Florida Claims Adjuster Exam: Multiple Choice Questions and Answers, Exams of Law

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Florida Claims Adjuster Exam – 3 questions with

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This optional provision states that if the insured becomes totally disabled, premiums are waived but the coverage remains in force: A. Waiver of Subrogation B. Waiver of Premium C. Waiver of Value D. None of the Above CORRECT ANSWER B. Waiver of Premium "premiums are waived" Frank owned a home that was destroyed by a hurricane. Both ABC and XYZ Banks were listed as additional interests on his homeowner policy. The insurance company will make a payment to: A. The first mortgagee, ABC B. The Insured C. Jointly to ABC and XYZ D. All listed interests CORRECT ANSWER D. All listed interests Remember that the insurer is not responsible to know the degrees of interest. In the event of a loss, one payment is made by the insurer and it is up to the additional interests on working out their share. Insurance applies separately to each insured as if other insureds did not exist. This is defined as:

A. Severability B. Conditional C. Warranty D. None of the above CORRECT 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 CORRECT 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 CORRECT 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 policy condition, either based on information in the insured's application or inserted by the insurer, is defined as: A. Warranty B. Misrepresentation C. Concealment D. None of the Above CORRECT ANSWER A. Warranty The following are basic characteristics of a property or liability insurance contract, except: A. Personal Contract B. Conditional Contract C. Loss of Settlement Contract D. Contract of Adhesion CORRECT ANSWER C. Loss of Settlement Contract The Insurer's responsibility to pay for a property loss may be conditioned on the insured having used reasonable means to avoid the loss, to protect the property against further loss, and to give the insurer proof of the loss is defined as? A. Conditional Contract B. Adhesion Contract C. Indemnity Contract D. All of the Above CORRECT ANSWER A. Conditional Contract "may be conditioned"

Which of the following is not one of the "Thresholds" in the "No-Fault" law? A. Death of the Insured B. Temporary Injury of the Insured C. A permanent loss of a bodily function D. Permanent scarring on the face of the insured CORRECT ANSWER B. Temporary Injury of the Insured Also included: permanent injury other than scarring and disfigurement Under Mechanical Breakdown Coverage, new cars are eligible for service up to: A. 36 Months/36,000 Miles B. 24 Months/36,000 Miles C. 12,000 Months/12,000 Miles D. 12 Months/36,000 Miles CORRECT ANSWER A. 36 Months/36,000 Miles 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 CORRECT ANSWER C. Both A & B

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 CORRECT 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 CORRECT 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, 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, B. $1,

C. $2,

D. $3,000 CORRECT ANSWER A. $1,

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, B. $5, C. $3, D. $0, Frank is not-at-fault CORRECT ANSWER B. $5, 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 CORRECT 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:

When the basic liability limits provided by the policy are insufficient for an insureds needs, two coverage forms are used to provide the additional amounts of coverage: A. Excess Liability B. Umbrella C. Both A & B D. None of the Above CORRECT ANSWER C. Both A & B Which of the following is not covered under Coverage C, Personal Property? A. A fire breaks out in the residence and an overnight guest loses his clothes in the fire B. A fish dies because he has been left alone for a week without food C. The insureds daughters tennis racket is stolen from her locker D. The insureds suitcase and clothing, valued at $1,500, are stolen from his hotel CORRECT ANSWER B. A fish dies because he has been left alone for a week without food Animals are listed as an "exclusion" under a Homeowner's policy. All of the following are eligible for a Homeowner's Policy, except? A. An apartment tenant B. A condominium owner C. Four-family dwelling owner-occupant

D. A business condo owned by a local insurance company CORRECT ANSWER D. A business condo owned by a local insurance company Commercial property is not eligible for a Homeowner's policy. Which of the following are characteristics of Homeowner's Insurance? A. Protects against economic loss to residences and household property and legal liabilities B. Owner-occupants of 1-4 family dwellings C. Renters who maintain residential occupancy in any type of building D. All of the Above CORRECT ANSWER D. All of the Above Also included: personal, non-business risk, no more than 2 roomers/boarders, condominium unit owners and cooperative apartment occupants Jeremy owns a home that is recently damaged due to a hurricane. The repair estimate is averaged at $25,000 and Jeremy decides to stay in a hotel because most of the damage is to his bedroom and kitchen. Under a Homeowner's Policy, what coverage will pay for the hotel room bill? A. Fair Rental Value B. Value Obligation C. Loss of Use D. Insurers Duties CORRECT ANSWER C. Loss of Use The insurer will pay any necessary and reasonable expenses associated with a daily living routine.

A. Common Policy Conditions B. Commercial Property Conditions C. Coverage Form D. Commercial Loss Schedule CORRECT 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 CORRECT 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 CORRECT ANSWER C. Commercial Property Insurance

(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 CORRECT 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 CORRECT ANSWER A. Value Reporting Replacement Cost is incorrect b/c it calculates monetary value of one's personal property

D. None of the Above CORRECT ANSWER A. Commercial Inland Marine Coverage Definition: to help identify kinds of risks which are eligible for either Ocean or Inland Marine insurance. Protects against loss of business income that results from damage to covered property from a covered cause of loss. A. Business Income Insurance Coverage B. Business Income Replacement Coverage C. Business Income Actual Value Coverage D. None of the Above CORRECT ANSWER A. Business Income Insurance Coverage Period of restoration begins 72 hours after date of direct damage. In effect, coverage has a 72 hour deductible. Coverage ends on either 1. date when damaged property could be repaired, rebuilt, or replaced 2. date business resumes operations at new, permanent location (whichever comes first) What payment covers several areas of costs related to claims, and are payable in addition to the policy limits? A. Supplementary B. Liability C. Personal Injury D. All of the Above CORRECT ANSWER A. Supplementary

Generally, all costs of litigation are covered (court costs, prejudgment interest, judgement interest, cost of bonds to release attachments) Three full-time employees from a local furniture company are horsing around and one is pushed into a machine that cut his foot. How will the company's General Liability respond? A. The Med Pay Section must pay Primary B. The General Liability Policy will pay up to $20,000 in medical payments C. The GL policy will not pay D. Only property damage is covered under GL policy CORRECT ANSWER C. The GL policy will not pay Coverage excludes liabilities under Workers Comp or similar law or arising from injuries to employees of the insured. The employees would have to file through Workers Comp. 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 CORRECT ANSWER D. All of the Above Also included: Nuclear Energy Liability Exclusion endorsement (other endorsements may be attached)

D. None of the Above CORRECT 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 CORRECT 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 CORRECT ANSWER B. Known Loss 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 CORRECT 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 CORRECT 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