FL Adjuster Practice Test: Questions and Answers for Insurance Adjusters, Exams of Insurance law

Download FL Adjuster Practice Test: Questions and Answers for Insurance Adjusters and more Exams Insurance law in PDF only on Docsity! FL Adjuster practice test (245 Questions and Answers). What requirements must Wholesalers and Distributors meet in order to be eligible for a BOP? - Correct Answers 25% or less of floor space is available to the general public, and less than 25% of gross income may come from retail sales. The first step in the claim process is to - Correct Answers Determining time and cost of repairs In Florida, an insurer has ___ days to pay or deny a claim. - Correct Answers 90 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? - Correct Answers $250,000 Which of the following best describes inland marine insurance? - Correct Answers Insurance designed to protect property being transported on land and property related to transportation A plane was damaged while being towed by another vehicle. By policy definition, this damage is considered to have occurred while the aircraft was: - Correct Answers not in motion Citizens Insurance - Correct Answers is available to certain people who are not residents of Florida. This provision in Ocean Marine insurance obligates insurers of various interests to share the cost of losses associated with a captain's decision to voluntarily sacrifice a part of the ship or its cargo. - Correct Answers General Average Walter works for a shipping company, delivering packages and picking up orders. He lives very close to work and the grocery store is only a few blocks away, so he can live conveniently without owning a car. However, he would like to have some Personal Injury Protection, just in case he ever gets injured in an accident. Which BAP endorsement could his employer use to give him this coverage? - Correct Answers Named Individuals Broadened PIP Which of the following is NOT a rating factor for a personal auto liability policy? - Correct Answers The condition of the vehicle 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 - Correct Answers disease transmitted from the insured to a third party is excluded. Jerrod owns two planes and has liability insurance with the following limits: Bodily Injury Excluding Passengers: $250,000/person; $500,000/occurrence Passenger Bodily Injury: $250,000/person; $750,000/occurrence Property Damage: $500,000/occurrence. When Jerrod crashes into a car while landing his plane, he injures the two people in the car and completely wrecks the car. The first person in the car suffers $200,000 in injuries, and the second person suffers $300,000 in injuries. Replacing the car costs $45,000. Without taking deductibles into account, how much will Jerrod have to pay out of his own pocket? - Correct Answers 50,000 Which of the following endorsements is mandatory for all Florida residential property policies? - Correct Answers Catastrophic ground collapse Maria was in the hospital for five days, recovering from a stroke. The bill she received for her hospital stay broke down the charges for room, lab fees, meals, and nursing care. However, her insurer paid a flat daily rate and she was left responsible for paying the remaining charges. What type of insurance does Maria have? - Correct Answers Hospital Indemnity insurance file a $6,000 lawsuit against Nicole. Why can't Sam sue Nicole for the full amount of his injuries? - Correct Answers By accepting payment from ABC Insurance, Sam subrogated a portion of his rights against Nicole to ABC Insurance. A fidelity bond covers: - Correct Answers an insured business for loss resulting from any dishonest acts committed by its bonded employees. Which of the following incidents would a liability insurance policy cover? - Correct Answers A man slips inside a grocery store and injures himself. When Louise goes online and fills out phony applications with XYZ Auto Insurance in order to print the temporary insurance cards and sell them for a profit on the black market, she is: - Correct Answers ? When Jane rear-ends Frank, she causes minor damage to Frank's car, but Frank is not hurt. However, when Jane's insurer asks him about the accident, Frank claims that his back and neck have been hurting a lot because of the collision, even though he is actually fine. Frank is guilty of: - Correct Answers soft fraud. Who sets the critical production dates and assigns commodity market prices for MPCI policies? - Correct Answers The risk management agency 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? - Correct Answers $1,800 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? - Correct Answers $300,000 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? - Correct Answers Basic, Broad, and Special Forms When an adjuster is engaging in salvage misappropriation, he is: - Correct Answers taking possession of salvaged property for his own use or benefit. Surestep Insurance Co. calculates that it needs to charge Elwood a higher premium for his auto policy. Which of the following statements is TRUE? - Correct Answers Once Elwood receives notice of this change from his insurer, he may keep his policy in force by paying the extra premium within 10 days. 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? - Correct Answers KLM Insurance 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? - Correct Answers 0 Which of the following professionals would be most likely to purchase malpractice insurance? - Correct Answers Lawyer 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? - Correct Answers Litigation Which of the following is NOT considered an "out-of-pocket expense" in health insurance? - Correct Answers Policy premiums What is the most common type of Time Element Insurance? - Correct Answers Business Interruption Insurance Which of the following is NOT one of the differences between a BAP and a truckers policy? - Correct Answers A BAP uses coverage symbols to designate covered autos. Which of the following states takes a "monopolistic" approach to workers' compensation insurance? - Correct Answers Ohio, Washington, Wyoming, and North Dakota. When Emma's house was burglarized, the thieves stole several pieces from her art collection. Although the pieces were only prints, Emma files a claim stating that they were originals, and therefore worth a good deal more than they really are. What has Emma committed? - Correct Answers soft fraud 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? - Correct Answers $12,000 Which of the following is TRUE concerning a Business Owners Policy? - Correct Answers A business owners policy offers liability protection Participation in the Florida Automobile Joint Underwriting Association is mandatory for - Correct Answers all insurers who can sell auto insurance in Florida. The insuring agreement for Part A-Liability in a personal auto policy states that - Correct Answers the insurer has the right to settle liability cases out of court. Which statement about the Federal Employers Liability Act is TRUE? - Correct Answers It protects only interstate railroad workers and their families. Which endorsement to the Commercial Crime policy would protect a bank against its legal liability for burglary, robbery, destruction, or damage to customers' belongings kept in safe deposit at the bank? - Correct Answers Safe Depository 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 - Correct Answers exclusions Which of the following would be covered under the peril of "theft" in an homeowners policy? - Correct Answers Theft from a building under construction 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 split the cost of the loss with Jim's own insurer without placing blame on ABC Garage? - Correct Answers Liability Coverage Bonnie's PAP includes Comprehensive coverage. Which of the following losses could this coverage pay for? - Correct Answers Bonnie's car catches fire. Which of the following BEST describes how covered losses are settled under a typical Equipment Breakdown Protection Coverage Form? - Correct Answers Losses are normally paid at replacement cost, but an insured may change this with an Actual Cash Value endorsement. Peter works as a real estate agent and uses the internet extensively for sales leads and advertising. One day, he finds another realtor's ad online and copies it, using his own information as the contact info. This generates a lot of business for Peter, but unfortunately Peter gets a call one day and is informed that he is being sued for copyright infringement. This is an example of what type of claim covered under Peter's Commercial General Liability policy? - Correct Answers Advertising Injury In the Business Auto Policy, what does the symbol #2 mean? - Correct Answers Any Owned Vehicle A fire burns down Jenny's Hardware, leaving virtually nothing salvageable. Which of the following items would NOT be covered under Coverage A of the Building and Personal Property Coverage Form in her commercial property policy? - Correct Answers ? Which of the following would NOT affect the rating for comprehensive and collision coverage on a vehicle? - Correct Answers Time of day vehicle is driven/The color of the vehicle 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? - Correct Answers Trucker Which of the following situations does NOT involve an insurable risk? - Correct Answers Dale just bought 30 shares of a hot new startup company online. 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? - Correct Answers ? Which of the following statements about the original Standard Fire Policy is FALSE? - Correct Answers It was the first multi-line policy, combining both Physical Damage and Liability coverages. 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? - Correct Answers Paul should apply 5% to his garage and the remainder to the home 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? - Correct Answers Mark's homeowners policy will cover $2,400 of this loss. Lance runs a staffing service in which his main job is transporting workers to and from various jobsites. His van can carry up to 12 people at a time, and he is worried about getting hit by a driver who does not have enough liability insurance to cover all of his passengers. Which additional coverage could help pay for injuries to his passengers if this were to happen? - Correct Answers Uninsured/Underinsured Motorist Coverage Which of the following statements about Crop-Hail insurance is FALSE? - Correct Answers ?? It protects crops even before they are visible--Crop Hail insurance coverage excludes crops until normal visible (crop must be above ground) Kyle operates a collision repair garage and has many vehicles in his care, some for extended periods of time. Which type of coverage protects Kyle from any liability claims which may arise if one of the cars is further damaged or destroyed while in his possession? - Correct Answers Bailee Coverage Which of the following activities could be a useful negotiation technique? - Correct Answers Reviewing video footage with the claimant that contradicts the claimant's position Phil owns a public pool. One day, Phil has an altercation with a woman visiting the pool. Phil doesn't like the way she looks, so he tells her that she has to leave the premises right away. The woman takes Phil to court for violating her civil rights. This is an example of what type of personal injury covered under Phil's Commercial General Liability policy? - Correct Answers Wrongful Eviction Which of the following perils is excluded from coverage in a National Flood Insurance Program policy? - Correct Answers Water-main breakage Which of these is NOT typically excluded from coverage in a property insurance policy? - Correct Answers Lightning Coast-to-Coast Trucking is in the business of transporting fresh produce from farmers to markets all across the U.S. Which type of inland marine policy would best protect Coast-to-Coast Trucking's interest in the produce that it ships? - Correct Answers Motor Truck Cargo policy States that have special legislation that requires workers' compensation coverage to be provided exclusively by the state's workers' comp program are: - Correct Answers monopolistic John, a contractor, just purchased a new backhoe and wants to get an insurance policy to cover it. He's looking for a policy that will provide coverage not only on the job site, but also while transporting it back and forth between sites. What type of inland marine insurance policy would likely fit John's needs? - Correct Answers Contractor's Equipment floater Which of the following best describes how losses are valued under a Commercial Crime policy? - Correct Answers Money is valued at face value; securities are set at their value on the day the loss is discovered; and other property is valued at the lesser of the cost to repair or replace. Which of the following conditions is frequently included in Mechanical Breakdown Insurance policies? - Correct Answers Subrogation Which of the following is NOT a condition for payment on a Mechanical Breakdown Insurance claim? - Correct Answers The cause of the breakdown cannot be associated with the front-end suspension. After a loss covered under a dwelling policy, Ordinance or Law coverage pays for: - Correct Answers ? Why has Pollutant Cleanup and Removal coverage become more popular recently? - Correct Answers ? Larry owns a restaurant downtown and employs his cousin Vinny as one of the line cooks. Vinny is a rather careless individual, and one night he leaves the stove on, leaking gas throughout the kitchen. When the ice machine turns on, it sparks a massive explosion. Which condition in Larry's commercial property policy indicates that he may be covered for this loss? - Correct Answers Control of Property Which of the following statements about MPCI insurance is FALSE? - Correct Answers Its coverage applies per acre, not per "unit." A CGL can provide liability insurance coverage for all of the following persons, EXCEPT: - Correct Answers auto accidents When is a self-insured retention applied in an umbrella policy? - Correct Answers When the umbrella policy covers a loss that is excluded by primary policies When Sandra files a claim with XYZ Insurance after a hailstorm, an adjuster comes out to inspect her damages. The adjuster is polite and professional, and he completes a thorough investigation. He tells Sandra that he will evaluate her claim and get back to her promptly. Which of the following items will the adjuster NOT take into account while evaluating Sandra's claim? - Correct Answers Policy premium Dr. Jones' current occurrence malpractice policy is in effect from July 1, 2005 through July 1, 2006. Which lawsuit would trigger this malpractice insurance policy? - Correct Answers A man sues Dr. Jones on July 26, 2009 for a damaging knee surgery performed on March 3, 2006. 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? - Correct Answers Farm Pollution Liability An injured employee's PPI rating (or Impairment rating) is NOT: - Correct Answers awarded before the employee reaches his Maximum Medical Improvement Shelly has been suffering from chronic headaches for over a year. She is sure that there is something medically wrong, despite what the doctors in her network have told her. So, she decides to visit a doctor that her friend recommended, even though he charges more and is not in Shelly's approved network. Shelly's insurer paid for the cost of the appointment up to the amount she would have reasonably been charged by an in-network physician, and Shelly was responsible for paying the remaining balance. Which type of health insurance plan does Shelly have? - Correct Answers Preferred Provider Organization 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? - Correct Answers $25,000 Bobby is adjusting a complicated auto claim. Which of the following is TRUE? - Correct Answers Because the policyholder (Jane) is 84 years old and seems to have trouble remembering what happened before the accident, Bobby should feel free to contact her 45-year-old caretaker for clarification. In a Commercial Crime policy, a "messenger" is defined as: - Correct Answers ? 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? - Correct Answers Agreed value policy Which of the following statements about the Standard Fire Policy is TRUE? - Correct Answers It is no longer used in its original format Which of the following would be most likely to purchase an Errors and Omissions policy? - Correct Answers Real State Agent Which Business Auto Policy endorsement covers employees while using their personal cars for business purposes? - Correct Answers Employee as Additional Insured 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 Which of these perils is NOT excluded from coverage in a homeowners policy? - Correct Answers ? In a homeowners policy, Coverage B - Other Structures provides insurance for which of the following? - Correct Answers Detached garages Which of the following lines of coverage could be found in a Commercial Package Policy? - Correct Answers Business Auto insurance Which one of the adjuster's reports usually includes the initial claim reserve amount? - Correct Answers Preliminary report A man wanders onto the runway of a small airport and is injured by a taxiing plane. Which insurance policy would pay for his injuries? - Correct Answers Airport Liability insurance How are mediators paid? - Correct Answers Their fees are split by all parties involved in the dispute. Which of the following would be considered an Instrumentality of Transportation and Communication? - Correct Answers Pipeline What BOP endorsement would cover a company's lost business income and extra expense due to loss of electrical service? - Correct Answers ? 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? - Correct Answers garagekeepers policy/Direct Primary Coverage Which statement BEST describes the "Follow Form" in excess liability coverage? - Correct Answers Excess liability insurance that "follows" the base insurance policy to the letter Which of the following is NOT considered "covered equipment" under an Equipment Breakdown Protection Coverage Form? - Correct Answers Equipment that is buried in the ground A dwelling policy would NOT be appropriate for: - Correct Answers ? In order to set a yield guarantee for Maren's policy, Maren's agent will need a record of the last four years of her crop yields. This record is called: - Correct Answers actual production history When a company collects a consumer's personal and financial information, the methods for that collection, as well as the ways in which the information is used and shared, are all regulated by the: - Correct Answers Fair credit reporting Act (FCRA) Dr. Nelson routinely schedules her patients for lab tests that they don't need so she can charge their insurers for more money. Dr. Nelson is: - Correct Answers committing health insurance fraud. In order for the contents of a home to qualify for flood insurance protection, which of the following conditions must be met? - Correct Answers The contents must be located in a fully enclosed building. 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? - Correct Answers Monoline Policy Bonnie's PAP includes Comprehensive coverage. Which of the following losses could this coverage pay for? A. Bonnie rear-ends another vehicle. - Correct Answers Bonnie's car catches fire UM/UIM coverage excludes: - Correct Answers ? 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: - Correct Answers the property is abandoned. 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? - Correct Answers -$0 Which of the following events would trigger the end to a commercial property Builders Risk Coverage Form? - Correct Answers building is accepted Adjuster Alice is trying to determine the final settlement amount for Ted's claim. Ted's house was damaged in a covered loss, and Alice has estimated that it will cost $25,000 to make the necessary repairs. Ted's homeowners policy has a $100,000 limit and a $2,000 deductible. Typically, how much would Adjuster Alice calculate Ted's final settlement amount to be? - Correct Answers $23,000 Residual market insurance programs are funded by: - Correct Answers insurers and their policyholders. In an Aviation policy, which of the following is only covered through an endorsement? - Correct Answers Hi-jacking Greg was in the process of completing the CE for his Florida adjuster license when unforseen circumstances made it necessary for him to drop everything and take care of his aging mother for a year. Now, Greg's license is about to expire and he does not have the CE credits he needs. What should he do? - Correct Answers Apply to the Department of Financial Services for an extension. As an adjuster for KLM Insurance, Chrystal has the important role of fiduciary agent. While acting in this capacity, Chrystal's primary responsibility is to: - Correct Answers protect the financial and property interests of KLM Insurance. Which of the following is similar to a Business Auto Policy, but adds several policy provisions and protections specific to the trucking industry? - Correct Answers Truckers policy 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? - Correct Answers ? Wilson is a Florida resident who maintains a liability policy with limits of 10/20/10. Recently, he was visiting a friend in Georgia when he ran a red light and hit a BMW, causing $30,000 in property damage. The minimum liability requirement in Georgia is 25/50/25. How much will Wilson's liability insurance pay in this situation? - Correct Answers $25,000 Which of the following losses may be covered by Mechanical Breakdown Insurance? - Correct Answers Harry's power steering system failed at 55,000 miles. Inducement can be defined as: - Correct Answers an action, item, or promise made to someone to motivate him toward certain desired behaviors. Which of the following is NOT true about a scheduled payment release? - Correct Answers It can't be used with Workers' Compensation claims. Which of the following statements about MPCI is FALSE? - Correct Answers It's coverage applies per acre, not per unit 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. Which statement about the Federal Employees Compensation Act is TRUE? - Correct Answers It provides federal government insurance for civilian employees. 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? - Correct Answers -$15,000 Which of the following insurance packages will indemnify a policyholder for a variety of hospital-related expenses such as nursing care, supplies, and rooming charges? - Correct Answers Hospitalization Expense insurance In a garagekeepers policy, PIP coverage is: - Correct Answers available with an endorsement. Which unfair claims settlement practice involves an adjuster making false statements about policy coverage in order to reduce the settlement? - Correct Answers Misrepresentation What is a reserve, in insurance terms? - Correct Answers A pool of collected premiums that the insurer sets aside to pay claims Lewis owns a computer store, and he spends many hours a day on the sales floor demonstrating his products to customers. He often gets very animated when showing the electronics and, although he does not intend for anything bad to happen, he doesn't worry too much about handling them carefully, since he knows that his insurance policy will cover any damages. This behavior would be called a: - Correct Answers morale hazard. 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. - Correct Answers ? Which of the following would be considered an insurable risk? - Correct Answers ? Frank purchases an automobile policy from 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? - Correct Answers Stock insurer 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? - Correct Answers Coverage A 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 BB Mart's general aggregate limit after the claim for Andrea's injuries is paid? - Correct Answers $700,000 Sam's Ocean Marine hull policy has a franchise deductible of $50,000. When Sam's ship suffers $75,000 in damage after being overtaken by pirates, how much indemnification can Sam expect to get from his insurer? - Correct Answers $75,000 Which statement BEST describes Umbrella coverage? - Correct Answers Excess liability insurance that can also provide additional coverages not provided by the base policy The Write Your Own program allows private insurers to: - Correct Answers sell standardized NFIP policies 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? - Correct Answers Money Orders and Counterfeit Paper Currency Which of the following statements about the Standard Flood Insurance Policy is FALSE? - Correct Answers It is subject to state courts. 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 In a dwelling policy, how much will the Fire Department Service Charge coverage pay? - Correct Answers Up to $500 if the fire department charges for responding to a covered peril 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? - Correct Answers $1,000 Joe decides to go surfing for three months in Hawaii. Before he leaves, he locks up his surfboard shop and rents a storage unit for most of his equipment and merchandise. When Joe returns, he finds that his shop has been broken into and vandalized. Under what policy condition would Joe's insurer likely refuse to make a full payment? - Correct Answers Vacancy 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? - Correct Answers Negotiate a settlement with the claimant. Generally speaking, which of the following has the broadest coverage? - Correct Answers Umbrella coverage Which of the following statements best explains why residual market insurance programs exist? - Correct Answers High-risk consumers need insurance, yet no private insurer wants to issue high-risk policies. Which of the following statements regarding health insurance is TRUE? - Correct Answers To be covered, members of an HMO must receive treatment for their medical conditions within the established network of healthcare providers. The Employee Retirement Income Security Act (ERISA): - Correct Answers requires that every fiduciary of an employee benefit plan and every person who handles funds or other property of those plans must be bonded. 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: - Correct Answers exclusions. Ken is getting his certification to adjust large commercial claims for the NFIP. Which of the following is NOT required of Ken in order to qualify for this certification? - Correct Answers Be able to accurately adjust RCBAP losses of $1,000,000 or more. 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? - Correct Answers $50,000