Insurance Contracts and Homeowner's Insurance: Characteristics and Exceptions, Exams of Law

Download Insurance Contracts and Homeowner's Insurance: Characteristics and Exceptions and more Exams Law in PDF only on Docsity! 1[Date] Florida Claims Adjuster Exam Questions with Verified Answers. 1. 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 - Correct answer 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. 2. Insurance applies separately to each insured as if other insured’s did not exist. This is defined as: A. Severability B. Conditional C. Warranty D. None of the above - Correct answer A. Severability 3. 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 - Correct answer B. Abandonment 4. 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 - Correct answer D. Insurable Interest 5. 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 - Correct answer D. Liberalization 6. The time frame is typically 60 days. 7. 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 2[Date] D. Doctrine of Property Insurance - Correct answer A. Doctrine of Proximate Cause 8. 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. 9. 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 - Correct answer A. Actual Cash Value 10. 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 - Correct answer A. Warranty 11. The following are basic characteristics of a property or liability insurance contract, except: A. Personal Contract B. Conditional Contract C. Loss of Settlement Contract D. Contract of Adhesion - Correct answer C. Loss of Settlement Contract 12. The Insurer's responsibility to pay for a property loss may be conditioned on the insured having used reasonable means to avoid the loss, to protect the property against further loss, and to give the insurer proof of the loss is defined as? A. Conditional Contract B. Adhesion Contract C. Indemnity Contract D. All of the above - Correct answer A. Conditional Contract 13. "May be conditioned" 14. Which of the following is not one of the "Thresholds" in the "No-Fault" law? A. Death of the Insured B. Temporary Injury of the Insured C. A permanent loss of a bodily function D. Permanent scarring on the face of the insured - Correct answer B. Temporary Injury of the Insured 15. Also included: permanent injury other than scarring and disfigurement 16. Under Mechanical Breakdown Coverage, new cars are eligible for service up to: A. 36 Months/36,000 Miles B. 24 Months/36,000 Miles C. 12,000 Months/12,000 Miles D. 12 Months/36,000 Miles - Correct answer A. 36 Months/36,000 Miles 17. Used vehicles: 12 Months/12,000 Miles 5[Date] B. Umbrella C. Both A & B D. None of the above - Correct answer C. Both A & B 42. 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 insured’s daughter’s tennis racket is stolen from her locker D. The insured’s suitcase and clothing, valued at $1,500, are stolen from his hotel - Correct answer B. A fish dies because he has been left alone for a week without food 43. Animals are listed as an "exclusion" under a Homeowner's policy. 44. 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 - Correct answer D. A business condo owned by a local insurance company 45. Commercial property is not eligible for a Homeowner's policy. 46. 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 - Correct answer D. All of the Above 47. Also included: personal, non-business risk, no more than 2 roomers/boarders, condominium unit owners and cooperative apartment occupants 48. 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 - Correct answer C. Loss of Use 49. The insurer will pay any necessary and reasonable expenses associated with a daily living routine. 50. 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 - Correct answer A. Preferred Risk Flood Policy 51. 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. 6[Date] 52. 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 - Correct answer C. Condominium Unit Owners Form 53. Does not cover buildings since coverage would typically be provided under the Condo Association coverage form issued. 54. The Commercial Property Contract includes all of the following, except: A. Common Policy Conditions B. Commercial Property Conditions C. Coverage Form D. Commercial Loss Schedule - Correct answer D. Commercial Loss Schedule 55. Also included: Declarations, Causes of Loss Form, Endorsements 56. Insures a condominium association against direct physical loss or damage to buildings, business personal property and personal property of others in the care, custody or control of the association and located at the premises: A. Condominium Association Form B. Condominium Unit Owners Form C. Condominium Insured Owner Form D. None of the above - Correct answer A. Condominium Association Form 57. This, along with Condo Unit Owners Form, is located under Condo Coverage. 58. Sometimes referred to as commercial fire and allied lines, this is the form of insurance that covers direct and indirect losses related to properties other than one-to-four family dwellings and farm properties: A. Business Property Insurance B. Building Property Insurance C. Commercial Property Insurance D. None of the above - Correct answer C. Commercial Property Insurance 59. (The question is the definition for this term) 60. Under Commercial Property Policies, Florida law requires an insurer to give the insured at least __________days advance written notice of non-renewal. A. 25 B. 90 C. 45 D. None of the above - Correct answer C. 45 61. Also, notice must state reasons the policy is not to be renewed. 62. When a business's personal property values fluctuate, a single, fixed amount of insurance could produce either over- or under-insurance at any given time. With this option, the limit of coverage is set at an amount somewhat higher than expected peak values. A. Value Reporting B. Replacement Cost C. Agreed Value 7[Date] D. None of the above - Correct answer A. Value Reporting 63. Replacement Cost is incorrect b/c it calculates monetary value of one's personal property 64. Liberalization states, "The insured gets the benefit of any broadened coverage if the company, within __________ days of inception, adopts a form revision that is broader and without increase in premium." A. 10 days B. 55 days C. 65 days D. 45 days - Correct answer D. 45 days 65. Used to cover buildings in the course of construction: A. Builders Risk Policy B. Builders Replacement Policy C. Construction Replacement Policy D. None of the above - Correct answer A. Builders Risk Policy 66. Includes: structure being built (including foundations), fixtures and machinery, equipment to service building, owned materials and supplies used for construction. Temporary structures built or assembled on site are also included if not covered by insurance. 67. First developed as an extension of Ocean Marine coverage, to provide coverage for cargo traveling over land, instead of by sea. A. Commercial Inland Marine Coverage B. Personal Inland Marine Coverage C. Ocean Commercial Coverage D. None of the above - Correct answer A. Commercial Inland Marine Coverage 68. Definition: to help identify kinds of risks which are eligible for either Ocean or Inland Marine insurance. 69. Protects against loss of business income that results from damage to covered property from a covered cause of loss. A. Business Income Insurance Coverage B. Business Income Replacement Coverage C. Business Income Actual Value Coverage D. None of the above - Correct answer A. Business Income Insurance Coverage 70. Period of restoration begins 72 hours after date of direct damage. In effect, coverage has a 72 hour deductible. 71. 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) 72. 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 - Correct answer A. Supplementary 73. Generally, all costs of litigation are covered (court costs, prejudgment interest, judgment interest, and cost of bonds to release attachments) 10[Date] 95. The measure to determine disability benefits is the __________ of the employee at the time of injury: A. Average Monthly Wage B. Average Weekly Wage C. Average Daily Wage D. Income Estimate - Correct answer B. Average Weekly Wage 96. Disability - incapacity due to injury to earn same or any other employment wages that employee was receiving at time of injury. 97. Mandatory for risks exceeding certain annual premiums, recognizes the prior loss experience of the risk and applies either a debit for unfavorable experience or a credit for better-than-expected loss results. This is defined as: A. The Experience Rating Plan B. The Retrospective Rating Plan C. The Risk Plan D. None of the above - Correct answer A. The Experience Rating Plan 98. This, along with Retrospective Rating Plan, is a manual rating process until premiums reach a certain level. 99. Under workers compensations, a rate is charged for every __________ of payroll to employees. A. $100 B. $1,000 C. $10 D. $500 - Correct answer A. $100 100. The National Council on Compensation Insurance enforces this rating. 101. Under Workers Compensation, Part Four You’re Duties if Injuries Occur, an employer is required to: A. Provide the names/addresses of injured persons and witnesses B. Promptly provide any legal papers C. Cooperate and assist as insurer requests D. All of the Above - Correct answer D. All of the Above 102. Also included: immediate contact with insurer, providing immediate medical or other services, do nothing to interfere with insured's right of recovery, make no voluntary payments or assume any obligation except at employer's own cost. 103. Under Workers Compensation, Employers Liability includes: A. Claims by others for the liabilities to insured’s employees B. Claims by relatives of injured employees for consequential damages C. Claims made by employees that are not subject to Workers Comp Laws D. All of the Above - Correct answer D. All of the Above 104. Samantha eats uncooked chicken at a local barbecue joint and becomes violently ill. Which of the following workers compensation benefits would pay for this occurrence? A. A products and completed operations form B. A premises and operations form C. An owners and contractors protective liability form 11[Date] D. None of the above - Correct answer D. None of the Above 105. Samantha is not an employee of the barbecue joint; Workers Comp does not apply. 106. An optional alternative providing for adjustment of premium after expiration, based on a guaranteed basic premium to the insurer to which is added the actual losses incurred by the insured. This is defined as: A. Cost-Plus Rating Plan B. Experience Rating Plan C. Retrospective Rating Plan D. None of the above - Correct answer C. Retrospective Rating Plan 107. Often referred to as Cost-Plus Programs 108. Under Employer's Liability, the minimum limits of liability are: A. 100/100/500 B. 100/500/1000 C. 500/100/500 D. 100/500 - Correct answer A. 100/100/500 109. $100,000 for all claims in each accident 110. $100,000 per employee for disease 111. $500,000 for all disease claims 112. Under Inside The Premises - Robbery or Safe Burglary of Personal Property, a special limit of __________ per occurrence applies to articles whose principal value is precious metals, precious or semiprecious stones, pearls or furs, and to the physical or intrinsic value of manuscripts, drawings or records: A. $1,000 B. $2,000 C. $4,000 D. $5,000 - Correct answer D. $5,000 113. 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 - Correct answer A. The Discovery Period 114. Crime Insurance is _________ over any other Insurance coverage. A. Primary B. Secondary C. Excess D. Recess - Correct answer C. Excess 115. A situation may arise where another form of insurance will pay claim - that insurance would be primary. 116. 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 12[Date] C. Sustained Loss D. None of the above - Correct answer B. Loss Sustained 117. 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 118. 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 - Correct answer C. Discovery 119. 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. 120. Under Crime Insurance, the insured is covered for loss by: A. Theft B. Burglary C. Robbery D. All of the Above - Correct answer D. All of the Above 121. Unless the loss is specifically excluded or limited 122. 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 - Correct answer B. outside the Premises 123. Also covers robbery of other property under the circumstances. 124. 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 - Correct answer A. Safe Burglary 125. 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 126. 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 15[Date] 155. Most plans provide that emergency treatment will be paid even if treated party does not go to service provider on approved list. 156. Define the coverage that pays a flat amount per day for hospitalization, regardless of expenses or other insurance: A. Hospitalization B. Hospital Indemnity C. Hospital Services D. All of the above - Correct answer B. Hospital Indemnity 157. This optional provision states that if the insured becomes totally disabled, premiums are waived but the coverage remains in force: A. Waiver of Subrogation B. Waiver of Premium C. Waiver of Value D. None of the above - Correct answer B. Waiver of Premium 158. "Premiums are waived" 159. Provides coverage for expenses, including loss of income, arising from an accident. This is defined as? A. Accident Insurance B. Hospitalization C. Hospital Pay D. None of the above - Correct answer A. Accident Insurance 160. Typical exclusions would be: hernia, war, disease and bacterial infections, suicide attempts, air travel injuries, accidents while committing felony, accidents while under the influence 161. 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 - Correct answer A. Conditionally Renewable 162. Vs. Optionally: company may not cancel during term but reserves right to non-renew upon expiration 163. Vs. Guaranteed: insurer required to renew policy at stated age (typically 65); company reserves right to increase premium 164. 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 - Correct answer A. Major Medical 165. Some forms designed to supplement basic policies; others provide both basic and catastrophic coverage 16[Date] 166. 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 - Correct answer C. Both A & B 167. This helps keep premiums reasonable by eliminating chance of persons buying coverage only when they are sick 168. 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 - Correct answer D. All of the Above 169. Also included: broad coverage, coinsurance provisions 170. 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 - Correct answer A. Hospitalization Expense 171. Associated with a daily limit, not to exceed specified maximum 172. 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 - Correct answer A. HMO 173. Referred to as an emerging and increasingly important non-insurance alternative to dealing with risk of health care costs 174. 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 - Correct answer E. FAJUA 175. 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 17[Date] E. FAJUA - Correct answer C. Citizens 176. 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 - Correct answer A. FWCJUA 177. 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. 178. 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 - Correct answer C. This practice is unacceptable and may result in the suspension or revocation of the Customer Representative's license 179. Unlike a Customer Representative, a General Lines Claim Adjuster need not be appointed with the Department of Financial Services. A. True B. False - Correct answer B. False 180. 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 - Correct answer D. Sliding 181. A licensed General Lines Claim Adjuster is required to complete how many hours of continuing education every two years? A. 6 B. 12 C. 18 D. 24 - Correct answer D. 24 182. Once a Customer Representative 4-40 has been licensed and appointed for at least 3 years, he or she may transact insurance in the home of an existing customer. A. True 20[Date] D. Independent Adjuster - Correct answer A. Public Adjuster 206. 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 - Correct answer D. All of the Above 207. 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 - Correct answer A. Fiduciary 208. Should always be maintained whether or not the adjuster is a direct employee 209. 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 - Correct answer D. Independent Adjuster 210. 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 - Correct answer D. Policy Cancellation 211. 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 - Correct answer C. Claim 212. 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 - Correct answer A. Advanced Payment 213. The process of disposing of an insurance claim is defined as: A. Adjusting B. Claims Management C. Adjustment 21[Date] D. None of the above - Correct answer A. Adjusting 214. Also "the negotiation period that results in an agreement" 215. 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 - Correct answer B. Adjusters may negotiate with a claimant who is represented by an attorney 216. Adjusters MAY NOT. Bad, adjuster, bad! 217. 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 - Correct answer A. Loan Receipt 218. Enables insurer to bring an action for recovery against a third party 219. 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 behavior - Correct answer B. Rating and underwriting rules 220. 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 - Correct answer A. Company or Staff Adjuster 221. Which of the following are not considered to be an adjuster: A. Employee or Staff Adjuster B. Independent Adjuster C. Public Adjuster D. General Lines Adjuster - Correct answer D. General Lines Adjuster 222. Bureau Adjusters are also considered adjusters. 223. An applicant for a license as an adjuster may qualify as an adjuster in the following fields (but not limited to): A. All lines of insurance except life and annuities B. Property and Casualty C. Workers Compensation Insurance 22[Date] D. All of the Above - Correct answer D. All of the Above 224. Also: motor vehicle physical damage and health insurance 225. A motor vehicle or mobile home which is a total loss is defined as: A. Lost Profit B. Salvage C. Salvageable D. All of the above - Correct answer B. Salvage 226. It cannot be restored to prior condition 227. When making any payment for damage to an automobile for a partial loss, the insurer shall have printed on the loss settlement, "Failure to use the insurance proceeds in accordance with the security agreement, if any, could be a violation of s.812.014, Florida Statutes." This is payment for a (n): A. Third Party Claim B. Two Party Claim C. Derivative Claim D. All of the above - Correct answer A. Third Party Claim 228. The District of Columbia and any state or territory of the United States in which an insurance agent maintains his or her principal place of residence or principal place of business and is licensed to act as an insurance agent. This is defined as: A. Business Territory B. Home Territory C. Home State D. None of the above - Correct answer C. Home State 229. Any material which is or may have been a motor vehicle or mobile home, which is inoperable and which material is in such condition that its highest or primary value is either in its sale or transfer as scrap metal or for its component parts, or a combination of the two. This is defined as: A. Junk B. Derelict C. Major Component Parts D. None of the above - Correct answer B. Derelict 230. An individual appointed by a general lines or agency to assist that agent or agency in transacting the business of insurance from the office of that agent or agency is defined as: A. Customer Representative B. General Lines Agent C. Adjuster D. None of the above - Correct answer A. Customer Representative 231. (4-40 license) 232. The authority given by an insurer or employer to a licensee to transact insurance or adjust claims on behalf of an insurer or employer is defined as: A. Appointment B. Express Authority 25[Date] 247. Subrogation - Correct answer 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 248. Loss Payee Clause - Correct answer 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 249. Mortgagee Clause - Correct answer protects a lender who has an insurable interest in a home 250. Grants special protection for the interest of a mortgage named in the policy; setting up a separate content between insurer and mortgagee 251. Liability - Correct answer Negligence of the insured 252. Other Structures - Correct answer Homeowner's Policy, covers items not permanently attached to main dwelling (shed, fence, etc.) 253. Commercial Inland Marine - Correct answer Identifies risks which are eligible for either ocean or inland marine insurance 254. Developed as extension to Ocean Marine coverage to provide coverage for cargo traveling over land instead of by sea 255. Umbrella Policy - Correct answer Covers much higher limit and goes above/beyond claims directly relating to home and auto; protects assets from unforeseen events 256. Known Loss - Correct answer Prevents insured from coverage if insured knew the loss was probable at time of contract 257. Commercial Property Insurance - Correct answer 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 258. Value Reporting - Correct answer Limit of coverage set at an amount higher than expected peak values 259. Employee Theft - Correct answer Provides coverage for loss or damage to money, securities, and other property resulting from theft committed by an employee 260. Bid - Correct answer Form of bond required to accompany a bid for a contract which will require that successful bidder furnish further bond if awarded job. 261. Agreement to fulfill a contractual obligation used frequently in construction and supplying goods 262. PPO - Correct answer (Preferred Provider Organization) 263. Selected group of hospitals and medical practitioners in given area who have joined together in an effort to reduce medical costs 26[Date] 264. HMO (pre-paid fixed fee) - Correct answer (Health Maintenance Organization) 265. Provides comprehensive health services to its members for a prepaid fixed fee equivalent to an insurance premium 266. Domestic - Correct answer Insurer formed under laws of this state 267. Foreign - Correct answer Insurer formed under laws of another state, district territory, or commonwealth of U.S. 268. Alien - Correct answer Insurer other than domestic or foreign (outside U.S.) 269. Sliding - Correct answer selling an item and stating that it is required by law 270. Waiver - Correct answer Voluntary relinquishment or surrender of some right or privilege 271. Fiduciary - Correct answer 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 272. Evaluation - Correct answer establishing a dollar value on a claim. 273. Determines the fair payment in accordance with the contract and applicable law 274. Negotiation - Correct answer a quality settlement based on facts discovered during the evaluation process 275. Estoppel - Correct answer An equitable principle to the effect that if one intentionally or unintentionally creates the impression that a certain fact exists, an innocent party relies on that impression and is damaged as a result, the guilty party may be legally prohibited (estopped) from asserting that the fact does not exist. 276. Junk - Correct answer Any material which is or may have been a motor vehicle or mobile home, with or without all component parts, which is inoperable and which material is in such condition that its highest or primary value is either in its sale or transfer as scrap metal 277. Salvage - Correct answer damaged property that may be retrieved, reconditioned and sold to reduce an insured loss. 278. Motor vehicle or mobile home is a total loss 279. Appointment - Correct answer Authority given by an insurer or employer to a licensee to transact insurance or adjust claims on their behalf 280. Derelict - Correct answer Material which is or may have been a motor vehicle or mobile home, with or without all component parts, which is inoperable and which material is in such condition that its highest or primary value is either in its sale or transfer as scrap metal or component parts or both 27[Date] 281. Implied Waiver - Correct answer May result from some act of neglect on part of the adjuster 282. Express Waiver - Correct answer Occurs when insurer or its representative knowingly gives up a known right under insurance contract 283. Mechanical Breakdown Coverage - Correct answer Covers repairs to mechanical parts of your vehicle that break; even covers in events not related to an accident 284. Identify examples of peril. - Correct answer Fire, windstorm, and flood after hurricane, etc. 285. (Something that causes a loss) 286. How long does one have to notify the Department of Financial Services for a name and/or address change? - Correct answer 30 days 287. What is the coinsurance clause and how might it apply to a given scenario? - Correct answer a coinsurance clause on a property policy requires the policyholder to carry, at minimum, a specified percent of the dwelling's replacement cost. Failure results in monetary penalty. 288. 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. 289. What are the minimum requirements for the Financial Responsibility Law? (There are two) - Correct answer 1. Legal valid claims of others must be satisfied up to the 10/20/10 requirements 290. 2. owner/operator must provide certification of financial responsibility for future accidents 291. What is PIP and how may it apply to a given scenario? - Correct answer Personal Injury Protection with limit of $10,000 per person, per accident 292. 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. 293. (3,000 - 1,000 = 2,000 x .80 = 1,600) 294. What is the difference between PIP and Workers Compensation? Which one is excess? - Correct answer 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. 295. What are the basic PIP benefits? - Correct answer 1. Medical; 80% of reasonable expenses are paid for necessary medical, surgical, x-ray, dental, and rehab services 296. 2. Work Loss; 60% of any loss of gross income and loss of earning capacity is reimbursed 297. 3. Replacement Services; 100% for cost of having household services performed by others which the injured person would have normally performed 298. 4. Death; $5,000 IN ADDITION to the $10,000 in medical/disability benefits afforded by PIP 30[Date] 341. -Failure to explain claim denials in writing 342. -Failure to maintain complaint-handling procedures, such as keeping accurate records of complaints 343. What perils are covered by Comprehensive Coverage? Does the deductible apply to them all? - Correct answer Comprehensive Coverage applies to damage not caused by collision (an animal runs into your vehicle, hail damages your hood, glass claims, etc.) 344. In Florida, windshields are replaced for free and you ARE NOT responsible for paying a deductible. 345. What is the time frame for a Non-Renewable Temporary License? - Correct answer a period not to exceed 6 months 346. What types of insurance licenses are offered by the Department and how do they differ? - Correct answer 1. General Lines Agent 2-20: licensed to write property/casualty, surety or health insurance. 347. 2. Customer Representative 4-40: must be licensed, appointed by a General Lines Agent and may assist in transactions in the OFFICE ONLY 348. 3. Limited Customer Representative 4-42: must be licensed, appointed by a General Lines Agent and transact AUTO insurance in the OFFICE ONLY. 349. 4. All Lines Claims Adjuster 6-20: investigates, Evaluates and Negotiates Claims 350. What are some reasons for suspension, revocation, or termination of a license? - Correct answer 1. Transacting insurance outside of scope of one's license 351. ►For example, an individual cannot sell life insurance if he or she has a Customer Service license but has not obtained a life license. 352. 2. Misrepresentation or Fraud. 353. 3. Participating in unfair methods of competition. 354. ►Using discriminatory practices, making false entries on an insurance application or defaming others. 355. 4. Sliding: Selling an item and stating that it is required by law (when it is not). 356. 5. Demonstration of unworthiness or lack of fitness. 357. 6. Misappropriation of funds. 358. 7. Failure to inform Department of Financial Services, within 30 days, after pleading guilty or no contest to a felony. 359. Compare/contrast different types of adjusters. - Correct answer 1. Independent Adjuster - self-employed and not affiliated with either insurers or bureaus 360. 2. Company/Staff Adjuster - salaried employee under supervision of home, branch, regional claims department of insurers 361. 3. Public Adjuster - represents the financial interests of the insured 362. Named in the policy 363. 4. Claims Adjuster - one who is involved in the investigation, adjustment, negotiation and/or trial preparations of claims arising under insurance policies? 364. 5. Bureau Adjuster - agent of adjustment bureau which serves multiple 365. Company clients 366. *Independent and Bureau are both "Fee Adjusters" 31[Date] 367. What is an Insurance Contract? - Correct answer Insurance is a contract whereby one undertakes to indemnify another or pay or allow a specified amount or a determinable benefit upon determinable contingencies 368. What are the components that make up the investigation process? - Correct answer Inquiry, verification, and comparison 369. What are the Code of Ethics for adjusters? - Correct answer Formal rules which impact on adjuster practices 1. Adjusters may not directly negotiate with a claimant who is represented by an attorney. 2. In interviewing witnesses, adjusters must avoid any actions tending to induce a suppression or deviation from the truth. A witness who requests a copy of a statement given must be provided with a copy. 3. Adjusters shall not give legal advice. 4. Adjusters shall not draft special releases; they are permitted only to fill in blanks of forms provided by the insurer. 5. Adjusters will not take advantage of an incapacitated claimant which would be to the detriment of the claimant. 6. Adjusters will not knowingly fail to advise claimants of their rights under contracts and laws of the state. 7. Adjusters will approach all aspects of the process with an unprejudiced and open mind, make truthful and unbiased reports, handle all processes with integrity and accept no remuneration other than that to which there is legal entitlement, and act with diligence and due dispatch in achieving proper disposition of claims. 8. The adjuster must put the duty for fair and honest treatment of the claimant above the adjuster's own interests, in every instance.