ADJUSTER PRO EXAM PREPARATION

ADJUSTER PRO EXAM PREPARATION Common law is based upon - CORRECT ANSWER-court decisions and customs. cause of loss or damage - CORRECT ANSWER-peril Jim owns a home valued at $187,500, but he only has a $100,000 homeowner's policy and is underinsured. During a storm, lightning strikes Jim's home causing $45,000 in damages. The insurer decides to invoke a coinsurance penalty. How much will Jim be required to pay for the penalty? - CORRECT ANSWER-The coinsurance requirement of 80% means that Jim should have maintained a minimum policy of $150,000 in coverage. Instead, Jim maintained a $100,000 policy, under-insuring himself by a third. When the insurer invokes the coinsurance penalty, Jim is then responsible for a third of the damages, which in this case totaled $45,000. So, Jim must pay $15,000. In the context of insurance adjusting, who is the principal? - CORRECT ANSWER-The source of the adjuster's authority What document do insurance companies give to claimants when they think something in the claim is not covered by the policy, but they are not sure yet? - CORRECT ANSWER-Reservation of Rights letter Which of the following is NOT a reason why an adjuster would collect written or recorded witness statements during a claim investigation? A. To fully comply with the Conditions section of the insurance policy B. To dispute an account provided by the claimant or another witness C. To impeach a witness's credibility if he changes his story when the claim goes to court D. To expose data that may have been overlooked in the claim handling process - CORRECT ANSWER-A. To fully comply with the Conditions section of the insurance policy 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? A. Control of Property B. No Benefit to Bailee C. Assignment D. Severability of Interests - CORRECT ANSWER-B. No Benefit to Bailee Which of the following would NOT fall under the definition of "Residence Premises" in Shannon's homeowners policy? A. The beach house that Shannon and her family rent for a weekend getaway each month B. Shannon's detached 4-car garage C. The two-bedroom house that Shannon owns in town, which she rents out to four college students D. The vacant lot that Shannon owns, located right next to her own house - CORRECT ANSWER-C. The two-bedroom house that Shannon owns in town, which she rents out to four college students With a ____ 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. - CORRECT ANSWER-franchise Which of the following does NOT apply to Tort Law? A. The state charges the defendant B. Only a simple majority is required to reward the claimant for damages C. Tort law applies only to civil trials D. The defendant is called the tortfeasor - CORRECT ANSWER-A. The state charges the defendant Quincy is in court attempting to convince the jury through a preponderance of evidence that his insurer is deliberately withholding his rightful indemnification for his property claim. In which type of legal proceeding are Quincy and his insurer currently involved? A. Criminal trial B. Civil trial C. Contributory negligence hearing D. Comparative negligence hearing - CORRECT ANSWER-B. Civil trial XYZ Trucking Company has a franchise deductible policy with a deductible of $100,000. When a tornado rips through their lot, the company sustains $965,000 in damage. How much of the damage will XYZ Trucking Company be responsible for paying? A. $0 B. $965,000 C. $100,000 D. $865,000 - CORRECT ANSWER-A. $0 HO-6 covers what? - CORRECT ANSWER-the finished surfaces of the insured's unit, but not the overall building, since this is owned collectively. What is the best reference for reconstructing the details of a claim? A. The claimant B. An eyewitness C. The claim file D. The insured who was present - CORRECT ANSWER-C. The claim file In _______court, the government (usually referred to as "the State") prosecutes a person for breaking the law, with the possibility of punishment like jail time or a fine. - CORRECT ANSWER-criminal In ______court, one party files a lawsuit against another, asking for money or for a court order against the other party. - CORRECT ANSWER-civil HO-4 only covers _______ - CORRECT ANSWER-a renter's personal property, not the structure 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? A. Removal of the tree and debris will cost hundreds of dollars. B. Terry's roof and front wall were damaged when the tree fell on the house. C. Terry's TV and entertainment system were damaged when the tree fell through the roof. D. Terry's attached carport was damage when the tree ripped it from the side of the house. - CORRECT ANSWER-C. Terry's TV and entertainment system were damaged when the tree fell through the roof. Missy lives on the top floor at Lakewood Condominiums. One day, a windstorm severely damages the building, including structural damage, broken windows, and interior water damage to most of the units. Part of the roof over Missy's unit is torn off by the high winds, and the rain ruins her furniture and hardwood floors. Which of these losses would be covered by Missy's HO-6 policy? A. Missy would be indemnified for all of the damage to her unit, including the roof, furniture, and hardwood floors. B. Missy would not receive any indemnification because all of the damage would be covered under Lakewood Condominiums' policy. C. Missy would be indemnified for her furniture, but the roof and floors would fall under Lakewood Condominiums' policy. D. Missy would be indemnified for her furniture and floors, but not the roof. - CORRECT ANSWER-D. Missy would be indemnified for her furniture and floors, but not the roof. What is the minimum limit for Coverage L of the Personal Liability Supplement in a dwelling policy? A. None B. $1,000 C. $10,000 D. $100,000 - CORRECT ANSWER-D. $100,000 An adjuster's preliminary claim report should: A. update the insurer every 30 days with any new or important information. B. list the disposition of the claim. C. establish a claim reserve. D. list all of the evidence of the claim. - CORRECT ANSWER-C. establish a claim reserve