Understanding Property Insurance: Valued Policy Law, Coverages, and Exclusions, Exams of Insurance law

Download Understanding Property Insurance: Valued Policy Law, Coverages, and Exclusions and more Exams Insurance law in PDF only on Docsity! LA Claims Adjuster Property and Causality Practice Exam 1 Questions and Answers. ______in the property and would suffer a financial loss if the property were damaged by an insured peril, their family members (names need not be listed in the policy), and others such as a lien holder, for example, the bank that holds the mortgage on a house. - Correct answer Insurable Interest ____establish and define the causes of loss (or perils) for which coverage is provided under the form. (Please do not confuse the "cause of loss" forms with the "proof of loss" form, which is the form submitted to the insurance company by the insured when they have a claim.) - Correct answer Cause of Loss Forms This form is a "named peril" form, that specifies the perils insured against. The perils listed on this form will usually be, as the name implies, the most basic perils. This form will only cover those perils that are specifically named in the form. - Correct answer Basic Cause of Loss Form This form is also a "named peril" form and provides coverage for the perils named in the basic form, but adds additional perils and names them on the form. - Correct answer Broad Cause of Loss Form ___form is an "open peril" or "all risk" form that provides coverage for all risks of loss, from any peril, except those that are specifically excluded in the policy. Remember for your state licensing exam that when coverage is provided under an open peril form, the burden of proof lies with the insurance company to prove that the cause of loss is excluded. - Correct answer Special Cause of Loss Form This property insurance provision allows either the insured or the insurance company to demand a binding appraisal of the damaged property in the event of a dispute as to the value of the property. The clause also establishes the required appraisal procedure. - Correct answer Appraisal Clause A provision in property insurance policies stating that the insurance company and the insured will share in the loss incurred by the insured, based on a fixed percentage of the value of the insured property. In addition, the insured will face a penalty, and must pay a higher percentage on the loss if they do not insure the property for a certain percentage of its full value (usually at least 80%). Sometimes, in Dwelling & Homeowners policies this clause is called the "Loss Settlement Clause". - Correct answer Coinsurance Clause This term, when referring to property insurance, is a doctrine stating that if loss or damage to property occurs as a result of more than one cause, one of which is covered under the policy, while the other cause is not covered, the damages are still likely to be compensated by the insurer. However, this doctrine is being revisited frequently in the courts and a number of recent cases have been decided in favor of denying the claim. - Correct answer Concurrent Causation This policy provision states that if part of a pair or set is lost or damaged, the loss will be valued as a fair proportion of the total value of the set. It gives consideration to the importance of the damaged article to the set. The insurer is not required to pay for the value of the whole set - Correct answer Pair or Set Clause This provision protects the interests of the bank/financial institution that holds the mortgage on the insured property. This clause also grants coverage to the mortgagee, even if the insured intentionally caused the loss. The bank can also provide a proof of loss or pay the insurance premiums in case the insured cannot, or refuses to do so. The mortgagee must also be advised if the contract has been cancelled or nonrenewed by the insurer - Correct answer The Standard Mortgage Clause (Mortgagee Rights) which is a combination of the proximate cause of loss. This can serve as a common law defense. - Correct answer Intervening Cause States have enacted laws as to when certain types of lawsuits must be filed. - Correct answer Statute of Limitations - As we have discussed, negligence has to be present to hold someone legally liable for an action. There are some exceptions, however. Absolute liability is imposed by law on those participating in certain activities that are considered especially hazardous. Absolute liability is most frequently applied to activities involving - Correct answer Absolute Liability This is a situation when a person is held responsible for the negligent acts of another person. A common form of vicarious liability involves the relationship between an employer and an employee. Often, the negligence of an employee can be imputed (charged) to an employer, because the employer has control over the employee. - Correct answer Vicarious Liability (imputed) These are the damages the injured party receives for the "economic losses" caused by the injury, such as medical expenses and loss of wages. - Correct answer Compensatory Damages (Special Damages) Type of compensatory damages that reimburse the injured party for "intangible, non-economic" items such as pain and suffering and disfigurement, and life altering issues such as loss of mobility and loss of consortium not readily defined by actual incurred expenses. - Correct answer General Damages are not always recoverable by the injured party because they are not intended to compensate for any loss. Instead, they are often awarded by the court and intended to punish the defendant. - Correct answer Punitive Damages The____pays up to one amount as the maximum limit of liability of the insurer with respect to any one accident/occurrence involving either or both bodily injury and property damage. - Correct answer Single limit for bodily injury liability claims are expressed by two figures. The first limit represents the maximum payable for each person injured per occurrence for bodily injury and the second limit is applicable to the claims of all persons injured in the accident or occurrence; in other words, multiple injuries (but no more than the eachperson limit). There is another separate limit for damage to property of others known as property damage. Today, split limits are almost exclusively used in personal automobile policies. - Correct answer Split limits ___is the limit stated in the policy representing the total amount for all claims paid during the policy period. Once the ____ has been met, the insured is without coverage. - Correct answer The aggregate limit is a term used in liability policies to refer to items such as firstaid expenses, premiums for bonds, pre- and post-judgment interest, and travel expenses incurred by the insured, at the request of the insurance company, in defense of a claim. Under some liability policies, supplementary payments are "in addition to" the liability limits of the policy, under other policies, supplementary payments reduce the limit of coverage. This will be pointed out when we cover the types of liability policies later in the course. - Correct answer Supplementary Payments can be a serious issue with liability policies. Many liability policies require an "underlying" coverage to be in force, before the excess liability coverage will be triggered. When the underlying policy and the "excess" policy have different inception and expiration dates, a denial of claim could occur. - Correct answer "Nonconcurrency" Loss Settlement - All DP policies settle losses to personal property at a____ - Correct answer actual cash value Losses to dwelling and other structures however, are paid on a ____ with no deduction for depreciation as long as the insured carries insurance equal to 80% or more of the full replacement cost of the building at the time of the loss. The DP-1 form pays for both building and contents losses on an actual cash value basis only. Under the Loss S - Correct answer replacement cost basis (except the DP-1), If there is other insurance covering the property the insurer will only pay its percentage of the loss as their limit bears to the total amount of insurance. - Correct answer Other Insurance and Service Agreement This clause provides that if a loss payee is listed in the declarations for insured personal property, the loss payee is considered an insured with respect to that property and will be notified in writing if the insurer cancels or nonrenews the policy. - Correct answer Loss Payable Clause Personal Liability Coverage Endorsement - There are two major areas of liability exposure that can be covered under the dwelling form: - Correct answer a. Personal; and b. Business - For specified permitted occupancies and operations Under a Property or Casualty policy, the Declarations page will include___ - Correct answer a description of the property, or a schedule of the coverage parts in CGL Deals with ___occurring away from the insureds principal place of business, while the operations are being preformed. - Correct answer Operations In CGL A company that manufactures and sells specific products would need products coverage. A contractor would need completed operations coverage - Correct answer Products and Completed Operations In CGL Protects the insured for bodily injury and property damage occurring away from the premises owned or rented to the insured and arising out of products made or sold by the insured - Correct answer Products coverage Products coverage legal responsibility must be based on ___ - Correct answer Breach of Warranty Strict Liability Negligence is triggered when the business is liable for an injury caused by "work" that has been completed. The "operations" are considered to be completed at the earliest of the following: - Correct answer completed operations coverage In CGL _____ is liability of another that an insured has assumed in a written contract. The policy will only provide coverage for an "insured contract." An "insured contract" is defined by the CGL policy as incidental contracts associated with the insured's business such as lease of premises, elevator maintenance agreements, sidetrack agreements with railroads, municipalities, easement agreements, civil authority type agreements and indemnity agreements sometimes known as "hold harmless" agreements. This coverage excludes contractual liability for architects, engineers or surveyors. - Correct answer Contractual Liability for "Insured Contracts" CGL "Insured Contracts" - Correct answer L Lease Agreement E Easement A Agreement with a Municipality S Sidetrack Agreement E Elevator Maintenance Agreement CGL Coverage A exclusion Coverage does not apply to bodily injury or property damage expected or intended by the insured. This exclusion has an exception that covers bodily injury resulting from the insured using reasonable force to protect persons or property. - Correct answer Expected or Intended Injury CGL coverage A exclusions There is no coverage for bodily injury or property damage in cases where the insured must pay damages based on its having assumed liability in a written contract or agreement. However, coverage does apply to liability for damages that: The insured would have had if there was no contract or agreement. That the insured assumed in an "insured contract or agreement". The bodily injury or property damage must occur after the contract or agreement was executed. - Correct answer Contractual Liability - CGL coverage A exclusions The insurance company does not pay for bodily injury or property damage that any insured may be liable for because of: Causing or contributing to the intoxication of any person; o Furnishing alcoholic beverages to a person under the legal drinking age or who is already under the influence of alcohol; o Any law relating to the sale, gift, distribution, or use of alcoholic beverages. This exclusion does not apply if the named insured is not in the business of manufacturing, distributing, selling, serving, or furnishing alcoholic beverages. Additionally, this exclusion does not apply to permitting a person to bring alcoholic beverages on the named insured's premises for the purpose of consuming them and does not by itself cause the operation to be in the business of selling, servicing or furnishing alcoholic beverages; o Negligence by any insured because of the hiring, employing, training or su - Correct answer CGL coverage A exclusions There is no coverage for any requirement or obligation of the insured imposed by any workers compensation, disability benefits, unemployment compensation or similar law. - Correct answer Workers Compensation and Similar Laws CGL coverage A exclusion Bodily injury to an employee of the insured as a result of his or her employment by the insured or performing duties in conjunction with the conduct of the insured's business is excluded. Bodily injury to the spouse, children, parents, brothers or sisters of that employee as a consequence of the employee's bodily injury is also excluded. This exclusion applies whether the insured is liable as an employer or in any other capacity, or whether it must share damages with or repay someone else who must pay damages because of the injury. However, it does not apply to liability the insured assumes under an insured contract. - Correct answer Employer's Liability CGL coverage A exclusion___ are any solid, liquid, gaseous, or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste also includes materials intended for recycling, reconditioning or reclamation. Coverage does not apply to bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants: - Correct answer Pollution CGL Coverage Excl Coverage does not apply to bodily injury or property damage that arises out of transporting mobile equipment by an auto that any insured owns, operates, Copyright Infringement Liability resulting from damage caused to a business by the misrepresentations of another. Also can include theft of a copyrighted trademark. - Correct answer Advertising Injury Liability CGL Coverage B Exclusions - Correct answer -Knowing Violation of Rights of Another -Material Published with Knowledge of Falsity -Material Published Prior to Policy Period -Criminal Acts -Contractual Liability -Breach of Contract -Quality of Performance of Goods -Wrong Description of Prices -Infringement of Copyright, Patent, Trademark or Trade Secret -Insureds in Media and Internet Type Business -Electronic Chatrooms or Bulletin Boards Unauthorized Use of Another's Name or Product -Pollution • Pollution-Related Loss • War • Recording and Distribution of Material or Information in Violation of Law - CGL This insurance policy will pay medical expenses of others invitees if there is no negligences from insured, incurred within one year of the accident. The occurrence must have taken place during the policy period and have: • Been caused by an accident; • Occurred on premises owned or rented by the insured; • On "ways" next to premises the insured owns or rents; • Result from the insured's operations. - Correct answer Coverage C - Medical Payments to Others Coverage C exclusions - Correct answer • Any Insured - To any insured, except "volunteer workers." • Hired Person - To a person hired to do work for, or on behalf of, any insured or a tenant of any insured. • Injury on Normally Occupied Premises - • Workers Compensation and Similar Laws - • Athletics Activities - Products-Completed Operations Hazard • Coverage A Exclusions - Those exclusions that apply under Coverage A liability coverage. Covers fire damage resulting from the negligence of the insured to a non- owned premises rented by the named insured or temporarily occupied by the insured with permission of the owner. This coverage is also known as "fire damage legal liability". A modest limit (usually $50,000) is included in the policy for this coverage and losses are deducted from the "aggregate limit." For that reason, a separate policy to cover the insured's negligence in causing a fire or explosion at a building he does not own is often recommended. - Correct answer Damage to Premises Rented to You Commercial General Liability - Supplementary Payments - Correct answer Payments for these items are in addition to the policy limits. • Expenses that the insurer incurs for defense and investigation of claims; • Up to $250 of cost of bail bonds required because of accidents or traffic law violations arising out of the use of any vehicle to which the bodily injury liability coverage applies; The cost of bonds to release attachments (only for bond amounts within the limit of insurance). Insurer does not have to furnish these bonds; • Reasonable expenses incurred by the insured at the insurer's request including loss of earnings up to $250 per day; • All costs taxed against the insured in a suit; • Prejudgment interest awarded against the insured; • All interest on the full amount of any judgment after entry of the judgment and before the insurer has paid. This could occur if the insurer appeals a verdict made against their insured. During the appeal process, the court will cha in CGL If the insured becomes____ or insolvent, the insurer cannot refuse to pay claims that may be covered under this policy. - Correct answer Bankruptcy CGL Duties in the Event of Occurrence, Offense, Claim or Suit - Correct answer o Must give prompt notice of a claim, including "how", "when", "where" the occurrence or offense too place; names and addresses of injured people or witnesses; and the nature and/or location of any injury or damage; o Must send to the insurer any demands, notices, summonses, or legal papers received in connection with the claim or "suit"; o Must give insurer authorization to obtain records and other information; o Must cooperate with the insurance company in any manner; o Must assist the insurance company in the enforcement of any subrogation rights; o May not make any voluntary claim payment, unless at his own expense, except first aid, without the insurer's permission. In CGL The insured cannot sue the insurance company unless all conditions of the policy have been met, nor, bring the insurance company into a suit later than one year. - Correct answer Legal Action Against Us If the insured has more than one CGL policy, the following are ways the insurance company can respond to a claim (will depend on how the other policy is structured):o Primary Insurance - This policy will respond to a loss until the limits of insurance have been exhausted unless more than one policy is in effect, then the company will pay its proportional share of the loss or contribute in equal shares if the other policies respond in like kind. o Excess Insurance - This policy will respond after other policies have exhausted their limits of insurance if an endorsement is attached to the policy. This means that this coverage is excess any time the named insured is an additional insured under another coverage form, regardless of whether or not the additional insured is specifically endorsed to that coverage form - Correct answer Other Insurance - CGL premiums for Coverage A are considered a deposit premium only. The insurer will compute an earned premium at the end of each period by making an It does not, however, provide coverage for cleanup costs associated with pollution losses. - Correct answer Pollution Liability Coverage Extension Endorsement CGL Covers certain pollution losses excluded under the standard form, but this form does not provide coverage for clean- up. - Correct answer Pollution Liability Limited Coverage Form CGL Covers claims arising from pollution releases at, on, or emanating from a specific scheduled location. Examples of a "location" can be a tract of land or a specified storage tank. Coverage enhancem - Correct answer Pollution Liability Coverage Form - CGL Covers insureds that are in the liquor business. It covers liability for contributing to a person's intoxication or for providing liquor in violation of the law for businesses engaged in the liquor business. CGL Coverage A specifically excludes this liability only for insureds in the business of selling or furnishing alcoholic beverages, which is sometimes called dram shop liability - Correct answer Liquor Liability Coverage Form - CGL A land motor vehicle, trailer, or semi-trailer, designed for travel on public roads, including any attached machinery or equipment. It does not include mobile equipment. Certain self propelled vehicles are not mobile equipment and are considered autos: - Correct answer Automobile CGL Any of the following types of land vehicles, including any attached machinery or equipment - Correct answer Mobile Equipment Loading and unloading CGL - Correct answer After is accepted for movement into or onto an aircraft, watercraft or automobile. while it is on or on an aircraft watercraft or automobile while it is being moved from ____is a formal request to an insurance company requesting a payment, based on the terms of an insurance policy (contract) - Correct answer Insurance claim _____is made by a policyholder, insured, or beneficiary, directly against the insurance company. First-party claims are filed under policies such as Dwelling or Automobile Physical Damage - Correct answer First-party claim _____is made against an insured who is covered by a liability policy, such as Commercial General Liability or Malpractice insurance policies. It's important to remember that policies such as Homeowners, Personal Auto, and Businessowners policies contain both first and third party coverage - Correct answer Third-party claim Insurance claims adjusters inspect and investigate property damage or personal injury claims to determine the amount an insurance company is liable to pay for a loss. - Correct answer Claims Adjusters Independent adjuster works for - Correct answer insurance company Public adjuster works for - Correct answer policy holders works on behalf of an insurance company and is not permitted to adjust claims on behalf of the individual policyholder - Correct answer Independent Adjuster may be hired by an insurance company as a "staff or company" adjuster working in the home office of the insurance company, or a "field" adjuster who adjusts claims for an insurer in a particular location. Staff adjusters can also include "specialty" adjusters such as workers compensation adjusters, accident & health adjusters, automobile claims adjusters, and other specialties as licensed per state law. - Correct answer Independent Adjuster Independent adjusters may also work for adjusting companies that deploy teams of adjusters to work on behalf of an insurer in the case of a catastrophe such as a hurricane, flood, or tornado. These adjusters are referred to as ____ - Correct answer "catastrophe" or "CAT" adjusters. "Property & Casualty Adjuster", "General Lines Adjuster" or "All Lines Adjuster" all are ____ - Correct answer Independent Adjuster ____ is an independent contractor representing solely the financial interests of the insured named in the policy. The insured, and not the insurance company, pays the public adjuster for his or her services. - Correct answer Public Adjuster State laws prohibit public adjusters from adjusting liability type claims and restrict their authority to the adjustment of ____ - Correct answer property insurance claims As a "fiduciary agent", an adjuster must represent the interests of ____ - Correct answer "the principal" A licensed adjuster, while handling claims must be very careful not to drift into an area where they find themselves engaged in the ___ - Correct answer unauthorized practice of law The adjuster may provide the information that was gained through the claims investigation, to the principal, but ____advise the principal as to how the claim should be settled. The adjuster may attempt to settle the claim, but only at the monetary value the principal is willing to pay, or to accept. - Correct answer cannot legally The adjuster may express an opinion on the extent of damage or injury, and the monetary value of the investigated claim, but only as ____ - Correct answer part of a factual analysis. The adjuster must manage claims in compliance with all state laws and regulations, that the policy actually covers the type of loss being claimed. The first step in the investigation of a claim IS ALWAYS to verify coverage under the policy. - Correct answer Losses Covered Investigation of Claim first Step - Correct answer verify coverage under the policy part of investigation With the exception of certain liability policies that cover risks on an "occurrence" basis, if a claim is received for injury or damage that occurred before the inception date or after the expiration date of the policy, the claim will not be covered - Correct answer Policy Period part of investigation The injury or damage must have occurred within the policy territory covered by the policy - Correct answer Coverage Territory part of investigation For first-party claims, insurable interest must exist - Correct answer Insurable Interest Evaluation of the claim includes utilizing the information gathered during the investigation to determine the extent of the damage or injury and how much of the claim is covered by the policy. The adjuster will also determine whether or not other insurance covers any part of the claim, the extent of the insured's liability, if any, and finalizing the valuation of the claim. - Correct answer Claims Evaluation step 3 This is when the claim is either paid or denied. Claims evaluation involves setting aside claim reserves based on information gathered during the investigation and using the valuation methods determined by the policy provisions to determine the amount of the claim. - Correct answer Claim Disposition (Settlement) This report documents the results of the initial fact-finding investigation and identification of the circumstances of the claim. - Correct answer Initial or Field Report The adjuster will make interim reports to document the investigative work that has been completed. This report may include a status on deposing witnesses, obtaining estimates, gathering additional medical information, determining special damages, etc. - Correct answer Interim Report This is the final report containing all the facts, evidence and disposition of the claim. In this report, it is usually determined if the insurer is willing to argue the case in court or if the claim will be settled without litigation. - Correct answer Full Report It is important to remember that the insurer ___settle a claim without the insured's consent. The only exception to this rule is that some malpractice policies offer an option of allowing the insured to grant permission before the insurer is permitted to settle the claim. - Correct answer can Results in immediate payment when the claimant signs a release relinquishing his or her right to sue. This is what the adjuster hopes to achieve. - Correct answer Full Release Settlement General damages, as well as special damages incurred to date, are paid immediately. The claim is left "open" for payment of future "specials" such as an additional visit to the physician. - Correct answer Scheduled Payment Release or Open-Ended Release The bills presented are paid with no attempt to obtain a separate release, although the wording on the draft or check may also serve as a form of release. After a certain amount of time has passed with no further contact with the claimant, the file is considered closed. - Correct answer No Release or Walk-Away Relieves the financial burden on the claimant by making certain payments to the claimant, even before the claim is negotiated. Advanced payments are subtracted from the final settlement. - Correct answer Advanced Payment This type of payout is generally reserved for large settlements. The claimant receives payment in set installments over a period of time instead of a lump sum. Structured settlements may call for part of the full amount to be paid as a lump sum. - Correct answer Structured Settlement Includes provisions for rehabilitative treatment of the claimant. - Correct answer Rehabilitation Most claims adjusters are given draft authority by the insurers to expedite the payment of claims. The insurer will normally limit the draft authority in terms of the limit that can be paid and the lines of insurance to which it applies. The larger more complicated claims would normally be handled by senior claims management and payment made at that level. - Correct answer Draft Authority Most policies contain a clause called "Transfer of Rights of Recovery Against Others to Us". This provision defines the subrogation rights under the policy when the insurer makes a payment to, or for, any person or organization, the named insured or any other. If payment is made under the policy and there is a right to recover damages from a third party, that right is transferred to the insurer to the extent the payment of the claim has been made. The insurer also attempts to collect the deductible, if any, paid by the insured. - Correct answer Subrogation Procedures An agreement between the insurance company and insured, preserving the insurance company's rights without citing the policy the resale value of that vehicle will be less than a comparable vehicle that has not been damaged. The damage to the vehicle results in a "diminution", or "reduction" in market value even after the repairs have been completed. The owner of the vehicle may make a first or third party claim to recover their "diminution in value" loss. - Correct answer Diminution in Value Claims The resolution of disputes in ways other than those involved in the traditional judicial process. Negotiation, mediation, and arbitration are forms of ___ - Correct answer Alternative Dispute Resolution (ADR) The unfair claims settlement practice act was created and published by ____ - Correct answer The national Association of Insurance Commissioners NAIC The penalties for violating an unfair claim settlement practice is set be ____ - Correct answer State Laws - If considered necessary by the Commissioner of Insurance, the Department may issue a limited claims adjuster license to an applicant in the manner otherwise provided for the issuance of a license under this section. The claims adjuster license shall specifically limit the kinds of insurance that may be handled by the person. The claims adjuster shall not adjust insurance claims other than those for which the adjuster is specifically licensed - Correct answer Limited Claims Adjuster License - Unless denied licensure pursuant to state law, a nonresident person may receive a nonresident claims adjuster license upon complying with state requirements - Correct answer Nonresident Claims Adjuster License - Nonresident Claims Adjuster License req. The person is currently licensed as a resident claims adjuster, and if an individual_____. If the home state does not require examinations, then the individual shall pass the examination required for residents of Louisiana. The person has submitted the proper request for licensure along with the required fees. The person has submitted or transmitted to the Commissioner of Insurance the appropriate completed application for licensure The person's home state awards nonresident claims adjuster licenses to residents of Louisiana on the same basis. - Correct answer has passed a claims adjuster examination, and is in good standing in the home state. The Commissioner of Insurance may verify the adjuster's licensing status through the _____, its affiliates, or subsidiaries. - Correct answer producer database maintained by the National Association of Insurance Commissioners (NAIC) A claims adjuster license will remain in effect unless revoked, terminated, suspended, or denied renewal or reinstatement, as long as the request for renewal has been filed, the required fee has been paid, and any other requirements for license renewal are met by the due date. - Correct answer Expiration Every licensed claims adjuster shall file an application for renewal of his license every two years, by notifying the Commissioner of Insurance using methods prescribed by the Commissioner of Insurance, of the licensee's intention to continue his license - Correct answer Renewal The licensee must inform the Commissioner of Insurance by any means acceptable to the Commissioner of Insurance of a change of address, change of telephone number, change of legal name, or change of information submitted on the application____ Failure to file a change within the required time shall subject the licensee ___ to a per violation or other fine as may be authorized by law. Any person against whom a penalty has been levied shall be given due notice of such action. Upon receipt of this notice, the licensee may apply for and shall be entitled to a hearing - Correct answer within 30 days of the change $50.00 An insurance producer doing business under any name other than the producer's legal name is required to notify the Commissioner of Insurance prior to using the assumed name. Prior to the use of or changes to any trade name or names, an insurance producer shall provide written notification of such use or change to the Commissioner, on a form prescribed by the Commissioner. A letter of registration from the secretary of state shall accompany the application for a trade name. The use by any insurance producer of a nonapproved trade name shall subject such person to a fine not exceeding $250. Additionally, if the insurance producer continues to utilize a nonapproved trade name for 10 or more days after being notified by the Commissioner to cease using the nonapproved trade name, the insurance producer will be subject to an additional fine not to exceed $5,000 - Correct answer Assumed names The adjuster shall report to the Commissioner of Insurance any administrative action taken against the adjuster in any jurisdiction or by another governmental agency within __days of the final disposition of the matter. This report shall include a copy of the order, consent order, or other relevant legal documents. Within 30 days of a conviction, the adjuster shall report to the Commissioner of Insurance any criminal prosecution of the adjuster taken in any jurisdiction for violation of insurance laws or regulations, any felony, or any misdemeanor involving misappropriation of funds. The report shall include a copy of the initial complaint filed, the order resulting from the hearing, and any other relevant legal documents. - Correct answer 30 The Commissioner of Insurance may place on $10,000 All insurers issuing any type of contract, other than life and health insurance, shall pay the amount of any claim due any insured within ___ days after receipt of satisfactory proofs of loss from the insured or any party in interest Except in the case of catastrophic loss, the insurer shall initiate loss adjustment of a property damage claim and of a claim for reasonable medical expenses within ___ days after notification of loss by the claimant. In the case of catastrophic loss, the insurer shall initiate loss adjustment of a property damage claim within 30 days after notification of loss by the claimant. - Correct answer 30 14 Fire policy Lawsuits - An insured may file a suit to recover for a loss only if all policy requirements have been complied with, and only if the suit is filed within __ months of the date of loss. The Standard Fire Policy limits lawsuits to within one year of the date of loss. - Correct answer 24 Fire Policy When Loss Payable - The amount of loss for which the insurer may be liable is payable __days after proof of loss is received by the insurer. The Standard Fire Policy requires payment within __ days. - Correct answer 30 60 Fire Policy Cancellation - If the insurer cancels, it must give the insured at least __ days written notice when the reason is nonpayment of premium, and at least ___days notice in all other cases. The Standard Fire Policy required five days notice for all cancellations - Correct answer 10 30 This must be attached to all Homeowners policies issued in Louisiana. The intentional loss exclusion for Section I differentiates between losses caused by fire and losses caused by other covered perils. The exclusion for fire losses applies only to the named insured; the exclusion for other covered losses applies to all insureds covered under the policy. The Section I mortgage clause is revised to require 10 days notice to the mortgagee if the policy is being cancelled for nonpayment of premium and 30 days notice if the policy is being cancelled for another reason. For nonrenewal, 30 days notice is required. The Section I concealment or fraud condition makes the same distinction between fire losses and other covered losses as the intentional loss ex - Correct answer The Special Provisions - Louisiana endorsement (HO 01 17) For Coverage E - Personal Liability, prejudgment interest is not included as damages. The Coverage E exclusion for communicable diseases does not apply. - Correct answer homeowners LA The Commissioner of Insurance may place on probation, suspend, revoke, or refuse to issue, renew, or reinstate a claims adjuster's license or may levy a fine not to exceed $500 for each violation up to $10,000 aggregate for all violations in a calendar year, unless a fine is established by separate statute in this section authorizing a greater penalty, or any combination of actions, for any one or more of these violations. - Correct answer 500/ 10,000 The HO-3 provides _____ coverage on the dwelling and ____ coverage on personal property. - Correct answer open peril / broad peril. Which of the following property insurance cause of loss forms provides coverage for all risks of loss? - Correct answer The special form. This is covered under a homeowner policy. Personal property is covered on a worldwide basis. If a HO policy is not in force then a ____ be written. - Correct answer Personal Property Floater could ___damage is not included. Commercial property forms include this coverage. - Correct answer Fire If Commercial Property coverage is written on the Building and Personal Property coverage form and a loss occurs, the insured must furnish a signed statement of loss within: - Correct answer 60 days after the request of the insurer. ___liability (also known as absolute liability) is imposed by law (statute) on those who participate in especially hazardous activities. - Correct answer Strict The use by any insurance producer of a nonapproved trade name may subject such person to a fine not exceeding ___Additionally, if the licensee continues to utilize a nonapproved trade name for 10 or more days after being notified by the Commissioner to cease using the nonapproved trade name, the licensee will be subject to an additional fine not to exceed $5,000. - Correct answer 250 The insured's riding lawn mower that is kept inside an attached garage is the only item listed that is covered under the personal property (contents). All of the other items listed are covered under the building coverage. - Correct answer When a loss occurs the insurance company establishes reserves representing what the adjuster estimates will be the____that will be paid on the claim. Reserves are constantly reviewed as the claim progresses. Under-reserving of a claim could put the insurance company in financial jeopardy if the practice is routine. - Correct answer total amount Structures connected by a fence or utility line are considered to be "other structures" - Correct answer Coverage B: Other Structures Replacement Cost Coverage does not apply to contents unless the replacement cost for contents coverage is purchased by endorsement. Without endorsement, replacement cost coverage only applies to covered structures. - Correct answer ok If an insurer intends to non-renew a commercial policy in Louisiana a _____ day notice of non-renewal is required. - Correct answer 60