LA CLAIMS ADJUSTER PROPERTY AND
CAUSALITY PRACTICE EXAM 1 (100%
SOLVED)
Insurable bInterest b- bcorrect banswers b-______in bthe bproperty band bwould bsuffer ba
bfinancial bloss bif bthe bproperty bwere bdamaged bby ban binsured bperil, btheir bfamily
bmembers b(names bneed bnot bbe blisted bin bthe bpolicy), band bothers bsuch bas ba blien
bholder, bfor bexample, bthe bbank bthat bholds bthe bmortgage bon ba bhouse.
Cause bof bLoss bForms b- bcorrect banswers b-____establish band bdefine bthe bcauses
bof bloss b(or bperils) bfor bwhich bcoverage bis bprovided bunder bthe bform. b(Please bdo
bnot bconfuse bthe b"cause bof bloss" bforms bwith bthe b"proof bof bloss" bform, bwhich bis
bthe bform bsubmitted bto bthe binsurance bcompany bby bthe binsured bwhen bthey bhave
ba bclaim.)
,Basic bCause bof bLoss bForm b- bcorrect banswers b-This bform bis ba b"named bperil"
bform, bthat bspecifies bthe bperils binsured bagainst. bThe bperils blisted bon bthis bform
bwill busually bbe, bas bthe bname bimplies,
the bmost bbasic bperils. bThis bform bwill bonly bcover bthose bperils bthat bare
bspecifically bnamed bin bthe bform.
Broad bCause bof bLoss bForm b- bcorrect banswers b-This bform bis balso ba b"named
bperil" bform band bprovides bcoverage bfor bthe bperils bnamed bin bthe bbasic bform, bbut
badds badditional bperils band bnames
them bon bthe bform.
Special bCause bof bLoss bForm b- bcorrect banswers b-___form bis ban b"open bperil" bor
b"all brisk"
form bthat bprovides bcoverage bfor ball brisks bof bloss, bfrom bany bperil, bexcept bthose
bthat bare
specifically bexcluded bin bthe bpolicy. bRemember bfor byour bstate blicensing bexam bthat
when bcoverage bis bprovided bunder ban bopen bperil bform, bthe bburden bof bproof blies
bwith
the binsurance bcompany bto bprove bthat bthe bcause bof bloss bis bexcluded.
Appraisal bClause b- bcorrect banswers b-This bproperty binsurance bprovision ballows
beither bthe binsured bor bthe binsurance bcompany bto bdemand ba bbinding bappraisal bof
bthe bdamaged bproperty bin bthe bevent bof ba bdispute bas bto bthe bvalue bof bthe
bproperty. bThe bclause balso bestablishes bthe brequired bappraisal bprocedure.
Coinsurance bClause b- bcorrect banswers b-A bprovision bin bproperty binsurance
bpolicies bstating bthat bthe binsurance bcompany band bthe binsured bwill bshare bin bthe
bloss bincurred bby bthe binsured, bbased bon ba bfixed bpercentage bof bthe bvalue bof bthe
binsured bproperty. bIn baddition, bthe binsured bwill bface ba bpenalty, band bmust bpay ba
bhigher bpercentage bon bthe bloss bif bthey bdo bnot binsure bthe bproperty bfor ba bcertain
bpercentage bof bits bfull bvalue b(usually bat bleast b80%). bSometimes, bin bDwelling b&
bHomeowners bpolicies bthis bclause bis bcalled bthe b"Loss bSettlement bClause".
Concurrent bCausation b- bcorrect banswers b-This bterm, bwhen breferring bto bproperty
binsurance, bis ba bdoctrine bstating bthat bif bloss bor bdamage bto bproperty boccurs bas
ba bresult bof bmore bthan bone bcause, bone bof bwhich bis bcovered bunder bthe bpolicy,
bwhile bthe bother bcause bis bnot bcovered, bthe bdamages bare bstill blikely bto bbe
bcompensated bby bthe binsurer. bHowever, bthis bdoctrine bis bbeing brevisited
bfrequently bin bthe bcourts band ba bnumber bof brecent bcases bhave bbeen bdecided bin
bfavor bof bdenying bthe bclaim.
Pair bor bSet bClause b- bcorrect banswers b-This bpolicy bprovision bstates bthat bif bpart
bof ba bpair bor bset bis blost bor bdamaged, bthe bloss bwill bbe bvalued bas ba bfair
bproportion bof bthe btotal bvalue bof bthe bset. bIt bgives bconsideration bto bthe
bimportance bof bthe bdamaged barticle bto bthe bset. bThe binsurer bis bnot brequired bto
bpay bfor bthe bvalue bof bthe bwhole bset
,The bStandard bMortgage bClause b(Mortgagee bRights) b- bcorrect banswers b-This
bprovision bprotects bthe
interests bof bthe bbank/financial binstitution bthat bholds bthe bmortgage bon bthe binsured
bproperty.
This bclause balso bgrants bcoverage bto bthe bmortgagee, beven bif bthe binsured
bintentionally bcaused bthe bloss. bThe bbank bcan balso bprovide ba bproof bof bloss bor
bpay bthe binsurance bpremiums bin bcase bthe binsured bcannot, bor brefuses bto bdo bso.
bThe bmortgagee bmust balso bbe badvised bif bthe
contract bhas bbeen bcancelled bor bnonrenewed bby bthe binsurer
broad bevidence brule b- bcorrect banswers b-which bis ba bcombination bof
"replacement bcost bminus bdepreciation" band b"fair bmarket bvalue" bthat ba bjudge
bdetermines
Replacement bCost b- bcorrect banswers b-This bis bdefined bas b"the bcurrent bcost bto
bpurchase bnew, bthe bitem bthat bwas blost bor bdamaged, bwith bno bdeduction bfor
bdepreciation".
Functional bReplacement bCost b- bcorrect banswers b-would bbe bused bto bvalue bof bthe
bproperty bat bthe bcost bto breplace bthe bproperty bthat bwas blost,
damaged bor bdestroyed, bwith bproperty bthat bserves bthe bsame bfunction.
Valued bPolicy bLaw b- bcorrect banswers b-a bstate blaw brequiring binsurance
bcompanies bto bpay bthe bfull b"agreed bvalue" bof bthe bpolicy bin
the bevent bof ba btotal bloss.
• bFlood b(a bseparate bpolicy bmust bbe bpurchased);
• bEarthquake b(a bseparate bpolicy bmust bbe bpurchased);
• bMold;
• bActs bof bWar;
• bParts bof bthe bproperty bin bdisrepair, bsuch bas bworn-out belectrical bwiring band
bplumbing, bair
conditioning, bheating bunits, band broofs. b- bcorrect banswers b-perils bthat bare btypically
bnot bcovered bunder bproperty binsurance bpolicies bare:
Fair bAccess bto bInsurance bRequirements b(FAIR bPlans) b- bcorrect banswers b-state-
mandated binsurance bprograms bthat bprovide b"fair" baccess bto bproperty
insurance bfor bindividuals bwho bcannot bsecure binsurance bin bthe bstandard bmarket.
High brisk b- bcorrect banswers b-FAIR bPlans bare bconsidered bpart bof bthe b"residual
bmarket" bof bany bstate. bInsurers bin bthe bstandard bmarket bmay bconsider bthe
bindividual's bclaims bhistory bor bthe bproperty bthey bare battempting bto binsure, b___
A bliability bloss b- bcorrect banswers b-____ boccurs bwhen ba bperson bor bentity bis
bdetermined bto bhave bbeen bresponsible, bor
, legally bliable, bfor binjury bor bloss bto banother bperson bor bliable bfor bdamage bto
banother's bproperty band
the blaw brequires bthem bto bmake bfinancial brestitution.
A bduty bof bcare b- bcorrect banswers b-arises bwhen bthe blaw brecognizes ba
brelationship bbetween btwo
parties, band bdue bto bthis brelationship, bone bparty bhas ba blegal bobligation bto bact bin
ba bcertain
manner btoward bthe bother. bFor bexample, ba bdepartment bstore bhas ba bduty bto btake
breasonable
care bto bkeep btheir bpremises bsafe bfor bcustomers
Breach bof bDuty b- bcorrect banswers b-A bperson bor bentity bbreaches bthe bduty bof
bcare bby bfailing bto btake breasonable bcare bin bfulfilling bthe bduty.
Contributory bNegligence b- bcorrect banswers b-Common blaw bdefense bagainst
bnegligence bstates bthat bif ban
individual bcontributes bto bhis bor bher bown bloss bin bany bway, bthen banother bcannot
bbe bheld
liable bfor bthe bloss
Comparative bNegligence b- bcorrect banswers b-Law bthat ballows ban binjured bparty bto
bcollect bfrom banother
party bfor ba bloss, beven bwhen bthe binjured bparty bcontributed bto bhis bor bher bown
bloss.
Damages bare breduced bto bthe bextent bof bthe binjured bparty's bnegligence. bThis bis
bthe
defense bused bin bmost bstates.
Assumption bof bRisk b- bcorrect banswers b-In bsome bstates, ba bdoctrine bknown bas
bassumption bof brisk bmay
apply. bAssumption bof brisk bapplies bwhen ba bperson bknowingly bexposes bhimself bor
bherself bto
danger bor binjury. bWhen ba bperson bassumes bthis brisk, bhe bor bshe bmay bbe
bprevented bfrom
recovering bfrom ba bnegligent bparty. bThis bdoctrine bis bfrequently bassociated bwith
binjuries
incurred bby bspectators bat bsporting bevents
Intervening bCause b- bcorrect banswers b-An bindependent baction bthat bbreaks bthe
bchain bof bcausation band
sets bin bmotion ba bnew bchain bof bevents. bWhen bthis boccurs, bthe bintervening bcause
bbecomes
the bproximate bcause bof bloss. bThis bcan bserve bas ba bcommon blaw bdefense.
CAUSALITY PRACTICE EXAM 1 (100%
SOLVED)
Insurable bInterest b- bcorrect banswers b-______in bthe bproperty band bwould bsuffer ba
bfinancial bloss bif bthe bproperty bwere bdamaged bby ban binsured bperil, btheir bfamily
bmembers b(names bneed bnot bbe blisted bin bthe bpolicy), band bothers bsuch bas ba blien
bholder, bfor bexample, bthe bbank bthat bholds bthe bmortgage bon ba bhouse.
Cause bof bLoss bForms b- bcorrect banswers b-____establish band bdefine bthe bcauses
bof bloss b(or bperils) bfor bwhich bcoverage bis bprovided bunder bthe bform. b(Please bdo
bnot bconfuse bthe b"cause bof bloss" bforms bwith bthe b"proof bof bloss" bform, bwhich bis
bthe bform bsubmitted bto bthe binsurance bcompany bby bthe binsured bwhen bthey bhave
ba bclaim.)
,Basic bCause bof bLoss bForm b- bcorrect banswers b-This bform bis ba b"named bperil"
bform, bthat bspecifies bthe bperils binsured bagainst. bThe bperils blisted bon bthis bform
bwill busually bbe, bas bthe bname bimplies,
the bmost bbasic bperils. bThis bform bwill bonly bcover bthose bperils bthat bare
bspecifically bnamed bin bthe bform.
Broad bCause bof bLoss bForm b- bcorrect banswers b-This bform bis balso ba b"named
bperil" bform band bprovides bcoverage bfor bthe bperils bnamed bin bthe bbasic bform, bbut
badds badditional bperils band bnames
them bon bthe bform.
Special bCause bof bLoss bForm b- bcorrect banswers b-___form bis ban b"open bperil" bor
b"all brisk"
form bthat bprovides bcoverage bfor ball brisks bof bloss, bfrom bany bperil, bexcept bthose
bthat bare
specifically bexcluded bin bthe bpolicy. bRemember bfor byour bstate blicensing bexam bthat
when bcoverage bis bprovided bunder ban bopen bperil bform, bthe bburden bof bproof blies
bwith
the binsurance bcompany bto bprove bthat bthe bcause bof bloss bis bexcluded.
Appraisal bClause b- bcorrect banswers b-This bproperty binsurance bprovision ballows
beither bthe binsured bor bthe binsurance bcompany bto bdemand ba bbinding bappraisal bof
bthe bdamaged bproperty bin bthe bevent bof ba bdispute bas bto bthe bvalue bof bthe
bproperty. bThe bclause balso bestablishes bthe brequired bappraisal bprocedure.
Coinsurance bClause b- bcorrect banswers b-A bprovision bin bproperty binsurance
bpolicies bstating bthat bthe binsurance bcompany band bthe binsured bwill bshare bin bthe
bloss bincurred bby bthe binsured, bbased bon ba bfixed bpercentage bof bthe bvalue bof bthe
binsured bproperty. bIn baddition, bthe binsured bwill bface ba bpenalty, band bmust bpay ba
bhigher bpercentage bon bthe bloss bif bthey bdo bnot binsure bthe bproperty bfor ba bcertain
bpercentage bof bits bfull bvalue b(usually bat bleast b80%). bSometimes, bin bDwelling b&
bHomeowners bpolicies bthis bclause bis bcalled bthe b"Loss bSettlement bClause".
Concurrent bCausation b- bcorrect banswers b-This bterm, bwhen breferring bto bproperty
binsurance, bis ba bdoctrine bstating bthat bif bloss bor bdamage bto bproperty boccurs bas
ba bresult bof bmore bthan bone bcause, bone bof bwhich bis bcovered bunder bthe bpolicy,
bwhile bthe bother bcause bis bnot bcovered, bthe bdamages bare bstill blikely bto bbe
bcompensated bby bthe binsurer. bHowever, bthis bdoctrine bis bbeing brevisited
bfrequently bin bthe bcourts band ba bnumber bof brecent bcases bhave bbeen bdecided bin
bfavor bof bdenying bthe bclaim.
Pair bor bSet bClause b- bcorrect banswers b-This bpolicy bprovision bstates bthat bif bpart
bof ba bpair bor bset bis blost bor bdamaged, bthe bloss bwill bbe bvalued bas ba bfair
bproportion bof bthe btotal bvalue bof bthe bset. bIt bgives bconsideration bto bthe
bimportance bof bthe bdamaged barticle bto bthe bset. bThe binsurer bis bnot brequired bto
bpay bfor bthe bvalue bof bthe bwhole bset
,The bStandard bMortgage bClause b(Mortgagee bRights) b- bcorrect banswers b-This
bprovision bprotects bthe
interests bof bthe bbank/financial binstitution bthat bholds bthe bmortgage bon bthe binsured
bproperty.
This bclause balso bgrants bcoverage bto bthe bmortgagee, beven bif bthe binsured
bintentionally bcaused bthe bloss. bThe bbank bcan balso bprovide ba bproof bof bloss bor
bpay bthe binsurance bpremiums bin bcase bthe binsured bcannot, bor brefuses bto bdo bso.
bThe bmortgagee bmust balso bbe badvised bif bthe
contract bhas bbeen bcancelled bor bnonrenewed bby bthe binsurer
broad bevidence brule b- bcorrect banswers b-which bis ba bcombination bof
"replacement bcost bminus bdepreciation" band b"fair bmarket bvalue" bthat ba bjudge
bdetermines
Replacement bCost b- bcorrect banswers b-This bis bdefined bas b"the bcurrent bcost bto
bpurchase bnew, bthe bitem bthat bwas blost bor bdamaged, bwith bno bdeduction bfor
bdepreciation".
Functional bReplacement bCost b- bcorrect banswers b-would bbe bused bto bvalue bof bthe
bproperty bat bthe bcost bto breplace bthe bproperty bthat bwas blost,
damaged bor bdestroyed, bwith bproperty bthat bserves bthe bsame bfunction.
Valued bPolicy bLaw b- bcorrect banswers b-a bstate blaw brequiring binsurance
bcompanies bto bpay bthe bfull b"agreed bvalue" bof bthe bpolicy bin
the bevent bof ba btotal bloss.
• bFlood b(a bseparate bpolicy bmust bbe bpurchased);
• bEarthquake b(a bseparate bpolicy bmust bbe bpurchased);
• bMold;
• bActs bof bWar;
• bParts bof bthe bproperty bin bdisrepair, bsuch bas bworn-out belectrical bwiring band
bplumbing, bair
conditioning, bheating bunits, band broofs. b- bcorrect banswers b-perils bthat bare btypically
bnot bcovered bunder bproperty binsurance bpolicies bare:
Fair bAccess bto bInsurance bRequirements b(FAIR bPlans) b- bcorrect banswers b-state-
mandated binsurance bprograms bthat bprovide b"fair" baccess bto bproperty
insurance bfor bindividuals bwho bcannot bsecure binsurance bin bthe bstandard bmarket.
High brisk b- bcorrect banswers b-FAIR bPlans bare bconsidered bpart bof bthe b"residual
bmarket" bof bany bstate. bInsurers bin bthe bstandard bmarket bmay bconsider bthe
bindividual's bclaims bhistory bor bthe bproperty bthey bare battempting bto binsure, b___
A bliability bloss b- bcorrect banswers b-____ boccurs bwhen ba bperson bor bentity bis
bdetermined bto bhave bbeen bresponsible, bor
, legally bliable, bfor binjury bor bloss bto banother bperson bor bliable bfor bdamage bto
banother's bproperty band
the blaw brequires bthem bto bmake bfinancial brestitution.
A bduty bof bcare b- bcorrect banswers b-arises bwhen bthe blaw brecognizes ba
brelationship bbetween btwo
parties, band bdue bto bthis brelationship, bone bparty bhas ba blegal bobligation bto bact bin
ba bcertain
manner btoward bthe bother. bFor bexample, ba bdepartment bstore bhas ba bduty bto btake
breasonable
care bto bkeep btheir bpremises bsafe bfor bcustomers
Breach bof bDuty b- bcorrect banswers b-A bperson bor bentity bbreaches bthe bduty bof
bcare bby bfailing bto btake breasonable bcare bin bfulfilling bthe bduty.
Contributory bNegligence b- bcorrect banswers b-Common blaw bdefense bagainst
bnegligence bstates bthat bif ban
individual bcontributes bto bhis bor bher bown bloss bin bany bway, bthen banother bcannot
bbe bheld
liable bfor bthe bloss
Comparative bNegligence b- bcorrect banswers b-Law bthat ballows ban binjured bparty bto
bcollect bfrom banother
party bfor ba bloss, beven bwhen bthe binjured bparty bcontributed bto bhis bor bher bown
bloss.
Damages bare breduced bto bthe bextent bof bthe binjured bparty's bnegligence. bThis bis
bthe
defense bused bin bmost bstates.
Assumption bof bRisk b- bcorrect banswers b-In bsome bstates, ba bdoctrine bknown bas
bassumption bof brisk bmay
apply. bAssumption bof brisk bapplies bwhen ba bperson bknowingly bexposes bhimself bor
bherself bto
danger bor binjury. bWhen ba bperson bassumes bthis brisk, bhe bor bshe bmay bbe
bprevented bfrom
recovering bfrom ba bnegligent bparty. bThis bdoctrine bis bfrequently bassociated bwith
binjuries
incurred bby bspectators bat bsporting bevents
Intervening bCause b- bcorrect banswers b-An bindependent baction bthat bbreaks bthe
bchain bof bcausation band
sets bin bmotion ba bnew bchain bof bevents. bWhen bthis boccurs, bthe bintervening bcause
bbecomes
the bproximate bcause bof bloss. bThis bcan bserve bas ba bcommon blaw bdefense.
