Texas All-Lines Adjuster course Final Exam Questions & Answers 2023, Exams of Socialization and the Life Course

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Texas All-Lines Adjuster course Final Exam

Questions & Answers 2023

1. A severe thunderstorm damaged a policyholder's residence. He called and asked how long it would be before he receives payment for his claim. Which of the following would NOT be an appropriate response? - Correct answer We have 6 months to reach a final settlement with you.
2. Janelle has just graduated college and is interested in becoming an adjuster. she would like to be able to handle any type of claim. The most comprehensive type of license would be: - Correct answer All-Lines
3. Jack and Rebecca own a vacation home on Galveston Island which they have insured under an HO-3 policy. After a week long winter ski trip to Aspen, they return home to find their house burglarized and their 50" TV, computer equipment, jewelry, a valuable gun collection and some fishing equipment stolen. How would their HO-3 policy respond to this loss? - Correct answer The entire theft loss would be covered under Coverage C. subject the policy limits and to certain limitations.
4. The oldest form of insurance known to exist is: - Correct answer Ocean Marine Insurance
5. How is an injured employee's weekly compensation rate for Temporary Income Benefits (TIBS) calculated under Texas Work
6. Comp laws? - Correct answer The comp rate = (AWW - Post Injury Earnings) × 70%
7. In workers compensation, an "injury is defined to mean: - Correct answer personal injury or death by "accident", arising out of work performed in the course of employment.
8. Justin is a Property adjuster for XYZ Insurance Company. He receives a claim involving the theft loss of various types of property. Justin's initial responsibility upon investigating the loss is to first determine: - Correct answer If coverage exists

9. Jim is a public adjuster. He has an arrangement with a water extraction company who pays him a commission of 10% for every referral that Jim sends their way. Which of the following statements is correct? - Correct answer This arrangement reflects a breach of ethical conduct and a violation that could jeopardize Jim's licensure.
10. Which of the following would NOT be covered under Coverage C Personal Property? - Correct answer Your 10-year old German Shepherd chokes on a bone and passes away.
11. A tornado strikes a duplex that is insured under a Dwelling (DP-3) policy. Which of the following would NOT be covered by the Dwelling policy? - Correct answer Damage to another duplex right next door, also owned by the landlord.
12. Common carriers (i.e. 18-wheelers, trains, planes, etc.) are responsible for damage to customer goods they transport EXCEPT for damages resulting from: - Correct answer Acts of God
13. You have just started your career handling Texas workers' compensation claims. Which one of the following WOULD BE considered a violation of the Texas Unfair Claim Settlement Practices Act? - Correct answer Not responding to an employee's calls because you're overworked and the claim involves complex issues you just don't feel like addressing.
14. Which type of bond would be used to cover the exposure to employee theft? - Correct answer Fidelity bond
15. Garrett wants a Texas All Lines Adjuster's license. Which of the following actions will be necessary for Garrett to secure such a license? - Correct answer Pass a state qualifying exam or pre-licensing course that is certified by the Texas Department of Insurance that includes an approved, comprehensive final examination of 150 questions, and attach the Certificate of Completion to an application for licensure.
16. The DP.3 Dwelling form is an "Open Risk" policy. This means that: - Correct answer All risks of direct physical loss are covered unless they are excluded

17. Assume your home caught fire due to a faulty electrical device. and one month after the fire you receive a bill from the fire department for $450.00 for responding to the fire. Would this be paid under your homeowner's policy? - Correct answer Yes. It is called Fire Department Service Charge and is an Additional Coverage provided under the policy, limited to $500.
18. Generally, if an employee suffers an occupational injury and accepts workers' compensation benefits, he or she: - Correct answer Gives up the right to sue the employer for personal injury and pain and suffering. The employee can only make claim for workers' compensation benefits.
19. Janelle has a Texas Personal Auto Policy with 30/60/25 policy limits. She hits a car with 4 occupants, all of whom are hurt.
20. They all sue. Each of the injured parties receives identical verdicts of $40,000. Under Janelle's bodily injury liability coverage, what is the total amount that the company would pay for the injuries to these plaintiffs? - Correct answer $60,
21. A person or entity who guarantees the performance or payment of one party who is obligated by contract to another is called a: - Correct answer Surety
22. If your insured were to ask you if a Dwelling policy would pay for his loss of rental income after a fire loss while the property is being repaired. what would you tell him? - Correct answer Yes, and it's called Fair Rental Value coverage and is available under Coverage D.
23. Fred runs a convenience store that sells gasoline. One day a customer pulls away from the pump while the gas is still pumping, breaks the pump line and causes gasoline to escape all over the parking lot and into the storm drain. Fred files a claim under his commercial property policy. Damage to repair the pump totals $545.00 and $257. worth of gasoline was pumped out before anyone noticed and stopped the pump. The local HazMat team was called out by the authorities to clean up the parking lot and the storm drain. Fred received a bill from the County for $12.850.00 for the clean up. He sends the bill to you to pay. What kind of coverage is available to Fred as a commercial

property extension of coverage needed to pay this loss? - Correct answer Pollution Clean Up and Removal

24. A cargo ship loaded with lumber and sailing from Seattle, Washington to Tokyo, Japan, encountered "the perfect storm" during its trip across the Pacific Ocean. Some of the lumber was thrown overboard to save the ship. This action is called: - Correct answer Jettison
25. Roberto owns a house on Lake Conroe. The house is insured with an HO-3 policy. During a storm, a tornado touches down and severely damages the house. Because the house is untenable and it will take 2 months to complete repairs, Roberto moves Into a local Marriott Residence Inn. Under which of the following coverages would Roberto be able to recover the additional expense of the Marriott and other costs? - Correct answer Coverage D: Loss of Use
26. Dwelling policies: - Correct answer provide basic property protection for individuals who want to protect their financial interest in a property
27. Which of the following perils or exposure are Fidelity bonds generally used to insure against? - Correct answer Embezzlement
28. To be compensable under workers' compensation laws, most jurisdictions require that an injury: - Correct answer arise out of and in the course of employment.
29. A customer of the Sunshine Grocery Store hit her leg on a low shelf in the isle of the store. The claim was assigned to you for handling. After contacting the claimant and taking a statement, you learn that the injury was minor and, at most, an inconvenience. Medical expenses were only $525.00 and there were no complications. You think the best way to handle the case Is to offer to pay her medical bills without admitting liability and try backing away without committing to any kind of settlement. How would you do it?

• Correct answer Tell her you'll pay her bills and ask her to call you if she has any questions. You would then wish her well and, when the bills arrive, pay them under the business's Medical Payments coverage.

30. You just started working as an adjuster with handling Texas 1st and 3rd party property damage claims. Which one of the following would NOT be an example of an unfair claim settlement practice? - Correct answer Deciding not to take a statement from an insured under oath in the investigation of a 1st party property claim.
31. Joe is a property adjuster employed by State Farm. He receives a loss assignment to handle a grease fire claim for an insured. Upon contacting the insured, she advises that she has hired her own adjuster (Pete) to represent her in this matter.
32. Pete will be providing Joe with the estimates of repair and has the insured's authority to negotiate the final settlement of the loss. Pete's fee will be paid out of the final settlement amount. Based upon this information, joe and Pete are which of the following types of adjusters? - Correct answer Joe is a Company Adjuster and Pete is a Public Adjuster
33. You have, just received a new property claim from an insured homeowner who suffered damage from a fire that burned down 30% of the property. During the initial contact, what is the most important thing you should tell the insured to do while waiting for you or your appraiser to arrive? - Correct answer "Take any and all reasonable steps to protect your property from further damage. These costs are included as part of your coverage and I will reimburse you as part of your claim.'
34. Which of the following would NoT be included in the definition of the term "Building" under a typical Commercial Building and Personal Property policy? - Correct answer Desks and personal business computers for each of the business' employees.
35. A Texas adjuster must secure how many continuing education credits in every two year period to maintain continued licensure? - Correct answer 24
36. Alicia has a home valued at $740,000 that is insured by an HO-3 policy with Coverage A limits of $675.000, Coverage B limits of $67,500 and Coverage C limits of $337,500 and a deductible of $1,000. One summer day a severe storm rolled in with a lot of high winds. Alicia unplugged all of the major electrical devices and rode the storm out in her living room. When it was over she went outside to inspect her property, only to find her detached 2-car garage in back yard gone with only a slab remaining. Alicia immediately called her carrier to report the loss.

37. For which perils does Alicia's HO-3 coverage form provide protection? - Correct answer The HO-3 policy provides "All Risk" coverage for Coverage A which includes all perils, including windstorm, unless excluded.
38. Harry's Diner suffers severe damage from hurricane winds that blow in all of the windows at the front of the diner and rip off a portion of his roof. It will be about thirty days before he can complete the necessary repairs and re-open the diner. His commercial policy provides standard Business income protection. How long must Harry wait before this coverage begins to kick in and provide loss of profits? - Correct answer 72 hours after the direct damage to the premises.
39. cameron owns a home in west Texas and a severe hail storm recently caused substantial damage to his roof. Cameron filed a claim with his homeowner's carrier. While on the phone reporting the claim, he asked how long it would be before he might expect payment. Which of the following would NOT be an appropriate response? - Correct answer "We have 6 months to reach a final settlement with you."
40. An adjuster whose license has expired for more than 90 days can obtain a new license without taking the licensing examination as long as the license has not been expired for more than: - Correct answer One year
41. A typical commercial building and personal property policy provides additional coverage for all of the following types of property EXCEPT? - Correct answer Money, cash, or securities
42. John and Jerrica own a Ford Expedition that has a Texas Personal Auto Policy with full coverage, including
43. "uninsured/underinsured" motorist coverage. Why would they want "uninsured/underinsured" coverage? - Correct answer To protect them from loss for injuries they sustain if another at-fault driver is uninsured or carries less coverage than that needed to pay for the insured's injuries.

44. Of the following statements, which is NOT true? - Correct answer Adjuster licensure is really just a formality in Texas. Its requirements are not monitored very closely and they are merely given lip service.
45. You own a small Bar & Grill. What kind of insurance would you need to protect you from claims that you served too much liquor to a customer and that customer's intoxication caused bodily injury or property damage? - Correct answer Liquor Liability coverage
46. XYZ Laundry has a commercial property policy with your company. One day an XYZ employee dropped a cigarette into a waste basket without putting it out completely and a fire destroyed half the store before it was extinguished. The fire department sent the laundry a bill for $626.00 for their response to put out the fire. Will the policy cover this expense and how much? - Correct answer Yes. Fire Department Service Charge is included in a commercial property policy up to $1,000, thus covering the entire bill.
47. Imagine that you own a home in North Dallas with your spouse and 2 children. You insure the house with a typical HO-3 policy. Which of the following situations would NOT be covered under Coverage C: Personal Property? - Correct answer The dead fish when the insured accidentally overturns his tropical fish tank and all fish die from lack of oxygen.
48. Ben and Sandy insured their home ten years ago for $160,000 which was its value at the time. They never again bothered to think about the value of their home or the amount of insurance. Two weeks ago a burning log rolled out of their fireplace and caused the house to catch fire. The CV of the cost to repair the home is $41,725. The ACV of the repairs is $27,500. The adjuster finds that the value of their home is now $275,000. There is a deductible of $500. The policy has an 80% coinsurance clause.
49. Considering the amount of insurance carried vs. how much should have been carried, how much should the adjuster pay the couple? - Correct answer $30.094.
50. Luke decided to take up sky-diving. His girlfriend tried to convince him not to do so, as she was afraid he could be injured or killed. Luke acknowledged the risk but told her that he was going to do it anyway. This would be known as what? - Correct answer Assumption of Risk

51. Two years ago Dustin purchased a state-of-the-art PC with all the latest bells and whistles. One afternoon during a thunderstorm. lightning struck Dustin's house and the electrical surge damaged his PC beyond repair. Dustin demanded that his insurance company pay him $5,575.00, the amount that a brand new PC would cost today with the latest operating system and features, even though his exact PC model with the original operating system and features could be purchased today for $3,250.
52. When the company refused to pay him what he wanted, Dustin sued and the case went to trial in small claims court. The judge ruled in favor of the insurance company, stating that an insured should not profit from loss. The judge's ruling is an example of what well- known insurance principle? - Correct answer The principle of indemnity
53. A grocery store has endorsed its Commercial Property Policy with Crime and Employee Dishonesty Coverage. If, over a period of time, one of the store's cashiers were to steal over $1,500 from cash purchases not processed through the register which of the following coverages would reimburse the insured for such a loss? - Correct answer Employee theft or dishonesty
54. Jerome was driving on the interstate between Dallas and Ft. Worth and decided to change into the left lane of travel. He did not see a car approaching from the rear in the left lane at a high rate of speed. The car sideswiped Jerome's car and sent it spinning until it ultimately crashed into a retainer wall. The other driver accused Jerome of negligence in improperly changing lanes. Which of the following would NOT be a defense that Jerome could possibly use against the driver and his claim of negligence? - Correct answer Breach of Warranty
55. Nicki is a company adjuster for Nutmeg Property and Casualty. She works within Nutmeg's "Auto Liability Unit" handling third-party, bodily injury and property damage claims. As such, her responsibilities include all of the following EXCEPT: - Correct answer Notify insured's of non-renewals and policy cancellation
56. The State of Texas will Issue all of the following types of adjuster licenses except: - Correct answer Casualty and Surety

57. In May, the owners of the Bayside Inn closed to take a vacation. They boarded up the motel and didn't return until in late August, only to find that someone had broken into the motel, stolen their computers, security system, and the televisions in each room. They incurred $9,500 in property damage to the building and $16.350 in theft losses. The Inn has a commercial Building and Personal Property coverage form with a $500 deductible with Replacement Cost coverage. Is the loss covered and, if so. what would you pay? - Correct answer It would not be covered. If a property is left vacant for more than 60 consecutive days, theft and vandalism coverages are suspended.
58. Houston Real Estate Services is insured by a Commercial Package Policy that includes a standard suite of property and lability coverages. A fire loss results in damage to one of its commercial buildings. The adjuster's repair appraisal totals $180.450 Before repairs can begin, all debris must be removed at a cost of $19,500. Ignoring any policy limit, deductible, or coinsurance issues, how much will the policy pay to remove the debris and will it affect the amount payable for repairs to the building? - Correct answer The policy will pay the maximum debris removal coverage of $10,000 in addition to the repair estimate of $180,450, less any applicable deductible.
59. Dustin has an HO-3 policy covering his personal residence, One day his septic tank backed up, causing a flood of blackwater throughout his home. He was forced to live in a hotel while the home was cleaned and the damage was repaired. Select the one TRUE statement from the following? - Correct answer Dustin's hotel expenses would be covered under Coverage D: Loss of Use
60. A shipper wants to obtain insurance coverage on both outgoing and incoming shipments while in transit. This type of coverage is called: - Correct answer Cargo Coverage
61. The ultimate goal in handling any claim is to get it closed..for good. Which of the following is NOT an appropriate end to a claim? - Correct answer Denying a claim in hopes that the claimant will go away, and if not forcing the claimant to go to trial in hopes of compromising the case for a smaller percentage of the claim.

62. An award of "compensatory damages" would NOT include which of the following? - Correct answer A jury verdict of $1.000.000 against the defendant to punish them for their reprehensible actions in causing the loss.
63. Stacy is a new adjuster handling Texas workers compensation claims. Her supervisor asked her which of the following WOULD be considered a violation of the Texas Unfair Claim Settlement Practices Act. Which of the following is correct? - Correct answer Not responding to a claimant's calls due to an extra heavy case load.
64. Whether it is done by a carrier or its adjuster, a breach of contract is taken very seriously. This could be done through non-payment, or even non compliance with policy requirements. Which of the following consequences would a carrier face due to a breach of contract? - Correct answer If found gullty of a breach of contract, the carrier could be punished with a "bad faith" verdict that would cost it millions of dollars.
65. Your home is insured with an HO-3 policy that carries a $60.000 limit for Coverage C (Personal Property) with a $500 deductible and a Replacement Cost endorsement. You lose personal property valued at $6,435.00 in a kitchen fire. How much would you expect to be paid under your homeowner's policy? - Correct answer $5,
66. In Texas, other than emergency adjusters, who must have an adjuster's license? - Correct answer All adjusters, regardiess of type of claim handled or source of employment
67. Jefferson Auto Sales and Service has has a Business Auto policy with Symbol #1 for Liability and Uninsured Motorist coverage and Symbol #2 for Physical Damage coverage. The business owns only one vehicle, the owner's 2019 Cadillac Escalade. All of the following claims would be covered under jefferson's Business Auto policy EXCEPT: - Correct answer One of Jefferson's employees is injured while changing a tire on his boss's Escalade.
68. The Texas Homeowners' policy that most closely resembles the ISO HO-5, providing all- risk coverage for both the building rand personal property is the: - Correct answer HO-C

69. An insurance policy is often referred to as a contract of adhesion. This means that: - Correct answer If the wording or language in an insurance policy is vague or ambiguous. the interpretation of its meaning shall be in favor of the party who did not control its terms, i.e. the policyholder.
70. Continental Claims Adjusting Services is an independent adjusting company that has just opened an office in Houston to prepare for the upcoming hurricane season. They are researching Texas regulations regarding "poor or inappropriate claims practice behaviors" and find that, in Texas, these behaviors are regulated by: - Correct answer The Texas Unfair Claim Settlement Practices Act
71. A "waiver" is defined as: - Correct answer The intentional or voluntary relinquishment of, or "giving up", a known right.
72. Ronaldo's Galveston home was severely damaged by a major hurricane and he submitted a claim to his homeowners insurance carrier. Unfortunately, shortly after reporting the claim, it was announced that the carrier had declared insolvency and was closing its doors. Rolando is worried that his claim will now go unpaid and he will be on his own for the damages. What entities were created to protect policyholders in such situations? - Correct answer Guaranty Associations
73. Identify the part of the policy that stipulates what is NOT covered: - Correct answer Exclusions
74. XYZ Insurance Company engages you, an independent adjuster, to investigate a water damage claim filed by their insured.
75. You've reviewed the insurance policy provided by XYZ, and have just finished investigating the claim. Your opinion is that the damage was not caused by a covered peril, What is the best way to handle the situation? - Correct answer Politely explain to the insured that your recommendation will be that there is no coverage and show him the appropriate section of his policy that supports this determination.

76. Assume that your home caught fire after you left a frying pan on high heat for too long and the grease ignited, causing a stove fire that burned the kitchen, living room and dining room. The fire department arrived quickly and put out the fire.
77. Unfortunately, the water from their hoses damaged the wood floors, walls and furniture. This water damage to dwelling and contents would be covered because: - Correct answer There was an unbroken connection between the fire and the damage caused by the water. Therefore fire was the
78. proximate cause and any resulting damage is covered.
79. A policy holder is concerned about a receiving a coinsurance penalty and they ask you what it is. You explain that it is: - Correct answer A penalty imposed if a property is under-insured.
80. Which of the following is NOT a peril? - Correct answer A teenager constantly texts while she is driving.
81. Sarai owns a 3-story home left to her by her grandmother. It's located in an older part of the business district. An engineering inspection finds that a significant portion of the roof is decaying due to old water leaks and wood rot. Which of the following statements best describes the insurability of this risk? - Correct answer The roof presents a significant physical hazard that increases the likelihood of loss from roof collapse, water leakage, or third party liability.
82. You are the managing partner of a medium-sized law firm. The firm is insured under a Business Owner's Policy. Because the firm has grown substantially over the past year, you are concerned that you might not have enough coverage for the firm's business property. Consequently, you begin taking an inventory. Which of the following would NoT be included in the definition of Business Personal Property? - Correct answer The air conditioning system.
83. The difference between a peril and a hazard can best be described by which one of the following statements? - Correct answer A peril is a cause of loss, like fire. A hazard is a condition that exists beforehand that increases the likelihood of such a loss, like a messy storeroom or garage that contains lots of toxic chemicals, oily rags, etc.

84. In today's society, the most important factor in the purchase of insurance is: - Correct answer Trust
85. An "accident, including continuous and repeated exposure to the same generally harmful conditions" is known as which trigger of coverage? - Correct answer An occurrence
86. You receive a GL claim from an insured hardware store that was served with a lawsuit by a customer who was injured by a lawnmower that they had purchased at the store. The lawsuit alleges that the hardware store was responsible for injuries sustained by the customer when the mower's pull cord snapped, causing severe lacerations to the customer's face. The lawsuit further alleges improper or inadequate usage instructions and lack of appropriate warnings, along with defective design and manufacture. Who else might be considered legally responsible under a claim of product liability? - Correct answer The designer and manufacturer of the lawnmower.
87. One of the elements of an insurance contract is that it is "conditional" in nature. This means that: - Correct answer A policyholder has certain conditions, duties and responsibilities that he or she must meet if a covered loss occurs before a carrier must comply with the terms of the insurance contract.
88. You're trying to teach another adjuster what negligence Is. You tell him that "negligence" is described as: - Correct answer Fault that arises from doing something you shouldn't have done, or not doing something you should have done.
89. Steve and his family take a vacation at their lake cabin located in the Colorado mountains. While there, lightning strikes the cabin and sets fire to pine needles that had accumulated in a roof valley. He gets his family out of the house along with his computer that stores all of his digital family photos and videos, which he sets on the lawn. The fire truck arrives and the fire is soon put out. After the firemen leave, Steve notices that the computer is soaked. Apparently it got wet while the firemen were hosing down the house. Under which of the following property doctrines would Steve's computer be covered for damage and repair? - Correct answer Proximate Cause

90. Lightning strikes a large, half-rotten tree standing next to Winfred's house and sends it crashing in flames onto the roof. The house catches fire and the loss to dwelling and personal property is substantial. Because he doesn't trust "big business", Winfred hires a public adjuster to do the damage appraisal and handle settlement of the claim with his insurance company. Settlement negotiations between the company's adjuster and the public adjuster quickly break down, so the company adjuster calls for an
91. "appraisal" under the terms of the policy. The purpose of the "appraisal" process is to do what? - Correct answer Determine the amount to be paid for the loss
92. Carmen goes to her local hardware store where she purchases a new lawn mower. After she gets home she tries to start the mower. The pull cord snaps and the cord recoils, striking Carmen in the face, cutting her badly from her forehead, across her right eye and through her right cheek. The injury requires 32 stitches, leaves a very visible scar across her face, and results in medical expenses of $17,342.00. Carmen sues the hardware store for her injuries. What kind of coverage would the hardware store need to respond to this claim? - Correct answer Products Liability
93. Which of the following is NOT required to calculate a coinsurance penaity? - Correct answer The property's market value, lie. how much it would sell for today.
94. A grocery store employee accidentally runs into a customer with a pallet of canned goods, injuring the customer's leg. What kind of claim would most likely be filed under the store's General Liability policy? - Correct answer A Premises Liability claim
95. Identify the part of the insurance policy used to modify or make changes to the coverage in some way: - Correct answer Endorsements
96. Bill just purchased his first home. At the closing he was told that he had to pay an additional $1,000 for a fully paid up year of homeowner's insurance with both property and liability insurance. As he was leaving the real estate broker's office, his thoughts immediately turned to the $1,000 he had just spent on insurance. From the following, select the correct description of what Bill really got for his $1,000. - Correct answer Peace of mind that if an insured event were to occur, the insurance company would keep its promise and provide protection from financial loss to his home.

97. A claims adjuster's primary mission in today's insurance industry is: - Correct answer Help people while also minimizing loss for the insured party and/or carrier.
98. The best definition for Replacement Cost is: - Correct answer The cost to replace a damaged or destroyed item of property with one of like kind and quality at today's prices.
99. After the insured negligently rewired a circuit box at the customers home, the house burns down the following day. This loss would be an example of: - Correct answer Completed operations
100. Albert is involved in an automobile accident. Fault is attributed to both Albert and the other driver. The method of determining damages due to Albert and the other driver by assigning percentages of negligence to each of them based on their relative contribution to the accident would be known as: - Correct answer Comparative negligence
101. Jean, a hair stylist, is sued for "defamation of character" by one of her customers after jean accuses her, in front of other customers, of shoplifting a bottle of shampoo. What form of "defamation" is she talking about and what would be Jane's greatest defense? - Correct answer Slander. Jean's best defense is "the truth". All she has to do is prove that she did, in fact, catch the customer shoplifting.
102. Which of the following does NOT constitute "conducting insurance business" in Texas? - Correct answer a. Serving as a "preferred contractor" for an insurance carrier to improve the cost and quality of residential property damage repairs.
103. b. Investigating or adjusting claims or losses for individual or commercial entities, including self-insured entities.
104. c. Taking or receiving applications for insurance on behalf of an insurance company, or an agent or broker who is compensated for doing so.
105. Anderson Construction owns a fleet of heavy paving equipment. While repairing a 5-mile stretch of interstate highway, a major car accident occurred in the area where they were working and two of their bulldozers were severely damaged. What kind of

insurance coverage would Anderson Construction need to cover these losses? - Correct answer a. Contractors Equipment coverage

106. b. Hull coverage
107. c. Cargo coverage
108. If a movie production company did not complete the production of a movie for Netflix for whom XYZ Insurance Company provided a surety bond, what would be required of XYZ Insurance Company? - Correct answer a. XYZ's obligations would amount to nothing more than providing the production company with a defense against any litigation that may arise from Netflix.
109. b. XYZ must provide Netflix with the financial resources to complete the production promised by the production company
110. c. As the surety for the production company, XYZ would be required to serve as a mediator between them and Netflix to reach a settlement agreement.
111. Isaiah's HO-3 would provide coverage for which of the following losses? - Correct answer a. He gets into an argument with his next door neighbor and punches him in the face.
112. b. He accidentally knocked down a pedestrian walking on the sidewalk while on his daily 5-mile run.
113. c. After losing his job, he intentionally burns down his house to escape the mortgage.
114. A Personal Articles Floater with "all risk" coverage would exclude which of the following losses? - Correct answer a. A sophisticated telescope, designed to track asteroids, is damaged by fire.
115. b. A valuable gun collection is stolen from the insured's home.
116. c. A valuable mink coat worth $5,000 is destroyed by moths.
117. An international shipping company wants to obtain insurance coverage on both outgoing and incoming shipments while in transit. This type of coverage is called: - Correct answer a. Liability coverage
118. b. Cargo coverage
119. c. Freight coverage

120. An insured sandwich shop served a customer a tuna sandwich made with mayonnaise that had gone bad. The customer became extremely ill and made a claim for medical expenses, lost wages, and pain and suffering. Assume that the sandwich shop had a full suite of insurance coverages in its portfolio. What kind of coverage would respond to such a claim? - Correct answer a. Completed Operations Liability
121. b. Premises and Operations Liability
122. c. Contractual Liability
123. Nancy was in a hurry to get to the airport and pick up her husband who was returning home from a business trip. As she rounded a turn, she hit some standing water, lost control of the car, and turned over. The damage incurred would be covered under which of the following automobile coverages? - Correct answer a. Property Damage Liability
124. b. Uninsured Motorist
125. c. Collision
126. Eric gets into an automobile accident with Beatriz. Both drivers report the accident to their respective carriers but each claims the other is at fault. Assume that after their investigation, Beatriz's carrier accepts liability, but not before Eric had already filed a claim with his own carrier and the car was in the shop being repaired. Eric has a Personal Auto Policy with a $500 collision deductible and rental reimbursement of $30/day for up to 30 days. Fortunately, Beatriz's carrier agreed to accept the appraisal that Eric's adjuster had obtained. After Eric picks up his car he presents Beatriz's adjuster with a rental reimbursement bill for $1,430 based on 22 days of rental at $ per day. If you were Beatriz's adjuster, what would you pay? - Correct answer a. $1,
127. b. $1,
128. c. $900.
129. You investigate a claim and advise your insured that no further action is required on his part and that the company will handle his defense. Later he finds that the insurance company failed to respond to his defense because they feel that he
130. "misrepresented" his driving record on his application. If Johnny's lawyer were to secure a bad faith verdict against johnny's carrier for their failure to defend him, which of

the following would be the principle of insurance that would support the verdict against his carrier? - Correct answer a. Concealment

131. b. Contract of Adhesion
132. c. Estoppel
133. Saul broke his arm when he fell off a front-end loader at work. How many days must he be off work before he is eligible for disability benefits? - Correct answer a. More than 1 day
134. b. More than 3 days
135. c. More than 7 days
136. C. More than 7 days
137. In Texas, a vehicle is considered to be a "total loss" when: - Correct answer a. The cost of repair is 70% of the cost to replace it with one of like kind and quality
138. b. The cost of repair is 65% of the cost to replace it with one of like kind and quality
139. c. The cost of repair exceeds the actual cash value of the vehicle
140. Mel's Minimart owns two vehicles: A 2017 Lexus and a tow truck. His Business Auto Policy shows Symbol #1 for Liability and UM coverage and Symbol #2 for Physical Damage. If Mel gets into an accident in his Lexus, which of the following will pay to repair the Lexus? - Correct answer a. Symbol #2 and Liability coverage.
141. b. Symbol #1 and Liability Coverage
142. c. Symbol #2 and Physical Damage coverage
143. A local business known as "Your Fur Piece" offers is the safekeeping, storage and cleaning of their clients' furs, jewelry, etc. while they are away traveling or for other reasons. What is the insurance term for this kind of business called? - Correct answer a. Surety
144. b. Indemnitor
145. c. Bailee

146. Lucas' home was insured under an HO-3 policy. One day his detached garage caught fire. It was completely destroyed along with everything inside. Under which coverage(s) would Lucas' policy provide protection for the losses he incurred? - Correct answer a. Coverage C only
147. b. Coverages B and C
148. c. Coverage B only
149. Cariton has a home in Houston that he insures with an HO-3 policy. During a summer thunderstorm a tree fell on his roof and slid over onto his fence, knocking down an electrical wire that shut off electricity to his home. His policy would NOT cover which of the following: - Correct answer a. Rental of a generator to power the air conditioning and refrigerator/freezer
150. b. The cost of reattaching the electrical service to the utility pole
151. c. Spoiled food in the refrigerator/freezer
152. Which of the following would be an appropriate and lawful advertising gift for a licensed insurance adjuster or agent? - Correct answer a. Two club- level seats to a Dallas Cowboys home football game costing $450.00 each.
153. b. A ball-point pen that has the vendor's name on it.
154. c. A $100.00 referral fee conditioned upon such referral producing the sale of an independent adjuster's services to a third party.
155. Rochelle has been licensed in Louisiana as an All-Lines adjuster for the past 10 years, handling only Louisiana losses. When her employer offered her a promotion that included handling and supervising the handling of Texas losses, Rochelle jumped at the opportunity. She was advised that she would not have to take the Texas licensing exam to secure her non-resident adjuster's lirense. The reason for this is: - Correct answer a. Rochelle already has 10 years of experience as a licensed adjuster.
156. b. Louisiana is a reciprocal state with Texas. As such, Texas recognizes the licensure of its adjusters and will waive the examination requirement.
157. c. Texas will waive the examination requirement for adjusters who act in a supervisory or management capacity.

158. A local bookstore decides to throw a holiday party just before Christmas. Attendance by company employees is strictly voluntary. The party went late into the night, and one of the employees became extremely intoxicated, left the store, and was involved in an auto accident. The occupants of the other vehicle sued the bookstore for allowing its employee to become intoxicated and then drive. The store tendered the lawsuit to Its insurance carrier for defense under their CGL. policy. The carriers claims supervisor instructed his new adjuster to research coverage carefully, as she recalls something about liquor hability being excluded. Imagine you are that adjuster and you find that there are no specific endorsements that woold apply, so you're left with the policy itself. Is this claim covered and why/why not? - Correct answer a. It is not covered. Liquor liability is tatally excluded under the CGL.
159. b. Yes it is covered. The GL policy only excludes liquor hability if the insured is in the business of serving alcohol, which the bookstore is not
160. c. The lawsuit is not covered because attendance was voluntary and the bookstore did not require anyone to come, or drink
161. Tim is an adjuster and a CPCU who lives in Tennessee which does not require licensure. He wants to secure a Texas adjuster's license. What will Tim have to do to get this license? - Correct answer a. Bill must move to Texas and become a resident in order to secure a Texas adjuster's license.
162. b. Because Bill lives in a state that does not require licensure. Texas will honor that state's laws through reciprocity and give Bill a Texas adjuster's license upon application and will waive the adjuster's examination.
163. c. Because Bill holds a CCU designation. Texas will grant him an adjuster's license upon application and will waive the examination
164. Leis Oriental Restaurant suffers property damage when a motorist runs through a plate glass window. Damage is extensive and the business must close for a month while repairs are completed. Lei makes temporary repairs and then hires a contractor for the remainder of the work. She personally oversees the repair work and pushes the contractor hard to get finished. As a result of her efforts, she is able to resume operations two weeks earlier than predicted. Lei also incurs additional expenses of $3.835.00 for expedited service from suppliers and sub-contractors, all designed to get the work done quickly and avoid unnecessary downtime and lost business. She asks if

there is any way she can recover this expense. You check her policy and find that Lei's policy provides Business income and Extra Expense coverage What would you tell her?

• Correct answer a. Her policy provides Extra Expense coverage. The expenses she incurred are covered and reimbursable because it helped open the business earlier than predicted and reduce the overall amount of business income loss.

165. b. This was an entirely voluntary action on her part. The expense is not covered.
166. c. Expenses are covered but because she didn't approval first, there's a 15% penalty.
167. Rebecca has a Texas HO-C policy covering her personal residence. When a hurricane moved through the area, high winds caused major damage to Rebecca's roof, letting in a large amount of rain and ruining most of Rebecca's carpeting, furniture and electronics in her living room. Due to the extent ofithe damage, Rebecca had to stay in a hotel for 3 weeks until enough of the Tefairs for the home to be livable. Which of the following statements is NOT TRUE regarding how Rebecca's policy will respond? - Correct answer a. Any steps Rebecca takes to mitigate the damage to her home, such as purchasing a tarp to cover the holes in the roof. would be covered under Extensions of Coverage. Reasonable Repairs.
168. b. Rebecca's hotel expenses will be covered under Coverage D: Loss of Use.
169. c. The repairs to the home, including the damaged carpet will be covered under Coverage A: Dwelling and Other Structures
170. Which of the following is NOT excluded under the Commercial General Liability policy for bodily injury and property damage liability? - Correct answer a. Property damage resulting from the insured's mobile equipment
171. b. Employee of the insured injured on the lob
172. c. Damage to property rented to the insured
173. Kevin is purchasing a home located on Galveston Island. After a recent hurricane caused flood and water damage to many homes, he is considering the purchase of Flood insurance and wants to know how much flood coverage he can purchase under the NFIP programs. What is the maximum coverage limit available to Kevin? - Correct answer a. $225,000
174. b. $250,000

175. c. $100,000
176. Identify the part of the policy that stipulates what coverage was purchased and the premium that was charged: - Correct answer a. Declarations page
177. b. Insuring Agreement
178. c. Endorsements
179. An insurance safety engineer conducts a cursory inspection of an insured's boiler room. He finds the room to be in a general state of disrepair, there is oil and water all over the floors, the machinery is rusted in places, and insulation around wires is frayed and cracked. He calls the office and recommends immediate suspension of coverage until the room and machinery are cleaned up, repaired and certified to be in proper working order. Hs request is approved and on the way out the door he completes a form and hands it to the office manager, notifying them that their Boiler and Machinery coverage is suspended until further notice. This policy condition that authorizes this action on the part of the insurance company is known as the: - Correct answer a. Termination clause
180. b. Suspension condition
181. c. Breach of contract provision
182. A customer bought a new window A/C unit from a local appliance store. One of the store's employees went to the customer's house to install it. While installing it, he dropped the A/C unit out of the window, which hit the customer's 8-year old daughter, who was playing in the yard outside. The child's arm was fractured. Under what coverage would an insurance policy respond to a claim made by the customer against the appliance store? - Correct answer a. Operations
183. b. Completed Operations
184. c. Products Liability
185. Randall owns a home in Dallas. He has Coverage A limits of $375,000 on his home. A tornado strikes the home and repair costs total $8,500. The adjuster sees two deductibles on Randall's policy, one for $7.500 (2% of the Coverage A limit) and one for $1.000. He selects the $1.000 deductible and pays Randall $7,500 in settlement of his

property claim. This reduction in payment is known as the application of: - Correct answer a. a percentage deductible

186. b. a straight deductible
187. c. a franchise deductible A. a percentage deductible
188. The Gulfside Villas are insured with a Condo Association Policy and $2.5 MM in Coverage A limits. A thunderstorm spawns a tornado that rips off one side of a condo building, damaging the entire building and several individual units. How would repairs to the exterior building and roof system be handled? - Correct answer a. Unit owners are jointly responsible for repairs to the building. based on the square footage of each individual unit as to the whole.
189. b. The Condo Association policy responds to exterior building damage to common property, including building, roof, mechanical equipment, and framing.
190. c. The Condo Association Policy would only respond to the roof damage as it covers the entire building. Individual unit owners are responsible for their own repairs.
191. Settlements that are generally reserved for very large financial commitments and are paid out over a period of time are referred to as: - Correct answer a. Pending settlements
192. b. Advanced settlements
193. c. Structured settlements
194. Three days after a roofing contractor finishes re-roofing its customer's residence, the roof began leaking. Damages are appraised at $16,500. What kind of claim would this produce and what kind of policy would respond? - Correct answer a. A property damage claim covered by the company's HO-3 policy.
195. b. A Completed Operations claim filed under the General Liability policy.
196. c. A claim filed under a Performance Bond provided to the property owner.
197. Sunshine Dry Cleaning, offers a laundry pickup and delivery service in which drivers pick up customers' clothes and laundry to be processed and then deliver the finished product back to the customer. What type of policy would the business need to

protect the customers' property during transit and their possession? - Correct answer a. A Commercial Property Policy

198. b. A Bailee Policy
199. c. A Business Owner's Policy (BOP)
200. A contract that provides insurance coverage for up to 30 days, pending the issuance of a permanent policy is known as a: - Correct answer a. Endorsement
201. b. Binder
202. c. Conditional Contract
203. Jason is served with a lawsuit stemming form an automobile accident that he was involved in a year ago. Which of the following statements would NOT be true? - Correct answer a. Jason's insurance carrier has the right, but not the duty, to settle any claim against Jason if it deems it reasonable and prudent to do so.
204. b. It is critical that Jason immediately send the lawsuit to his carrier or it may jeopardize the carrier's ability to defend the claim, and the Jason's rights to coverage under the policy.
205. c. If a question of coverage were to arise that could not be swiftly resolved in Jason's favor, the carrier should immediately tender the claim to its attorney and deny coverage for Jason.
206. Which of the following would result in a first-party claim? - Correct answer a. You fall in a hole in the parking lot of your neighborhood grocery store.
207. b. Your dog bites your neighbor
208. c. Robbers break in to your home and steal your HDTV.
209. A construction worker employed by Old World Construction Company loses his temper when a pedestrian walking by the jobsite makes a rude comment. In his anger, the construction worker throws a brick, hitting the pedestrian in the head. The pedestrian suffers traumatic brain injury and falls into a coma. The family sues Old World Construction Company for damages caused by its employee. Under what theory of liability could Old World Construction Company be held liable? - Correct answer a. Strict liability
210. b. Employer's liability

211. c. Vicarious liability
212. In which one of the following instances might you expect coverage under your Homeowner's policy to be declined by your insurer? - Correct answer a. You own a house on 10 acres and have a 3 wheeler which you use for carrying firewood and doing general work on the property. One day your 12-year old son and his friend are riding it and he takes a turn too sharp, flipping the 3-wheeler. His friend's arm is broken.
213. b. A cable repairman trips over a garden hose that is lying on your lawn covered by grass that hasn't been mowed in weeks.
214. c. You are attending your child's soccer game. The game gets very close, and a parent of one of the children playing on the opposing team makes a rude comment about your son and you punch him squarely in the nose, breaking it.
215. Which of the following is not a hazard? - Correct answer a. A homeowner stores old cans of paint, gasoline and oily rags in one corner of his garage.
216. b. A massive ice storm is moving off the Great Lakes and quickly approaching the northeastern states of Maine, Vermont and New Hampshire.
217. c. A business owner doesn't make daily deposits in the bank and doesn't want to spend money on a safe, so every night he takes his day's receipts, often between $3.000.00 and $5.000.00 home with him in a green cash bag, until he can get to bank.
218. Jerren owns a house in west Texas that he has insured for $340.000. It was totally destroyed by fire after being struck by lightning. His insurance company paid him $340,000, even though the replacement cost of the house was only $295,000. The reason for this decision was based on: - Correct answer a. The principle of Indemnity that prohibits one from profiting from a loss.
219. b. The Valued Policy law, also referred to in Texas as "liquidated damages" for total loss by fire.
220. c. The principle of Subrogation that allows the insurance company to step into the shoes of its policyholder and pursue a responsible third party for the amount of loss paid.
221. Loss settlements under commercial property coverages are initially valued how?

• Correct answer a. Based on the Full Retail Repair Cost