Insurance Contracts and Claims, Exams of Insurance Economics

Download Insurance Contracts and Claims and more Exams Insurance Economics in PDF only on Docsity! Florida Claims Adjuster Exam Containing 206 Questions and Certified Answers/ 2024-2025. 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 - 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. Insurance applies separately to each insured as if other insureds did not exist. This is defined as: 1 | P a g e A. Severability B. Conditional C. Warranty D. None of the above - Answer: 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 - Answer: 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 - Answer: 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 - Answer: D. Liberalization The time frame is typically 60 days. 2 | P a g e C. 12,000 Months/12,000 Miles D. 12 Months/36,000 Miles - Answer: A. 36 Months/36,000 Miles Used vehicles: 12 Months/12,000 Miles If financial responsibility doesn't exist at the time of an accident, which of the following things must happen to avoid penalties? A. The legally valid claims of others must be satisfied (up to 10/20/10) B. The owner and operator must provide certification of future responsibility for future accidents C. Both A & B D. None of the Above - Answer: C. Both A & B As to required proof for future accidents by purchase of auto liability insurance, the insurer must make a filing (Form SR-22) certifying that coverage is in effect, and this certification must remain on file for __________ years: A. 1 B. 3 C. 4 D. 2 - Answer: B. 3 The Business Automobile Policy includes all of the following coverage forms except: A. The Garage Coverage Form B. The Trailer Interchange Coverage Form C. The Truckers Coverage Form D. The Business Auto Coverage Form - Answer: B. The Trailer Interchange Coverage Form 5 | P a g e Personal Injury Protection, or PIP, has a __________ per person, per accident limit. A. 10,000 B. 20,000 C. 1,000 D. Depends on the damaged property - Answer: A. 10,000 Used to insure businesses engaged in selling, servicing, repairing, parking or storing automobiles: A. Servicing Coverage Form B. Garage Coverage Form C. Truckers Coverage Form D. None of the Above - Answer: B. Garage Coverage Form The following examples are referred to as __________ liability limits: 25/50/25 or 10/20/10. A. Split B. Single C. Straight D. None of the Above - Answer: A. Split 10/20/10 = 10,000 per person injured 20,000 all injuries combined 10,000 property damage Example of straight liability limit = $30,000 6 | P a g e 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 - Answer: 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 - Answer: 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 - Answer: C. Age & Gender of Insured On a Homeowner's Policy, covers items that are not permanently attached to the dwelling. This is defined as: 7 | P a g e 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 - Answer: 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 - Answer: 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 10 | P a g e D. None of the Above - Answer: C. Condominium Unit Owners Form Does not cover buildings since coverage would typically be provided under the Condo Association coverage form issued. 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 - Answer: D. Commercial Loss Schedule Also included: Declarations, Causes of Loss Form, Endorsements 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 - Answer: A. Condominium Association Form This, along with Condo Unit Owners Form, is located under Condo Coverage. 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 - Answer: C. Commercial Property Insurance 11 | P a g e (the question is the definition for this term) 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 - Answer: C. 45 Also, notice must state reasons the policy is not to be renewed. 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 D. None of the Above - Answer: A. Value Reporting Replacement Cost is incorrect b/c it calculates monetary value of one's personal property 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 12 | P a g e 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 - Answer: 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 - Answer: 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 - Answer: 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. 15 | P a g e 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 - Answer: 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 - Answer: 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 - Answer: B. Known Loss 16 | P a g e 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 - Answer: 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 - Answer: 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 - Answer: A. Up to $750,000 in Death Benefits 17 | P a g e 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 D. None of the Above - Answer: D. None of the Above Samantha is not an employee of the barbecue joint; Workers Comp does not apply. 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 - Answer: C. Retrospective Rating Plan Often referred to as Cost-Plus Programs 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 - Answer: A. 100/100/500 $100,000 for all claims in each accident $100,000 per employee for disease $500,000 for all disease claims 20 | P a g e 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 - Answer: 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 - Answer: A. The Discovery Period Crime Insurance is _________ over any other Insurance coverage. A. Primary B. Secondary C. Excess D. Recess - Answer: 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 21 | P a g e B. Loss Sustained C. Sustained Loss D. None of the Above - Answer: 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 - Answer: 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 - Answer: 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: 22 | P a g e 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 - Answer: 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 C. Surety D. All of the Above - Answer: A. Principal Obligee - needs guarantee principal will perform Surety - guarantees performance between principal and obligee This form of bond is required to accompany a bid for a contract which will require that the successful bidder furnish further bond if awarded the job: A. Bid B. Performance C. Court D. Maintenance - Answer: A. Bid May act as part of the bonding party and agrees to reimburse the surety for any loss it may suffer from having bonded the principal: 25 | P a g e A. Indemnitor B. Surety C. Obligee D. None of the Above - Answer: A. Indemnitor Known as "fourth party", may put up collateral Which of the following are parties to a Bond? A. Principal B. Obligee C. Surety D. All of the Above - Answer: D. All of the Above Principal - undertakes to perform/fulfill Obligee - guaranteed principal will perform Surety - guarantees performance *Indemnitor - may act as additional party; agrees to reimburse surety for any loss This type of bond covers streets, sidealks, sewers, etc.: A. Sidewalk B. Subdivision C. Supply D. None of the Above - Answer: B. Subdivision Falls under Maintenance Bond When a person has lost stock certificates, bonds or similar instruments, a bond is generally required by the issuing company to reissue the document. This is known as a: A. Public Official Bond 26 | P a g e B. Lost Instrument Bond C. Public Instrument Bond D. None of the Above - Answer: B. Lost Instrument Bond Also guarantees to save issuer from any loss growing out of lost instrument A __________ is a selected group of hospitals and medical practitioners in a given area who have joined together in an effort to reduce medical costs. A. HMO B. Major Medical Insurance C. Coinsurance D. PPO - Answer: D. PPO Most plans provide that emergency treatment will be paid even if treated party does not go to service provider on approved list. Define the coverage that pays a flat amount per day for hospitalization, regardless of expenses or other insurance: A. Hospitilization B. Hospital Indemnity C. Hospital Services D. All of the Above - Answer: B. Hospital Indemnity 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 - Answer: B. Waiver of Premium 27 | P a g e C. Accident Policy D. All of the Above - Answer: 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 - Answer: 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 - Answer: 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 30 | P a g e D. FRPCJUA E. FAJUA - Answer: 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 - Answer: 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 - Answer: C. This practice is unacceptable and may result in the suspension or revocation of the Customer Representative's license 31 | P a g e Unlike a Customer Representative, a General Lines Claim Adjuster need not be appointed with the Department of Financial Services. A. True B. False - Answer: 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 - Answer: D. Sliding 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 - Answer: D. 24 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 B. False - Answer: B. False 32 | P a g e C. Covered Property D. Peril - Answer: B. Salvage Efficient disposal of salvage reduces amount of loss to either insured or insurer The voluntary or intentional relinquishment of a known right is defined as a(n): A. Waiver B. Estoppel C. Avoidance of Performance D. None of the Above - Answer: A. Waiver The law recognizes two types: express and implied. 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 - Answer: D. All of the Above The adjusters basic activities in claims handling are: A. Investigation B. Evaluation C. Negotiation D. All of the Above - Answer: 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 35 | P a g e 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 - Answer: 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 - Answer: 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 - Answer: 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 36 | P a g e C. Public D. None of the Above - Answer: 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 - Answer: 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 - Answer: 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 - Answer: 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 37 | P a g e B. Property and Casualty C. Workers Compensation Insurance D. All of the Above - Answer: D. All of the Above Also: motor vehicle physical damage and health insurance 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 - Answer: B. Salvage It cannot be restored to prior condition 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 - Answer: A. Third Party Claim 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 40 | P a g e D. None of the Above - Answer: C. Home State 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 - Answer: B. Derelict 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 - Answer: A. Customer Representative (4-40 license) 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 C. Registered D. Certificate of Authority - Answer: A. Appointment Licensees are given authority through the appointment process 41 | P a g e The Department may issue a nonrenewable temporary license authorizing the appointment of a general lines insurance agent, life agent, or an industrial fire or burglary agent, for a period not to exceed: A. 1 Year B. 6 Weeks C. 1 Month D. 6 Months - Answer: D. 6 Months How many continuing education hours must an insurance adjuster complete every 2 years? A. 12 B. 20 C. 24 D. 14 - Answer: 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 - Answer: 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 42 | P a g e D. None of the Above - Answer: 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 - Answer: D. Authorized Actual Cash Value - Answer: Replacement cost minus depreciation Subrogation - 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 Loss Payee Clause - 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 Mortgagee Clause - Answer: 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 - Answer: Negligence of the insured 45 | P a g e Other Structures - Answer: Homeowner's Policy, covers items not permanently attached to main dwelling (shed, fence, etc.) Commercial Inland Marine - Answer: 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 - Answer: Covers much higher limit and goes above/beyond claims directly relating to home and auto; protects assets from unforeseen events Known Loss - Answer: Prevents insured from coverage if insured knew the loss was probable at time of contract Commercial Property Insurance - 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 Value Reporting - Answer: Limit of coverage set at an amount higher than expected peak values Employee Theft - Answer: Provides coverage for loss or damage to money, securities, and other property resulting from theft committed by an employee Bid - Answer: Form of bond required to accompany a bid for a contract which will require that successful bidder furnish further bond if awarded job. 46 | P a g e Agreement to fulfill a contractual obligation used frequently in construction and supplying goods PPO - Answer: (Preferred Provider Organization) Selected group of hospitals and medical practitioners in given area who have joined together in an effort to reduce medical costs HMO (pre-paid fixed fee) - Answer: (Health Maintenance Organization) Provides comprehensive health services to its members for a prepaid fixed fee equivalent to an insurance premium Domestic - Answer: Insurer formed under laws of this state Foreign - Answer: Insurer formed under laws of another state, district territory, or commonwealth of U.S. Alien - Answer: Insurer other than domestic or foreign (outside U.S.) Sliding - Answer: Selling an item and stating that it is required by law Waiver - Answer: Voluntary relinquishment or surrender of some right or privilege Fiduciary - 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 Evaluation - Answer: Establishing a dollar value on a claim. 47 | P a g e 2. owner/operator must provide certification of financial responsibility for future accidents What is PIP and how may it apply to a given scenario? - Answer: 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? - 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. What are the basic PIP benefits? - Answer: 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)? - Answer: PIP applies to Florida residents if struck by insured's motor vehicle while not occupying a self- propelled vehicle (a pedestrian). 50 | P a g e 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? - Answer: 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? - Answer: 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? - Answer: 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? - Answer: The Department of Highway Safety and Motor Vehicles What are the characteristics of a Homeowner's policy? - Answer: -protects against economic loss to residence and household property and legal liabilities 51 | P a g e -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? - Answer: -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? - Answer: 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? - Answer: Anyone who would suffer an economic loss from an adverse happening to the property What do the Declarations of a policy outline? - Answer: 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? - Answer: -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 52 | P a g e What types of insurance licenses are offered by the Department and how do they differ? - Answer: 1. General Lines Agent 2-20: licensed to write property/casualty, surety or health insurance. 2. Customer Representative 4-40: must be licensed, appointed by a General Lines Agent and may assist in transactions in the OFFICE ONLY 3. Limited Customer Representative 4-42: must be licensed, appointed by a General Lines Agent and transact AUTO insurance in the OFFICE ONLY. 4. All Lines Claims Adjuster 6-20: investigates, Evaluates and Negotiates Claims What are some reasons for suspension, revocation, or termination of a license? - Answer: 1. Transacting insurance outside of scope of one's license ►For example, an individual cannot sell life insurance if he or she has a Customer Service license but has not obtained a life license. 2. Misrepresentation or Fraud. 3. Participating in unfair methods of competition. ►Using discriminatory practices, making false entries on an insurance application or defaming others. 4. Sliding: Selling an item and stating that it is required by law (when it is not). 5. Demonstration of unworthiness or lack of fitness. 6. Misappropriation of funds. 7. Failure to inform Department of Financial Services, within 30 days, after pleading guilty or no contest to a felony. Compare/contrast different types of adjusters. - Answer: 1. Independent Adjuster - self-employed and not affiliated with either insurers or bureaus 55 | P a g e 2. Company/Staff Adjuster - salaried employee under supervision of home, branch, regional claims department of insurers 3. Public Adjuster - represents the financial interests of the insured named in the policy 4. Claims Adjuster - one who is involved in the investigation, adjustment, negotiation and/or trial preparations of claims arising under insurance policies 5. Bureau Adjuster - agent of adjustment bureau which serves multiple company clients *Independent and Bureau are both "Fee Adjusters" What is an Insurance Contract? - 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 What are the components that make up the investigation process? - Answer: Inquiry, verification, comparison What are the Code of Ethics for adjusters? - 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. 56 | P a g e 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. 57 | P a g e