Insurance Policies and Coverage: A Comprehensive Guide, Exams of Insurance law

Download Insurance Policies and Coverage: A Comprehensive Guide and more Exams Insurance law in PDF only on Docsity! Insurance Adjuster Exam Questions and answers. Which kind of losses are covered under a standard fire policy? - Correct Answers Direct All fires are not covered by the Standard Fire policies, only those that: - Correct Answers are hostile and have a flame or glow At what time does a fire policy go into affect? - Correct Answers 12:01am standard time at the location of the insured's property A property is insured under two Standard Fire policies for $25,000 each. A fire causes $10,000 worth of damage. What is the maximum amount the insured may collect under each policy? - Correct Answers $5,000 A fire burning in the middle of the living room would be considered: - Correct Answers a hostile fire An insured's house is damaged by fire caused by a neighbor's negligence. The insurance company will attempt to recover damage from the neighbor. This is called: - Correct Answers subrogation Which of the following statements are true concerning requirements of the standard fire policy? - Correct Answers The insured must separate damaged from undamaged property in the event there is a loss AND If a loss occurs, the insured normally has 60 days to file a proof of loss with the insurer Which types of property are excluded from coverage under the basic fire policy? - Correct Answers accounts, currency, deeds, and securities Who is insured under the Standard Fire policy? - Correct Answers the named insured and his legal representatives An agreement which affords temporary insurance protection until the policy is issued is called: - Correct Answers a binder as a general rule, a complete fire insurance policy would be made up of: - Correct Answers the Standard Fire policy with one or more forms attached The one condition listed below which will not void a fire policy: a) false swearing b) misrepresentation c) over-insurance d) concealment - Correct Answers over-insurance replacement cost minus depreciation: - Correct Answers Actual Cash Value (ACV) The Standard Fire policy with an extended coverage endorsement attached covers which of the following: - Correct Answers riot A loss due to order of Civil Authority: - Correct Answers is excluded unless the loss occurs because of an order by Civil Authorities for the purpose of controlling a fire The term "unoccupancy" refers to the absence of : - Correct Answers persons from a building Suppose a fire occurs on February 26th. On April 30th, the insurance company notifies the mortgagee the insured has not filed a proof of loss. To protect their interest, the mortgagee must file a proof of loss within _________ days after what date? - Correct Answers 60 days after April 30th For recovery under the Standard Fire policy, a party must: - Correct Answers be named in the policy and show an insurable interest in the property at the time the loss occurs What is the requirement on how much experience one must have to be elected the insurance commissioner in Georgia? - Correct Answers None Once elected, how long is the insurance commissioner's term? - Correct Answers 4 years an insured's right to seek damages from someone at-fault may be may be transferred to the insurer under the policy's: - Correct Answers subrogation clause the Law of Large Numbers states that: - Correct Answers the more examples used to develop a statistic, the more reliable the statistic will be Which of the following about insurance policies are true? - Correct Answers policies are usually personal contracts The concept of restoring the insured to approximately the same economic position occupied before the loss is called: - Correct Answers indemnity which of the following is used to modify an insurance policy from its original form? - Correct Answers Endorsements an insurer formed under the law of a state of the United States other than the state where it is licensed, domiciled and chartered is: - Correct Answers a Foreign insurer careless driving because the driver knows he or she is insured is a: - Correct Answers Morale hazard oily rags left to accumulate in the garage is a: - Correct Answers physical hazard insurance policies are contracts of adhesion, which means: - Correct Answers terms of the contract are drawn up by the insurer and the insured simply adheres to the terms It is assumed that any oral agreements made before contract formation were incorporated into the written contract. Once formed, earlier oral evidence will not be admitted in court to change or contradict the contract. This is known as: - Correct Answers Parol Evidence Rule The two major types of insurers in the private sector are: - Correct Answers Stock and Mutual companies temporary contract of insurance that commits the insurer before before a policy is issued is called a: - Correct Answers binder a term that blocks all attempts to change conduct or reassert a right previously waived, and it usually applies after the other party has begun to rely on the conduct or waiver is known as: - Correct Answers estoppel property and liability insurers use different marketing methods. Which of the following are features of the independent agency system? - Correct Answers Agents can represent one or more insurers AND Agent owns renewal rights to policies Concealment is failure of the insurance applicant to reveal a material fact to the insurer. Which of the following statements must be proved before the insurer can deny a claim on the basis of concealment? - Correct Answers a concealed fact was known to be material by the insured AND the insured intended to defraud the insurer who is considered the first party to an insurance contract? - Correct Answers the Insured the insuring agreement summarizes the insurers obligations and conditions for loss payment. Which of the following is/are types of insuring agreements? - Correct Answers open peril policy when a person installs burglar bars and a fire alarm system, what method of managing risks has been undertaken? - Correct Answers Reduction All of the following could be covered under a named insured's personal auto policy, except: - Correct Answers A private passenger vehicle owned by the named insured's spouse who moved to a separate residence 5 months ago (b/c policy only covers up to 90 days; she's been gone 5 months) The physical damage section of the personal auto policy excludes losses arising from: a) flood b) earthquake c) animals d) mechanical breakdowns - Correct Answers d) mechanical breakdowns Which of the following causes of loss is covered by Other-Than-Collision Coverage written under a Personal Auto Policy? a) freezing b) electrical breakdown c) vandalism damage to tires d) upset - Correct Answers vandalism damage to tires Which of the following losses would be covered by Other-Than-Collision Coverage under an automobile policy? a) mechanical breakdown b) hail c) wear and tear d) upset - Correct Answers b) Hail What is the principle coverage under the Personal Auto Policy coverage Part D? a) liability coverage b) physical damage coverage c) uninsured motorist coverage d) medical payments coverage - Correct Answers b) Physical Damage Coverage How much will the Personal Auto Policy Coverage Part A pay towards an appeal bond? - Correct Answers unlimited to dollar amount All of the following are true about newly-acquired eligible vehicles, except: a) some coverage applies automatically to all newly acquired eligible vehicles b) comprehensive nor collision coverage is never automatically provided for newly acquired vehicles c) liability coverage for additional vehicles will be provided automatically only for 14 days d) if liability coverage applies to a replacement vehicle the coverage is automatic until the end of the policy term - Correct Answers b) comprehensive nor collision coverage is never automatically provided to newly acquired vehicles all of the following statements concerning the physical damage section of the personal auto policy are correct except: Under Uninsured Motorists Coverage, an insured can collect from his own liability insurer: - Correct Answers bodily injury and property damage he would be legally entitled to collect from an uninsured motorist An insured's auto is stolen and recovered 5 days later. If the insured claims transportation expenses $32.50 per day, how much will be paid under the covered peril? - Correct Answers $60.00, b/c there is a 48 hour waiting period, so they are eligible to receive payment after the first two days, making 3 days. You can get up to $20.00 per day. 3x20=60 Which of the following is not included in the policy conditions? a) the name of the parties to the contract b) amplification of definitions c) certain duties, responsibilities, rights and privileges of the parties to the contract d) agreed procedures under specified circumstances - Correct Answers a) the name of the parties to the contract If the named insured allows his son to use one of the vehicles covered under the personal auto policy (PAP), is the son an insured under the PAP even though he does not reside in the insured's household? - Correct Answers Yes, because the definition of "insured" includes any person using the named insured's covered auto Coverage A-Dwelling covers which of the following? - Correct Answers Materials located next to the residence for use in the construction of the dwelling when a loss is settled on a replacement cost basis, the insured receives: - Correct Answers the replacement cost of the property with no deduction for depreciation The condominium form HO-6 provides no dwelling coverage but provides the same coverage as what other form for personal property? - Correct Answers HO-2 (they're both Broad Form named perils) Which is excluded under a homeowner's policy? a) earthquake b) a dwelling insured under the HO-5 form and damage in a flood c) accidental and sudden discharge of water from plumbing system d) meat which spoils when refrigerator motor breaks down after many years of service - Correct Answers a, b, and d Coverage E of the Homeowner's Policy has a minimum limit of: - Correct Answers $100,000 How much coverage is applied to contents away from the premises under the dwelling building and contents broad form? - Correct Answers 10% of contents coverage Homeowner's insurance is a package policy combining two or more separate coverages into one policy. Which of the following are advantages of a package policy? - Correct Answers Efficiency, fewer gaps in coverage To obtain coverage for the dwelling under a homeowners contract, the insured must: - Correct Answers be the owner occupant All of the following types of personal property on each homeowner form are subject to a special limit of liability of $1,500, except: a) watercraft b) trailers c) securities, accounts, deeds d) firearms - Correct Answers d) firearms ($2500) in the homeowners policy, personal property used for business purposes: - Correct Answers is covered for up to $2,500 on the premises and up to $500 off the premises All of the following are additional coverages provided in addition to the stated limits of liability in a homeowners policy, except: a) claims expenses b) first aid to others c) loss assessment coverages d) personal injuries - Correct Answers d) personal injury All of the following risks would be eligible for coverage under a homeowner policy, except: a) a four family dwelling under construction which will be occupied by the owner b) an apartment rented by a tenant non-owner c) a small family farm d) a mobile home - Correct Answers c) a small family farm Replacement cost coverage for dwellings is available under: - Correct Answers DP-2 and DP-3 only HO-8 Basic Form of homeowner's policy is the only one that lets you: - Correct Answers insure a house for market value Which HO Form has the least named perils? - Correct Answers HO-8 Basic Which HO Form is for older houses? - Correct Answers HO-8 Basic Which HO Form has the most named perils? - Correct Answers HO-2 Broad Which HO Form is all risk, for high value/luxury homes? - Correct Answers HO-5 Comprehensive How many employees must an employer have to be required to carry workers compensation coverage? - Correct Answers 3 or more What loss of income payment can employees awarded workers comp receive? - Correct Answers loss of wages payable up to 66 2/3 of wages What is the waiting period to receive income benefits for workers compensation? - Correct Answers 7 days If employee dies from injury in workplace accident, will cover funeral costs up to: - Correct Answers $7500 What is the first page of the Workers Comp Policy called? - Correct Answers Information Page Does Coverage C of Dwelling Policy have a default limit? - Correct Answers no, it does not have a default limit Coverage D (rental loss) of Dwelling Policy limit is automatically _____% of Coverage A? - Correct Answers 20% Coverage E (additional living expenses) of Dwelling Policy limit is automatically ____% of Coverage A? - Correct Answers 20% DP-1 Basic Dwelling policy includes everything except Coverage _____ - Correct Answers Coverage E which coverages do DP-2 and DP-3 Dwelling policies include? - Correct Answers All of them Insuring Agreement Section - Correct Answers identifies the losses you have coverage for How many years of experience must you have to qualify to be Counselor? - Correct Answers 5 years experience (and take exam) Are stolen items covered under burglary damage? - Correct Answers No. Burglary policy only covers the actual house, NOT its contents Flooding - Correct Answers caused by acts of nature ONLY (would NOT include any plumbing issues) What would be covered if plumbing burst from old age? - Correct Answers the water damage only; not the plumbing expenses b/c they were gradual and expected What would be covered if plumbing burst from a mechanical defect? - Correct Answers The water damage only; the mechanical would be covered under separate warranty What would be covered if there was freeze damage to plumbing? - Correct Answers would cover everything (water damage and plumbing) b/c was sudden/unexpected What is the best dwelling DP form? - Correct Answers DP-3 Special DP-3 Special Dwelling Form - Correct Answers -all risk coverage, is the best -includes theft coverage Is rebating legal in Georgia? - Correct Answers No- it is illegal in GA Does dwelling policy cover theft? - Correct Answers it requires an endorsement to cover theft Does the Homeowners policy cover theft? - Correct Answers Yes- does NOT require an endorsement to do so If there is a loss (like in a house fire) and the insured removes some contents (like a tv) and relocates them (to neighbors house), the insurance company will cover these contents at new location (neighbors) for how long? - Correct Answers up to 30 days Do dwelling policies cover the cost of debris removal? - Correct Answers Yes, they all cover cost of debris removal, but ONLY if that debris resulted from a covered loss Which dwelling policies will cover collapse of a building? - Correct Answers DP-2 and DP-3 Do dwelling policies include liability coverage? - Correct Answers no How much will Fire Department Policy reimburse for charges? - Correct Answers up to $500 Is the Homeowners Policy a package policy? - Correct Answers Yes- it includes property coverages and liability coverages Is the Homeowners Policy or Dwelling Policy better? - Correct Answers Homeowners, b/c it is more efficient and has fewer gaps in coverage To qualify for Homeowners Policy: - Correct Answers house must be owner-occupied, can contain up to 4 family units If you get the endorsement for motor home coverage on the Homeowners Policy, it covers collision damage for moving home, and transportation costs up to: - Correct Answers $500 What are the requirements for a mobile home to qualify for Homeowners Insurance? - Correct Answers must be at least 40 feet in length, and 10 feet wide _________ is the only homeowners policy that lets you insure property for Market Value - Correct Answers HO-8 Basic Why is HO-5 Comprehensive the best form for house coverage? - Correct Answers B/c it has all risk for everything HO-4 Tenant Form - Correct Answers covers contents for renters; does not have Coverage A or Coverage B HO-6 Condo Broad Form - Correct Answers covers contents of people who own condo units Additions and Alterations - Correct Answers part of HO-6 Condo Broad Form; any upgrades you make to your condo would be covered under this policy which homeowners policy covers any renovations or upgrades a homeowner makes to their condo? - Correct Answers HO-6 Condo Broad Form--> Additions and Alterations To be negligent, one must: - Correct Answers be able to control the circumstances leading to other persons loss Coverage E of homeowners policy - Correct Answers basic limit for coverage is $100,000 per occurrence; works both on and off premises , follows you when you leave your house Coverage F homeowners policy covers medical expenses up to: - Correct Answers $1,000 per person, per occurrence Personal Umbrella Policy - Correct Answers Is a separate policy for liability claims - pays excess to personal automobile policy and homeowners policy - must carry higher limits on primary policy to qualify for umbrella policy -it wont cover your injuries, but will cover accident damages and bodily injuries to OTHERS Georgia Assigned Risk Auto Policy - Correct Answers Offered to drivers who can't get a policy with any other companies (ex: someone with several DUIs on record); this program can NOT deny anyone, has very high rates There are two options for auto policy terms: - Correct Answers 6 month & 12 month For a truck to qualify as a personal auto, must: - Correct Answers must be under 10,000 lbs. If it is over 10,000lbs. it must get a commercial auto policy Does a personal auto policy insure owned and leased vehicles? - Correct Answers Yes- personal auto policy insures BOTH owned and leased vehicles When driving a car as a sales person, the policy gets charged a ______ Rate - Correct Answers Business Use Rate Pleasure Rate - Correct Answers auto policy for retirees or people who work at home; has the lowest rate Can trucks ever qualify for personal auto insurance? - Correct Answers yes- if they weigh under 10,000lbs; BUT even if it does weigh less than 10,000lbs, if it is being used for business, MUST get commercial policy Can business-owned vehicles qualify for personal auto insurance? - Correct Answers NO To qualify for auto insurance, vehicle must: - Correct Answers must have at least 4 wheels; motorcycles are NOT eligible for auto insurance b/c only have two wheels Auto policies cover the insured in the U.S. and ________ - Correct Answers Canada If a spouse leaves his/her partner and takes the named vehicle with them, they will remain covered under the same auto policy for _____ days before the policy is terminated (grace period) - Correct Answers 90 days If you give someone permission to drive your car and they get in an accident, is this covered by your policy? - Correct Answers yes Occupying - Correct Answers While in, on, upon, entering onto, or exiting from the vehicle trailer - Correct Answers vehicle that can only move once connected to the automobile; trailer + car = one vehicle Newly Acquired Additional Vehicle: - Correct Answers got new vehicle but haven't yet told agent; reason for vehicle is to add to current policy; you have up to 14 days of automatic coverage from the date you got new vehicle to register it Newly Acquired Replacement Vehicle - Correct Answers insured acquired new vehicle and has not yet told insurance agent; reason for new vehicle is to replace another one; automatic coverage for 14 days from when you get new vehicle for physical damage; over coverages extend to end of policy date Coverage ___ is the only insurance policy required to have in GA - Correct Answers Coverage A (for damages caused to other persons)