cause a disruption in normal business operations, the policyholder will often try to keep the business going by "making do" at a damaged factory, contracting work to other businesses, or leasing space elsewhere to continue operations. By covering the costs associated with these efforts, Extra Expense coverage helps the insured business get up and running again and reduce the amount of income lost due to the damages. Sam is in the process of expanding his furniture warehouse when he inherits some property about 100 miles away and decides to move his business there. Why would Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correctly verified answers latest update 2024/2025 RATED A+ that cause his insurance company to cancel his Builder's Risk policy? - CORRECT ANSWERS The property is abandoned The Abandonment condition states that the insurer holds no financial responsibility for properties abandoned by the insured. In other words, if the policyholder leaves an insured property abandoned, this automatically negates coverage for the property, since an abandoned property presents a huge risk to the insurer - a risk that the insurer did not account for when calculating adequate premiums for the policy ABC Roofing has two non-claims-made CGL policies that cover the same losses. The first policy is through KLM Insurance and has a limit of $300,000. The second is through XYZ Mutual, with a limit of $600,000. One day, ABC Roofing suffers an occurrence resulting in a $150,000 covered loss. How will this loss be indemnified? - CORRECT ANSWERS XYZ Mutual will pay $50,000; KLM Insurance will pay $100,000 DEC Construction was hired to renovate Randy's home completely. As the general contractor of the job, DEC Construction subcontracts the electrical portion of the job to Mac Electric and requires Mac to have Owners & Contractors Protective Liability for the job. Who retains ultimate control over this policy? - CORRECT ANSWERS DEC Construction 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. How much will BB Mart have to pay out-of-pocket in this case? - CORRECT ANSWERS $75,000 Under each aggregate limit, the declarations page will list a per occurrence limit. The per occurrence limit establishes the maximum amount the insurer will pay to satisfy claims for bodily injury, property damage, and medical payments for any single occurrence. For example, consider a CGL with a General Aggregate limit of $1,000,000, and a per occurrence limit at $250,000. If an individual makes a claim against the insured for $350,000 arising out of a single occurrence, the most the CGL will pay to satisfy that particular claim is $250,000, or the per occurrence limit. Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correctly verified answers latest update 2024/2025 RATED A+ Brent's Professional Liability policy can cover him for all of the following situations, except: - CORRECT ANSWERS He breaches a contract he made with his client. Professional Liability Insurance covers the cost of defending the insured in a lawsuit. If such a suit is decided against the insured, or if a settlement is reached in place of a lawsuit, it pays any monetary damages awarded to a plaintiff for alleged "wrongful acts." Which of the following statements is FALSE regarding Professional Liability insurance? - CORRECT ANSWERS Legal defense costs are not included in policy limits. Professional Liability Insurance covers the cost of defending the insured in a lawsuit. If such a suit is decided against the insured, or if a settlement is reached in place of a lawsuit, it pays any monetary damages awarded to a plaintiff for alleged "wrongful acts." Aces International has a contract with XYZ Insurance, whereby XYZ Insurance will pay for any financial damages that Aces International may incur if an Aces employee commits fraud. What type of contract is this? - CORRECT ANSWERS Fidelity bond The obligee of a fidelity bond is the employer, who pays for the bond, often without the employee even knowing about it. The surety for this type of bond is the insurer. They promise to pay the obligee if the principal, that is, the employee, commits certain acts. Essentially, a fidelity bond is a way for an employer to make sure they don't suffer large losses as the result of an employee's dishonest actions. Daily Constructions has been contracted by the City to renovate the historic courthouse building in the town square. Daily Constructions has also contracted with KLM Insurance, which has agreed to act as the surety, but requires that Daily Constructions deposit $90,000 into a bank account under KLM's control until the job is finished. If Daily Constructions fails to complete the job for the City, it will forfeit the $90,000. The $90,000 would be called: - CORRECT ANSWERS a guarantee. Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correctly verified answers latest update 2024/2025 RATED A+ The minimum limit of most Boiler and Machinery policies is: - CORRECT ANSWERS The minimum limit of most Boiler and Machinery contracts is $500,000. Mark's house sustained $236,000 of damage in a flood. On top of that, when he was applying for the permits to repair the damage, he found out that the city is requiring him raise his house nine inches to comply with new code requirements. This will add an additional $20,000 to the scope of work. Mark's flood policy has a Coverage A limit of $240,000. Ignoring the deductible, how much will Mark's SFIP pay him for this claim? - CORRECT ANSWERS $236,000 Standard Flood Insurance Policy (SFIP). This policy is governed by Federal law and is not subject to state departments of insurance or state and local courts." I did not see anything about and ordinance law. Ordinance law is a optional coverage." Erica's property sustained damage in a recent flood. The damages to her home and detached garage came to $80,000 and $15,000, respectively. Erica has a dwelling form flood policy with $100,000 limit. Ignoring any deductible, how much can Erica expect to receive in indemnification for this claim? - CORRECT ANSWERS $90,000 If the insured owns a detached garage, it will automatically be granted 10% of the limit of liability associated with the main dwelling. This 10% is not an additional amount of insurance. This means that, if it were used, it would reduce the amount of insurance available for the dwelling. Rick and his wife were evacuating due to rising flood waters in their neighborhood. They were towing a small trailer filled with their belongings, in an effort to save them from the flood, but they failed to secure the load properly and several items fell off the trailer, resulting in $1,500 in damage when striking the ground. Assuming the couple is covered by an SFIP, which of the following statements is true? - CORRECT ANSWERS Loss Avoidance Measures (Mitigation) pays up to $1,000 per measure that the insured takes to avoid loss. It is not subject to a deductible. Covered Loss Avoidance Measures include sandbags (including the sand), fill for temporary levees, pumps, plastic sheeting and lumber, and finally, labor (if the insured, or family members of the insured, perform the labor themselves, they are paid at the federal minimum wage). Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correctly verified answers latest update 2024/2025 RATED A+ Sharon's SUV has a mechanical breakdown while she was driving to work, so she had it towed to an auto repair shop. The inspection showed that the transmission failed. Sharon files a claim on her MBI policy, but her insurer denied the claim. Which of the following would be a valid reason for this denial? - CORRECT ANSWERS The transmission is covered under her regular auto insurance policy. Mechanical Breakdown policies will cover the major components of a motor vehicle, including: engine, transmission, drive train and steering mechanisms, electrical and electronic systems, air conditioning, and front suspension. Payment on a mechanical breakdown claim is subject to which of the following conditions? - CORRECT ANSWERS MBI policies require vehicle owners to provide proof of regular maintenance, usually along the exact guidelines suggested by the auto manufacturer. Each company has its own limits on the age and mileage of vehicles it will cover. The insurer may also require a full inspection of the vehicle before an MBI policy is written. An Umbrella liability policy: - CORRECT ANSWERS may cover risks not covered in an underlying policy An umbrella policy provides liability coverage over and above the normal or base limits of liability in a policy. An umbrella policy is a type of Excess Liability Eve's Organic Applesauce makes a family sick in Oregon, and Eve has to recall thousands of boxes of product. Since her base policy does not cover product liability, which coverage could help pay for Eve's losses associated with the recall? - CORRECT ANSWERS Product liability insurance is designed to protect businesses from this type of liability by covering damages to third parties caused by the manufacturing, merchandising, distributing, or operation of a product. Bill holds a hull policy for his cargo ship which sails between China and the United States, transporting wooden toys. On voyage i. his cargo is stolen by pirates. On voyage ii. the cargo is destroyed by striking employees. On voyage iii. the cargo is destroyed when Bill's ship strays into a war zone and is struck by a missile. On voyage iv. the cargo is destroyed when poorly fastened crates fall into the sea. Bill's losses will be covered by his hull policy for which of these voyages? - CORRECT ANSWERS iii. only pirates Example of Coverage: Fire, Lightning, Earthquake, Piracy- intentional theft of a vessel or its cargo, intentional sinking or desertion of a vessel, fighting and piracy Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correctly verified answers latest update 2024/2025 RATED A+ Examples of EXCLUTION: acts of war, rioting and civil commotion, Employee strikes, confiscation, damage due to dampness or breakage. Smith Shipping Co. owns two cargo ships. The first ship is covered by a hull policy with a $50,000 average deductible. The second ship is covered by a hull policy with a $75,000 franchise deductible. One very unlucky month, both ships lose all of their cargo to fire, thereby sustaining $100,000 in each of the 2 losses. Smith Shipping Co. will be indemnified ______ (total) for their losses. - CORRECT ANSWERS $125,000 Which of the following statements about a Personal Articles Floater (PAF) policy is FALSE? - CORRECT ANSWERS Personal Property Floaters are written on a single policy form called a Personal Articles Floater, or PAF. All PAFs typically have several characteristics in common: they provide open-perils protection with no deductible, and coverage is worldwide. When settling a PAF claim, valuation should be determined by taking the lesser of three amounts: the actual cash value of the property, the cost to repair or replace it, or the coverage limits. When Mary moves to the small town of N-ville and opens a jewelry shop, she realizes that she needs a form of insurance that will protect her from damages that might occur to her customers' jewelry when they leave it with her for cleaning. What type of Commercial Property Floater is Mary looking for? - CORRECT ANSWERS a Bailee's Customer Floater When goods are in someone's care, custody, and control this is called "bailment" and insurance on these goods is called "bailee coverage." What is covered under Aircraft Hull Coverage? - CORRECT ANSWERS Hull coverage, also known as hull aircraft insurance, indemnifies the owner against loss of, or damage to, his aircraft. The "hull" refers to the entire aircraft, including the body and wings of a plane, its machinery, engines, instruments, radios, autopilots, and other equipment specifically named in the policy. What is Admitted Aircraft Liability? - CORRECT ANSWERS "Admitted Aircraft Liability Insurance," this release is an aviation-specific coverage. It is written on a per-seat basis so that aircraft owners can promise guests, that is, non-paying passengers, limited recompense for bodily injury. This sort of insurance gives Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correctly verified answers latest update 2024/2025 RATED A+ expected income would have been if the loss hadn't occurred. Then he will determine what fixed expenses the business continues to pay even if the business is not fully operational. Evangeline is negotiating a settlement with a claimant, who becomes dissatisfied with Evangeline's suggestions and asks if he can consult with an attorney before proceeding. Evangeline knows that her offer is fair and advises the client not to spend the money on an attorney. Why are Evangeline's actions unethical? - CORRECT ANSWERS Evangeline cannot advise a client to refrain from seeking legal advice in any situation. While ethical behavior conforms to virtues such as honesty, loyalty, and thoughtfulness, unethical behavior chooses self-interest over virtue. Specific types of unethical behavior include dishonesty, disloyalty, disregard for the needs or rights of another person, selfishness, lack of concern for the consequences of your actions, etc. Some unethical behaviors are also criminal, like theft or fraud. April, an independent adjuster, gets paid on a fee schedule. This means that the larger the claim, the more money April makes from adjusting it. In order to increase her commission, she normally adds an additional 1% to the amount of the settlement. This is illegal practice is known as: - CORRECT ANSWERS Settlement Padding pad, or falsely increase, settlements to increase your own income. This is not just unethical, but is in fact a crime, and one that will probably be discovered eventually. The short-term benefits certainly do not outweigh the long-term effects of padding settlements. What is inducement? - CORRECT ANSWERS Inducements are actions, items, or promises made to someone in order to motivate them to act in a certain way. These include, but are not limited to, bribery, kickbacks, favors, gifts, trades, and even sexual relationships. what is kickbacks? - CORRECT ANSWERS Money of favors offered to the adjuster in exchange for referring business to specific repair shops of contractors Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correctly verified answers latest update 2024/2025 RATED A+ What is Misrepresentations? - CORRECT ANSWERS Your job as an adjuster is to explain in detail the rights and coverages of the insurance policy to the insured party. You must never withhold material information or misinform a claimant regarding his rights in order to save money for an insurer. What is Salvage misappropriation? - CORRECT ANSWERS In the wake of a disaster or other loss, an adjuster may come across valuable salvage material. This may become the property of the insurer, as part of its recovery of losses, or it may be returned to the policyholder. In no case does it belong to the adjuster. Adjusters must never misappropriate salvaged property for their own use or the use of others. Maryanne goes to Hometown Insurance to ask about an auto policy. Kelly, the insurance agent, tells Maryanne that in order to take advantage of Hometown's advertised low auto premiums, she must also purchase homeowners insurance from them. Maryanne is happy with her current homeowners policy, but cancels it and purchases a new one from Homeowners. Which unethical sales practice has Kelly committed? - CORRECT ANSWERS Twisting "Twisting" (also sometimes called "churning") means intentionally tricking a policyholder into lapsing or forfeiting her policy so that she can purchase a new one. Agents and brokers may be tempted to do this in order to increase their own income. Under which circumstance would it be legal for an insurer to charge one insured more than another insured for the same coverage? - CORRECT ANSWERS When the insured is statistically more likely to experience a loss Risk Reduction in three main ways: it can insure a risk but charge higher than usual premiums, or it can require the policyholder to perform some action to reduce risk, or it can provide less coverage than the applicant wants. Which of the following insurers is not engaging in an Unfair Claims Settlement Practice? - CORRECT ANSWERS XYZ Insurance Company owns its own auto repair shop and sends policyholders' cars there to be repaired. Most of the aspects and activities of the insurance industry are regulated: - CORRECT ANSWERS State commissioners and departments of insurance are Alabama Insurance adjuster exam study guide Exam with 129questions and answers 100%Correctly verified answers latest update 2024/2025 RATED A+ responsible for regulating many aspects of the insurance industry (especially those concerning the financial solvency of the insurers doing business in their state). The commissioners and departments oversee the financial stability of insurers and regulate the rates that insurers charge. They also protect consumers and ensure that insurance is available for all individuals. Alabama Commissioner of Insurance is in charge of regulating the insurance industry in the state. The Alabama Commissioner of Insurance: - CORRECT ANSWERS is appointed by the Governor of Alabama. The Commissioner of Insurance is appointed by the Governor, and serves a term concurrent with that of the Governor. Commissioners are chosen based on training, experience, and capacity, and are not allowed to hold or be a candidate for any other public office while serving as Commissioner. The Governor sets the Commissioner's compensation, and before taking the oath of office, the incoming Commissioner must provide a $50,000 bond in favor of the state of Alabama. In order to legally conduct business in the state of Alabama, all insurers must do all of the following, except: - CORRECT ANSWERS The Alabama Department of Insurance requires all admitted insurers to prove that they are financially stable. When an insurer enters into a contract with a policyholder, it has the legal obligation to pay all legitimate claims of that client. To ensure that Alabama insurers are able to do this, they are required to keep a certain amount of assets readily available. In addition to this, all insurers must be members of a guaranty association. Amy has her insurance adjuster's license revoked by the State of Alabama. What was the most likely reason to revoke her license? - CORRECT ANSWERS You must fulfill the state education and examination requirements. Alabama requires most types of agents to complete a 40-hour pre-licensing course and pass a licensing exam. You must not have anything on your record (like a felony or fraud) that could cause you to have your license denied, suspended, or revoked; And finally, you must submit an application and pay the licensing fee for the type of agent license you are getting Seth lives in California, where he is a licensed adjuster. He is wanting to also obtain an adjuster license in Alabama, so he can legally work claims in that state. Which of