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QUESTIONS
A public adjuster represents the interest of: A. The insurer B. The Insured C. The employer D. The interest of the general public - CORRECT ANSWERB. The insured Which of the following is the type of report that indicates the initial results of a claim investigation? A. Field Report B. Interim Report C. Full Report D. None of the above - CORRECT ANSWERA. Field Report States have adopted statutes regarding claims adjusting. To avoid unfair treatment to a claimant the adjuster must not: A. Promptly investigate the claim. B. Follow the laws regarding the number of days in which to commence an investigation. C. Deny the claim until a fair and prompt investigation has commenced. D. Pay the claim within a reasonable number of days after the final proof of loss has been received. - CORRECT ANSWERC. Deny the claim until a fair and prompt investigation has commenced. Which of the following is not a claim settlement option? A. Forcing the insured to sue by offering less than the claim is worth. B. Repairing property. C. Replacing with like kind and quality. D. Replace with new - CORRECT ANSWERA. Forcing the insured to sue by offering less than the claim is worth. The giving up of a known right is called: A. Estoppel B. Violation of policy conditions C. Rebating D. Waiver - CORRECT ANSWERD. Waiver An innocent party relies on certain statements made by the adjuster and is damaged as a result. The guilty party may be legally prohibited from asserting that the fact does not exist because of:
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A. Waiver B. Estoppel C. Duties of the adjuster D. Law of contract - CORRECT ANSWERB. Estoppel Should an insured fail to report a claim in a timely fashion the adjuster will usually: A. Deny the claim. B. Send the insured a reservation of rights letter. C. Cease investigating. D. Seek the advice of the company's attorney. - CORRECT ANSWERB. Send the insured a reservation of rights letter. A company adjuster primarily represents the interests of: A. The insured. B. The claimant. C. The insurer. D. The public. - CORRECT ANSWERC. The insurer. An adjuster's license will usually be revoked for which of the following reasons: A. Denying claims that are not covered. B. Failing to report a change of address. C. Having been convicted of a misdemeanor. D. Having been convicted of a felony. - CORRECT ANSWERD. Having been convicted of a felony. The insured has been involved in an automobile accident and has sustained bodily injuries and damage to the insured vehicle. The adjuster will usually: A. Withhold any payment until all the bills have been reviewed for payment. B. Pay to repair the vehicle and pay the medical bills later. C. Pay for the repair of the vehicle and require a release for all claims. D. Pay to repair the damage to the vehicle and obtain a partial release and settle the medical payments later and then seek a final release. - CORRECT ANSWERD. Pay to repair the damage to the vehicle and obtain a partial release and settle the medical payments later and then seek a final release. Mr. Jones has damaged his vehicle by striking a tree. He can: A. Take the car to a repair garage recommended by the insurer. B. Take the car to a garage of his/her choice. C. Accept the payment based on the adjuster's estimate. D. All of the above. - CORRECT ANSWERD. All of the above.
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D. Mobile Equipment. - CORRECT ANSWERB. Change Other Driver. Under the Business Auto Policy, each of the following is true about classification of "covered autos," except: A. "Any auto" is the broadest coverage classification. B. An insured may select different classifications for different coverages. C. All classes of newly acquired autos are automatically covered. D. "Hired autos" includes autos the insured leases, hires, rents or borrows. - CORRECT ANSWERC. All classes of newly acquired autos are automatically covered. According to the Business Auto definitions, an "accident": A. Includes continuous or repeated exposure to the same conditions. B. Must be sudden and unexpected. C. Must be unexpected and unpreventable. D. Is any event that causes injury or damage. - CORRECT ANSWERA. Includes continuous or repeated exposure to the same conditions. Joseph Young, who is insured under a Business Auto policy, is involved in an accident. He and the insurance company disagree on the amount to be paid for the damage to his car. Under the terms of the policy, which of the following statements is true: A. Each party engages an appraiser, and the appraisers will select an umpire. B. Mr. Young must accept the insurance company's estimate. C. Each party engages an appraiser, and the appraisers will decide the amount. D. The estimates of both parties will be averaged. - CORRECT ANSWERA. Each party engages an appraiser, and the appraisers will select an umpire Under Form MCS-90, a _____ notice to the other party is required for cancellation of coverage on the part of either the insurer or insured. A. 10 day B. 72 hour C. 14 day D. 35 day - CORRECT ANSWERD. 35 day Which of the following is considered a "garage operation"? I. Ownership, maintenance or use of garage premises. II. Sale of products or services in connection with garage operations. III. Ownership or maintenance of covered autos. IV. Production or support of racing or competitive operations. A. I and II only. B. I, II, and III only. C. I and III only. D. I, II, III, and IV. - CORRECT ANSWERB. I, II, and III only.
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Which of the following would be covered under a Garage Liability Policy? A. Damage to property the insured is transporting to another location. B. The use of covered autos leased to another party except as a replacement for a car under repair. C. Products and completed operations. D. Covered autos used in organized racing. - CORRECT ANSWERC. Products and completed operations. Which of the following pollution losses would be covered under the Garage Liability Policy? I. Escape of toxic sludge from a dumpsite the named insured utilizes to store garage waste. II. Pollution of a creek caused by a gasoline leak from the ruptured fuel tank of a covered truck following a collision with another vehicle. A. I only. B. Both I and II. C. Neither I nor II. D. II only. - CORRECT ANSWERD. II only. Garagekeepers coverage excludes all of the following losses, except: A. Loss to a high-value stereo system permanently installed in a customer's auto. B. Loss to CDs from a covered auto. C. Faulty work performed by a mechanic. D. Theft of equipment from a covered auto by a garage employee. - CORRECT ANSWERA. Loss to a high-value stereo system permanently installed in a customer's auto. Extra Expense insurance covers the cost of: A. Relocation. B. Temporary location. C. Research costs to replace lost information. D. All of the above. - CORRECT ANSWERD. All of the above. The Special Cause of Loss form excludes all of the following, except: A. Loss of market. B. Loss due to artificially generated electric current. C. Agricultural smudging. D. None of these are exclusions. - CORRECT ANSWERD. None of these are exclusions. Earth movement is covered under which of the following Cause of Loss forms?
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A. Securities B. Property of others in the insured's care, custody and control C. Land D. Patios or other paved surfaces - CORRECT ANSWERB. Property of others in the insured's care, custody and control Under the Commercial Building and Personal Property form, coverage for the "building" includes: A. Additions and extensions to the building B. Property used to service the building C. A heating system D. All of the above - CORRECT ANSWERD. All of the above Under the Commercial Building and Personal Property form, coverage for "business personal property" includes: A. Furniture B. Machinery C. Stock D. All of the above - CORRECT ANSWERD. All of the above Sinkhole collapse is covered under which of the following Cause of Loss forms? A. Basic B. Broad C. Special D. All of the above - CORRECT ANSWERD. All of the above A building valued at $100,000 was insured for $80,000 with a policy containing 80% Coinsurance clause. Disregarding any deductibles, what would the company pay on a $20,000 loss? A. $7, B. $5, C. $15, D. $20,000 - CORRECT ANSWERD. $20, All of the following are excluded under the Commercial Building and Personal Property form, except: A. Furniture and fixtures. B. Petty cash and IOUs. C. A watch dog. D. The insured's panel truck. - CORRECT ANSWERA. Furniture and fixtures. Which of the following is not covered property under a Commercial Property form?
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A. Accounts, bills and currency. B. Animals not held for sale. C. Cost of foundations. D. All of the above. - CORRECT ANSWERD. All of the above. The insured has transported a portion of his property to an exhibition trade show. It is destroyed by a fire. What coverage would apply? A. Property off the premises is not covered B. Fire is not covered for this exposure C. A limit of $10,000 would apply to cover the loss D. Special coverage would have to be purchased to cover property off the premises - CORRECT ANSWERC. A limit of $10,000 would apply to cover the loss The deductible under the revised Commercial Property forms is: A. $ B. $1, C. $ D. $750 - CORRECT ANSWERA. $ The insured has suffered a loss as the result of a cracked steam boiler. What coverage would apply under the Commercial Property Cause of Loss forms? A. The loss would be covered B. The loss is not covered C. Only part of the loss is covered D. Covers only the extra expense in replacing the boiler - CORRECT ANSWERB. The loss is not covered Before legal action may be taken against an insurer, an insured must have complied with all terms of the policy. Any legal action must begin within ____ following a loss. A. 6 months B. 5 years C. 2 years D. 12 months - CORRECT ANSWERC. 2 years If the civil authority blocks access to the insured's premises because of a covered peril that has damaged a building down the street, what period of time will the Business Income forms pay the insured for loss of income at his/her premises? A. One week B. Two consecutive weeks
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the insured's care custody and control - CORRECT ANSWERA. Request a separate replacement cost endorsement on the Personal Property of Others coverage on the policy, Which of the following statements regarding aircraft insurance is incorrect? A. The physical damage coverage is written with a flat deductible. B. Coverage for passengers can be excluded. C. Special coverage must be arranged for Air Meet liability coverage. D. Wear and tear is excluded. - CORRECT ANSWERA. The physical damage coverage is written with a flat deductible. Most aircraft hull policies are written on a: A. Replacement cost basis B. Market value C. Valued basis D. Actual cash value basis - CORRECT ANSWERC. Valued basis A deductible that is commonly used in aircraft physical damage insurance is usually: A. A percentage of the value B. A flat deductible C. A disappearing deductible D. A franchise deductible - CORRECT ANSWERA. A percentage of the value The hull physical damage deductible applies to which of the following losses? A. Pilferage B. Fire C. Collision D. Fire and explosion (except when caused by collision) - CORRECT ANSWERC. Collision The covered territory for aircraft coverage does not apply to which of the following? A. United States B. Canada C. Mexico D. Puerto Rico - CORRECT ANSWERD. Puerto Rico Which of the following describes admitted aircraft liability? A. Negligence is not a factor B. Must prove legal liability C. Based on a board review D. Based on a limited threshold of damage - CORRECT ANSWERA. Negligence is not a factor
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What coverage under aircraft coverage can cover the injuries to crew members as an optional coverage? A. Liability coverage B. Admitted liability C. Medical payments D. Workers compensation - CORRECT ANSWERC. Medical payments What type of physical damage coverage is needed by a company that repairs aircraft for damage to customer's property? A. Garage liability coverage B. Hangarkeeper's liability C. General liability D. Garagekeeper's legal liability - CORRECT ANSWERB. Hangarkeeper's liability Aircraft liability coverage is very similar to auto insurance coverage with the following exception: A. Usually written with a deductible B. Does not apply to property damage of others C. Liability to passengers is treated as a separate exposure D. Cannot exclude passenger liability - CORRECT ANSWERC. Liability to passengers is treated as a separate exposure Which of the following is not covered under aircraft hull insurance? A. Personal effects B. Fuselage C. Wheels D. Propeller - CORRECT ANSWERA. Personal effects Common carriers are responsible for damage to customer goods they transport except for damage resulting from: A. Acts of God B. Traffic Accidents C. Load shifting D. Poor vehicle maintenance - CORRECT ANSWERA. Acts of God Which of the following commercial inland marine coverage forms covers sums due the insured from customers which are uncollectible due to loss or damage of records? A. Equipment dealers B. Electronic data processing C. Valuable papers and records
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C. Auto physical damage coverage D. Contractors equipment floater - CORRECT ANSWERD. Contractors equipment floater Savage Construction Company has delivered and installed a large boiler in a commercial building. The owner has not yet accepted nor paid for the work. What type of policy should Savage Construction purchase to cover the work until accepted? A. Builders risk B. Installation floater C. Dealer floater D. Transportation floater - CORRECT ANSWERB. Installation floater Community Cleaners is a new dry cleaning and laundry service business. They have vehicles that pick up customer's property to be processed and then delivered back to the customer. What type of policy would you recommend they purchase to cover the customer's property? A. A business owners policy B. A commercial property policy C. A bailee policy D. A trip transit policy - CORRECT ANSWERC. A bailee policy Global Electronics has a large piece of equipment that needs to be transported from their plant to their customer. They are using a rented U-Haul truck and one of their drivers is to make the delivery. What type of policy would be needed to cover this one time trip exposure? A. A trip transit policy B. An annual trip policy C. Motor truck cargo D. Bailee policy - CORRECT ANSWERA. A trip transit policy The Equipment Dealers Form covers all of the following types of property, except: A. A farm tractor B. A Snow removal truck C. A customer's bulldozer in the insured's repair shop D. An inventory of hats and jackets - CORRECT ANSWERB. A Snow removal truck
QUESTIONS
Which of the following statements regarding the Equipment Dealers Form is incorrect? A. Coverage is on an "open peril basis" B. Coverage applies on a world wide basis C. Contractor's equipment can be covered D. Covers similar property owned by others and on the insured premises - CORRECT ANSWERB. Coverage applies on a world wide basis In crime insurance, all of the following situations would be considered theft, except: A. A store's year-end inventory coming up short by 5%. B. Merchandise being stolen with evidence of forced entry. C. A clerk witnessing a customer shoplifting merchandise. D. A clerk being robbed at gunpoint. - CORRECT ANSWERA. A store's year-end inventory coming up short by 5%. A prospective insured wishes to protect her firm against criminals taking money from a messenger going from the firm to a bank. In this situation, the prospect should purchase coverage for: A. Fidelity B. Robbery C. Assault D. Burglary - CORRECT ANSWERB. Robbery Under a Fidelity Bond, which of the following parties receives protection? A. A subcontractor B. An employee C. An employer D. A creditor - CORRECT ANSWERC. An employer Which of the following losses would be covered under a Robbery and Safe Burglary coverage? A. Valuables kept in a locked safe are destroyed by fire. B. Cash disappears from a locked safe, with no explanation. C. Jewelry is stolen from a locked safe that shows no signs of forced entry. D. Rare manuscripts are stolen from a locked safe that shows signs of forced entry. - CORRECT ANSWERD. Rare manuscripts are stolen from a locked safe that shows signs of forced entry. Which of the following losses would be covered under a crime policy's "Inside the Premises Robbery or Safe Burglary of Other Property" coverage? A. Broken windows on the insured premises caused by a burglar. B. Theft of money and securities.
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from forgery or alteration of: I. Outgoing checks II. Drafts III. Promissory notes IV. Financial instruments drawn against the insured A. I, II, III and IV B. I and II only C. I and III only D. I, II, and III only - CORRECT ANSWERA. I, II, III and IV Surety bonds guarantee the fulfillment of specific obligations. Each of the following may be the subject of a Surety bond, except: A. Payment of debt B. Protection of funds handled by employees C. Meeting contractual commitments D. Completing a construction job - CORRECT ANSWERB. Protection of funds handled by employees Under a Surety bond, the "Principal" is the party who: A. Agrees to pay damages if default occurs B. Provides the bond in exchange for a fee C. Will be paid damages if default occurs D. Agrees to fulfill an obligation - CORRECT ANSWERD. Agrees to fulfill an obligation A contractor has borrowed funds from a bank in order to finance a construction project. A Surety bond which guarantees the lender that the contractor will use the borrowed funds to finish the contract free and clear of liens is known as: A. A Performance bond B. Bid bond. C. Completion bond D. Labor and materials bond - CORRECT ANSWERC. Completion bond Sue Green has a Commercial Crime Policy on her restaurant, but she only chose the insuring agreement "Inside the Premises Robbery or Safe Burglary of Other Property." If an employee steals some equipment by breaking into the premises during the daytime on a holiday, the policy would: A. Cover the loss B. Not cover the loss, since acts by employees are excluded C. Not cover the loss, since daytime burglaries are excluded
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D. Not cover the loss, since only loss of merchandise is covered - CORRECT ANSWERB. Not cover the loss, since acts by employees are excluded Under the "Inside the Premises Theft of Money and Securities" insuring agreement of a Crime Policy, which of the following situations would NOT be covered? A. Cash in the register is destroyed in a fire. B. Traveler's checks that have turned up missing. C. A casino suffers a theft of slot machine tokens. D. Cash that is taken by employees. - CORRECT ANSWERD. Cash that is taken by employees. In crime insurance terminology, an officer of the company having care and custody of insured property outside the insured premises is known as a: A. Scheduled executive B. Custodian C. Messenger D. Insured property executive - CORRECT ANSWERC. Messenger In crime insurance terminology, a salesperson having possession of the insured's property on-premises is known as a: A. Custodian B. Insured C. Messenger D. Watchperson - CORRECT ANSWERA. Custodian In Commercial Crime coverage, the "Inside the Premises Theft of Money and Securities" insuring agreement would cover loss of all the following, except: A. Currency B. Jewelry C. Tokens and tickets D. Checks and drafts - CORRECT ANSWERB. Jewelry Which of the following are parties to a contract bond? I. Principal II. Surety III. Obligee IV. Employee A. I, II, and III only B. I, II, III, and IV C. I and II only
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C. Extra expense coverage D. Loss of income coverage - CORRECT ANSWERA. Replacement coverage If a boiler explodes and damages a building, contents and property of others, what coverage would apply? A. Only the damage to the boiler is covered. B. Only the building coverage is provided. C. Only the insured's contents are covered. D. If proper limits are in place the entire loss is covered. - CORRECT ANSWERD. If proper limits are in place the entire loss is covered. Automatic coverage is provided for newly acquired equipment for: A. 30 days B. 60 days C. 90 days D. 120 days - CORRECT ANSWERC. 90 days A steam boiler has been inspected and found to be in serious need of repairs. The inspector "red tags" the item. This means: A. A 30 day grace period is provided until repairs are made after the coverage is suspended B. Coverage is suspended until repairs are made C. The entire facility must be shut down until repairs are made D. The company will cancel the entire insurance applicable to all property insured - CORRECT ANSWERB. Coverage is suspended until repairs are made The term "undamaged stock" in Equipment Breakdown coverage refers to: A. The fact that the insurer is not liable for any damage to the stock B. The salvage value of the stock C. The reduction in the value of the stock D. Losses that are not adjusted on a replacement cost basis - CORRECT ANSWERC. The reduction in the value of the stock The BOP is designed to cover all of the following, except: A. Gas stations. B. Small apartment houses. C. Medium size clothing stores. D. An office complex with 7,500 square feet in total floor area. - CORRECT ANSWERA. Gas stations.
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All of the following are exclusions under the standard BOP form, except: A. Governmental action. B. Building ordinance C. Earth movement. D. Transportation. - CORRECT ANSWERD. Transportation. The Now Company carries a special BOP policy with a liability limit of $500,000. The company is involved in an occurrence causing $200,000 bodily injury damage and $200, property damage. The total amount payable as damages under the policy is: A. $100, B. $200, C. $400, D. $500,000 - CORRECT ANSWERC. $400, The BOP policy form does not cover: A. Personal property of the insured B. Debris removal. C. Cracking of a steam boiler D. Personal property of others. - CORRECT ANSWERC. Cracking of a steam boiler Businessowners policies provide "Preservation of Property" coverage when property is removed from the premises to protect it from a covered cause of loss. The coverage will apply at other locations for up to: A. 10 days. B. 30 days. C. 20 days. D. 60 days. - CORRECT ANSWERB. 30 days. An apartment buildings may be covered by a Businessowners Policy (BOP) if it does not have more than: A. 15,000 square feet B. 10,000 square feet C. 35,000 square feet D. 30,000 square feet - CORRECT ANSWERC. 35,000 square feet Under the BOP, how much is paid for pollution clean-up and removal in case of a covered loss? A. $10, B. Any amount that does not exceed the limit of the policy
