Insurance Adjusting- LA-Questions Solved 100%
Correct| Verified Solutions-Newest 2025
Sara's home was partially destroyed by a fire and she insists it will cost $97,000 to repair
the damage. However, after completing his investigation, the adjuster determined the
repairs could be done for $65,000. All attempts at negotiation have failed. Even though
it's risky to go to court, why might the insurer decide to pursue that course of action? -
✔✔Despite the drawbacks of litigation, the insurer may decide to go to court to avoid
developing a reputation of being a pushover, which could make future claims more
difficult.
What is the main difference between a Full Release Settlement and a No Release
Settlement? - ✔✔In a Full Release Settlement, the claimant signs a release form
giving up the right to additional indemnification; in a No Release Settlement, the
claimant does not sign a release form.
Which of the following is NOT true of arbitration? - ✔✔Arbitrators often have more
expertise than juries.
n insurer can use a Reservation of Rights letter to let the claimant know that the
adjuster will begin the claim process, but might deny coverage if it becomes clear that
the policy does not apply to the losses, or if the claim was reported too late. - ✔✔
Which of the following statements applies to actual cash value? - ✔✔Actual cash
value generally reflects the fair market value of an item.
franchise deductible - ✔✔With a franchise deductible, the policyholder only pays for
damages that are less than his deductible. If the cost of damages equals or exceeds his
deductible, the insurer pays the full amount and the policyholder pays nothing.
,Jack's home is valued at $950,000. How much insurance does he need to carry on his
home in order to be fully insured under a typical insurance policy? - ✔✔Jack must
carry at least $760,000 (80% of the value of his home) in insurance in order to be fully
insured.
Joe is looking for information in his Standard Fire Policy, relating to policy cancellation,
assignment, and subrogation. In which section would he find this information? -
✔✔Conditions
Nichole's car was damaged while it was being serviced at Don's Auto Shop. Nichole's
auto insurance policy covers physical damage to her vehicle, but it will not cover the
damage that occurred while the vehicle was under the control of Don's Auto Shop.
Which provision in her policy states this? - ✔✔Since Nichole's car was in the care and
control of Don's Auto Shop, Don's Auto Shop is responsible for the damages, according
to the No Benefit to Bailee condition of Nichole's policy.
Roxanne bought her 50" TV four years ago for $2,400. During a storm, her house is
struck by lightning and the current fries her TV. The TV depreciates $400 per year, and a
similar TV costs $1,800 today. Assuming Roxanne's homeowners policy pays ACV for
personal property, how much can she expect to receive in indemnification for the
damaged TV? - ✔✔You can calculate ACV by subtracting the total depreciation from
the Replacement cost. In this case, the TV is four years old and has depreciated $400 per
year. This means the total depreciation = $1,600. The replacement cost is $1,800. So,
subtract $1,600 from $1,800 and you get $200.
Joanne sells her house to her sister, Dianne. To save Dianne the trouble of finding her
own homeowners policy, Joanne calls up her insurance company and tells them that
Dianne bought her house and any future claim settlements should be paid to Dianne.
Joanne's insurer tells her that they can't do that because of which condition? -
✔✔The assignment condition states that the policyholder cannot transfer the policy
to someone else unless the insurer agrees to the change in writing.
, Bill's home was destroyed by a tornado, and Nick is adjusting the claim. Bill's home will
cost $235,000 to rebuild. His homeowners policy has a $225,000 limit and a $1,700
deductible. How much would Nick typically calculate the final settlement amount to be?
- ✔✔Because the cost of repairs is more than the policy limit, the final settlement
amount is the full policy limit ($225,000) and the deductible is absorbed into the
amount of the loss that exceeds the limit.
Terry is renting half of a duplex. During a severe storm, lightning strikes a tree in the
front yard and causes a large portion of the tree to fall on Terry's side of the duplex.
Which of the following losses will be covered by Terry's Homeowners 4 policy? -
✔✔HO-4 only covers a renter's personal property, not the structure, so Terry's policy
will only cover the TV and entertainment system.
Andrew's house is struck by lightning. The power surge fries two of the family's laptop
computers, and starts a fire that damages his roof, two living room walls, and a leather
sofa. Which of these damages would fall under Coverage C of Andrew's Homeowners 3
policy? - ✔✔The computers and phones would fall under Coverage C, but there is a
special limit for portable electronics: $1,500.
When the state issues a mandatory evacuation order due to a hurricane, Kimberly is
forced to leave her home. The hurricane causes a lot of damage, but Kimberly's house is
spared. Three weeks later, when Kimberly is finally allowed to return to her home, she
files a claim against her homeowners policy for her increased living expenses. Will it be
accepted? - ✔✔Civil Authority coverage will pay the insured's Additional Living
Expenses for up to two weeks if the insured had to leave the home because of an order
by civil authority. Kimberly's policy will pay her for two of the three weeks that she was
out of her home.
Orlando's house was fully insured when it was completely destroyed by a tornado. All
that's left is a huge pile of debris and a $167,000 mortgage balance. Orlando files a claim
against his DP-3 with a $220,000 limit. Normally, the cost of debris removal is subject to
the policy limit, but Orlando's total costs exceed his limit. Once all cleanup and repairs
are completed, what is the maximum indemnification the insurer could end up paying
Correct| Verified Solutions-Newest 2025
Sara's home was partially destroyed by a fire and she insists it will cost $97,000 to repair
the damage. However, after completing his investigation, the adjuster determined the
repairs could be done for $65,000. All attempts at negotiation have failed. Even though
it's risky to go to court, why might the insurer decide to pursue that course of action? -
✔✔Despite the drawbacks of litigation, the insurer may decide to go to court to avoid
developing a reputation of being a pushover, which could make future claims more
difficult.
What is the main difference between a Full Release Settlement and a No Release
Settlement? - ✔✔In a Full Release Settlement, the claimant signs a release form
giving up the right to additional indemnification; in a No Release Settlement, the
claimant does not sign a release form.
Which of the following is NOT true of arbitration? - ✔✔Arbitrators often have more
expertise than juries.
n insurer can use a Reservation of Rights letter to let the claimant know that the
adjuster will begin the claim process, but might deny coverage if it becomes clear that
the policy does not apply to the losses, or if the claim was reported too late. - ✔✔
Which of the following statements applies to actual cash value? - ✔✔Actual cash
value generally reflects the fair market value of an item.
franchise deductible - ✔✔With a franchise deductible, the policyholder only pays for
damages that are less than his deductible. If the cost of damages equals or exceeds his
deductible, the insurer pays the full amount and the policyholder pays nothing.
,Jack's home is valued at $950,000. How much insurance does he need to carry on his
home in order to be fully insured under a typical insurance policy? - ✔✔Jack must
carry at least $760,000 (80% of the value of his home) in insurance in order to be fully
insured.
Joe is looking for information in his Standard Fire Policy, relating to policy cancellation,
assignment, and subrogation. In which section would he find this information? -
✔✔Conditions
Nichole's car was damaged while it was being serviced at Don's Auto Shop. Nichole's
auto insurance policy covers physical damage to her vehicle, but it will not cover the
damage that occurred while the vehicle was under the control of Don's Auto Shop.
Which provision in her policy states this? - ✔✔Since Nichole's car was in the care and
control of Don's Auto Shop, Don's Auto Shop is responsible for the damages, according
to the No Benefit to Bailee condition of Nichole's policy.
Roxanne bought her 50" TV four years ago for $2,400. During a storm, her house is
struck by lightning and the current fries her TV. The TV depreciates $400 per year, and a
similar TV costs $1,800 today. Assuming Roxanne's homeowners policy pays ACV for
personal property, how much can she expect to receive in indemnification for the
damaged TV? - ✔✔You can calculate ACV by subtracting the total depreciation from
the Replacement cost. In this case, the TV is four years old and has depreciated $400 per
year. This means the total depreciation = $1,600. The replacement cost is $1,800. So,
subtract $1,600 from $1,800 and you get $200.
Joanne sells her house to her sister, Dianne. To save Dianne the trouble of finding her
own homeowners policy, Joanne calls up her insurance company and tells them that
Dianne bought her house and any future claim settlements should be paid to Dianne.
Joanne's insurer tells her that they can't do that because of which condition? -
✔✔The assignment condition states that the policyholder cannot transfer the policy
to someone else unless the insurer agrees to the change in writing.
, Bill's home was destroyed by a tornado, and Nick is adjusting the claim. Bill's home will
cost $235,000 to rebuild. His homeowners policy has a $225,000 limit and a $1,700
deductible. How much would Nick typically calculate the final settlement amount to be?
- ✔✔Because the cost of repairs is more than the policy limit, the final settlement
amount is the full policy limit ($225,000) and the deductible is absorbed into the
amount of the loss that exceeds the limit.
Terry is renting half of a duplex. During a severe storm, lightning strikes a tree in the
front yard and causes a large portion of the tree to fall on Terry's side of the duplex.
Which of the following losses will be covered by Terry's Homeowners 4 policy? -
✔✔HO-4 only covers a renter's personal property, not the structure, so Terry's policy
will only cover the TV and entertainment system.
Andrew's house is struck by lightning. The power surge fries two of the family's laptop
computers, and starts a fire that damages his roof, two living room walls, and a leather
sofa. Which of these damages would fall under Coverage C of Andrew's Homeowners 3
policy? - ✔✔The computers and phones would fall under Coverage C, but there is a
special limit for portable electronics: $1,500.
When the state issues a mandatory evacuation order due to a hurricane, Kimberly is
forced to leave her home. The hurricane causes a lot of damage, but Kimberly's house is
spared. Three weeks later, when Kimberly is finally allowed to return to her home, she
files a claim against her homeowners policy for her increased living expenses. Will it be
accepted? - ✔✔Civil Authority coverage will pay the insured's Additional Living
Expenses for up to two weeks if the insured had to leave the home because of an order
by civil authority. Kimberly's policy will pay her for two of the three weeks that she was
out of her home.
Orlando's house was fully insured when it was completely destroyed by a tornado. All
that's left is a huge pile of debris and a $167,000 mortgage balance. Orlando files a claim
against his DP-3 with a $220,000 limit. Normally, the cost of debris removal is subject to
the policy limit, but Orlando's total costs exceed his limit. Once all cleanup and repairs
are completed, what is the maximum indemnification the insurer could end up paying
