Insurance Contracts and Bonds: Key Concepts and Characteristics, Exams of Insurance law

Download Insurance Contracts and Bonds: Key Concepts and Characteristics and more Exams Insurance law in PDF only on Docsity! Florida Claims Adjuster Exam (206 Questions with 100% CORRECT ANSWERS 2024 LATEST UPDATE Frank owned a home that was destroyed by a hurricane. Both ABC and XYZ Banks were listed as additional interests on his homeowner policy. The insurance company will make a payment to: A. The first mortgagee, ABC B. The Insured C. Jointly to ABC and XYZ D. All listed interests - SOLUTION D. All listed interests Remember that the insurer is not responsible to know the degrees of interest. In the event of a loss, one payment is made by the insurer and it is up to the additional interests on working out their share. Insurance applies separately to each insured as if other insureds did not exist. This is defined as: A. Severability B. Conditional C. Warranty D. None of the above - SOLUTION A. Severability Property insurance policies usually contain a(n) __________ clause, stating the insured cannot dump damaged property on the insurer and demand its full value: A. Pro Rata B. Abandonment C. Liberalization D. All of the above - SOLUTION B. Abandonment A(n) __________ is one wherein economic loss would be suffered from an adverse happening to the subject: A. Conditional Contract B. Personal Contract C. Economic Contract D. Insurable Interest - SOLUTION D. Insurable Interest States that if the insurer adopts a revision which would broaden coverage without additional premium within some period of time prior to the policy period or during the policy period, the insured receives the benefit of such broadened coverage. A. Cancellation Clause B. Policy Period C. Pro Rata D. Liberalization - SOLUTION D. Liberalization The time frame is typically 60 days. The __________ states that when there is an unbroken connection between an occurrence and damage that grows out of the occurrence, then the resultant damage is all a part of the occurrence. A. Doctrine of Proximate Cause B. Doctrine of Perils & Hazards C. Insurance Policy Handbook D. Doctrine of Property Insurance - SOLUTION A. Doctrine of Proximate Cause For example, if a property insurance policy covers the peril of fire but further damage is caused by smoke, water used to extinguish, and the process of moving property away - fire is considered to be the *proximate cause* of all of the damage. The Loss Settlement Valuation that subtracts an allowance for depreciation is defined as? A. Actual Cash Value B. Replacement Cost C. "Old for New" D. None of the Above - SOLUTION A. Actual Cash Value A policy condition, either based on information in the insured's application or inserted by the insurer, is defined as: A. Warranty B. Misrepresentation C. Concealment D. None of the Above - SOLUTION A. Warranty The following are basic characteristics of a property or liability insurance contract, except: 10,000 property damage Example of straight liability limit = $30,000 Jeremy has a not at fault accident. If he has PIP with a $1,000 deductible, how much can he expect his PIP coverage to pay toward his medical bills that total $3,000? A. $1,600 B. $1,000 C. $2,400 D. $3,000 - SOLUTION A. $1,600 3000 (bills) - 1000 (deductible) = 2000 x .80 (eighty percent) Frank has a not-at-fault accident, he has basic PIP, no deductible and Med pay of $5,000. How much will his Med Pay contribute to medical bills of $15,000? A. $15,000 B. $5,000 C. $3,000 D. $0, Frank is not-at-fault - SOLUTION B. $5,000 Medical Payment limits apply per person; Frank will receive full amount towards medical bills. Which of the following is not one of the rating factors for a Homeowner's Policy? A. Type of Construction B. Location of Risk C. Age & Gender of Insured D. Proximity to Fire Department - SOLUTION C. Age & Gender of Insured On a Homeowner's Policy, covers items that are not permanently attached to the dwelling. This is defined as: A. Other Structures B. Excess Structures C. Personal Property D. Dwelling - SOLUTION A. Other Structures Examples include sheds, fences, pool houses, detached car ports, etc. A lender has an insurable interest in a home and finds protection in the: A. Loss Payee Clause B. Mortgagee Clause C. Lender Clause D. Additional Insured Clause - SOLUTION B. Mortgagee Clause Mortgagee - Homeowner's policy Loss Payee - Automobile policy Which of the following forms is "all-risk" on the dwelling policy? A. DP-1, or the Basic Form B. DP-2, or the Broad C. DP-3, or the Special Form D. None of the Above - SOLUTION C. DP-3, or the Special Form When the basic liability limits provided by the policy are insufficient for an insureds needs, two coverage forms are used to provide the additional amounts of coverage: A. Excess Liability B. Umbrella C. Both A & B D. None of the Above - SOLUTION C. Both A & B Which of the following is not covered under Coverage C, Personal Property? A. A fire breaks out in the residence and an overnight guest loses his clothes in the fire B. A fish dies because he has been left alone for a week without food C. The insureds daughters tennis racket is stolen from her locker D. The insureds suitcase and clothing, valued at $1,500, are stolen from his hotel - SOLUTION B. A fish dies because he has been left alone for a week without food Animals are listed as an "exclusion" under a Homeowner's policy. All of the following are eligible for a Homeowner's Policy, except? A. An apartment tenant B. A condominium owner C. Four-family dwelling owner-occupant D. A business condo owned by a local insurance company - SOLUTION D. A business condo owned by a local insurance company Commercial property is not eligible for a Homeowner's policy. Which of the following are characteristics of Homeowner's Insurance? A. Protects against economic loss to residences and household property and legal liabilities B. Owner-occupants of 1-4 family dwellings C. Renters who maintain residential occupancy in any type of building D. All of the Above - SOLUTION D. All of the Above Also included: personal, non-business risk, no more than 2 roomers/boarders, condominium unit owners and cooperative apartment occupants Jeremy owns a home that is recently damaged due to a hurricane. The repair estimate is averaged at $25,000 and Jeremy decides to stay in a hotel because most of the damage is to his bedroom and kitchen. Under a Homeowner's Policy, what coverage will pay for the hotel room bill? A. Fair Rental Value B. Value Obligation C. Loss of Use D. Insurers Duties - SOLUTION C. Loss of Use The insurer will pay any necessary and reasonable expenses associated with a daily living routine. An insured who wishes to purchase flood insurance, but is located in a moderate or low risk flood zone may do so by purchasing a: A. Preferred Risk Flood Policy B. Standard Flood Policy C. Universal Flood Insurance D. None of the Above - SOLUTION A. Preferred Risk Flood Policy Although Flood Insurance is provided by the Federal Government, those who are not in a "flood zone" may purchase a preferred risk policy to cover them for a flood claim. Used only for Commercial Condominiums, it covers the unit-owners business personal property and the personal property of others in the insured's care, custody or control: A. Condominium Dwelling Form B. Personal Condominium Unit Owners Form C. Condominium Unit Owners Form D. None of the Above - SOLUTION C. Condominium Unit Owners Form Does not cover buildings since coverage would typically be provided under the Condo Association coverage form issued. Period of restoration begins 72 hours after date of direct damage. In effect, coverage has a 72 hour deductible. Coverage ends on either 1. date when damaged property could be repaired, rebuilt, or replaced 2. date business resumes operations at new, permanent location (whichever comes first) What payment covers several areas of costs related to claims, and are payable in addition to the policy limits? A. Supplementary B. Liability C. Personal Injury D. All of the Above - SOLUTION A. Supplementary Generally, all costs of litigation are covered (court costs, prejudgment interest, judgement interest, cost of bonds to release attachments) Three full-time employees from a local furniture company are horsing around and one is pushed into a machine that cut his foot. How will the company's General Liability respond? A. The Med Pay Section must pay Primary B. The General Liability Policy will pay up to $20,000 in medical payments C. The GL policy will not pay D. Only property damage is covered under GL policy - SOLUTION C. The GL policy will not pay Coverage excludes liabilities under Workers Comp or similar law or arising from injuries to employees of the insured. The employees would have to file through Workers Comp. Which of the following can be found in a Commercial General Liability Contract? A. Declarations B. Common Policy Conditions C. Occurrence and Claims-Made Forms D. All of the Above - SOLUTION D. All of the Above Also included: Nuclear Energy Liability Exclusion endorsement (other endorsements may be attached) There is __________ coverage for injury, damage or clean-up costs caused by pollutants, subject to minor exceptions: A. 50% B. 10% C. 0% D. A Percentage Ratio - SOLUTION C. 0% Under a Commercial General Liability Policy, a basic limit of __________ per person applies to Medical Payments: A. $1,000 B. $10,000 C. $2,500 D. $5,000 - SOLUTION D. $5,000 Payment is for medical, dental, hospital, and funeral services incurred within one year of date of accident to persons who suffer bodily injury by accident 1. on or next to insured's owned or rented premises, or 2. due to insured's operations. The Commercial General Liability __________ identifies the named insured and address, states the policy period and premium and miscellaneous information about the insured, and specifies the limits of coverage that apply. A. Declarations B. Contract C. Policy D. None of the Above - SOLUTION A. Declarations States the pertinent information of the policy The Nuclear Energy Liability Exclusion endorsement, in general, __________ all hazards related to nuclear energy. A. Includes B. Excludes C. Prohibits D. Summarizes - SOLUTION B. Excludes Firms involved in Nuclear activities receive protection from special insurer pools organized for that purpose. Toxic wastes escaped from a gas station disposal tank. The insured operator discovers the leak and cleans up the spill. Unfortunately, the waste quickly seeped into the ground and has caused illness among the residents of a neighboring community This is an example of? A. Loss Known B. Known Loss C. Claims-Made D. None of the Above - SOLUTION B. Known Loss Insurer should have been notified and further investigation of the spill and effective clean-up would have been observed. Applies to BI or PD which occurs during the policy period, regardless of any later time at which a claim is made: A. Occurrence Form B. Claims-Made Form C. Premises and Operations Exposure D. None of the Above - SOLUTION A. Occurrence Form vs. Claims-Made: applies only to BI or PD occurring on or after retroactive date for which claim is received/recorded during policy period Applies only to a BI or PD which occurs on or after the retroactive date, and for which the claim is received or recorded by an insured or the company during the policy period: A. Occurrence B. Claims-Made C. Operations Completed D. None of the Above - SOLUTION B. Claims-Made Retroactive date is stated in Declarations and will normally be same date as issuing company's first claims-made effective date for insured. All of the following are components of Workers Compensation, except: A. Up to $750,000 in Death Benefits B. Reimbursement for Medical Expenses incurred C. Reimbursement for lost wages on percentage basis D. Funeral costs up to $7,500 - SOLUTION A. Up to $750,000 in Death Benefits Compensation for death is payable if death results within one year of an accident or if it follows disability within five years of accident. The following are classes of disability, except: A. Permanent Total B. Temporary Total C. Permanent Impairment D. Temporary Full - SOLUTION D. Temporary Full Also included: Temporary Partial C. $4,000 D. $5,000 - SOLUTION D. $5,000 Under Crime Insurance, losses must be discovered within 1 year. This is defined as: A. The Discovery Period B. The Loss Sustained Period C. The Open Period D. All of the Above - SOLUTION A. The Discovery Period Crime Insurance is _________ over any other Insurance coverage. A. Primary B. Secondary C. Excess D. Recess - SOLUTION C. Excess A situation may arise where another form of insurance will pay claim - that insurance would be primary. Cover only losses that both occurred and were discovered during the policy period, or within one year of its expiration. This is defined as: A. Discovery B. Loss Sustained C. Sustained Loss D. None of the Above - SOLUTION B. Loss Sustained One exception to the rule is that Loss Sustained forms will also cover losses that occurred under previous (expired) crime policies and that were discovered during current policy year, as long as crime coverage had continued w/o interruption Any loss discovered during the policy period or within 60 days after its expiration (one year after expiration for losses connected with employee benefit plans) is covered regardless of when it occurred. This is defined as: A. Loss Sustained B. Valuation C. Discovery D. None of the Above - SOLUTION C. Discovery If XYZ restaurant discovers stolen goods taken over a year ago, this is within 2 years of inception date and found within policy period so it's covered. Under Crime Insurance, the insured is covered for loss by: A. Theft B. Burglary C. Robbery D. All of the Above - SOLUTION D. All of the Above Unless the loss is specifically excluded or limited Provides for loss of money and securities outside the premises in the care, custody and control of a messenger or armored car service resulting from theft, disappearance or destruction. This is defined as: A. Inside the Premises B. Outside the Premises C. Care, Custody, & Control D. None of the Above - SOLUTION B. Outside the Premises Also covers robbery of other property under the circumstances. Taking or attempted taking of property from within a locked safe or vault, by unlawful entry, with visible marks of forcible entry, or taking of the safe or vault from inside the premises. This is defined as: A. Safe Burglary B. Inside the Premises C. Custodial Burglary D. None of the Above - SOLUTION A. Safe Burglary Exclusions: accounting errors, giving/surrendering property, voluntarily parting, fire (except damage to safe/vault), vandalism, transferring property to someone based on unauthorized instructions or from threat to harm Covers for all types of property, when surrendered away from the premises as a result of a threat to do bodily harm to the insured or an employee, or to a relative or invitee of either, who is (or allegedly is) being held captive. This is defined as: A. Extortion B. Surrendered Property C. Client's Property D. None of the Above - SOLUTION A. Extortion Also triggered by threats to damage the premises or property within the premises. Employee Theft Coverage may be written in the following ways: A. Scheduled Persons Coverage B. Scheduled Position Coverage C. Blanket Coverage D. All May Apply - SOLUTION D. All May Apply Employee Theft may be written in three ways. Which of the following are NOT a type of bond? A. Contract B. Fiduciary C. Court D. Apprentice - SOLUTION D. Apprentice Contract - fulfill obligation Fiduciary - make good to court for any deficiencies found in performance Court - protect opposing party from loss Which of the following are characteristics of a License Bond? A. To guarantee the licensee will act according to laws B. Protect public from unfair business practice C. Proper collection and payment of taxes D. All of the Above - SOLUTION D. All of the Above Guarantees the performance between the principle and the obligee: A. Principal B. Obligee C. Surety D. All of the Above - SOLUTION C. Surety aka Bonding Company; Surety is a "guarantee" This bond guarantees indemnification to the obligee for any losses resulting from the principal's failure to complete the contract work in accord with specifications: A. Performance B. Bid C. Court D. Maintenance - SOLUTION A. Performance Considered a contract bond One who undertakes to perform, to fulfill a contract or to meet an obligation is known as: A. Principal B. Obligee Typical exclusions would be: hernia, war, disease and bacterial infections, suicide attempts, air travel injuries, accidents while committing felony, accidents while under the influence This type of provision states the insurer can refuse to renew the policy only under certain conditions. The policy must state the conditions under which the policy will not be renewed. This is defined as? A. Conditionally Renewable B. Guaranteed Renewable C. Optionally Renewable D. None of the Above - SOLUTION A. Conditionally Renewable vs. Optionally: company may not cancel during term but reserves right to non-renew upon expiration vs. Guaranteed: insurer required to renew policy at stated age (typically 65); company reserves right to increase premium The coverage that is intended to afford protection against catastrophic losses is defined as? A. Major Medical B. HMO C. PPO D. None of the Above - SOLUTION A. Major Medical Some forms designed to supplement basic policies; others provide both basic and catastrophic coverage A policy may contain a provision which states a period of time between issuance and acceptance before sickness benefits begin. This is defined as: A. Waiting Period B. Elimination Period C. Both A & B D. None of the Above - SOLUTION C. Both A & B This helps keep premiums reasonable by eliminating chance of persons buying coverage only when they are sick Characteristics of an HMO plan usually include: A. Small of non-existent Deductibles B. Fewer Exclusions C. Insurance services to members through employed physicians D. All of the Above - SOLUTION D. All of the Above Also included: broad coverage, coinsurance provisions Provides indemnification to the insured for basic hospitalization of room and board in the hospital, nursing care, laboratory fees, operating room, medical supplies, etc. This is defined as? A. Hospitalization Expense B. Hospital Indemnity C. Accident Policy D. All of the Above - SOLUTION A. Hospitalization Expense Associated with a daily limit, not to exceed specified maximum A(n) __________ provides comprehensive health services to its members for a prepaid fixed fee, equivalent to an insurance premium. A. HMO B. PPO C. Major Medical Plan D. All of the Above - SOLUTION A. HMO Referred to as an emerging and increasingly important non-insurance alternative to dealing with risk of health care costs Established in 1973, this association was created for applicants who are unable to obtain insurance in the private market: A. FWCJUA B. FWUA C. Citizens D. FRPCJUA E. FAJUA - SOLUTION E. FAJUA In 2002, the Florida Residential Property and Casualty Joint Underwriting Association (FRPCJUA) and the Florida Windstorm Joint Underwriting Association (FWUA), were combined to create: A. FWCJUA B. FWUA C. Citizens D. FRPCJUA E. FAJUA - SOLUTION C. Citizens Passed during a legislative session in 1993, this association was created for employers who cannot obtain workers compensation insurance in the private market: A. FWCJUA B. FWUA C. Citizens D. FRPCJUA E. FAJUA - SOLUTION A. FWCJUA A General Lines Agent instructs a licensed Customer Representative 4-40 to thoroughly cover the details of a new life insurance product with every Homeowner customer who calls or visits the office. The agent provides training on the new product. Although the Customer Representative does not have a Life License, he or she feels comfortable with the training and does as requested. Which of the following is true? A. This practice is acceptable if done in the office under supervision of General Lines Agent B. This practice is acceptable because adequate training and product knowledge was provided C. This practice is unacceptable and may result in the suspension or revocation of the Customer Representative's license D. This practice is only acceptable if the product training was certified by the Life Insurance Company - SOLUTION C. This practice is unacceptable and may result in the suspension or revocation of the Customer Representative's license Unlike a Customer Representative, a General Lines Claim Adjuster need not be appointed with the Department of Financial Services. A. True B. False - SOLUTION B. False While selling an Automobile policy to a customer, an agent tells them that they are also required to purchase an Emergency Road Service Plan, even though that is not true. This is an example of: A. Misrepresentation B. Lack of Fitness C. Deception D. Sliding - SOLUTION D. Sliding A licensed General Lines Claim Adjuster is required to complete how many hours of continuing education every two years? A. 6 The principle of utmost good faith on which an insurance contract is based places serious responsibilities on the claims adjuster in regards to: A. Conduct B. Work Habits C. Claim Handling Activites D. All of the Above - SOLUTION D. All of the Above The adjusters basic activities in claims handling are: A. Investigation B. Evaluation C. Negotiation D. All of the Above - SOLUTION D. All of the Above Investigation - establish coverage, determine liability, verify damages qualify Evaluation - determine fair payment in accordance with contract and law Negotiation - settlement based on facts discovered during evaluation Under the Florida Unfair Insurance Trade Practices Act, penalties are provided for misrepresentation of business practices, which include all of the following except: A. Failing to act promptly B. Failure to explain claim denials in writing C. Denying claims with reasonable investigation D. Failure to maintain complaint handling procedures - SOLUTION C. Denying claims with reasonable investigation An adjuster who represents the financial interests of the insured named in the policy is defined as a(n): A. Public Adjuster B. Bureau Adjuster C. Fee Adjuster D. Independent Adjuster - SOLUTION A. Public Adjuster When investigating liability insurance claims, which of the following three major elements are determined: A. Coverage B. Liability C. Damages D. All of the Above - SOLUTION D. All of the Above A relationship that requires maintenance of a high degree of fidelity and loyalty to the interests of the principal, whether or not the adjuster is a direct employee is defined as: A. Fiduciary B. Estoppel C. Public D. None of the Above - SOLUTION A. Fiduciary Should always be maintained whether or not the adjuster is a direct employee An adjuster who is self employed and not affiliated with either insurers or bureaus is defined as a(n): A. Fee Adjuster B. Public Adjuster C. Bureau Adjuster D. Independent Adjuster - SOLUTION D. Independent Adjuster The adjuster's investigation may include all of the following except: A. Verification of Bills and Estimates B. Photographs C. Witness Canvasses D. Policy Cancellation - SOLUTION D. Policy Cancellation The assertion of an alleged legal right against an insurer, which carries with it a demand for appropriate relief, is defined as: A. Adjustment B. Summons C. Claim D. None of the Above - SOLUTION C. Claim Relieving the financial burden on the claimant by making certain payments to the claimant even before the claim can be negotiated is defined as: A. Advanced Payment B. Full Release Settlement C. Non-Advanced Payment D. Scheduled Payment - SOLUTION A. Advanced Payment The process of disposing of an insurance claim is defined as: A. Adjusting B. Claims Management C. Adjustment D. None of the Above - SOLUTION A. Adjusting Also "the negotiation period that results in an agreement" All of the following are requirements for the "Code of Ethics," except: A. Adjusters should not give legal advice B. Adjusters may negotiate with a claimant who is represented by an attorney C. A witness who requests a copy of a statement given must be provided with one D. Adjusters will keep an unprejudiced and open mind - SOLUTION B. Adjusters may negotiate with a claimant who is represented by an attorney Adjusters MAY NOT. Bad, adjuster, bad! A written statement given by the insured to the insurer acknowledging that money received in the settlement of damages is received, not as a final payment, but as an advance pending an outcome of a claim against the person responsible for the damage. This is defined as a(n): A. Loan Receipt B. Subrogation Loan C. Full Release Statement D. Partial Release Statement - SOLUTION A. Loan Receipt Enables insurer to bring an action for recovery against a third party Duties and functions of the Department of Financial Services include all of the following except: A. Approve the issuance of licenses B. Rating and underwriting rules C. Claims Supervision D. Investigate charges of unethical behavoir - SOLUTION B. Rating and underwriting rules An adjuster who is a salaried employee under the supervision of the home, branch, or regional claims department of insurers is defined as a(n): A. Company or Staff Adjuster B. Fee Adjuster C. Public Adjuster D. Bureau Adjuster - SOLUTION A. Company or Staff Adjuster Which of the following are not considered to be an adjuster: D. 14 - SOLUTION C. 24 Which of the following are considered unfair methods of competition and unfair or deceptive acts or practices: A. False Statements B. Unfair Discrimination C. Unlawful Rebates D. All of the Above - SOLUTION D. All of the Above A customer representative appointed by a general lines agent or agency in transacting only the business of private passenger motor vehicle insurance from the office of that agent or agency is defined as: A. Automobile Agent B. Automobile Representative C. Limited Customer Service Representative D. Limited Customer Service Agent - SOLUTION C. Limited Customer Service Representative An individual representing an insurer as to life insurance and annuity contracts, including agents appointed to transact life insurance, fixed-dollar annuities, or variable contracts by the same insurer is defined as: A. Life Agent B. Life Representative C. General Lines Agent D. None of the Above - SOLUTION A. Life Agent Charging an applicant for a specific ancillary coverage or product, in addition to the cost of the insurance coverage provided for, without the informed consent of the applicant is a practice of: A. Churning B. Sliding C. Soliciting D. None of the Above - SOLUTION B. Sliding Which of the following are reasons for refusal, suspension or revocation of a license or appointment? A. Lack of Qualifications B. Failure to Pass State Examinations C. Fraudulent or Dishonest Practices D. All of the Above - SOLUTION D. All of the Above Every licensee shall notify the department, in writing, after a change of name, residence address, principal business street address and/or mailing address within how many days? A. 60 B. 30 C. 15 D. 90 - SOLUTION B. 30 An agent who transacts any one or more of the following types of insurance: Property, Casualty, Surety, Marine, and Health is defined as a(n): A. Customer Service Representative B. Adjuster C. Health Agent D. General Lines Agent - SOLUTION D. General Lines Agent An agent representing a health maintenance organization, or as to health insurance only, an insurer transacting health insurance is defined as a(n): A. Health Agent B. Health Representative C. HMO Agent D. None of the Above - SOLUTION A. Health Agent An applicant for a temporary license must be: A. A natural person at least 18 years of age B. A US citizen or legal alien who possesses work authorization C. Both A & B D. None of the Above - SOLUTION C. Both A & B One who is duly authorized by a subsisting certificate of authority issued by the department to transact insurance in this state. This is defined as a(n): A. Unauthorized B. Certified C. Domiciled Insurer D. Authorized - SOLUTION D. Authorized Actual Cash Value - SOLUTION Replacement cost minus depreciation Subrogation - SOLUTION When an insured has a right to collect damages from another party but elects to claim damages under his/her insurance policy; rights transfer to the insurer Loss Payee Clause - SOLUTION Provides, in event of payment being made under the policy in relation to insured risk, that payment will be made to a third party rather than the beneficiary Mortgagee Clause - SOLUTION Protects a lender who has an insurable interest in a home Grants special protection for the interest of a mortgage named in the policy; setting up a separate content between insurer and mortgagee Liability - SOLUTION Negligence of the insured Other Structures - SOLUTION Homeowner's Policy, covers items not permanently attached to main dwelling (shed, fence, etc.) Commercial Inland Marine - SOLUTION Identifies risks which are eligible for either ocean or inland marine insurance Developed as extension to Ocean Marine coverage to provide coverage for cargo traveling over land instead of by sea Umbrella Policy - SOLUTION Covers much higher limit and goes above/beyond claims directly relating to home and auto; protects assets from unforeseen events Known Loss - SOLUTION Prevents insured from coverage if insured knew the loss was probable at time of contract Commercial Property Insurance - SOLUTION Sometimes referred to as Commercial Fire and Allied Lines; Covers direct and indirect losses related to properties other than 1-4 family dwelling and farm properties Value Reporting - SOLUTION Limit of coverage set at an amount higher than expected peak values Employee Theft - SOLUTION Provides coverage for loss or damage to money, securities, and other property resulting from theft committed by an employee policyholder to carry, at minimum, a specified percent of the dwelling's replacement cost. Failure results in monetary penalty. Almost without exception, the percentage is 80% in coinsurance clauses of homeowner policies - this means the insured should carry 80% of replacement cost if they don't want to be penalized at the time of loss. What are the minimum requirements for the Financial Responsibility Law? (there are two) - SOLUTION 1. legal valid claims of others must be satisfied up to the 10/20/10 requirements 2. owner/operator must provide certification of financial responsibility for future accidents What is PIP and how may it apply to a given scenario? - SOLUTION Personal Injury Protection with limit of $10,000 per person, per accident If Jeremy has a not-at-fault accident and he has PIP with a $1000 deductible, he can expect PIP to pay $1,600 of his $3,000 medical bill. (3,000 - 1,000 = 2,000 x .80 = 1,600) What is the difference between PIP and Workers Compensation? Which one is excess? - SOLUTION PIP is primary against all other forms of medical and disability insurance coverage. Florida courts have held PIP is excess over Workers Comp. To eliminate duplicate recoveries, the law prohibits persons who have received PIP from recovering same amounts from others in legal liability actions. What are the basic PIP benefits? - SOLUTION 1. Medical; 80% of reasonable expenses are paid for necessary medical, surgical, x-ray, dental, and rehab services 2. Work Loss; 60% of any loss of gross income and loss of earning capacity is reimbursed 3. Replacement Services; 100% for cost of having household services performed by others which the injured person would have normally performed 4. Death; $5,000 IN ADDITION to the $10,000 in medical/disability benefits afforded by PIP How does PIP apply to pedestrians (in and out of state)? - SOLUTION PIP applies to Florida residents if struck by insured's motor vehicle while not occupying a self-propelled vehicle (a pedestrian). In situations wherein PIP does not apply, named insured and relatives occupying or struck by others vehicles out-of-state; nonresident passengers out-of-state; and nonresidents as pedestrians in Florida - The No-Fault Law has no applicability and usual legal remedies and other insurance coverage's are to be relied upon. When can Other-Than-Collision (Comprehensive Coverage) be used? - SOLUTION When there is damage to your vehicle not caused by a collision (hail storm damages hood, animal runs into car, windshield replacement) What are the penalties for not complying with the No-Fault Law? - SOLUTION 1. Owner is denied immunities from legal liabilities that are granted to those who comply 2. Owner is personally liable for payment of PIP benefits to those entitled 3. Owner's driver's license and vehicle registration are subject to suspension What is the PIP Death Benefit amount? - SOLUTION Effective 1/1/13, the death benefit will be $5,000 IN ADDITION to the $10,000 in medical and disability benefits afforded by PIP. Example: Joe is seriously injured in an accident and incurs $50,000 in medical bills. He passes away a few days later. PIP would pay its maximum amount of $10,000 and, in addition, pay an extra $5,000 for death benefit. Who administers the Financial Responsibility Law? - SOLUTION The Department of Highway Safety and Motor Vehicles What are the characteristics of a Homeowner's policy? - SOLUTION - protects against economic loss to residence and household property and legal liabilities -owner/occupants of 1-4 family dwellings -renters who maintain residential occupancy in any type of building -other structures (not permanently attached) What are the benefits under the Workers Compensation Law? - SOLUTION -Medical Expenses: needed medical treatment with no dollar limit -Disability Benefits: compensation for wage loss -Death Benefits: if death results within one year of accident or, if it follow continuous disability, within five years after the accident What are the requirements for continuing education for a 6-20 license? - SOLUTION A licensed General Lines Claims Adjuster is required to complete 24 hours of education every 2 years. Who might have an insurable interest in a property? - SOLUTION Anyone who would suffer an economic loss from an adverse happening to the property What do the Declarations of a policy outline? - SOLUTION The declarations identifies the named insured and address, states the policy period and premium and miscellaneous information about the insured, and specifies the limits of coverage that apply Which parties are associated with a bond? - SOLUTION -Principal: one who undertakes to perform, fulfill a contract, or meet an obligation -Obligee: one who is guaranteed that the principal will perform -Surety (Bonding Company): guarantees performance -Indemnitor: may act as additional party at times; agrees to reimburse the surety for any loss it may suffer from having bonded the principal What are the features of Major Medical Insurance? - SOLUTION Major Medical Insurance is intended to afford protection against catastrophic losses. Some forms are designated to supplement basic hospital/surgical policies; others intend to provide both basic and catastrophic coverage These policies are characterized by a deductible, high maximum limit, and percentage participation or coinsurance. It may contain internal limits for hospital daily room charge and surgical services. What associations make up Citizens Property and Insurance? - SOLUTION Florida Residential Property and Casualty Joint Underwriting Association (FRPCJUA) and Florida Windstorm Joint Underwriting Association (FWUA) What are the characteristics of a Personal Automobile Policy Declaration page? - SOLUTION Liability (bodily injury), property damage, uninsured