Texas All-Lines Adjuster course Final Exam Questions with 100% Correct Answers | Verified, Exams of Advanced Education

Download Texas All-Lines Adjuster course Final Exam Questions with 100% Correct Answers | Verified and more Exams Advanced Education in PDF only on Docsity! Texas All-Lines Adjuster course Final Exam Questions with 100% Correct Answers | Verified | Updated 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. 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 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. The oldest form of insurance known to exist is: - Correct Answer-Ocean Marine Insurance How is an injured employee's weekly compensation rate for Temporary Income Benefits (TIBS) calculated under Texas Work Comp laws? - Correct Answer-The comp rate = (AWW - Post Injury Earnings) × 70% 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. 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 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? - injury and pain and suffering. The employee can only make claim for workers' compensation benefits. 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. 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-$60,000 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 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. 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 $257.00 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 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 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 Dwelling policies: - Correct Answer-provide basic property protection for individuals who want to protect their financial interest in a property Which of the following perils or exposure are Fidelity bonds generally used to insure against? - Correct Answer-Embezzlement To be compensable under workers' compensation laws, most jurisdictions require that an injury: - Correct Answer-arise out of and in the course of employment. 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. 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. 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." 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 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 John and Jerrica own a Ford Expedition that has a Texas Personal Auto Policy with full coverage, including "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. 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. 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 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. 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. 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. Considering the amount of insurance carried vs. how much should have been carried, how much should the adjuster pay the couple? - Correct Answer-$30.094.25 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 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. 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 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 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 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. 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. 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. 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. 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-$5,935 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 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. 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 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. 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 A "waiver" is defined as: - Correct Answer-The intentional or voluntary relinquishment of, or "giving up", a known right. 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. 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. In today's society, the most important factor in the purchase of insurance is: - Correct Answer-Trust An "accident, including continuous and repeated exposure to the same generally harmful conditions" is known as which trigger of coverage? - Correct Answer-An occurrence 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. 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. 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. 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 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 "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 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 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. c. Taking or receiving applications for insurance on behalf of an insurance company, or an agent or broker who is compensated for doing so. 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 b. Hull coverage c. Cargo coverage 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. b. XYZ must provide Netflix with the financial resources to complete the production promised by the production company 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. 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. b. He accidentally knocked down a pedestrian walking on the sidewalk while on his daily 5-mile run. c. After losing his job, he intentionally burns down his house to escape the mortgage. 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. b. A valuable gun collection is stolen from the insured's home. c. A valuable mink coat worth $5,000 is destroyed by moths. 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 b. Cargo coverage c. Freight coverage 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 b. Premises and Operations Liability c. Contractual Liability 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 b. Uninsured Motorist c. Collision 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 $65 per day. If you were Beatriz's adjuster, what would you pay? - Correct Answer-a. $1,430 b. $1,030 protection for the losses he incurred? - Correct Answer-a. Coverage C only b. Coverages B and C c. Coverage B only 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 b. The cost of reattaching the electrical service to the utility pole c. Spoiled food in the refrigerator/freezer 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. b. A ball-point pen that has the vendor's name on it. c. A $100.00 referral fee conditioned upon such referral producing the sale of an independent adjuster's services to a third party. 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. b. Louisiana is a reciprocal state with Texas. As such, Texas recognizes the licensure of its adjusters and will waive the examination requirement. c. Texas will waive the examination requirement for adjusters who act in a supervisory or management capacity. 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. 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 c. The lawsuit is not covered because attendance was voluntary and the bookstore did not require anyone to come, or drink 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. 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. c. Because Bill holds a CCU designation. Texas will grant him an adjuster's license upon application and will waive the examination 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 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 b. Suspension condition c. Breach of contract provision 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 b. Completed Operations c. Products Liability 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 b. a straight deductible c. a franchise deductible A. a percentage deductible 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. b. The Condo Association policy responds to exterior building damage to common property, including building, roof, mechanical equipment, and framing. 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. 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 b. Advanced settlements c. Structured settlements 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. b. A Completed Operations claim filed under the General Liability policy. c. A claim filed under a Performance Bond provided to the property owner. 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 b. A Bailee Policy c. A Business Owner's Policy (BOP) 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. b. A massive ice storm is moving off the Great Lakes and quickly approaching the northeastern states of Maine, Vermont and New Hampshire. 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. 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. b. The Valued Policy law, also referred to in Texas as "liquidated damages" for total loss by fire. 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. Loss settlements under commercial property coverages are initially valued how? - Correct Answer-a. Based on the Full Retail Repair Cost b. Based on Pro-rated Replacement Cost c. At Actual Cash Value Identify the type of alternative dispute resolution that allows the insured and insurer to each hire their own appraisers in an attempt to reach an agreement on the value of damaged property. If they can't agree, an umpire is consulted and each party shares in the cost of the umpire. The final amount agreed upon by any two of the three parties is the final amount to be paid on the loss. - Correct Answer-a. Appraisal b. Mediation c. Arbitration In the process of installing a new hot water tank, the insured's employee accidentally sets a customer's home on fire when the torch he is using ignites flammable materials. What coverage under the insured's Commercial General Liability policy would respond to cover this claim? - Correct Answer-a. Products and Completed Operations b. Owners and Contractors Protective Liability c. Premises and Operations A company's legal liability could be affected by all EXCEPT which one of the following laws? - Correct Answer-a. Valued Policy Law b. Workers' Compensation c. statute of Limitations Your insured carries a Business Auto Policy with combined single limits of $100,000. An employee of the insured was involved in an at fault auto accident that went to trial. The jury awarded the plaintiff $77.000 in bodily injury and $35,000 in property damage. Costs to defend the case included $17,000 in legal defense fees. What is the maximum amount the insurer will pay for this loss? - Correct Answer-a. $100,000 b. $117,000 c. $124,000 An insured sustains interior water damage to his home as a result of a flash flood from heavy storms. Flood is specifically excluded as a covered peril. However, the agent informs the insured that the peril is covered under the Homeowners policy when it is actually excluded. The insured incurs $20.000 in repairs. Considering the two types of waivers, this situation would be an example of an: - Correct Answer-a. Unintentional waiver b. Implied waiver c. Expressed waiver Rolando was hit by a vehicle while walking across a downtown crosswalk. According to Texas law, in order to recover damages from the at-fault party, he must file his claim or suit within: - Correct Answer-a. Three years Sometimes adjusters approach their jobs with different perspectives. which of the following perspectives, or belief systems, reflects the most important goal of an adjuster: - Correct Answer- Sam owns a hardware store in a small community on the southeastern Texas Gulf Coast. One day an elderly customer slips and falls where turpentine had spilled from an open can. Sam and the hardware store could be held legally liable for the customer's injuries under which type of liability? - Correct Answer- 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 To which of the following does Texas' Valued Policy Law apply? - Correct Answer-Total loss to buildings or structures for the peril of fire only The Texas homeowners form that most closely compares to the popular HO-3 is the: - Correct Answer-HO-B While driving his 2012 Honda Pilot, Terry is rear ended while he is stopped at a red light. The at-fault driver's insurance carrier has informed Terry that, although their insured was at fault, there may be a coverage issue and they need time to investigate. Terry elects to file the claim under his own collision coverage to expedite his repairs and allow his insurance carrier to subrogate against the at-fault party. The policy on his 2012 Pilot provides Collision with a $500 deductible, Comprehensive with a $250 deductible and rental reimbursement at $30/dav for a maximum of 30 davs, or $900 total. Damage to the rear bumper, rear door and right side quarter panel totaled $7,432.00. His car was not drivable. Two days after the accident, John went out on his own, without discussing it with the adjuster, and rented a Cadillac Escalade at a rate of $85.00/day (he couldn't find a Honda anywhere). While his car was being r - Correct Answer-$660. ($30/day rental reimbursement x 22 days he rented) while parked at the grocery store, Connor's 2016 Jeep Wrangler is hit by another vehicle that was backing out of its parking space. The at- fault driver's insurance carrier informs Connor that, although their insured was at fault, there may be a coverage issue and they need time to investigate. Connor files the claim under his own collision coverage to expedite his repairs. The policy on his 2016 Jeep Wrangler provides Collision with a $500 deductible, Comprehensive with a $250 deductible and rental reimbursement at $20/day or $600 total. Damage to the rear bumper and left quarter panel totaled $4,265.00. He drops the Jeep off at a body shop and goes out on his own, without discussing it with the adjuster, and rents new model jeep Wrangler at a rate of $65.00/day. While his car was being repaired, he incurred 12 days of rental expense, or $780.00 plus 7% tax for a total of $834.60. While the Jeep is in the shop, the a - Correct Answer-$834.60. 3rd party claimants are entitled to "like kind and quality" temporary transportation for as long as necessary. (Example: If the insured is liable for damage to a claimant's luxury SUV and repairs take 45 days and the rental cost of a comparable vehicle is $85 per day, the claimant is entitled to the full $3,825.) PIP Coverage - Correct Answer-Personal injury protection coverage, which is part of car insurance (if your policy has it) and covers medical expenses regardless of who's at fault comprehensive coverage - Correct Answer-protection against damages to your car from causes other than collision or rolling over Bryce received his first car at age 16, a 2012 Ford Focus. His parents' Personal Auto Policy has full coverage with Liability limits of $100,000/$300,000/$100,000, Med Pay of $5,000, Basic PIP, Additional PIP of $25,000, Extended PIP, stacked UM at the same levels as the liability limits, Collision with a $500 deductible and Comprehensive with no deductible. Bryce's car, valued at $6,000.00, is added to the policy and insured for the policy's existing Liability, Med Pay, PIP and UM limits only. Bryce [permanently] installed a CD player on: - Correct Answer-The Valued Policy Law Which of the following is NOT true when comparing the standard ISO policy forms and the Texas Homeowners policy forms? - Correct Answer-Loss of Use is addressed by Coverage C in the Texas homeowners policies. Which of the following statements is FALSE regarding the Texas Homeowners policy forms? - Correct Answer-The Texas Homeowners policies are the most popular and commonly used homeowners policies in Texas In Texas, when is a vehicle considered to be a "total loss"? - Correct Answer-When the cost of repair exceeds the actual cash value of the vehicle Jack carries Mechanical Breakdown Insurance on his vehicle with a $250 deductible. One day while driving home from work the engine simply stops and he has to have the car towed to a garage for repair. The mechanic finds the crankcase has no oil in it and the engine has frozen up. The mechanic can find no oil leak. It just appears that no one has checked the oil in a long time. The engine block must be replaced at a total repair cost of $4,950.00. Jack gets a bill from the garage for $85.00 for towing and $75 for the inspection/diagnosis. How much can you pay him? - Correct Answer-$0 You receive a claim in which your insured rear ended another vehicle while in heavy traffic. Your insured was issued a citation for following too closely. While taking your insured's statement, she claimed that she felt that she was maintaining a proper following distance and that the driver in front of her suddenly slammed on his breaks for no reason, causing the accident, and that she was wrongly cited by the police. If, after completing a thorough investigation into the cause of the accident, you determine that our insured is at fault and the chance of success in recovering damages from the other driver or their carrier is low, what must you do in order to comply with Texas law? - Correct Answer-Send the insured a letter notifying them that you will not be pursuing subrogation against the third party and that they are authorized to attempt to do so, if they wish. The process by which an insurance company collects money from an at-fault party or that party's insurance in order to recover funds that have been paid out on behalf of their insured is called: - Correct Answer-Subrogation Sam paid $1,300 to get his old car painted and is quite proud of how it looks. Two weeks later, while driving to Tallahassee, he runs through a severe thunder and hail storm. When he arrives he finds the entire surface of his car hood, top and trunk to be pitted and scratched. He is furious. He calls his agent to report the damage and file a claim under this insurance. He has a Personal Auto Policy with Collision with a deductible of $500 and Comprehensive with a deductible of $100. The repair estimate comes to $2,165.00. How much would you pay Sam? - Correct Answer-$2,065.00 Bryce received his first car at age 16, a 2012 Ford Focus. His parents' Personal Auto Policy has full coverage with Liability limits of $100.000/$300.000/$100,000, Med Pay of $5.000, Basic PIP. Additional PIP of $25,000, Extended PIP, stacked UM at the same levels as the liability limits, Collision with a $500 deductible and Comprehensive with no deductible. Bryce's car, valued at $6.000.00, is added to the policy and insured for the policy's existing Liability. Med Pay, PIP and UM limits only. Bryce [permanently] installed a CD player in the dash, replacing the manufacturer's radio unit at a cost of $250.00. Only a month later. the car was stolen from the school parking lot. Bryce insists that a claim be filed under the family's insurance policy so he can ger another car and buy a new CD player for it. What would you tell him the policy will pay? - Correct Answer-$ -0- ; There is no Comprehensive coverage Damage to a windshield by a bird would be covered under: - Correct Answer-comprehensive Connie purchases a previously owned 2018 Toyota Camry with 27,000 miles on 10/1/2018. She adds the car to her PAP with $100,000 Liability limits, Collision with a $500 deductible, Comprehensive with a $250 deductible, Towing and Labor with a maximum limit of $75.00, and Mechanical Breakdown coverage with a $100 deductible, good for 12 months or 12,000 miles, whichever comes first. On 9/25/2019 Connie's car breaks down while on her way in to work, leaving her work, or for which indemnity benefits would otherwise be due, such as a medical only claim that results in a permanent impairment. A shopper hits her head on a low hanging shelf in a grocery store. You've been asked to handle the claim. After talking to both her and your insured on the telephone, you really don't think there is any liability, but you think the best way to handle the case is to pay her medical bills without admitting liability and try a walk-away settlement. How would you do it? - Correct Answer-Tell her you'll pay her bills and wish her well. Ask her to call you if she has any questions. When they arrive, pay the bills under the CGL's Medical Payments coverage. Dwelling coverages are intended for: - Correct Answer-Individuals and companies seeking only to protect their financial interest in the property How are adjustments under commercial property coverages initially valued? - Correct Answer-Actual Cash Value Business Auto Policies "Covered Autos" - Correct Answer-01. Any Auto 02. Owned Autos Only 07. Specifically Described Autos 09. Non-Owned Autos Only Garage Policy "Covered Autos" - Correct Answer-21. Any Auto 22. Owned Autos Only 27. Specifically Described Autos 29. Non-Owned Autos Only which of the following is not true when comparing the standard ISO policy forms and the Texas Homeowners policy forms? - Correct Answer-Loss of Use is addressed by Coverage C in the Texas homeowners policies. Texas Homeowners Policy Forms - Correct Answer-HO-A HO-1 HO-A+ HO-2 HO-B HO-3 HO-C HO-5 Property Insurance Coverages - Correct Answer-Coverage A - Dwelling Coverage B - Other Structures Coverage C - Personal Property Coverage D - Loss of Use The Texas Policy Coverages - Correct Answer-Coverage A - Dwelling & Other Structures Coverage B - Personal Property Extensions of Coverage - Loss of Use, Debris removal, Reasonable repairs, trees shrubs plants & lawns. What did the legislature create to provide consumers with availability and affordability of insurance coverages that are no longer available through normal channels? - Correct Answer-The Residual Marketplace Which of the following was created to address the issue of insolvent insurance carriers? - Correct Answer-Insurance Guaranty Associations What is the residual market choice for consumers unable to secure residential property coverage in the voluntary insurance market? - Correct Answer-Texas Windstorm Association Which of the following is NOT a current member of the Texas Residual Insurance Market? - Correct Answer-Texas Workers' Compensation Insurance Fund Which of the following statements are not true of Texas' residual markets? - Correct Answer-The residual market is the preferred market for