ADJUSTER PRO TEXAS QUESTIONS AND
CORRECT ANSWERS
AllA2ofA2theA2followingA2piecesA2ofA2informationA2canA2beA2foundA2inA2theA2conditionsA2sect
ionA2ofA2anA2insuranceA2policyA2EXCEPT:A2-A2Ans--
CausesA2ofA2lossA2thatA2areA2notA2covered
WhichA2ofA2theA2followingA2bestA2definesA2theA2principleA2ofA2indemnity?A2-A2Ans--
AfterA2aA2loss,A2theA2insuredA2shouldA2beA2restoredA2toA2hisA2approximateA2financialA2con
ditionA2beforeA2theA2loss
SureTrustA2InsuranceA2wasA2foundedA2andA2operatesA2inA2Texas.A2InA2Texas,A2SuretrustA
2isA2consideredA2-A2Ans--aA2domesticA2insurer
WhatA2isA2aA2reserve,A2inA2insuranceA2terms?A2-A2Ans--
AA2poolA2ofA2collectedA2premiumsA2thatA2theA2insurerA2setsA2asideA2toA2payA2claims
WhichA2ofA2theA2followingA2wouldA2youA2findA2inA2theA2ConditionsA2sectionA2ofA2anA2insura
nceA2policy?A2-A2Ans--TheA2insured'sA2dutyA2afterA2aA2loss
WhichA2ofA2theA2followingA2isA2foundA2inA2theA2declarationsA2pageA2ofA2anA2insuranceA2pol
icy?A2-A2Ans--TheA2nameA2ofA2theA2insuredA2party
WhichA2ofA2theA2followingA2refersA2toA2beingA2restoredA2toA2theA2financialA2conditionA2youA
2wereA2inA2beforeA2aA2loss?A2-A2Ans--Indemnification
Dr.A2NelsonA2routinelyA2schedulesA2herA2patientsA2forA2labA2testsA2thatA2theyA2dontA2needA
2soA2sheA2canA2chargeA2theirA2insurersA2forA2moreA2money.A2Dr.A2NelsonA2is:A2-A2Ans--
committingA2healthA2insuranceA2fraud
SixA2StartsA2DevelopmentA2CompanyA2hasA2justA2purchasedA2severalA2largeA2propertiesA
2inA2LasA2Vegas.A2AsA2aA2resultA2ofA2thisA2largeA2purchase,A2theyA2areA2aA2littleA2shortA2on
A2moneyA2andA2decideA2toA2saveA2moneyA2byA2notA2purchasingA2insuranceA2onA2theirA2ne
wA2properties.A2SixA2StarsA2isA2practicing:A2-A2Ans--RiskA2retention
WhichA2ofA2theA2followingA2peopleA2committedA2softA2fraud?A2-A2Ans--
RafaelA2accidentallyA2slippedA2onA2aA2wetA2floorA2atA2theA2supermarket.A2AlthoughA2hisA2o
nlyA2injuryA2wasA2aA2sprainedA2ankle,A2heA2claimedA2heA2hadA2backA2andA2neckA2painA2wh
enA2heA2suedA2theA2supermarketA2inA2anA2effortA2toA2getA2moreA2moneyA2inA2theA2settleme
nt.
WhenA2aA2carA2stopsA2shortA2inA2frontA2ofA2Mike'sA2car,A2heA2managesA2toA2hitA2theA2brake
sA2inA2timeA2andA2avoidsA2aA2collision.A2ToA2Mike'sA2surprise,A2theA2otherA2driverA2thenA2th
,rowsA2theA2carA2intoA2reverseA2andA2backsA2intoA2Mike'sA2car!
A2TheA2otherA2driversA2actionsA2areA2anA2exampleA2of:A2-A2Ans--HardA2fraud
WhenA2LouiseA2goesA2onlineA2andA2fillsA2outA2phonyA2applicationsA2withA2XYZA2AutoA2Ins
uranceA2inA2orderA2toA2printA2theA2temporaryA2insuranceA2cardsA2andA2sellA2themA2forA2aA2
profitA2onA2theA2blackA2market,A2sheA2is:A2-A2Ans--CommittingA2hardA2fraud
LucyA2hasA2insuranceA2onA2anA2expensiveA2necklaceA2sheA2likesA2toA2wearA2toA2workA2ev
eryA2day.A2AfterA2work,A2sheA2takesA2itA2offA2andA2leavesA2itA2inA2herA2car'sA2cupholderA2so
A2sheA2canA2putA2itA2backA2onA2inA2theA2morningA2onA2herA2wayA2toA2work.A2Lucy'sA2behavi
orA2wouldA2beA2consideredA2a:A2-A2Ans--MoraleA2hazard
WhenA2anA2insurerA2issuesA2anA2insuranceA2policy,A2theA2actualA2item,A2person,A2orA2orga
nizationA2thatA2isA2beingA2insuredA2isA2calledA2the:A2-A2Ans--Risk
WhichA2ofA2theA2followingA2situationsA2doesA2notA2involveA2anA2instanceA2ofA2"pureA2risk"A2
-A2Ans--LossA2ofA2moneyA2investedA2inA2theA2stockA2market
WhichA2ofA2theA2followingA2isA2anA2exampleA2ofA2howA2someA2insurersA2areA2fightingA2bac
kA2againstA2insuranceA2fraud?A2-A2Ans--
StartingA2fraudA2bustingA2unitsA2staffedA2withA2formerA2detectivesA2andA2policeA2officers
WhichA2ofA2theA2followingA2isA2NOTA2aA2formA2ofA2insuranceA2fraud?A2-A2Ans--
IncreasingA2yourA2insuranceA2coverageA2whenA2youA2thinkA2aA2lossA2isA2likely
SteveA2hasA2justA2purchasedA2aA2weddingA2ringA2forA2hisA2newA2bride.A2IfA2somethingA2we
reA2toA2happenA2toA2theA2ring,A2he'dA2beA2outA2ofA2aA2lotA2ofA2money,A2soA2heA2purchasesA
2anA2insuranceA2policy.A2HeA2isA2ableA2toA2doA2thisA2because:A2-A2Ans--
TheA2ringA2isA2aA2pureA2risk
HaleyA2takesA2aA2bottleA2ofA2waterA2intoA2aA2store,A2poursA2someA2ofA2itA2onA2theA2floorA2w
henA2noA2oneA2isA2looking,A2andA2thenA2pretendsA2toA2slipA2andA2fall.A2SheA2criesA2outA2for
A2helpA2inA2apparentA2painA2untilA2someoneA2comesA2toA2herA2aid.A2SheA2thenA2suesA2theA
2storeA2forA2herA2fakeA2injuryA2inA2anA2effortA2toA2collectA2anA2insuranceA2settlement.A2Wha
tA2hasA2HaleyA2committed?A2-A2Ans--HardA2fraud
AfterA2anA2earthquake,A2Jake'sA2homeA2isA2stillA2standing,A2butA2itA2isA2aA2littleA2shaken.A2
TheA2damageA2isA2notA2extensiveA2butA2JakeA2wantsA2toA2cashA2inA2onA2theA2situation,A2s
oA2heA2takesA2aA2sledgehammerA2toA2someA2ofA2hisA2extraA2belongingsA2andA2addsA2the
mA2toA2hisA2claim.A2JakeA2hasA2committed:A2-A2Ans--PropertyA2insuranceA2fraud
WhichA2ofA2theA2followingA2isA2anA2exampleA2ofA2aA2hazard?A2-A2Ans--
Sandra'sA2homeA2isA2inA2anA2areaA2ofA2LosA2AngelesA2thatA2isA2oftenA2hitA2byA2earthquake
s
RiskA2avoidanceA2isA2aA2riskA2managementA2techniqueA2that:A2-A2Ans--EliminatesA2risk
,AnA2"occurrence"A2isA2definedA2as:A2-A2Ans--AnA2unexpectedA2eventA2thatA2causesA2loss
WhenA2SallyA2appliesA2forA2anA2autoA2policy,A2herA2agentA2issuesA2herA2aA2_______A2soA2
thatA2sheA2canA2benefitA2fromA2insuranceA2protectionA2whileA2heA2underwritesA2theA2policy
.A2-A2Ans--Binder
Jane'sA2shedA2burnsA2toA2theA2groundA2duringA2aA2tornado,A2whenA2theA2highA2windsA2bre
akA2aA2wallA2ofA2theA2shed,A2knockingA2overA2aA2lanternA2inside.A2WhatA2isA2theA2proximat
eA2causeA2ofA2theA2loss?A2-A2Ans--Wind
DuringA2aA2storm,A2lightningA2strikesA2aA2treeA2inA2Harry'sA2yardA2andA2startsA2aA2fireA2that
A2spreadsA2toA2hisA2shedA2whereA2heA2keepsA2allA2hisA2equipmentA2forA2hisA2landscapingA
2business.A2InA2additionA2toA2theA2shed,A2HarryA2hasA2toA2purchaseA2allA2newA2equipment
A2toA2stayA2inA2business.A2TheA2costA2toA2replaceA2theA2equipmentA2wouldA2beA2considere
d:A2-A2Ans--AA2directA2loss
ClarkA2isA2fillingA2outA2anA2applicationA2forA2anA2insuranceA2policy.A2TheA2applicationA2ask
sA2forA2hisA2birthA2date,A2andA2ClarkA2writesA21/24/67.A2HisA2actualA2birthdayA2isA21/24/63,
A2butA2heA2likesA2toA2appearA2youngerA2soA2heA2usesA2aA2differentA2date.A2ThisA2wouldA2b
eA2called:A2-A2Ans--Misrepresentation
Jason'sA2autoA2policyA2statesA2thatA2theA2insurerA2mayA2cancelA2coverageA2ifA2aA2premiu
mA2isA2moreA2thanA230A2daysA2late.A2However,A2JasonA2isA2currentlyA2moreA2thanA230A2da
ysA2late,A2andA2hasA2beenA2soA2fiveA2timesA2inA2theA2lastA2year,A2andA2hisA2insurerA2hasA2d
oneA2nothingA2aboutA2it.A2WhenA2JasonA2getsA2intoA2anA2accidentA2andA2filesA2aA2claim,A2
whichA2ofA2theA2followingA2isA2mostA2likelyA2toA2happen?A2-A2Ans--
TheA2insurerA2willA2payA2theA2claimA2becauseA2ofA2theA2impliedA2waiverA2theyA2haveA2mad
eA2byA2notA2cancelingA2Jason'sA2policyA2theA2previousA2timesA2heA2wasA2lateA2withA2hisA2p
ayments.
WhatA2isA2aA2binder?A2-A2Ans--
TemporaryA2coverageA2forA2anA2insuranceA2applicantA2untilA2theA2policyA2isA2issued
InA2orderA2toA2qualifyA2forA2anA2insuranceA2policy,A2Lydia'sA2FineA2JewelsA2mustA2agreeA2t
oA2haveA2aA2securityA2guardA2onA2theA2premisesA224/7.A2ThisA2isA2calledA2a:A2-A2Ans--
Warranty
WhichA2ofA2theA2followingA2statementsA2aboutA2theA2principleA2ofA2estoppelA2isA2TRUE?A2-
A2Ans--
EstoppelA2protectsA2theA2insuredA2partyA2fromA2anA2insurerA2whoA2initiallyA2approvesA2cov
erage,A2butA2thenA2laterA2deniesA2coverageA2afterA2theA2insuredA2paysA2forA2repairs.
DrivingA2homeA2afterA2aA214-
hourA2shiftA2SamA2fallsA2asleepA2atA2theA2wheelA2andA2plowsA2intoA2Sandra'sA2home,A2cau
singA2extensiveA2damageA2toA2theA2EastA2wallA2andA2roof.A2AsA2aA2result,A2SandraA2andA2
, herA2familyA2mustA2moveA2intoA2aA2hotelA2untilA2theA2repairsA2areA2completed.A2TheA2costA
2ofA2stayingA2inA2aA2hotelA2is:A2-A2Ans--AnA2indirectA2loss
WhenA2JimA2isA2involvedA2inA2anA2accident,A2heA2immediatelyA2callsA2hisA2insurerA2andA2fil
esA2aA2claim.A2WhenA2hisA2insurerA2deniesA2theA2claim,A2itA2isA2requiredA2toA2provideA2Jim
A2with:A2-A2Ans--AA2reasonA2forA2denyingA2theA2claim
SueA2decidesA2toA2getA2aA2valuedA2insuranceA2policyA2onA2herA2antiqueA2car.A2SheA2andA2
herA2insuranceA2companyA2agreeA2toA2aA2valueA2ofA2$85,000.A2ThreeA2yearsA2later,A2theA2
carA2isA2destroyedA2whenA2aA2treeA2fallsA2onA2itA2inA2aA2parkingA2lot.A2TheA2carA2depreciate
sA2atA2$2,000A2aA2year,A2andA2itsA2replacementA2costA2isA2100,000.A2IgnoringA2anyA2dedu
ctible,A2howA2muchA2canA2SueA2expectA2herA2insurerA2toA2indemnifyA2her?A2-A2Ans--
$85,000
WhenA2ZachA2purposefullyA2burnedA2downA2Matt'sA2restaurant,A2Matt'sA2insurerA2paidA2th
eA2claimA2andA2thenA2wentA2afterA2ZachA2forA2theA2damages.A2MattA2isA2furiousA2aboutA2w
hatA2ZachA2didA2andA2wantsA2toA2sueA2himA2asA2well.A2WhyA2isA2itA2NOTA2possibleA2forA2M
attA2toA2sueA2Zach?A2-A2Ans--
MattA2hasA2alreadyA2receivedA2indemnificationA2fromA2hisA2insurer
Jesse'sA2homeA2isA2worthA2$200,000A2andA2heA2hasA2aA2homeownersA2policyA2withA2aA2$
160,000A2limit.A2AfterA2aA2coveredA2loss,A2JesseA2isA2leftA2withA2aA2totalA2ofA2$10,000A2inA2
damages.A2AssumingA2theA2insurerA2requiresA2theA2standardA280%A2levelA2ofA2insuranceA
2forA2coinsuranceA2purposes,A2andA2ignoringA2anyA2deductibles,A2howA2muchA2willA2Jesse
A2receiveA2inA2indemnification?A2-A2Ans--$10,000
WhileA2makingA2aA2right-
handA2turnA2fromA2theA2rightA2lane,A2BenA2isA2sideswipedA2byA2Roxanne,A2totalingA2theA2c
arA2heA2boughtA2newA212A2yearsA2agoA2forA2$15,000.A2RoxanneA2isA2judgedA2toA2beA2atA2f
ault.A2SheA2hasA2anA2autoA2policyA2withA2limitsA2ofA250/100/25A2andA2aA2$500A2deductibleA
2onA2herA2collisionA2coverage.A2AssumingA2Ben'sA2carA2depreciatesA2atA2aA2rateA2ofA2$1,1
00A2aA2year,A2howA2muchA2willA2RoxanneA2haveA2toA2payA2outA2ofA2pocketA2whenA2BenA2fil
esA2aA2claimA2againstA2herA2insurerA2forA2theA2damages?A2-A2Ans--0
WhichA2ofA2theA2followingA2doesA2notA2haveA2anA2insurableA2interestA2inA2BigA2Ed'sA2Stea
kA2House,A2aA2localA2restaurant?A2-A2Ans--
Jim,A2whoA2regularlyA2eatsA2atA2BigA2Ed'sA2SteakA2HouseA2becauseA2it'sA2hisA2favoriteA2re
staurant.
ABCA2Masonry,A2Inc.A2hasA2anA2aggregateA2liabilityA2policyA2withA2limitsA2ofA2100,000/300
,000.A2OneA2day,A2anA2accidentA2atA2aA2constructionA2siteA2leadsA2toA2$150,000A2inA2dam
ageA2toA2publicA2property.A2AssumingA2theA2causeA2ofA2lossA2isA2coveredA2underA2ABCA2
Masonry'sA2liabilityA2policy,A2howA2willA2thisA2claimA2beA2paid?A2-A2Ans--
TheA2insurerA2paysA2$100,000;A2theA2aggregateA2limitsA2isA2nowA2$200,000;A2andA2ABCA2
MasonryA2mustA2payA2$50,000
CORRECT ANSWERS
AllA2ofA2theA2followingA2piecesA2ofA2informationA2canA2beA2foundA2inA2theA2conditionsA2sect
ionA2ofA2anA2insuranceA2policyA2EXCEPT:A2-A2Ans--
CausesA2ofA2lossA2thatA2areA2notA2covered
WhichA2ofA2theA2followingA2bestA2definesA2theA2principleA2ofA2indemnity?A2-A2Ans--
AfterA2aA2loss,A2theA2insuredA2shouldA2beA2restoredA2toA2hisA2approximateA2financialA2con
ditionA2beforeA2theA2loss
SureTrustA2InsuranceA2wasA2foundedA2andA2operatesA2inA2Texas.A2InA2Texas,A2SuretrustA
2isA2consideredA2-A2Ans--aA2domesticA2insurer
WhatA2isA2aA2reserve,A2inA2insuranceA2terms?A2-A2Ans--
AA2poolA2ofA2collectedA2premiumsA2thatA2theA2insurerA2setsA2asideA2toA2payA2claims
WhichA2ofA2theA2followingA2wouldA2youA2findA2inA2theA2ConditionsA2sectionA2ofA2anA2insura
nceA2policy?A2-A2Ans--TheA2insured'sA2dutyA2afterA2aA2loss
WhichA2ofA2theA2followingA2isA2foundA2inA2theA2declarationsA2pageA2ofA2anA2insuranceA2pol
icy?A2-A2Ans--TheA2nameA2ofA2theA2insuredA2party
WhichA2ofA2theA2followingA2refersA2toA2beingA2restoredA2toA2theA2financialA2conditionA2youA
2wereA2inA2beforeA2aA2loss?A2-A2Ans--Indemnification
Dr.A2NelsonA2routinelyA2schedulesA2herA2patientsA2forA2labA2testsA2thatA2theyA2dontA2needA
2soA2sheA2canA2chargeA2theirA2insurersA2forA2moreA2money.A2Dr.A2NelsonA2is:A2-A2Ans--
committingA2healthA2insuranceA2fraud
SixA2StartsA2DevelopmentA2CompanyA2hasA2justA2purchasedA2severalA2largeA2propertiesA
2inA2LasA2Vegas.A2AsA2aA2resultA2ofA2thisA2largeA2purchase,A2theyA2areA2aA2littleA2shortA2on
A2moneyA2andA2decideA2toA2saveA2moneyA2byA2notA2purchasingA2insuranceA2onA2theirA2ne
wA2properties.A2SixA2StarsA2isA2practicing:A2-A2Ans--RiskA2retention
WhichA2ofA2theA2followingA2peopleA2committedA2softA2fraud?A2-A2Ans--
RafaelA2accidentallyA2slippedA2onA2aA2wetA2floorA2atA2theA2supermarket.A2AlthoughA2hisA2o
nlyA2injuryA2wasA2aA2sprainedA2ankle,A2heA2claimedA2heA2hadA2backA2andA2neckA2painA2wh
enA2heA2suedA2theA2supermarketA2inA2anA2effortA2toA2getA2moreA2moneyA2inA2theA2settleme
nt.
WhenA2aA2carA2stopsA2shortA2inA2frontA2ofA2Mike'sA2car,A2heA2managesA2toA2hitA2theA2brake
sA2inA2timeA2andA2avoidsA2aA2collision.A2ToA2Mike'sA2surprise,A2theA2otherA2driverA2thenA2th
,rowsA2theA2carA2intoA2reverseA2andA2backsA2intoA2Mike'sA2car!
A2TheA2otherA2driversA2actionsA2areA2anA2exampleA2of:A2-A2Ans--HardA2fraud
WhenA2LouiseA2goesA2onlineA2andA2fillsA2outA2phonyA2applicationsA2withA2XYZA2AutoA2Ins
uranceA2inA2orderA2toA2printA2theA2temporaryA2insuranceA2cardsA2andA2sellA2themA2forA2aA2
profitA2onA2theA2blackA2market,A2sheA2is:A2-A2Ans--CommittingA2hardA2fraud
LucyA2hasA2insuranceA2onA2anA2expensiveA2necklaceA2sheA2likesA2toA2wearA2toA2workA2ev
eryA2day.A2AfterA2work,A2sheA2takesA2itA2offA2andA2leavesA2itA2inA2herA2car'sA2cupholderA2so
A2sheA2canA2putA2itA2backA2onA2inA2theA2morningA2onA2herA2wayA2toA2work.A2Lucy'sA2behavi
orA2wouldA2beA2consideredA2a:A2-A2Ans--MoraleA2hazard
WhenA2anA2insurerA2issuesA2anA2insuranceA2policy,A2theA2actualA2item,A2person,A2orA2orga
nizationA2thatA2isA2beingA2insuredA2isA2calledA2the:A2-A2Ans--Risk
WhichA2ofA2theA2followingA2situationsA2doesA2notA2involveA2anA2instanceA2ofA2"pureA2risk"A2
-A2Ans--LossA2ofA2moneyA2investedA2inA2theA2stockA2market
WhichA2ofA2theA2followingA2isA2anA2exampleA2ofA2howA2someA2insurersA2areA2fightingA2bac
kA2againstA2insuranceA2fraud?A2-A2Ans--
StartingA2fraudA2bustingA2unitsA2staffedA2withA2formerA2detectivesA2andA2policeA2officers
WhichA2ofA2theA2followingA2isA2NOTA2aA2formA2ofA2insuranceA2fraud?A2-A2Ans--
IncreasingA2yourA2insuranceA2coverageA2whenA2youA2thinkA2aA2lossA2isA2likely
SteveA2hasA2justA2purchasedA2aA2weddingA2ringA2forA2hisA2newA2bride.A2IfA2somethingA2we
reA2toA2happenA2toA2theA2ring,A2he'dA2beA2outA2ofA2aA2lotA2ofA2money,A2soA2heA2purchasesA
2anA2insuranceA2policy.A2HeA2isA2ableA2toA2doA2thisA2because:A2-A2Ans--
TheA2ringA2isA2aA2pureA2risk
HaleyA2takesA2aA2bottleA2ofA2waterA2intoA2aA2store,A2poursA2someA2ofA2itA2onA2theA2floorA2w
henA2noA2oneA2isA2looking,A2andA2thenA2pretendsA2toA2slipA2andA2fall.A2SheA2criesA2outA2for
A2helpA2inA2apparentA2painA2untilA2someoneA2comesA2toA2herA2aid.A2SheA2thenA2suesA2theA
2storeA2forA2herA2fakeA2injuryA2inA2anA2effortA2toA2collectA2anA2insuranceA2settlement.A2Wha
tA2hasA2HaleyA2committed?A2-A2Ans--HardA2fraud
AfterA2anA2earthquake,A2Jake'sA2homeA2isA2stillA2standing,A2butA2itA2isA2aA2littleA2shaken.A2
TheA2damageA2isA2notA2extensiveA2butA2JakeA2wantsA2toA2cashA2inA2onA2theA2situation,A2s
oA2heA2takesA2aA2sledgehammerA2toA2someA2ofA2hisA2extraA2belongingsA2andA2addsA2the
mA2toA2hisA2claim.A2JakeA2hasA2committed:A2-A2Ans--PropertyA2insuranceA2fraud
WhichA2ofA2theA2followingA2isA2anA2exampleA2ofA2aA2hazard?A2-A2Ans--
Sandra'sA2homeA2isA2inA2anA2areaA2ofA2LosA2AngelesA2thatA2isA2oftenA2hitA2byA2earthquake
s
RiskA2avoidanceA2isA2aA2riskA2managementA2techniqueA2that:A2-A2Ans--EliminatesA2risk
,AnA2"occurrence"A2isA2definedA2as:A2-A2Ans--AnA2unexpectedA2eventA2thatA2causesA2loss
WhenA2SallyA2appliesA2forA2anA2autoA2policy,A2herA2agentA2issuesA2herA2aA2_______A2soA2
thatA2sheA2canA2benefitA2fromA2insuranceA2protectionA2whileA2heA2underwritesA2theA2policy
.A2-A2Ans--Binder
Jane'sA2shedA2burnsA2toA2theA2groundA2duringA2aA2tornado,A2whenA2theA2highA2windsA2bre
akA2aA2wallA2ofA2theA2shed,A2knockingA2overA2aA2lanternA2inside.A2WhatA2isA2theA2proximat
eA2causeA2ofA2theA2loss?A2-A2Ans--Wind
DuringA2aA2storm,A2lightningA2strikesA2aA2treeA2inA2Harry'sA2yardA2andA2startsA2aA2fireA2that
A2spreadsA2toA2hisA2shedA2whereA2heA2keepsA2allA2hisA2equipmentA2forA2hisA2landscapingA
2business.A2InA2additionA2toA2theA2shed,A2HarryA2hasA2toA2purchaseA2allA2newA2equipment
A2toA2stayA2inA2business.A2TheA2costA2toA2replaceA2theA2equipmentA2wouldA2beA2considere
d:A2-A2Ans--AA2directA2loss
ClarkA2isA2fillingA2outA2anA2applicationA2forA2anA2insuranceA2policy.A2TheA2applicationA2ask
sA2forA2hisA2birthA2date,A2andA2ClarkA2writesA21/24/67.A2HisA2actualA2birthdayA2isA21/24/63,
A2butA2heA2likesA2toA2appearA2youngerA2soA2heA2usesA2aA2differentA2date.A2ThisA2wouldA2b
eA2called:A2-A2Ans--Misrepresentation
Jason'sA2autoA2policyA2statesA2thatA2theA2insurerA2mayA2cancelA2coverageA2ifA2aA2premiu
mA2isA2moreA2thanA230A2daysA2late.A2However,A2JasonA2isA2currentlyA2moreA2thanA230A2da
ysA2late,A2andA2hasA2beenA2soA2fiveA2timesA2inA2theA2lastA2year,A2andA2hisA2insurerA2hasA2d
oneA2nothingA2aboutA2it.A2WhenA2JasonA2getsA2intoA2anA2accidentA2andA2filesA2aA2claim,A2
whichA2ofA2theA2followingA2isA2mostA2likelyA2toA2happen?A2-A2Ans--
TheA2insurerA2willA2payA2theA2claimA2becauseA2ofA2theA2impliedA2waiverA2theyA2haveA2mad
eA2byA2notA2cancelingA2Jason'sA2policyA2theA2previousA2timesA2heA2wasA2lateA2withA2hisA2p
ayments.
WhatA2isA2aA2binder?A2-A2Ans--
TemporaryA2coverageA2forA2anA2insuranceA2applicantA2untilA2theA2policyA2isA2issued
InA2orderA2toA2qualifyA2forA2anA2insuranceA2policy,A2Lydia'sA2FineA2JewelsA2mustA2agreeA2t
oA2haveA2aA2securityA2guardA2onA2theA2premisesA224/7.A2ThisA2isA2calledA2a:A2-A2Ans--
Warranty
WhichA2ofA2theA2followingA2statementsA2aboutA2theA2principleA2ofA2estoppelA2isA2TRUE?A2-
A2Ans--
EstoppelA2protectsA2theA2insuredA2partyA2fromA2anA2insurerA2whoA2initiallyA2approvesA2cov
erage,A2butA2thenA2laterA2deniesA2coverageA2afterA2theA2insuredA2paysA2forA2repairs.
DrivingA2homeA2afterA2aA214-
hourA2shiftA2SamA2fallsA2asleepA2atA2theA2wheelA2andA2plowsA2intoA2Sandra'sA2home,A2cau
singA2extensiveA2damageA2toA2theA2EastA2wallA2andA2roof.A2AsA2aA2result,A2SandraA2andA2
, herA2familyA2mustA2moveA2intoA2aA2hotelA2untilA2theA2repairsA2areA2completed.A2TheA2costA
2ofA2stayingA2inA2aA2hotelA2is:A2-A2Ans--AnA2indirectA2loss
WhenA2JimA2isA2involvedA2inA2anA2accident,A2heA2immediatelyA2callsA2hisA2insurerA2andA2fil
esA2aA2claim.A2WhenA2hisA2insurerA2deniesA2theA2claim,A2itA2isA2requiredA2toA2provideA2Jim
A2with:A2-A2Ans--AA2reasonA2forA2denyingA2theA2claim
SueA2decidesA2toA2getA2aA2valuedA2insuranceA2policyA2onA2herA2antiqueA2car.A2SheA2andA2
herA2insuranceA2companyA2agreeA2toA2aA2valueA2ofA2$85,000.A2ThreeA2yearsA2later,A2theA2
carA2isA2destroyedA2whenA2aA2treeA2fallsA2onA2itA2inA2aA2parkingA2lot.A2TheA2carA2depreciate
sA2atA2$2,000A2aA2year,A2andA2itsA2replacementA2costA2isA2100,000.A2IgnoringA2anyA2dedu
ctible,A2howA2muchA2canA2SueA2expectA2herA2insurerA2toA2indemnifyA2her?A2-A2Ans--
$85,000
WhenA2ZachA2purposefullyA2burnedA2downA2Matt'sA2restaurant,A2Matt'sA2insurerA2paidA2th
eA2claimA2andA2thenA2wentA2afterA2ZachA2forA2theA2damages.A2MattA2isA2furiousA2aboutA2w
hatA2ZachA2didA2andA2wantsA2toA2sueA2himA2asA2well.A2WhyA2isA2itA2NOTA2possibleA2forA2M
attA2toA2sueA2Zach?A2-A2Ans--
MattA2hasA2alreadyA2receivedA2indemnificationA2fromA2hisA2insurer
Jesse'sA2homeA2isA2worthA2$200,000A2andA2heA2hasA2aA2homeownersA2policyA2withA2aA2$
160,000A2limit.A2AfterA2aA2coveredA2loss,A2JesseA2isA2leftA2withA2aA2totalA2ofA2$10,000A2inA2
damages.A2AssumingA2theA2insurerA2requiresA2theA2standardA280%A2levelA2ofA2insuranceA
2forA2coinsuranceA2purposes,A2andA2ignoringA2anyA2deductibles,A2howA2muchA2willA2Jesse
A2receiveA2inA2indemnification?A2-A2Ans--$10,000
WhileA2makingA2aA2right-
handA2turnA2fromA2theA2rightA2lane,A2BenA2isA2sideswipedA2byA2Roxanne,A2totalingA2theA2c
arA2heA2boughtA2newA212A2yearsA2agoA2forA2$15,000.A2RoxanneA2isA2judgedA2toA2beA2atA2f
ault.A2SheA2hasA2anA2autoA2policyA2withA2limitsA2ofA250/100/25A2andA2aA2$500A2deductibleA
2onA2herA2collisionA2coverage.A2AssumingA2Ben'sA2carA2depreciatesA2atA2aA2rateA2ofA2$1,1
00A2aA2year,A2howA2muchA2willA2RoxanneA2haveA2toA2payA2outA2ofA2pocketA2whenA2BenA2fil
esA2aA2claimA2againstA2herA2insurerA2forA2theA2damages?A2-A2Ans--0
WhichA2ofA2theA2followingA2doesA2notA2haveA2anA2insurableA2interestA2inA2BigA2Ed'sA2Stea
kA2House,A2aA2localA2restaurant?A2-A2Ans--
Jim,A2whoA2regularlyA2eatsA2atA2BigA2Ed'sA2SteakA2HouseA2becauseA2it'sA2hisA2favoriteA2re
staurant.
ABCA2Masonry,A2Inc.A2hasA2anA2aggregateA2liabilityA2policyA2withA2limitsA2ofA2100,000/300
,000.A2OneA2day,A2anA2accidentA2atA2aA2constructionA2siteA2leadsA2toA2$150,000A2inA2dam
ageA2toA2publicA2property.A2AssumingA2theA2causeA2ofA2lossA2isA2coveredA2underA2ABCA2
Masonry'sA2liabilityA2policy,A2howA2willA2thisA2claimA2beA2paid?A2-A2Ans--
TheA2insurerA2paysA2$100,000;A2theA2aggregateA2limitsA2isA2nowA2$200,000;A2andA2ABCA2
MasonryA2mustA2payA2$50,000
