Louisiana Claims Adjuster Exam Questions & Answers 100% Correct

The coverage territory of the Business Auto form provides for "worldwide liability coverage" for private passenger autos that the insured: a) Hires, leases, rents or borrows without a driver while outside the United States, its territories and possessions. b) Purchases while outside the United States, its territories and possessions. c) Sells while outside the United States, its territories and possessions. d) Occupies while outside the United States, its territories and possessions. - Answer Hires, leases, rents or borrows without a driver while outside the United States, its territories and possessions.. Which of the following dwelling types would be eligible for the Limited Theft coverage endorsement to their Dwelling policy? - Answer A nonowner-occupied one-family dwelling. Which of the following shows a correct sequence of activities for an adjuster when negotiating a claim? - Answer Acknowledging the claim, then opening a line of communication with the insured or claimant.. A slippery floor is an example of: - Answer A physical hazard. An insured suffers a partial fire loss to his residence. Under an HO-3 policy what insuring agreement is available to pay for temporary, alternate living quarters? - Answer Coverage D Which of the following is the BEST explanation as to the reason insurance policies are called "unilateral contracts"? - Answer Because the insurance company is the only party to the contract that can be sued if they do not meet the terms.. Which of the following terms means "liability through another person"? - Answer Vicarious/Imputed liability All of the following are duties of the insured after a loss, EXCEPT: Answer Choices:Select the Correct Answer a) Promptly hiring a public adjuster to assist in presenting the claim to the insurance company. b) Promptly reporting the loss to the insurer. c) Cooperating with the insurer in the investigation of the claim by providing the information requested by the adjuster. d) Submitting to an examination under oath (EUO) if requested by the insurer. - Answer Promptly hiring a public adjuster to assist in presenting the claim to the insurance company The "liberalization clause" of an insurance policy: a) States that if an insurer decides to broaden its standard policy coverages, then all outstanding policies issued prior to that decision will automatically receive those new coverages at no additional premium. b) States that the insurer retains the right to suspend or cancel the policy at any time during the policy period. c) States that if a mortgage company liberalizes its loan agreement with the named insured, the insurer must be sent the revised wording within 60 days. d) States that if the insurer broadens its underwriting eligibility requirements, all previously denied applicants must be notified within 60 days. - Answer States that if an insurer decides to broaden its standard policy coverages, then all outstanding policies issued prior to that decision will automatically receive those new coverages at no additional premium. When an insurer files a declaratory judgement action with a court of law, all of the following questions will be resolved by the court, EXCEPT: A) Will the insurer become insolvent if they pay the claim as submitted by the insured? B) Does the insuring agreement within the policy actually provide coverage for the loss claimed? C) Is there another insurance policy that would be liable to pay part of the claim? D) Has the insured violated any policy condition that would void the coverage provided by the policy? - Answer Will the insurer become insolvent if they pay the claim as submitted by the insured? Declaratory judgement actions are filed to seek judicial determination of the insurer's rights and obligations as indicated by the policy provisions, conditions, definitions, exclusions, etc. The court would not make a determination regarding the solvency of the insurance company because the purpose of the action is only to answer questions as to whether coverage applies, not if the insurer can actually pay the claim. The Louisiana Commissioner of Insurance may place on probation, suspend, revoke, or refuse to issue, renew or reinstate a claims adjuster's license or may levy a fine not to exceed _______ for each violation. - Answer $10,000. Meg has been in very good health in the past 3 years. She has been exercising, her blood pressure is at a perfect level and her cholesterol is the envy of all her friends. Because Meg is feeling so healthy, she decides to cancel her health insurance policy. This is an example of which of the following risk management methods? - Answer Risk retention Emily is an adjuster for Indemnify Insurance and she has been assigned to a first-party claim that was submitted by Harvey. Emily has set up several meetings with Harvey to obtain documents and records relevant to the claim investigation but Harvey has not shown up. Emily has also placed many phone calls to Harvey that he has not answered, nor has he returned the calls when Emily has left a message for him to do so. Which of the following statements is TRUE regarding how this claim will be concluded? - Answer The insurance company has legitimate grounds to deny the claim based on Harvey's breach of duty to cooperate in the investigation of the claim. Which of the following CGL forms would pay for bodily injury or property damage liability that occurs during the policy period, but a claim for the occurrence is not submitted until after the policy has expired? - Answer The occurrence form.. A type of insurance that permits an insured to collect from his/her own insurance company, without proving the negligence of a third-party, is known as: - Answer No-fault. A person becomes legally liable by: - Answer Committing a tort A tort is a civil wrong that violates the rights of others. A person becomes legally liable by committing a tort. Generally, a court of law must determine legal liability. Which of the following statements is TRUE regarding an "examination under oath"? - Answer An EUO will only be requested by an insurer if they have reason to believe an insured has not been truthful in their account of the circumstances of the loss. is correct Which of the following sentence which best describes the term "fiduciary"? a) A person who submits a claim to their insurance company. b) A person who has been bonded as honest and trustworthy. c) A person who is entrusted with the assets of another. d) A person who holds a fiduciary's license. - Answer A person who is entrusted with the assets of another. Insurance companies, agents, producers and adjusters have a fiduciary responsibility to their clients in the collection and handling of premiums, claim payments, and return of unearned premium. All of these items are "assets" that the fiduciary has been entrusted to handle. There is not a "fiduciary's license". Anna is walking through the park one day while unwrapping an ice cream sandwich. It was a windy day, and the ice cream wrapper was covered with partially melted ice cream. Anna doesn't want to look for a trash can to throw away the wrapper so she simply throws it down. The wind takes the wrapper across the park and drops it to the ground just in time for Ulysses to ride onto it with his unicycle. The melted ice cream on the wrapper causes Ulysses' unicycle to slip out from under him and he falls backward, striking his head on the pavement. Several witnesses saw Anna throw the ice cream wrapper into the wind, so Ulysses sues her for his medical bills. Ultimately, Anna was not proven to be negligent and her insurance company did not have to pay damages to Ulysses. What is the most likely reason for the court's finding? - Answer Anna could not have foreseen that the act of throwing her ice cream wrapper into the wind would have resulted in the bodily injuries to Ulysses. Which of the following losses would be covered by the EC peril of "volcanic eruption" under a standard Dwelling form? A) The cracks in the ceiling of the dwelling due to the earthquake preceding a volcanic eruption. B) The damage to an exterior patio from a large bolder that was dislodged due to an aftershock. C) The exterior siding of the dwelling that was ruined by the ash that settled on it from the erupting volcano. D) The cracked foundation of the covered dwelling resulting from the earthquake that caused the volcanic eruption. - Answer The exterior siding of the dwelling that was ruined by the ash that settled on it from the erupting volcano. The exterior siding would be covered because it was damaged by the ash from the volcano. All the other answer choices would not be covered because they are associated with an earthquake. Jamie has submitted a claim against Ron's insurance policy for a loss he has legitimately suffered. This claim is a: A) Third-party property claim. B) First-party liability claim. C) Third-party liability claim. D) First-party property claim. - Answer Third-party liability claim When a "claimant" submits a claim against an "insureds" policy, the claim is a third-party liability claim (even if the claimant suffered a "property damage loss"). Alex has his SUV covered under a standard Personal Automobile policy. He has borrowed a trailer from his friend Josh, hitched it to his SUV, and begins moving some boxes from his house to a new house he recently purchased. After he has unloaded the trailer, he is driving back to his house and loses control of his vehicle, wrapping Josh's trailer around a tree. There is no other insurance covering Josh's trailer and Alex's Part D deductible for "Collision" is $250. His deductible for "Other Than Collision" is $300. Before the accident, the ACV of the trailer was $2,000. The cost to repair or replace the trailer with like kind and quality is $1,800. How much coverage would Alex's policy provide? - Answer $1,500 The policy will pay the LESSER of the ACV or the cost to repair or replace with like kind and quality. This would be $1,800 minus the "Collision" deductible of $250, which leaves us with $1,550. However, the Part D limit of liability specifies that no more than $1,500 will be paid for a non-owned trailer, therefore, the correct answer is $1,500. All of the following are duties of the insurer in case of a loss as specified by insurance policies, EXCEPT: - Answer To pay amounts to the insured or a third-party claimant that are at least as high as the national average of similar claim settlements. Insurance claim settlement amounts are determined by a policy's limit of liability, not a national average that is paid on similar claims. The attempt to restore an insured to his or her previous financial condition before a loss occurred is BEST described as: - Answer Indemnification All of the following statements regarding the Motor Carrier Act of 1980 are correct, EXCEPT: A) The Act requires truckers to certify that they are able to meet financial obligations arising from physical damage to nonowned trailers being used under a written Trailer Interchange agreement. B) The Act requires truckers to certify that they are able to meet financial obligations arising from liabilities of their trucking operations. C) The Act deregulated the commercial trucking industry. D) The Act requires that the MCS-90 endorsement be attached to a Truckers policy to demonstrate proof of financial responsibility for liabilities arising from their trucking operations. - Answer The Act requires truckers to certify that they are able to meet financial obligations arising from physical damage to nonowned trailers being used under a written Trailer Interchange agreement. is correct. When the property covered under an insurance policy is destroyed beyond repair and nothing of value remains, this is known as: - Answer Actual total loss. Which of the following types of property would be covered by Coverage B of a standard, unendorsed Businessowners policy? a) An owned automobile. b) An unscheduled exterior business sign. c) A copy machine that is leased by the covered business. d) An outdoor fence. - Answer A copy machine that is leased by the covered business. The Homeowners forms exclude coverage for loss resulting from "earth movement" but the peril of "earthquake" can be added by endorsement as an insured peril for: - Answer Coverages A, B, and C In order to be covered under Coverage C - Medical Payments of the Commercial General Liability policy, bodily injury must be caused by - Answer An accident Medical payments coverage applies to accidents and the limit of coverage applies per person per accident. Legal liability and negligence are not required to be proven. Willie's Widgets has leased a business location for a term of 10 years. In the seventh year of the lease, the location is destroyed by fire. As luck would have it, Willie had purchased "Leasehold Interest" coverage as part of his Commercial Package policy. All of the following would be covered for Willie, EXCEPT: - Answer The damage that Willie caused to the parking lot by bringing large, heavy rigs onto the lot, causing the asphalt to buckle Which of the following statements correctly applies to a named perils policy? - Answer Only the perils listed by name in the policy are covered. Only the perils listed by name in the cause of loss form are covered perils. A loss by a peril that is not named would not be covered. Under a named peril policy the burden of proof is on the insured to prove that one of the named perils caused the loss. Which of the following is NOT a reason that proper claim reserving techniques should be used? a) To permit the insurer to present a better financial picture to regulatory officials than is accurate. b) To ensure that the company has enough reserve on hand to meet the company's current claim obligations. c) To prevent the necessity of raising premium rates. d) To prevent underwriters from making inaccurate coverage decisions based on data from prior claims. - Answer To permit the insurer to present a better financial picture to regulatory officials than is accurate. . The Insurance Commissioner/Director/Superintendent of a given state would refer to an insurance company formed under the laws of a different state as: - Answer A foreign insurer. Which of the following is NOT an exposure covered by an insuring agreement in a Commercial General Liability policy? a) premises-operations liability. b) Independent contractor's legal liability. c) Insured contracts. d) Hold harmless agreements. - Answer Hold harmless agreements. Which of the following would meet the definition of "concurrent causation"? a) A collision claim involving more than two vehicles. b) Two or more perils that cause a single loss. c) A claim involving a consequential loss. d) A train derailment causing cargo damage. - Answer Two or more perils that cause a single loss.. Concurrent causation is defined as a single loss caused by two or more perils, occurring simultaneously or in succession. This becomes an issue when one peril is covered and the other is not. In some states, courts have ruled that the entire loss is covered as long as one of the perils is a covered cause of loss, other states are passing "anti-concurrent causation" laws to limit coverage of the peril that is excluded. However, for the purposes of your state exam, you will simply need to know the definition of "concurrent causation". The insured is liable for $500,000 in damages for a personal injury claim that is covered under the insured's primary liability policy. The primary liability policy has a $300,000 limit per occurrence. The insured also has a $1 million Umbrella policy with a $3,000 self-insured retention limit. How would this claim likely be settled? - Answer The primary policy would pay $300,000 and the Umbrella policy would pay $200,000 Under a liability policy the insurance company will pay damages on behalf of an insured when - Answer When it is established that the insured is legally liable Which of the following statements is NOT TRUE regarding the Dwelling Under Construction endorsement to a Dwelling policy? a) The endorsement must be purchased by the intended occupant of the dwelling when it is complete. b) The available policy limit of the endorsement increases as construction of the dwelling progresses. c) The limit the endorsement will pay at any given time in the construction process is 25%, 50%, or 75%. d) The intended occupant of the dwelling under construction must be the named insured on the Dwelling policy. - Answer The limit the endorsement will pay at any given time in the construction process is 25%, 50%, or 75%