ADJUSTER PRO PRACTICE EXAM TEST DUE ON

ADJUSTER PRO PRACTICE EXAM TEST DUE ON John is doing some lawn maintenance using a steel blade on his weed-whacker. He fails to properly tighten the blade and it comes loose while he is trimming some tall grass at the edge of his property. The blade flies off towards his neighbor's house and crashes into the HVAC unit, severing the lines and effectively destroying the unit. Which coverage in John's homeowners policy might pay for the damage he caused to his neighbor's HVAC system? A. Coverage E - Personal Liability B. Coverage B - Other Structures C. None D. Coverage A - Dwelling - CORRECT ANSWER-A Which of the following expenses would NOT be covered under a homeowners policy additional coverage called Claims Expenses? A. Interest accrual on judgements B. Administrative costs related to renewing the insured's policy C. Premiums for bonds required in a lawsuit defended by the insurer D. Up to $250 per day for the insured's lost wages while the insured is helping with the claim investigation - CORRECT ANSWER-B A neighbor stepped on a rusty rake while walking through Jake's backyard, unannounced. He ends up with a bad case of tetanus and has to stay in the hospital for three days. He files a claim against Jake, who protests any wrongdoing because he believes his neighbor was trespassing and should be responsible for his own injury. Jake wants a court of law to settle the dispute. How can the insurer settle the claim put forth by Jake's neighbor? A. The insurer can settle anyway it finds advantageous to its interests. B. The insurer must use arbitration since Jake feels he is not at fault. C. The insurer can only settle in court if Jake demands a lawsuit. D. The insurer must settle however Jake's neighbor wishes. - CORRECT ANSWER-A Frances is visiting her mom's grave and notices that several headstones in the cemetery have been defaced with spray-paint, including her mother's. Frances hires a professional cleaning service to remove the spray-paint from her mother's headstone. Which type of additional coverage in her homeowners policy could help Frances with the cost of removing the paint? A. None B. Grave Markers coverage C. Reasonable repairs coverage D. Debris Removal coverage - CORRECT ANSWER-B Following a covered loss, which of these expenses would NOT be covered under Coverage F - Medical Payments in a homeowners policy? A. Funeral services B. Dental costs C. Hospital stays D. Weight loss surgery - CORRECT ANSWER-D Paul lives in an area where property values are appreciating rapidly. He would like his homeowner's policy to reflect the increase in the value of his home. Which endorsement might Paul purchase to accomplish this? A. Inflation Guard B. Increased Limits on Personal Property C. Additional Structures D. Valuation Endorsement - CORRECT ANSWER-A Under Coverage F - Medical Payments to Others, the Payment of Claim provision states: A. all payments made under Coverage F will be paid at actual cash value. B. Coverage F is voluntary coverage: even if a claim is paid, it is not an admission of the insurer's liability. C. no payments will be made until the insurer's liability has been determined. Under Coverage F - Medical Payments to Others, the Payment of Claim provision states that Coverage F is voluntary coverage: even if a claim is paid, it is not an admission of the insurer's liability. D. the insurer reserves the right to demand a proof of loss before paying an indemnity under Coverage F. - CORRECT ANSWER-B Ron works from home. After a kitchen fire renders his home uninhabitable, he is forced to rent an apartment in town while the repairs are made. Which type of coverage could help Ron pay the cost of renting the apartment? A. Coverage B - Other Structures B. Coverage A - Dwelling C. None D. Coverage D - Loss of Use - CORRECT ANSWER-D John's home is totally destroyed by a fire, and along with it most of his personal property. A few of the items were scheduled in his homeowners policy, such as his Rolex watch and a few antiques, but everything else was left as "unscheduled property." These "unscheduled" items, A. will not be covered. The Scheduled Personal Property endorsement is used to list (or schedule) certain items with higher coverage limits. Otherwise, all personal property normally kept at the insured premises is covered up to the Coverage C limit, with no need to list, or schedule, each individual item. B. will have to be scheduled before they can be covered. C. will take twice as long for indemnification since their times weren't scheduled. D. will be covered under the normal policy limits - CORRECT ANSWER-D The Liberalization clause in a homeowners policy: A. states that the insurer is obligated to pay out only up to the limit set by the policy, but must do so within 60 days of receiving proof of loss. In the HO policy, the Liberalization provision applies not only to changes made during the policy period, but also to any changes up to 60 days before it goes into effect. B. states that only losses occurring during the policy period will be paid. C. applies not only to changes made during the policy period, but also to any changes made up to 60 days before the policy went into effect. D. voids the policy if the insured deliberately conceals or misstates pertinent info. - CORRECT ANSWER-C To meet the 80% level of co-insurance required by his lender, Tom discovers he must insure his home for at least $320,000. What is the value of Tom's home? A. $440,000 B. $256,000 $320,000 / 80% = $400,000 C. $400,000 D. $320,000 - CORRECT ANSWER-C Which of the following is true of an Indiana insurer who does not want to renew a policy? A. It may decide not to renew for any reason, but must give the policyholder 30 days' notice beforehand. B. It may decide not to renew for any reason, and is not required to give notice to the policyholder. C. It may only decide not to renew if the policyholder has paid less than 50% of his premiums in the last quarter, and must give the policyholder 10 days' notice beforehand. D. Its reasons for nonrenewal must meet state requirements, and it must give the policyholder 20 days' notice beforehand. - CORRECT ANSWER-D In Indiana, if an insurer wishes to cancel a policy that has been in effect for less than 60 days, it may do so: A. for any reason, as long as it refunds any pre-paid premiums. That is incorrect. In Indiana, if an insurer wishes to cancel a policy that has been in effect for less than 60 days, it may do so only for a state-approved reason, and must give the policyholder 10 days' written notice before cancellation. B. only for a state-approved reason, and must give the policyholder 10 days' written notice before cancellation. C. only for violation of safety codes, and must give the policyholder 20 days' written notice before cancellation. D. for any reason, and must give the policyholder 15 days' written notice before cancellation. - CORRECT ANSWER-B An unendorsed D-1 Basic Form covers what 3 perils? - CORRECT ANSWER-fire, lightning, internal explosion Frank is only going to use his property a few times a year as a hunting lounge. What coverage should he get? - CORRECT ANSWER-Dwelling Policy Molly leaves town for a one week vacation. When she returns, she finds that the back door to her house has been kicked in and damage. Her laptop is gone, and-to her surprise, she finds that the pipe copper piping in the basement has been torn out and stolen as well! She has a DP-3 with coverage for contents but no additional endorsements. What, if anything, is covered? - CORRECT ANSWER-the damage to the door and the copper piping ABC Trucking owns a nice vacation house in the country, to which they regularly bring high-ticket clients as a benefit for staying loyal to them. They would like to purchase a policy to insure the property from things like fire, windstorm damage, or vandalism. What policy type could ABC Trucking purchase to cover the property? - CORRECT ANSWER-Dwelling policy Leonard has a dwelling insured under a DP-1 with a limit of liability of $100,000 and no endorsements. An automobile swerves off the road and crashes through Leonard's dwelling. The cost to repair the damage to the wall is $10,000. However, when Leonard attempts to get the permits to do the repair, he finds out that current codes require that he perform a $1,000 upgrade to the plumbing in the wall. How much will the policy pay (ignore the deductible)? - CORRECT ANSWER-Nothing. Damage from vehicles is not a covered peril under a DP-1 without an endorsement. Joe has a basic DP-1 policy on his home, without any endorsements. During a storm, a tree limb is blown down onto his attached garage. The limb crashes through the roof and lands on Joe's water softener tank, destroying it completely. Which of these damages would be covered under Coverage B in Joe's policy? - CORRECT ANSWERNone François has a DP-3 policy on his home, which covers him from most losses on an open-peril basis. He likes to collect old films, many of which are recorded on Safety Film (cellulose acetate). The problem is that cellulose acetate film gradually breaks down over time and will eventually "self destruct." The films are uninsurable for gradual breakdown under the DP-3 policy because: - CORRECT ANSWER-damage caused by an inherent vice is excluded. Dwelling coverage would provide indemnification for damages to all of the following items EXCEPT: - CORRECT ANSWER-a car parked in a detached garage Dan has a DP-3 policy on his $100,000 home. A tree falls onto his attached garage during a storm and breaks through the roof, causing $5,000 in damage. Under which coverage within the dwelling policy would the damage to roof possibly be covered? - CORRECT ANSWER-Coverage A In a dwelling policy, coverage for a stand alone lamp-post in the front yard would fall under: - CORRECT ANSWER-Coverage B Dwelling policies exclude inherent vice because: - CORRECT ANSWER-Items will eventually self destruct Christina owns a home in Midland Texas. When she purchased the home, she fixed up the detached garage, turning it into Harley into a studio apartment, which she rents out for $1000/month. If ears wind storm comes through town and blows the roof offer home and studio rental. Christina insurance her home with a $200,000 DP-three policy. How much of her at detached garage will be covered under her policy? - CORRECT ANSWER-$0 Christine is detached garage it's not covered under the policy. Grace purchased 40 acres of land a couple miles outside of town. To save time and money, she put up a basic mobile home and installed it permanently in the ground. Not planning on farming on the other land, Grace is now looking For a way to ensure this second home and property. Which policy could best fit her needs? - CORRECT ANSWER-Dwelling Policy Dan has DP-3 policy on his home. During a storm, a tree falls onto his attached garage. The tree crashes through the garage roof and lands on dance water softener tank, destroying it completely. Which of these damages would be covered under coverage A? - CORRECT ANSWER-The roof and the water softener Joe has a basic DP-1 policy on his home, without any endorsements. During a storm, a tree limb is blown down onto his attached garage. The limb crashes through the roof and land on Joe's water softener tank, destroying it completely. Which of these damages would be covered under Coverage B in Joe's policy? - CORRECT ANSWERNon