ARKANSAS ADJUSTER UPDATED EXAM SCRIPT
QUESTIONS AND ANSWERS MARKED A+
✔✔Stan built a porch for his home three years ago at a cost of $10,000. The value of
the porch has depreciated by $6,000, and it would cost $12,000 to replace it today. After
Stan's porch burnt down during a BBQ today, how much would a Standard Fire Policy
indemnify Stan for his porch? - ✔✔??
✔✔Which of the following is NOT considered an "out-of-pocket expense" in health
insurance?
A. Deductible
B. Copayment
C. Coinsurance
D. Policy premiums - ✔✔D. Policy premiums
✔✔An insurance adjuster is obliged to inform claimants of their rights under the
insurance contract in which of the following situations?
A. Claims involving traumatized claimants
B. Every claim the adjuster handles
C. Claims involving elderly claimants
D. Third-party claims - ✔✔Every claim the adjuster handles
✔✔Jason's auto policy states that the insurer may cancel coverage if a premium is more
than 30 days late. However, Jason is currently more than 30 days late, and has been so
five times in the last year, and his insurer has done nothing about it. When Jason gets
into an accident and files a claim, which of the following is most likely to happen?
A. The insurer will pay the claim because of the express waiver they have made by not
canceling Jason's policy the previous times he was late with his payments.
B. The insurer will pay the claim because of the implied waiver they have made by not
canceling Jason's policy the previous times he was late with his payments.
C. The insurer will deny the claim and cancel Jason's policy because of the implied
waiver they have made by not canceling his policy the previous times he was late with
his payments.
,D. The insurer will deny the claim and cancel Jason's policy because he is - ✔✔The
insurer will pay the claim because of the implied waiver they have made by not
canceling Jason's policy the previous times he was late with his payments.
✔✔Arlene's house suffered structural damage in an earthquake last year, but her policy
does not cover earthquake damage, so Arlene never got it fixed. When a tornado rips
through her neighborhood, it causes some roof damage totaling $2,000, and Arlene
sees an opportunity in the situation. She files a claim for the roof damage, but also
claims that the tornado caused the structural damage to her house that was actually
caused by the earthquake last year. Which of the following statements is true?
A. Arlene has just created a morale hazard.
B. Arlene has just created a physical hazard.
C. Arlene has just committed hard fraud.
D. Arlene has just committed soft fraud. - ✔✔Arlene has just committed soft fraud.
✔✔When Jane rear-ends Frank, she causes minor damage to Frank's car, but Frank is
not hurt. However, when Jane's insurer asks him about the accident, Frank claims that
his back and neck have been hurting a lot because of the collision, even though he is
actually fine. Frank is guilty of: - ✔✔soft fraud.
✔✔Which of the following is NOT an adjuster's duty in the claim process?
A. Investigating a claim
B. Determining coverage on a claim
C. Evaluating a claim
D. Filing a claim - ✔✔Filing a claim
✔✔A Discovery Form Commercial Crime policy can apply to losses discovered during
the policy period, as well as up to how many days after its expiration date? - ✔✔??
✔✔In Arkansas, workers' compensation insurance can cover funeral expenses, up to: -
✔✔$6000
✔✔Under the Earthquake and Volcanic Eruption endorsement in a commercial property
policy, what is the time span within which multiple earthquake or volcanic events are
considered a "single occurrence" for coverage purposes? - ✔✔??
,✔✔In order to renew an Arkansas adjuster license, an adjuster must complete: - ✔✔24
hours of continuing education, including 3 hours of ethics
✔✔When Acme Paper Mill was struck by lightning, the resulting damage included a
burst waste pipe, which began leaking chemical-laden waste water into the county
aquifer. Acme Paper Mill discovered the leak 2 weeks later and reported it to their
insurer immediately. Which additional coverage could help Acme with the expense of
cleaning up the contaminated water? - ✔✔Pollutant Cleanup and Removal Insurance
✔✔Marlene has been living in her $120,000 home for 31 years. Because she has paid
off the mortgage, she decides to save some money on her monthly insurance premiums
by reducing her homeowners coverage to $40,000. After a severe hailstorm totals her
roof, her adjuster estimates the damage at $12,000. Assuming the insurer imposes the
standard coinsurance penalty, and ignoring the deductible, how much will Marlene
receive in the settlement? - ✔✔$5,000
✔✔Jim adjusts auto damage claims. He supplements his paycheck with kickbacks from
a local body shop that he recommends to claimants involved in these accidents. In
accepting monetary gifts for business referrals, Jim is acting: - ✔✔unethically.
✔✔In Ocean Marine insurance, this term of sale states that the seller of goods is
responsible for damage to the cargo during shipment: - ✔✔Cost, Insurance, and Freight
(CIF)
✔✔Workers' compensation insurance can provide compensation for all of the following,
EXCEPT:
A. lost vacation time
B. medical expenses
C. death
D. lost income - ✔✔lost vacation time
✔✔While shopping at Acme, Mark slips and falls on a wet floor, knocking over some
shelves, smashing a window, and injuring his knee. The medical costs for Mark's knee
surgery total $8,000, and he will live the rest of his life with a limp since his knee may
never fully heal. Which of these costs will be most difficult for Acme's insurer and Mark
to negotiate?
A. The cost to replace the window
B. The medical bills associated with the surgery
, C. The mental anguish associated with never fully recovering
D. The cost to replace the shelves - ✔✔C. The mental anguish associated with never
fully recovering
✔✔Jared recently purchased a 25 foot watercraft with a 250 horsepower motor. While
cruising on the lake, he accidentally runs into Gary's boat, causing $2,500 in damage to
Gary's hull. How will Jared's insurer respond when Gary files a claim against Jared's
homeowners policy for the damage he caused? - ✔✔??
✔✔If an adjuster needs to find clarification about what actually constitutes a collision, in
which section of an insurance policy would she find that information? - ✔✔?
✔✔In a BOP, the purpose of Supplementary Payments in conjunction with liability
coverage is to:
A. make incidental payments to an injured claimant before the final settlement amount is
reached.
B. cover costs associated with defending and investigating a claim against the insured.
C. cover a claimant's lost wages after suffering an injury caused by the insured.
D. cover the cost of additional damage that was discovered after the settlement was
paid - ✔✔??
✔✔Jesse's home is worth $200,000 and he has a homeowners policy with a $160,000
limit. After a covered loss, Jesse is left with a total of $10,000 in damages. Assuming
the insurer requires the standard 80% level of insurance for coinsurance purposes, and
ignoring any deductibles, how much will Jesse receive in indemnification? - ✔✔.
$10,000
✔✔Jay's Chip Factory makes potato chips, and it gets chip bags from Bags, Inc. One
day, the bag-making machine at Bags, Inc. broke down, and thus, Jay's Chip Factory
couldn't get the bags it needed to bag its potato chips. Jay's Chip Factory had to shut
down production temporarily while waiting on Bags, Inc. to fix their machine. Jay's lost
business income may be covered under what coverage in its Equipment Breakdown
Protection Coverage Form?
A. Brands and Labels
B. Business Income and Extra Expense
C. Contingent Business Income and Extra Expense
QUESTIONS AND ANSWERS MARKED A+
✔✔Stan built a porch for his home three years ago at a cost of $10,000. The value of
the porch has depreciated by $6,000, and it would cost $12,000 to replace it today. After
Stan's porch burnt down during a BBQ today, how much would a Standard Fire Policy
indemnify Stan for his porch? - ✔✔??
✔✔Which of the following is NOT considered an "out-of-pocket expense" in health
insurance?
A. Deductible
B. Copayment
C. Coinsurance
D. Policy premiums - ✔✔D. Policy premiums
✔✔An insurance adjuster is obliged to inform claimants of their rights under the
insurance contract in which of the following situations?
A. Claims involving traumatized claimants
B. Every claim the adjuster handles
C. Claims involving elderly claimants
D. Third-party claims - ✔✔Every claim the adjuster handles
✔✔Jason's auto policy states that the insurer may cancel coverage if a premium is more
than 30 days late. However, Jason is currently more than 30 days late, and has been so
five times in the last year, and his insurer has done nothing about it. When Jason gets
into an accident and files a claim, which of the following is most likely to happen?
A. The insurer will pay the claim because of the express waiver they have made by not
canceling Jason's policy the previous times he was late with his payments.
B. The insurer will pay the claim because of the implied waiver they have made by not
canceling Jason's policy the previous times he was late with his payments.
C. The insurer will deny the claim and cancel Jason's policy because of the implied
waiver they have made by not canceling his policy the previous times he was late with
his payments.
,D. The insurer will deny the claim and cancel Jason's policy because he is - ✔✔The
insurer will pay the claim because of the implied waiver they have made by not
canceling Jason's policy the previous times he was late with his payments.
✔✔Arlene's house suffered structural damage in an earthquake last year, but her policy
does not cover earthquake damage, so Arlene never got it fixed. When a tornado rips
through her neighborhood, it causes some roof damage totaling $2,000, and Arlene
sees an opportunity in the situation. She files a claim for the roof damage, but also
claims that the tornado caused the structural damage to her house that was actually
caused by the earthquake last year. Which of the following statements is true?
A. Arlene has just created a morale hazard.
B. Arlene has just created a physical hazard.
C. Arlene has just committed hard fraud.
D. Arlene has just committed soft fraud. - ✔✔Arlene has just committed soft fraud.
✔✔When Jane rear-ends Frank, she causes minor damage to Frank's car, but Frank is
not hurt. However, when Jane's insurer asks him about the accident, Frank claims that
his back and neck have been hurting a lot because of the collision, even though he is
actually fine. Frank is guilty of: - ✔✔soft fraud.
✔✔Which of the following is NOT an adjuster's duty in the claim process?
A. Investigating a claim
B. Determining coverage on a claim
C. Evaluating a claim
D. Filing a claim - ✔✔Filing a claim
✔✔A Discovery Form Commercial Crime policy can apply to losses discovered during
the policy period, as well as up to how many days after its expiration date? - ✔✔??
✔✔In Arkansas, workers' compensation insurance can cover funeral expenses, up to: -
✔✔$6000
✔✔Under the Earthquake and Volcanic Eruption endorsement in a commercial property
policy, what is the time span within which multiple earthquake or volcanic events are
considered a "single occurrence" for coverage purposes? - ✔✔??
,✔✔In order to renew an Arkansas adjuster license, an adjuster must complete: - ✔✔24
hours of continuing education, including 3 hours of ethics
✔✔When Acme Paper Mill was struck by lightning, the resulting damage included a
burst waste pipe, which began leaking chemical-laden waste water into the county
aquifer. Acme Paper Mill discovered the leak 2 weeks later and reported it to their
insurer immediately. Which additional coverage could help Acme with the expense of
cleaning up the contaminated water? - ✔✔Pollutant Cleanup and Removal Insurance
✔✔Marlene has been living in her $120,000 home for 31 years. Because she has paid
off the mortgage, she decides to save some money on her monthly insurance premiums
by reducing her homeowners coverage to $40,000. After a severe hailstorm totals her
roof, her adjuster estimates the damage at $12,000. Assuming the insurer imposes the
standard coinsurance penalty, and ignoring the deductible, how much will Marlene
receive in the settlement? - ✔✔$5,000
✔✔Jim adjusts auto damage claims. He supplements his paycheck with kickbacks from
a local body shop that he recommends to claimants involved in these accidents. In
accepting monetary gifts for business referrals, Jim is acting: - ✔✔unethically.
✔✔In Ocean Marine insurance, this term of sale states that the seller of goods is
responsible for damage to the cargo during shipment: - ✔✔Cost, Insurance, and Freight
(CIF)
✔✔Workers' compensation insurance can provide compensation for all of the following,
EXCEPT:
A. lost vacation time
B. medical expenses
C. death
D. lost income - ✔✔lost vacation time
✔✔While shopping at Acme, Mark slips and falls on a wet floor, knocking over some
shelves, smashing a window, and injuring his knee. The medical costs for Mark's knee
surgery total $8,000, and he will live the rest of his life with a limp since his knee may
never fully heal. Which of these costs will be most difficult for Acme's insurer and Mark
to negotiate?
A. The cost to replace the window
B. The medical bills associated with the surgery
, C. The mental anguish associated with never fully recovering
D. The cost to replace the shelves - ✔✔C. The mental anguish associated with never
fully recovering
✔✔Jared recently purchased a 25 foot watercraft with a 250 horsepower motor. While
cruising on the lake, he accidentally runs into Gary's boat, causing $2,500 in damage to
Gary's hull. How will Jared's insurer respond when Gary files a claim against Jared's
homeowners policy for the damage he caused? - ✔✔??
✔✔If an adjuster needs to find clarification about what actually constitutes a collision, in
which section of an insurance policy would she find that information? - ✔✔?
✔✔In a BOP, the purpose of Supplementary Payments in conjunction with liability
coverage is to:
A. make incidental payments to an injured claimant before the final settlement amount is
reached.
B. cover costs associated with defending and investigating a claim against the insured.
C. cover a claimant's lost wages after suffering an injury caused by the insured.
D. cover the cost of additional damage that was discovered after the settlement was
paid - ✔✔??
✔✔Jesse's home is worth $200,000 and he has a homeowners policy with a $160,000
limit. After a covered loss, Jesse is left with a total of $10,000 in damages. Assuming
the insurer requires the standard 80% level of insurance for coinsurance purposes, and
ignoring any deductibles, how much will Jesse receive in indemnification? - ✔✔.
$10,000
✔✔Jay's Chip Factory makes potato chips, and it gets chip bags from Bags, Inc. One
day, the bag-making machine at Bags, Inc. broke down, and thus, Jay's Chip Factory
couldn't get the bags it needed to bag its potato chips. Jay's Chip Factory had to shut
down production temporarily while waiting on Bags, Inc. to fix their machine. Jay's lost
business income may be covered under what coverage in its Equipment Breakdown
Protection Coverage Form?
A. Brands and Labels
B. Business Income and Extra Expense
C. Contingent Business Income and Extra Expense
