Arkansas Health Insurance Adjuster Practice Test Exam Questions with Verified Answers

Herb owns a processing plant outside of town that services all the local farmers. He's been using over-the-road transportation but wants to streamline his business by using the railroads. He contacts ABC Railway Transport and the two come to an agreement: ABC Railway will run a sidetrack onto Herb's business premises, if Herb agrees not to hold ABC Railway responsible for certain liabilities that could result from the sidetrack's use. This agreement would fall under __________ in Herb's Commercial General Liability policy. - CORRECT ANSWER-Insured Contracts What is a reserve, in insurance terms? - CORRECT ANSWER-A pool of collected premiums that the insurer sets aside to pay claims Norris borrows Arnold's truck to pick up some lumber from the hardware store. On the way to the store, Norris collides with a car, injuring the three people inside. The driver suffers $15,000 in injuries, one passenger suffers $25,000, and the other passenger suffers $20,000. Norris has a PAP with liability limits of 50/100/50, and Arnold's policy has liability limits of 25/50/10. How much will the primary policy pay for the injuries? - CORRECT ANSWER-$50,000 Alice is an adjuster and is currently negotiating a settlement with Gale. Which of the following actions that Alice could take would be disrespectful towards Gale, and thus hinder the negotiation process? - CORRECT ANSWER-Assuming to know what Gale wants Which of the following automobile components is NOT covered by a Mechanical Breakdown Insurance policy? - CORRECT ANSWER-Tires (Drive train, steering assembly, engine ARE covered by a mechanical breakdown insurance policy) Which of the following statements applies to replacement cost valuation? A. An actual cash value policy will pay out more than a replacement cost value policy. B. Replacement cost valuations take into account the depreciated value of an item. C. Under replacement cost valuation, insurers may sa