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TEXAS ALL LINES ADJUSTER EXAM QUESTIONS
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◍Which of the following is NOT TRUE of coverage for Business Personal Property and Personal Property of Others in a Commercial Property policy? Answer - Coverage is provided while the property is located within a covered vehicle at any location as long as the vehicle is owned by the insured business. ◍As a condition to gain entrance into Louisiana to conduct insurance business, a Texas domestic insurer makes a deposit with the Texas Comptroller. The amount of the deposit is sufficient to satisfy the Louisiana Department that the insurer can cover the claims submitted by the insureds in Louisiana. Who has jurisdiction to collect taxes on the interest earned on this deposit? Answer - The county and municipality in Texas where the principal business office of the insurer making the deposit is fixed by the insurer's charter. ◍Which of the following would be considered an "incidental occupancy" under a Homeowners policy? Answer - An art studio located in the named insured's home, where she also holds occasional painting classes. ◍Scott lives in Texas and has submitted a claim to his insurance company. He has received notice from the insurer that the claim is covered under the policy and they will be paying the claim. How long does the insurer have to pay Scott's claim according to Texas law? Answer - Not later than the fifth business day after the notice was made.
◍All of the following are duties that a Texas insurer must perform within 15 days after receipt of the claim, EXCEPT: Answer - Schedule a hearing to dispute the claim, if necessary. ◍Which of the following is NOT a claim settlement option for liability claims? Answer - Excessive amounts claimed. ◍Mason has suffered a $42,000 loss to his commercial building due to fire. The building is covered under the Building & Personal Property coverage form and had been vacant for 74 days. The insurer would have paid the entire loss if the building had been occupied, but what will they pay because the insured building was considered vacant? Answer - $35,700. ◍Julius has selected the "Maximum Period of Indemnity" optional coverage of the Business Income form. Which of the following statements is TRUE regarding how a loss will be paid if this option is selected? Answer - The most the insurer will pay for the total loss of business income and extra expense is the amount of the loss sustained during the 120 days immediately following the period of restoration or the limit scheduled on the declarations page, whichever is less.. ◍The "Medical Payments" coverage of the standard Yacht policy covers all medical expenses incurred by an insured, family members, invitees, or guests if a claim is submitted: Answer - Within 1 year following a covered accident. ◍Many stationary objects, such as bridges, tunnels and power lines fall within the nationwide marine definition because they are considered to be: Answer - Instrumentalities of transportation and communication. ◍All of the following are characteristics of a principal that a surety will scrutinize during the underwriting process, EXCEPT: Answer - Consideration.
◍All of the following statements are true regarding a Personal Liability Supplement, EXCEPT: Answer - The policy will cover watercraft liability. ◍Which of the following statements is TRUE regarding Commercial Property coverage? Answer - Commercial property coverage can be written as both a monoline policy and as part of a package policy. ◍What type of insurance is usually provided or subsidized by the state or federal government because it is not ordinarily available from private insurers? Answer - Residual market insurance. ◍The optional coverage for "Employee Dishonesty" under a standard Businessowners policy provides a "discovery period" for the insured to discover the dishonest act and have coverage still apply. Which of the following statements best describes the "discovery period" for this optional coverage? Answer - The "discovery period" is one year from the end of the policy period. ◍Which of the following would be considered an Unfair Claim Settlement Practice? Answer - Failing to deny coverage of a claim within a reasonable amount of time after concluding the investigation ◍Which of the following is TRUE regarding the DP-2 Broad Form coverage for "artificially generated electrical current"? Answer - A fire must be the result of the artificially generated electrical current for coverage to apply.. ◍The Commercial Building and Personal Property coverage form provides five extensions of coverage, but only if: Answer - An 80% or higher coinsurance percentage is shown on the Declarations page, and the property amount of coverage, based on that percentage, is purchased.
◍All of the following would be considered "uninsured motorists", EXCEPT: Answer - A motorist driving with coverage up to the required state financial responsibility limits for liability, but not high enough to pay the claims for an at-fault accident. ◍Regulation of the insurance industry in the United States is primarily left to: Answer - State governments. ◍Which of the following coverages does NOT need to be added to a Garage Coverage form by endorsement for coverage to apply? Answer - Collision. ◍Chaz takes his girlfriend to an expensive restaurant for Valentine's Day. It is raining, so he decides to have the valet park his car, saving his girlfriend from getting wet. The valet is driving the car into the restaurant's parking garage, when he clips the side of the garage entrance with the front fender of Chaz's car. The garage wall needs to be repaired as well as the fender and headlight of Chaz's car. How would Part D of Chaz's Personal Automobile respond to this loss? Answer - It would cover the loss to Chaz's car because it is the insured automobile, but would not cover the damage to the garage.. ◍Which of the following statements is TRUE regarding the coverage extension of the standard Businessowners policy for "Business Personal Property Temporarily in Portable Storage Units"? Answer - Coverage will not apply if the storage unit has been on the insured premises for longer than 90 days, even if the business personal property has only been stored there for less than 90 days. ◍Which of the following would be considered a Part D - Other Than Collision claim under a Personal Automobile claim? Answer - A load of bricks falling from an apartment building onto the car.
◍The additional coverage for debris removal under the standardized Building and Personal Property coverage form will only be paid if: Answer - The insured reports the debris removal expenses to the insurance company in writing within 180 days of the loss.. ◍The insured is covered under a Watercraft policy and asks the agent about a lay-up period credit to get a reduction in the premium. The dates of the lay-up period are specified in the policy. There is an emergency and the insured must use his boat in a life saving event. The boat is damaged and sinks. Under what circumstances would coverage apply? Answer - Only if the insurance company is notified within 10 days of the emergency use ◍Which of the following coverage parts would be eligible for inclusion in a Commercial Package policy? Answer - Professional liability coverage. ◍When an insurer files a declaratory judgement action with a court of law, all of the following questions will be resolved by the court, EXCEPT: Answer - Will the insurer become insolvent if they pay the claim as submitted by the insured? ◍An insured is covered under a CGL policy. He would like to purchase another policy to increase the limits of insurance for his commercial liability exposures. Which of the following statements is correct regarding the insured's situation? Answer - The insured may purchase either a Commercial Umbrella or an Excess Liability policy to increase his liability insurance limits.. ◍Which of the following statements defines a "bailee"? Answer - Someone, other than the insured, to whom the insured property is entrusted temporarily.
◍The crew of a ship is guilty of fraud with the intention of reaping gains at the expense of the owner. In ocean marine coverage, what is this called? Answer - Barratry. ◍Symbol 23 is designated on the insured's Garage Coverage form. This indicates that: Answer - That owned private passenger autos only are covered.. ◍An applicant fails to disclose known facts when completing an application for insurance. This act is known as: Answer - Concealment ◍All of the following are correct statements regarding the limits of liability under Part A of a Personal Auto policy, EXCEPT: Answer - When the Part A limits are exhausted, any limits for Uninsured Motorists coverage can be used to pay the entire claim.. ◍If a covered business is a limited liability company, the standard Businessowners policy provides coverage for all of the following "insureds", EXCEPT: Answer - Executive director.. ◍The HO-3 form insures for direct physical loss to covered property involving collapse of a building caused by all of the following, EXCEPT: Answer - Settling. ◍All of the following statements are TRUE if Builders' Risk coverage is written on a completed value basis, EXCEPT Answer - All premiums must be paid up front before construction can begin.. ◍A non-waiver agreement allows the insurer to: Answer - Investigate a loss without implying that it is covered
◍If the disability for a worker in Texas continues for more than one week, weekly income benefits begin to accrue: Answer - On the 8th day after the disability began ◍Which of the following is NOT an "alternative dispute resolution" (ADR) used to deal with coverage disputes in the claim settlement process? Answer - Litigation ◍Mike purchased a policy several years ago to cover him for liability. Last year, Mike determined that the limits of his liability policy were not high enough to cover him adequately should a loss occur, so he purchases an excess liability policy to provide more coverage. Mike experiences a loss, and discovers that his underlying liability policy had expired before the loss, but his excess liability policy is still in effect. How will this loss be paid? Answer - It will be denied, due to nonconcurrency. ◍Workers' compensation insurance premium rates are typically affected by each of the following factors, EXCEPT: Answer - The company's current profit or loss. ◍An insured's boat is struck by another boat. He and his family are injured. His boat sinks because of the damage. An investigation determines that the party that caused the accident is not insured. If the insured carries a watercraft policy, what coverages would apply? Answer - Uninsured boater's coverage and hull insurance. ◍Catherine suffered a covered cause of loss that resulted in water in her basement along with other damage. Alan, an adjuster for Binders Keepers Insurance, tells Catherine to immediately have the water damaged carpeting and wall paneling removed from her basement, so that mold will not cause further damage. Alan then begins the process of identifying coverage under the policy and finds that the water damage is not covered. Which of the
following statements is TRUE regarding this claim? Answer - Because Alan told Catherine to remove the carpeting and paneling before he checked the coverage, he waived the right of Binders Keepers to deny the claim.. ◍Which of the following is NOT TRUE regarding surety bonds? Answer - They are an agreement that in exchange for a premium, the surety will indemnify the obligee.. ◍The insured carries a Personal Auto policy and a Personal Umbrella policy. In case of a loss, how would the policies respond to pay a covered claim? Answer
- The Personal Auto policy would be the primary and would pay up to the policy limits, then the Umbrella policy would be excess to pay up to its policy limits. ◍George went out for target practice one day with his handgun. He has practiced many times with the same target located in the woods behind his house. Unbeknownst to George, a neighbor was walking in the woods behind the target one day and was shot in the leg by George. Intentional acts are never covered by insurance, however, the claim filed by the injured neighbor may be covered under George's liability coverage. Which of the following is the most likely reason why? Answer - Shooting the gun was an intentional act committed by George, but the consequences of act (his neighbor being shot) were not intended. ◍Acme Corp. requested three bids from different contractors for the construction of its new office building. Acme accepted the lowest bid from Corbett's Contracting and entered into a contract to have the office building constructed. After construction was completed, Corbett's presented Acme with a bill for construction costs over and above the amount of the bid that was agreed to in the contract. Which of the following types of bonds would protect Acme from paying the additional costs? Answer - A performance bond.
◍The 1943 New York Standard Fire policy specifically excludes all of the following, EXCEPT: Answer - Manuscripts. ◍The standard Personal Automobile policy provisions state that the insurance company has subrogation rights against any person permitted to use a covered auto, under all coverages, EXCEPT: Answer - Part D. ◍Max was injured on the job in Texas. Max has reached MMI but will have a permanent limp while walking that was due to the compensable injury. Which of the following terms as defined by the Texas Workers Compensation code best describes how Max's injury will be classified? Answer - Max's injury is now classified as an "impairment". ◍All of the following is a function of the standard mortgage clause in a property insurance policy, EXCEPT: Answer - Guarantees that the mortgage payments will be made by an insurance policy, if the insured does not make the payments.. ◍The insured has liability coverage with a limit of $300,000 per occurrence. She purchases a $1 million Personal Umbrella to extend and broaden her coverage. The Umbrella policy includes a $10,000 retained limit. The insured becomes liable for $800,000 in damages that are excluded by the underlying liability policy, but is covered by the Umbrella policy. How would this case likely be settled? Answer - The insured would pay $10,000 and the Umbrella policy would pay $790,000. ◍Insurance adjusters have the "power to bind". Which of the following statements best describes what this means? Answer - The principal is bound to the decisions of the adjuster.
◍Which of the following types of bonds guarantees that all project materials will be paid in full by the contractor upon completion of the project? Answer - Payment bond. ◍Which of the following is NOT a "duty of the insured" after a loss? Answer - To pay damages to any third-party claimant while waiting to be reimbursed by the insurer for the loss. ◍All of the following are perils NOT typically covered by property cause of loss forms, EXCEPT: Answer - Hail ◍What is the minimum limit for Coverage L of the Personal Liability Supplement that can be attached to a Dwelling Property policy? Answer - $100, ◍The "Medical Payments" section of the standard Yacht policy will provide coverage for all of the following, EXCEPT: Answer - A scuba diving accident when diving from the insured boat.. ◍Which of the following coverages would NOT be included in the liability section of the Businessowners policy? Answer - Professional liability. ◍An insured owns a set of six drawing pens designed and used by Benjamin Franklin. Each pen is worth $1,000 alone, but the set is worth $12,000. One pen is destroyed by a covered peril. Under the pair or set clause the insurance company will pay a maximum of which of the following amounts? Answer - $7, ◍Economic loss that is the consequence of a direct loss is known as: Answer - An indirect loss.
◍Which of the following would be excluded under Part A of the Personal Auto policy? Answer - A person transports people from the airport to nearby hotels for a fee.. ◍A Texas insurer has notified a claimant that all or part of a claim will be paid. The claim must be paid not later than the ____ business day after the date notice is made. Answer - 5th ◍The type of auto body frame that is most often used in today's automobile and is a single molded unit, is known as: Answer - A unibody frame. ◍A contractor in need of a bid bond to obtain a contract is an example of a(n): Answer - Principal. ◍When loss settlement under a policy is the "agreed value", which of the following is true? Answer - The insurer will pay the value that was agreed upon and scheduled in the policy. ◍The "control of property" condition of the Commercial Property policy: Answer - States that a negligent act of someone beyond the insured's direction or control will not affect the coverage.. ◍The insured has liability coverage with a limit of $300,000 per occurrence. She purchases a $1 million Personal Umbrella policy to extend and broaden her coverage. The Umbrella policy includes a $10,000 retained limit. The insured becomes liable for $800,000 in damages that are excluded by the underlying liability policy, but is covered by the Umbrella policy. How would this claim likely be settled? Answer - The insured would pay $10,000 and the Umbrella policy would pay $790,000.
◍The aircraft physical damage (hull) deductible is normally expressed as: Answer - A percentage of the value of the aircraft. ◍Ally's insurance agency has contracted with Indemnify Insurance to sell only those insurance products offered by Indemnify. Ally's is utilizing which of the following types of insurance marketing and distribution systems? Answer - Exclusive agency system. ◍In which of the following situations would trees, shrubs, and other plants be covered by the Homeowners additional coverages? Answer - The insured's fruit trees are destroyed when an ember from a nearby brush fire lands on them and burns them. ◍Aircraft liability coverage is very similar to auto insurance coverage with which of following exceptions? Answer - Liability to passengers is treated as a separate exposure. ◍All of the following would be eligible as "your covered auto" under a standard personal automobile policy, EXCEPT: Answer - A motorcycle owned by the insured. ◍All of the following are eligible risks for Commercial Inland Marine insurance, EXCEPT: Answer - Goods manufactured in the United States for export to other countries. ◍Which of the following would be covered under Coverage B of the Business and Personal Property coverage form? Answer - The stock held for sale by the insured business.
medical care, Alec files a claim against the amusement park, seeking payment for his medical bills, pain and suffering. What defense against negligence would the amusement park most likely use to deny this claim? Answer - Assumption of risk ◍The type of claims investigation that looks at the possibility of a third-party being responsible for the loss is known as: Answer - A subrogation investigation. ◍The Commercial Property condition known as "Concealment, Misrepresentation, or Fraud" calls for the policy: Answer - To be voided??? ◍Which of the following Equipment Breakdown coverages applies to direct damage to covered property located at a premises described in the Declarations? Answer - Property damage coverage. ◍Which of the following lost or damaged property is NOT covered when the Actual Cash Value endorsement is attached to an Equipment Breakdown policy? Answer - Property that has reached obsolescence. ◍The Part B - Medical Payments coverage under a standard Personal Auto policy will cover the insured if he/she is injured while a passenger on a: Answer
- Bus. ◍Garagekeeper's liability coverage excludes all of the following losses, EXCEPT: Answer - Loss to a high-value audio system permanently installed in a covered auto. ◍Sally Roe's vehicle is rear-ended by John Doe. Sally and John are good friends. Sally tells John not to worry about the damage. She says she has insurance and will tell her insurance company to pay for the damage. She will
waive her subrogation right so that John won't have to pay anything. Her insurer will: Answer - Proceed with subrogation against John Doe and will not honor the waiver.. ◍All of the following are a "cause of loss" form, EXCEPT: Answer - Comprehensive. ◍For a workers' compensation claim to be compensable, the injury suffered by the employee must meet all of the following criteria, EXCEPT: Answer - Must have occurred on the employer's premises. ◍Part One of the NCCI standard workers' compensation policy specifies the: Answer - Statutory provisions of the policy. ◍Risk is best defined as: Answer - An uncertainty of loss. ◍The insured has his home insured on a HO-2 policy. Lightning has struck the home and causes a fire. The insured takes as much personal property out of the house as possible while waiting for the fire department to arrive and extinguish the fire. The insured and some of his neighbors damage some of the property while moving it to safety in the back of a pickup truck not owned by the insured. What additional coverage would cover this damage to the insured's personal property? Answer - Property Removed. ◍When would the Personal Auto policy respond to a loss with an all-terrain three-wheeled vehicle? Answer - When used in an emergency situation. ◍Which of the following is a true statement regarding the "law of large numbers"? Answer - As the number of insured units increases, the ability to predict losses increases.
