Florida Claims Adjuster Exam Test Questions and Answers, Exams of Insurance law

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Florida Claims Adjuster Exam Test Questions

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Peril - Correct Answer-Something that causes a loss. Hazard - Correct Answer-Something that increases the probability that a loss will occur. Warranty - Correct Answer-A policy condition, either based on information in the insureds application or inserted by the insurer. It is a guarantee of a fact. Misrepresentation - Correct Answer-An untrue statement by the insured, made in an application for insurance but which does not become a part of the policy. Concealment - Correct Answer-The failure of the insured to reveal relevant facts known to the insured in applying for insurance. Abandonment - Correct Answer-Property insurance policies usually contain an abandonment clause, stating the insured cannot dump damaged property on the insurer and demand its full value. Severability - Correct Answer-The insurance applies separately to each insured as if other insureds did not exist. Proximate Cause - Correct Answer-A fundamental doctrine in property insurance holds that when there is an unbroken connection between an occurrence and damage that grows out of the occurrence, then the resultant damage is all a part of the occurrence. Direct Loss - Correct Answer-Physical harm to tangible property. Indirect Loss - Correct Answer-Economic loss which flows as a result of direct loss. Actual Cash Value(ACV) - Correct Answer-Replacement Cost minus Depreciation

Coinsurance - Correct Answer-Is a method of providing equity in premiums by granting lower rates to those indureds who accept the responsibility of insuring for amounts which reflect a high percentage of the value of the subject property. Personal Contract - Correct Answer-Policies cover people who own and operate things, such as automobiles. Conditional Contract - Correct Answer-The parties are of unequal bargaining power, and the insured cannot negotiate the terms, having to take the offer of the insurer as made. Contract of Indemnity - Correct Answer-One should return to their same position as they were before the loss occurred. This limits the number of people intentionally causing losses because it was to their economic advantage. Insurable Interest - Correct Answer-Any actual, lawful and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment. Waiver - Correct Answer-Generally defined as the voluntary relinquishment or surrender of some rightor privilege. Express Waiver - Correct Answer-Occurs when the insurer or its representative knowingly gives up a known right under the insurance contract. Implied Waiver - Correct Answer-May result from some act of neglect on the part of the adjuster. Damages - Correct Answer-Money Amounts. Subrogation - Correct Answer-When an insured has a right to collect damages from another party, but instead elects to claim the damages under his insurance policy, his rights against the other party are transferred to the insurer. Changes - Correct Answer-All policies provide that any changes to the policy be made by the insurer, in writing.

Policy Period - Correct Answer-The condition states that coverage applies only to losses or occurrences that take place during the policy period. (Prior to the stated date and time of termination). Policy Territory - Correct Answer-Condition limiting coverage to occurrences or losses that take place only within a stated geographical region. Other Insurance - Correct Answer-The principle of indemnity dictates against duplicate recovery for the same loss. Cancellation - Correct Answer-The insured may cancel at any time, for any reason, without advance notice. If the conpany wishes to cancel, it must provide some degree of advance notice so the insured will have time to replace the coverage. Appraisal - Correct Answer-A written contract of or written agreement for or effecting insurance, or the certificate thereof, by whatever name called, and includes all clauses, riders, endorsements and papers which are a part thereof. Insurance - Correct Answer-Is a contract whereby one undertakes to indemnify another or pay or allow a specified amount or a determinable benefit upon determinable contingencies. Binder - Correct Answer-Acts as a temporary contract until the policy is issued. How many days should a insurer give for a prior notice of concellation of a binder? - Correct Answer- 5 days. Property Insurance - Correct Answer-Any insurance wherein payment by the insurer will be paid directly to the insured or other specifically named interests. Liability Insurance - Correct Answer-Payment will be on behalf of the insured to another, based upon the insureds liability to the recipient. Simply stated, Liability is "Negligence of the Insured". Loss Payee Clause - Correct Answer-A Clause in a contract of insurance that provides, in the event of payment being made under the policy in relation to the insured risk, that payment will be made to a 3rd party rather than to the insured beneficiary of the policy.

Mortgage Clause - Correct Answer-A property insurance provision granting special protection for the interest of a mortgagee named in the policy, in effect setting up a separate content between the insurer and the mortgagee. Other Structures - Correct Answer-Covers items that are not permanently attached to the main dwelling, such as a shed, fence, etc. Commercial Inland Marine - Correct Answer-Helps identify the kinds of risk which are eligible for either ocean or inland Marine insurance. Building Ordinance Coverage - Correct Answer-This endorsement covers the insured for enforcement of laws which require demolition of undamaged portions of buildings. Umbrella Policy - Correct Answer-Covers a much higher limit and goes above and beyond claims directly relating to your home and auto, it provides your assets from an unforeseen event, such as a tragic accident in which you are held responsible for damages or bodily injuries. Known Loss - Correct Answer-Prevents an insured from coverage if the insured knew the loss was probable at the time of the insurance contract. Value Reporting - Correct Answer-The limit of coverage is set at an amount somewhat higher than expected peak values. Commercial Property Insurance - Correct Answer-Covers direct and indirect losses related to properties other than one to four family dwellings and farm properties. Employee Theft - Correct Answer-Provides coverage for loss of or damage to money, securities, and other property resulting from theft committed by an employee. Theft is defined as the unlawful taking of money, securities or other property to the deprivation of the insured. Bid - Correct Answer-Aggreement to fulfill a contractual obligation used frequently in construction and supplying goods. Health Maintenance Organization (HMO) - Correct Answer-Provides comprehensive health services to its members for a prepaid fixed fee, equivalent to an insurance premium.

Preferred Provider Organization (PPO) - Correct Answer-A selected group of hospital's and medical practitioners in a given area who have joined together in an effort to reduce medical costs. Estoppel - Correct Answer-Is an equitable principle to the effect that if one intentionally or unintentionally creates the impression that a certain fact exists, and 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. Salvage - Correct Answer-Motor vehicle or mobile home is a total loss. Junk - Correct Answer-Any material which is or may have been a motor vehicle or mobile home, with or without all component parts, 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. Fiduciary Agent - Correct Answer-Agent for a principal/Client. The legal or special relationship of trust, confidence, or responsibility between 2 or more parties. Domestic Insurer - Correct Answer-Insurer is one formed under the laws of its this state. Foreign Insurer - Correct Answer-Insurer is one formed under the laws of any state, district territory, or commonwealth of the United States other than this State. Alien Insurer - Correct Answer-Insurer is an insurer other than a domestic or foreign insurer. Appointment - Correct Answer-The authority given by an insurer or employer to a licensee to transact insurance or adjust claims on behalf an insurer or employer. Derelict - Correct Answer-Material which is or may have been a motor vehicle or mobile home, with or without all component parts, 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 component parts or both. Mechanical Breakdown Coverage - Correct Answer-Covers repairs to mechanical parts of your vehicle that break. Even covers break in events not related to an accident.

Sliding - Correct Answer-Selling an item and stating that it is required by law. What is the Death Benefit amount for PIP? - Correct Answer-$5, What is the amount for medical and disability benefits afforded by PIP? - Correct Answer- $10, Who is the Financial Responsibility Law administered by? - Correct Answer-The Department of Highway Safety and Motor Vehicles. What are the Basic PIP Benefits? - Correct Answer--Medical-80% of responsible expenses are paid for necessary medical, surgical, X-Ray and dental.

• Work Loss-60% of any loss of gross income and loss of earning capacity reimbursed.
• Replacement Services-100% for the cost of having household services performed by others.
• Death-Effective 01/01/2013 the death benefit will be $5,000 in addition to the $10,000 in medical and disability benefits afforded by PIP. Company or Staff Adjuster - Correct Answer-Are salaried employees under the supervision of the home, branch or regional claims department of insurers. Fee Adjusters - Correct Answer-Offer their services on a fee-for-service basis. They represent many insurers. Bureau Adjuster - Correct Answer-Employee or agent of an adjustment bureau which serves multiple company clients such as the GAB Business Services, Inc and Underwriters Adjusting Company both national firms. Independent Adjuster - Correct Answer-Are Self-Employed and are not affiliated with either insurers or bureaus. They serve as adjuster representatives of insurers, and their services are compensated on a fee-plus-expenses basis for each loss handled. Public Adjuster - Correct Answer-Is a claims adjuster who is an advocate for the policyholder in appraising and negotiating an insurance claim.

What are the Characteristics of a Personal Auto Policy Declaration Page? - Correct Answer--Liability(Bodily Injury)

• Property Damage
• Uninsured Motorist
• Medical Payments
• Personal Injury Protection
• Collision Deductible
• Comprehensive Deductible
• Towing Coverage
• Rental Coverage What are examples of Transacting Insurance? - Correct Answer--Solictitation of Insurance
• Negotiation of Insurance
• Effecting Coverage (Binding insurance coverage)
• Transacting Insurance Matters(during and after insurance is bound). What are thresholds of the No-Fault Law? - Correct Answer--Significant and permanent loss of a bodily function or
• Permanent injury other than scarring and disfigurement or
• Significant and permanent scarring or disfigurement or
• Death What is the adjusters investigation limited too? - Correct Answer-A simple verification of bills and estimates or it may be expanded to include photographs, witness canvasses, or recorded statements as the circumstances require. What are the componets of a investigation process? - Correct Answer--Inquiry
• Verification
• Comparison What are some reasons for suspension, revocation or termination of a license? - Correct Answer--Transacting Insurance outside of scope of one's license

• Misrepresentation or fraud
• Sliding
• Demonstration of unworthiness or lack of fitness
• Misappropriation of funds
• Failure to inform Department of financial services, within 30 days, after pleading guilty or no contest to a felony. Florida Unfair Insurance Trade Practices Act - Correct Answer-Describes certain practices, penalties are provided for misrepresentation to insureds and claimants and business practices such as
• Failing to act promptly
• Failure to affirm or deny a claim when an insured is entitled there to
• Failure to explain claim denials in writing
• Failure to maintain complaint-handling procedures such as keeping accurate records of complaints. Comprehensive Coverage - Correct Answer-Covers all loss except collision or overturn. Standard deductible is $100 per car, $500 per occurrence applies to losses from theft, mischief, and vandalism. What is the minimum requirements for the Financial Responsibility Law? - Correct Answer--The legally valid claims of others must be satisfied(up to the 10/20/ requirements)
• The owner and operator must provide certification of financial responsibility for future accidents. If not satisfied operator's driver's license and the registrations of all owned vehicle's are suspended. What are the basic activities in claims handling? - Correct Answer--Investigation to establish coverage, determine legal liability, and verify if the alleged damages qualify the loss for payment.
• Evaluation to determine the fair payment in accordance with the contract and applicable law.
• Negotiation of a quality settlement based on facts discovered during the evaluation process.

Claim - Correct Answer-Is the assertion of an alleged legal right against an insurer, which carries with it a demand for appropriate relief. Claims Adjuster - Correct Answer-One who is involved in the investigation, adjustment, negotiation and/or trial preparations of claims arising under insurance policies. Adjusting - Correct Answer-Process of disposing of an insurance claim. Loan Receipt - Correct Answer-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 advanced pending the outcome of a claim against the person responsible for the damage. Apportionment - Correct Answer-Is a provision for computing and assigning to each of two or more contracts covering a claim its proportion of the amount of the loss. How to settle a claim for an Injured Minor? - Correct Answer-Under Fl Law, the adjuster should settle a third-party liability claim of an injured minor child with both parents of the injured child, presuming the settlement is for an amount not in excess of $15,000. If it is more than that it must be consummated through the Circuit or County Courts. What are the violations of the Unfair Trade Practices Act? - Correct Answer--Failing to act promptly.

• Failure to affirm or deny a claim when an insured is entitled thereto.
• Failure to explain claim denials in writing.
• Failure to maintain complaint-handling procedures, such as keeping accurate records of complaints. Section 624.155 of the Florida Statues provides? - Correct Answer-That any person who is damaged by certain insurer practices is granted a right to sue the insurer for damages. The Principle Of Utmost Good Faith - Correct Answer-An insurance contract is based, places serious responsibilities on the claim adjuster with regard to conduct, work habits, and specific claims handling activities. What does 10/20/10 mean? - Correct Answer-10=10,000 Livability per person injured- amount that will be paid out for injuries to one person.

20=20,000 Combined Total Liability for all injuries-this is the most paid out for injuries for an accident. 10=10,000 Property Damage-the most paid out for damage caused to property of others. What is SR- 22? - Correct Answer-A form of coverage known as a NAMED NOOWNER policy is required, this form offers insurance coverage only while the insured is operating automobiles owned by others. What are the two things that need to happen for financial responsibility that did not exist at the time of the accident? - Correct Answer--The legally valid claims of others must be satisfied(up to the 10/20/10 requirements).

• The owner and operator must provide certification of financial responsibility for future accidents. What are the main elements of the FL Law? - Correct Answer--Those who comply with the law have limited immunity from tort suits.
• As one may not be able to seek legal liability damages against another for bodily injuries, the law substitutes, under one's own insurance, the coverage defined as Personal Injury Protection(PIP) How many days does a Non-Resident's vehicle physically present in FL have subject to the No-fault law? - Correct Answer- 90 days. What are the three penalties for non-compliance with the compulsory insurance requirements? - Correct Answer--The owner is denied the immunities from legal liabilities that are granted to those who comply.
• The owner is personalltly liable for payment of PIP benefits to those entitled to such benefits.
• The owner's driver's license and vehicle registration are subject to suspension, as under the Financial Responsibility Law. What does Extended PIP do? - Correct Answer--Increases medical benefits from 80% to 100%.
• Increases income loss from 60% to 80%.
• Applies only to named insured and family members.

What does additional PIP do? - Correct Answer--Increases the $10,000 limit by amounts such as $10,000, $25,000, $40,000, and $90,000(again, for a premium increase).

• Increases do not impact $5,000 death benefit.
• Applies only to insured and family members. Personal Auto Policy - Correct Answer-Used to insure the automobile exposures of individuals and families. Business Auto Policy - Correct Answer-Insurers the automobile exposures of Business. What are the kinds of autos owned by businesses and covered under a Business Auto Policy? - Correct Answer--Private Passenge Type Auto-Station Wagons, jeeps, pickups, panel trucks, vans, and utility trailers.
• Public Auto- Buses and Taxicabs
• Commercial Auto- truck tractors, semi-trailers, commercial trailers, and Service trailers.
• Special types of vehicles like cherry pickers, air compressors. Garage Coverage Form - Correct Answer-Used to insure businesses engaged in selling, servicing, repairing, parking or storing autos. Truckers Coverage Form - Correct Answer-Used to insure businesses that are hired to transport goods for someone else. Business Auto Coverage Form - Correct Answer-Used to insure the automobile exposures of all businesses other than garage or trucking businesses. What does Commercial General Liability contract includes? - Correct Answer-- Declarations
• Common policy conditions
• One of the two coverage forms, Occurrence, or Claims-Made
• A Nuclear Energy Liability Exclusion endorsement
• Various other endorsements may be attached to broaden or restrict the coverage provided by these basic forms.

Declarations - Correct Answer-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. The policy states that if a company wishes to cancel, How many days must it give prior notice? - Correct Answer- 30 days. Nuclear Endorsement - Correct Answer-Excludes all hazards related to nuclear energy. What is Coverage A? - Correct Answer-Bodily Injury and Property Damage Insuring Agreement. Bodily Injury(BI) - Correct Answer-Physical harm and includes sickness or disease or death resulting there from. Property Damage(PD) - Correct Answer-Physical injury to tangible property, including loss of use of that property. Occurrence - Correct Answer-An accident, including. continues or repeated exposure to substantially the same general harmful conditions. Accident - Correct Answer-A sudden, unexpected event. Coverage Territory - Correct Answer-Is the U.S. and its territories or possessions , Puerto Rico and Canada, including international waters and airspace between these places. The Coverage Trigger - Correct Answer-Determines how policy will respond. The Occurrence form - Correct Answer-Applies to BI or PD which occurs during the policy period, regardless of any later time at which a claim is made. The Claims-Made form - Correct Answer-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. Retroactive Date - Correct Answer-Establishes the original policy date for a serious of claims made policies.

Intentionally Injury - Correct Answer-Coverage excludes injury or damage which is expected or intended by the insured. liquor Liability - Correct Answer-If the insured is in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages, liability associated with serving liquor to intoxicated or underage persons or in violation of a law is excluded. Employee Injuries - Correct Answer-Coverage excludes liabilities under a workers compensation or similar law or arising from injuries to employees of the insured. Pollution - Correct Answer-There a basically no coverage for injury, damage or clean up costs caused by pullutants, subject to minor exceptions. What is Coverage B? - Correct Answer-Personal and Advertising Injury. What is Coverage C? - Correct Answer-Medical Payments. What are the General Liability Insurance Forms? - Correct Answer--Owners and Contractors Protective Liability(OCP)Form.

• Liquor Liability Coverage Form.
• Products/Completed Operations Liability Coverage Form
• Pollution Liability Coverage and Pollution Limited Form. Professional Liability Insurance Coverage - Correct Answer-Covers liability arising from rendering of or failure to render professional services. Farm Liability Coverage Form - Correct Answer-Provides coverage for BI or PD arising out of farming operations of personal activities. The Custom Farming Endorsement - Correct Answer-Provides coverage for liability arising from the insureds performance of farming operations for another, for a charge under any contract or agreement. The Farm Employers Liability/Medical Payments Endorsement - Correct Answer-Applies the basic Liability and Medical Payments coverages to injuries to farm employees, but not to employees eligible to receive workers compensation benefits.

Employment Related Practices Liability - Correct Answer-This Form provides employers witg claims- made coverage for liability arising out of claims for injury to an employee because of an employment-related offense. Unauthorized Entity - Correct Answer-An entity that is required to be licensed or registered with the Florida Office of Insurance Regulation but is operating without the proper authorization is identified as an unauthorized insurer. To be Authorized and transact business in FL what must you have? - Correct Answer- Certificate of Authority. General Lines Agent 2 - 20 - Correct Answer-Licensed to write property/casualty, surety, or health insurance. Customer Representative 4 - 40 - Correct Answer-Must be licensed, appointed by a General Lines Agent and may assist in transactions in the OFFICE ONLY. Limited Customer Representative 4 - 42 - Correct Answer-Must be licensed, appointed by a General Lines Agent and transact AUTO insurance in the OFFICE ONLY. All Lines Claims Adjuster 6 - 20 - Correct Answer-Investigates, Evaluates, and Negotiates Claims. A General Lines Adjuster is required to do what? - Correct Answer-Participate in 24 hrs of continuing education every 2 years. A licensee must notify the Department in writing in how many days for change of name, address, phone number or email? - Correct Answer- 30 days. Loss Sustained - Correct Answer-Cover only losses that both occurred and were discovered during the policy period, or within one year of it's expiration. Discovery - Correct Answer-Any loss discovered during the policy period or within 60 days after it's expiration is called regardless of when it occurred. Property Covered - Correct Answer-The policy covers only property the named insured owns or holds or for which the insured is legally liable, and for the benefit of the insured.

Safe Depository - Correct Answer-Covers the named insureds legal liability if it is the safe depository for customers property. Perils covered include burglary, robbery, destruction on damage. Valuation - Correct Answer-Money is valued at its face value; securities at their value on the day loss is discovered; and other property at actual replacement cost or, if less, cost to repair. Government Crime - Correct Answer-A slightly different set of basic Crime Coverage Forms is tailored for insuring governmental entities. Guests' Property - Correct Answer-Covers the named insureds legal liability for guest's property while in a safe deposit box or while the property is inside the premises or in the named insureds possession. Commercial Crime Forms - Correct Answer-Crime Insurance may be written as a separate policy, with it's own Declaration and Conditions, or as a package policy, bundled together with Employee Dishonesty. Forgery Or Alteration - Correct Answer-Provides coverage for loss by forgery or alteration of negotiable instruments, such as checks, drafts, promissory notes or similar instruments calling for payment of a sum certain in money. Computer Fraud - Correct Answer-Will pay for the loss of or damage to money, securities and other property resulting from using a computer to fraudulently transport from inside the insureds promises to a person or place outside the premises, which encompasses anywhere in the world. Extortion - Correct Answer-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 being held captive. Clients Property - Correct Answer-Offers coverage for non-owned property for which the insured is legally liable while the property is on the premises of the insureds client. Lesses of Safe Deposit Boxes - Correct Answer-Covers theft, disappearance, or destruction of securities; and burglary or robbery of property other than money or securities, all from within designated places of safe depository.

Funds Transfer Fraud - Correct Answer-Is designed to cover loss due to the fraudulent transfer of funds through the use of a telephone or fax machine. Securities Deposited with Others - Correct Answer-Covers theft, disappearance, or destruction of securities, which have been deposited with a custodian, such as a bank or stockbroker.