West Virginia Adjuster Exam 8 UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Stephanie lets Chad borrow her truck so he can pick up materials for his home remodeling
project. While backing out of the parking space at the hardware store, Chad backs into Mary's
vehicle and damages her driver's side door. Which insurance policy would cover the damages
caused to Mary's car? - CORRECT ANSWER - Stephanie's auto liability insurance
Tom purchases a new car from his local car dealer. He also decides to get insurance coverage
that will pay to repair the car if he were to get into an accident. This is because Tom wants to
protect: - CORRECT ANSWER - his own financial interest in the car.
How is concealment distinct from misrepresentation? - CORRECT ANSWER - Concealment
is deliberately withholding information, while misrepresentation is stating a falsehood.
Oswald can't afford to take his car to a shop, even though it is falling into disrepair. The
windshield has been cracked for some time, and two of the lights are broken, not to mention the
oil leak he noticed last week. While he is driving on icy roads one day, he loses control and
slides into a guardrail, damaging the front bumper. He is upset by the accident, but then sees an
opportunity. He files a claim for the accident, stating that the windshield, lights, and oil tank
were damaged by the collision. Oswald's actions constitute: - CORRECT ANSWER - soft
fraud.
In an insurance contract, consideration from both parties is comprised of: - CORRECT
ANSWER - premiums from the insured and the promise to pay from the insurer.
Darren's SUV cost him $28,500 when he bought it new five years ago, but it would cost $29,600
to replace it today. The vehicle has an annual depreciation of $1,200. Darren loses control while
driving too fast around a bend in the road and flips his vehicle, totaling it. Assuming Darren's
auto insurance policy pays ACV, how much can he expect to receive in indemnification for this
claim? - CORRECT ANSWER - $23,600
, 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? - CORRECT ANSWER - $760,000
Jack must carry at least $760,000 (80% of the value of his home) in insurance in order to be fully
insured.
Skip's Convenience Store suffers severe fire damage after a gas pump explodes. The adjuster
asks if the emergency shutoff system, which is required by the policy, was properly maintained
and functional at the time of the accident. Skip says "yes," even though the system was actually
broken at the time. Which of the following statements is true? - CORRECT ANSWER - Skip
is guilty of misrepresentation and violating a warranty, so the insurer could deny the claim.
Jane's shed burns to the ground during a tornado, when a tree falls on the roof and snaps a power
line, which then ignites the structure. What is the proximate cause of the loss? - CORRECT
ANSWER - Wind
Greg lends Frank his arc welder to build a custom smoker grill. While Frank is using the arc
welder, he suffers a severe injury when the tool malfunctions. Even though Greg did not
knowingly lend Frank a faulty welder, he is charged with committing a/an __________ when
Frank brings a civil suit against him. - CORRECT ANSWER - negligent tort
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? - CORRECT
ANSWER - $200 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.
All of the following scenarios may be covered under a liability insurance policy, except: -
CORRECT ANSWER - A homeowner's son breaks her window with a baseball while playing
in the back yard.
Policy rescission means: - CORRECT ANSWER - declaring that the policy was never a valid
agreement.
ACTUAL Exam Questions and CORRECT
Answers
Stephanie lets Chad borrow her truck so he can pick up materials for his home remodeling
project. While backing out of the parking space at the hardware store, Chad backs into Mary's
vehicle and damages her driver's side door. Which insurance policy would cover the damages
caused to Mary's car? - CORRECT ANSWER - Stephanie's auto liability insurance
Tom purchases a new car from his local car dealer. He also decides to get insurance coverage
that will pay to repair the car if he were to get into an accident. This is because Tom wants to
protect: - CORRECT ANSWER - his own financial interest in the car.
How is concealment distinct from misrepresentation? - CORRECT ANSWER - Concealment
is deliberately withholding information, while misrepresentation is stating a falsehood.
Oswald can't afford to take his car to a shop, even though it is falling into disrepair. The
windshield has been cracked for some time, and two of the lights are broken, not to mention the
oil leak he noticed last week. While he is driving on icy roads one day, he loses control and
slides into a guardrail, damaging the front bumper. He is upset by the accident, but then sees an
opportunity. He files a claim for the accident, stating that the windshield, lights, and oil tank
were damaged by the collision. Oswald's actions constitute: - CORRECT ANSWER - soft
fraud.
In an insurance contract, consideration from both parties is comprised of: - CORRECT
ANSWER - premiums from the insured and the promise to pay from the insurer.
Darren's SUV cost him $28,500 when he bought it new five years ago, but it would cost $29,600
to replace it today. The vehicle has an annual depreciation of $1,200. Darren loses control while
driving too fast around a bend in the road and flips his vehicle, totaling it. Assuming Darren's
auto insurance policy pays ACV, how much can he expect to receive in indemnification for this
claim? - CORRECT ANSWER - $23,600
, 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? - CORRECT ANSWER - $760,000
Jack must carry at least $760,000 (80% of the value of his home) in insurance in order to be fully
insured.
Skip's Convenience Store suffers severe fire damage after a gas pump explodes. The adjuster
asks if the emergency shutoff system, which is required by the policy, was properly maintained
and functional at the time of the accident. Skip says "yes," even though the system was actually
broken at the time. Which of the following statements is true? - CORRECT ANSWER - Skip
is guilty of misrepresentation and violating a warranty, so the insurer could deny the claim.
Jane's shed burns to the ground during a tornado, when a tree falls on the roof and snaps a power
line, which then ignites the structure. What is the proximate cause of the loss? - CORRECT
ANSWER - Wind
Greg lends Frank his arc welder to build a custom smoker grill. While Frank is using the arc
welder, he suffers a severe injury when the tool malfunctions. Even though Greg did not
knowingly lend Frank a faulty welder, he is charged with committing a/an __________ when
Frank brings a civil suit against him. - CORRECT ANSWER - negligent tort
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? - CORRECT
ANSWER - $200 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.
All of the following scenarios may be covered under a liability insurance policy, except: -
CORRECT ANSWER - A homeowner's son breaks her window with a baseball while playing
in the back yard.
Policy rescission means: - CORRECT ANSWER - declaring that the policy was never a valid
agreement.
