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

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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-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-Conditional Contract "may be conditioned" 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 A lender has an insurable interest in a home and finds protection in the: A. Loss Payee Clause B. Mortgagee Clause C. Lender Clause D. Additional Insured Clause - Correct Answer-B. Mortgagee Clause Mortgagee - Homeowner's policy Loss Payee - Automobile policy Which of the following forms is "all-risk" on the dwelling policy? A. DP-1, or the Basic Form B. DP-2, or the Broad C. DP-3, or the Special Form D. None of the Above - Correct Answer-C. DP-3, or the Special Form 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. 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 An insured who wishes to purchase flood insurance, but is located in a moderate or low risk flood zone may do so by purchasing a: A. Preferred Risk Flood Policy B. Standard Flood Policy C. Universal Flood Insurance D. None of the Above - Correct Answer-A. Preferred Risk Flood Policy Although Flood Insurance is provided by the Federal Government, those who are not in a "flood zone" may purchase a preferred risk policy to cover them for a flood claim. Used only for Commercial Condominiums, it covers the unit-owners business personal property and the personal property of others in the insured's care, custody or control: A. Condominium Dwelling Form B. Personal Condominium Unit Owners Form C. Condominium Unit Owners Form D. None of the Above - Correct Answer-C. Condominium Unit Owners Form Does not cover buildings since coverage would typically be provided under the Condo Association coverage form issued. The Commercial Property Contract includes all of the following, except: A. Common Policy Conditions B. Commercial Property Conditions C. Coverage Form D. Commercial Loss Schedule - Correct Answer-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. Liberalization states, "The insured gets the benefit of any broadened coverage if the company, within __________ days of inception, adopts a form revision that is broader and without increase in premium." A. 10 days B. 55 days C. 65 days D. 45 days - Correct Answer-D. 45 days 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) 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) There is __________ coverage for injury, damage or clean-up costs caused by pollutants, subject to minor exceptions: A. 50% B. 10% C. 0% D. A Percentage Ratio - Correct Answer-C. 0% Under a Commercial General Liability Policy, a basic limit of __________ per person applies to Medical Payments: A. $1, B. $10, C. $2, D. $5,000 - Correct Answer-D. $5, Payment is for medical, dental, hospital, and funeral services incurred within one year of date of accident to persons who suffer bodily injury by accident 1. on or next to insured's owned or rented premises, or 2. due to insured's operations. 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. Covers for all types of property, when surrendered away from the premises as a result of a threat to do bodily harm to the insured or an employee, or to a relative or invitee of either, who is (or allegedly is) being held captive. This is defined as: A. Extortion B. Surrendered Property C. Client's Property D. None of the Above - Correct Answer-A. Extortion Also triggered by threats to damage the premises or property within the premises. Employee Theft Coverage may be written in the following ways: A. Scheduled Persons Coverage B. Scheduled Position Coverage C. Blanket Coverage D. All May Apply - Correct Answer-D. All May Apply Employee Theft may be written in three ways. One who undertakes to perform, to fulfill a contract or to meet an obligation is known as: A. Principal B. Obligee C. Surety D. All of the Above - Correct Answer-A. Principal Obligee - needs guarantee principal will perform Surety - guarantees performance between principal and obligee

May act as part of the bonding party and agrees to reimburse the surety for any loss it may suffer from having bonded the principal: A. Indemnitor B. Surety C. Obligee D. None of the Above - Correct Answer-A. Indemnitor Known as "fourth party", may put up collateral This type of bond covers streets, sidealks, sewers, etc.: A. Sidewalk B. Subdivision C. Supply D. None of the Above - Correct Answer-B. Subdivision Falls under Maintenance Bond Define the coverage that pays a flat amount per day for hospitalization, regardless of expenses or other insurance: A. Hospitilization B. Hospital Indemnity C. Hospital Services D. All of the Above - Correct Answer-B. Hospital Indemnity This optional provision states that if the insured becomes totally disabled, premiums are waived but the coverage remains in force: A. Waiver of Subrogation B. Waiver of Premium C. Waiver of Value D. None of the Above - Correct Answer-B. Waiver of Premium "premiums are waived" Provides coverage for expenses, including loss of income, arising from an accident. This is defined as? A. Accident Insurance B. Hospitilization C. Hospital Pay D. None of the Above - Correct Answer-A. Accident Insurance Typical exclusions would be: hernia, war, disease and bacterial infections, suicide attempts, air travel injuries, accidents while committing felony, accidents while under the influence While selling an Automobile policy to a customer, an agent tells them that they are also required to purchase an Emergency Road Service Plan, even though that is not true. This is an example of: A. Misrepresentation B. Lack of Fitness C. Deception

D. Sliding - Correct Answer-D. Sliding After pleading guilty or no contest to a felony, a licensed individual has _________ days to inform the Department? A. 10 B. 20 C. 30 D. 40 - Correct Answer-C. 30 Under the Florida Unfair Insurance Trade Practices Act, penalties are provided for misrepresentation of business practices, which include all of the following except: A. Failing to act promptly B. Failure to explain claim denials in writing C. Denying claims with reasonable investigation D. Failure to maintain complaint handling procedures - Correct Answer-C. Denying claims with reasonable investigation An adjuster who represents the financial interests of the insured named in the policy is defined as a(n): A. Public Adjuster B. Bureau Adjuster C. Fee Adjuster D. Independent Adjuster - Correct Answer-A. Public Adjuster A written statement given by the insured to the insurer acknowledging that money received in the settlement of damages is received, not as a final payment, but as an advance pending an outcome of a claim against the person responsible for the damage. This is defined as a(n): A. Loan Receipt B. Subrogation Loan C. Full Release Statement D. Partial Release Statement - Correct Answer-A. Loan Receipt Enables insurer to bring an action for recovery against a third party Duties and functions of the Department of Financial Services include all of the following except: A. Approve the issuance of licenses B. Rating and underwriting rules C. Claims Supervision D. Investigate charges of unethical behavoir - Correct Answer-B. Rating and underwriting rules Which of the following are not considered to be an adjuster: A. Employee or Staff Adjuster B. Independent Adjuster C. Public Adjuster

D. General Lines Adjuster - Correct Answer-D. General Lines Adjuster Bureau Adjusters are also considered adjusters. When making any payment for damage to an automobile for a partial loss, the insurer shall have printed on the loss settlement, "Failure to use the insurance proceeds in accordance with the security agreement, if any, could be a violation of s.812.014, Florida Statutes." This is payment for a(n): A. Third Party Claim B. Two Party Claim C. Derivative Claim D. All of the Above - Correct Answer-A. Third Party Claim The District of Columbia and any state or territory of the United States in which an insurance agent maintains his or her principal place of residence or principal place of business and is licensed to act as an insurance agent. This is defined as: A. Business Territory B. Home Territory C. Home State D. None of the Above - Correct Answer-C. Home State Any material which is or may have been a motor vehicle or mobile home, which is inoperable and which material is in such condition that its highest or primary value is either in its sale or transfer as scrap metal or for its component parts, or a combination of the two. This is defined as: A. Junk B. Derelict C. Major Component Parts D. None of the Above - Correct Answer-B. Derelict The authority given by an insurer or employer to a licensee to transact insurance or adjust claims on behalf of an insurer or employer is defined as: A. Appointment B. Express Authority C. Registered D. Certificate of Authority - Correct Answer-A. Appointment Licensees are given authority through the appointment process Charging an applicant for a specific ancillary coverage or product, in addition to the cost of the insurance coverage provided for, without the informed consent of the applicant is a practice of: A. Churning B. Sliding C. Soliciting D. None of the Above - Correct Answer-B. Sliding

Loss Payee Clause - Correct Answer-Provides, in event of payment being made under the policy in relation to insured risk, that payment will be made to a third party rather than the beneficiary Mortgagee Clause - Correct Answer-Protects a lender who has an insurable interest in a home Grants special protection for the interest of a mortgage named in the policy; setting up a separate content between insurer and mortgagee Fiduciary - Correct Answer-A relationship that requires maintenance of a high degree of fidelity and loyalty to the interests of the principal, whether or not the adjuster is a direct employee Evaluation - Correct Answer-Establishing a dollar value on a claim. Determines the fair payment in accordance with the contract and applicable law Estoppel - Correct Answer-An equitable principle to the effect that if one intentionally or unintentionally creates the impression that a certain fact exists, an innocent party relies on that impression and is damaged as a result, the guilty party may be legally prohibited (estopped) from asserting that the fact does not exist. Implied Waiver - Correct Answer-May result from some act of neglect on part of the adjuster Express Waiver - Correct Answer-Occurs when insurer or its representative knowingly gives up a known right under insurance contract Identify examples of peril. - Correct Answer-Fire, windstorm, flood after hurricane, etc. (something that causes a loss) How long does one have to notify the Department of Financial Services for a name and/or address change? - Correct Answer-30 days What do the Declarations of a policy outline? - Correct Answer-The declarations identifies the named insured and address, states the policy period and premium and miscellaneous information about the insured, and specifies the limits of coverage that apply