REVIEWED QUESTIONS AND ANSWERS FOR FLORIDA CLAIMS ADJUSTER EXAM - 3

REVIEWED QUESTIONS AND ANSWERS FOR FLORIDA CLAIMS ADJUSTER EXAM - 3 This optional provision states that if the insured becomes totally disabled, premiums are waived but the coverage remains in force: A. Waiver of Subrogation B. Waiver of Premium C. Waiver of Value D. None of the Above - CORRECT ANSWER-B. Waiver of Premium "premiums are waived" Frank owned a home that was destroyed by a hurricane. Both ABC and XYZ Banks were listed as additional interests on his homeowner policy. The insurance company will make a payment to: A. The first mortgagee, ABC B. The Insured C. Jointly to ABC and XYZ D. All listed interests - CORRECT ANSWER-D. All listed interests Remember that the insurer is not responsible to know the degrees of interest. In the event of a loss, one payment is made by the insurer and it is up to the additional interests on working out their share. Insurance applies *separately* to each insured as if other insureds did not exist. This is defined as: A. Severability B. Conditional C. Warranty D. None of the above - CORRECT ANSWER-A. Severability Property insurance policies usually contain a(n) __________ clause, stating the insured cannot *dump damaged property* on the insurer and demand its full value: A. Pro Rata B. Abandonment C. Liberalization D. All of the above - CORRECT ANSWER-B. Abandonment A(n) __________ is one wherein economic loss would be suffered from an adverse happening to the subject: A. Conditional Contract B. Personal Contract C. Economic Contract D. Insurable Interest - CORRECT ANSWER-D. Insurable Interest States that if the insurer adopts a revision which would *broaden* coverage without additional premium within some period of time prior to the policy period or during the policy period, the insured receives the benefit of such *broadened* coverage. A. Cancellation Clause B. Policy Period C. Pro Rata D. Liberalization - CORRECT ANSWER-D. Liberalization The time frame is typically 60 days. The __________ states that when there is an unbroken connection between an occurrence and damage that *grows* out of the occurrence, then the resultant damage is all a part of the occurrence. A. Doctrine of Proximate Cause B. Doctrine of Perils & Hazards C. Insurance Policy Handbook D. Doctrine of Property Insurance - CORRECT ANSWER-A. Doctrine of Proximate Cause For example, if a property insurance policy covers the peril of fire but further damage is caused by smoke, water used to extinguish, and the process of moving property away - fire is considered to be the *proximate cause* of all of the damage. The Loss Settlement Valuation that subtracts an allowance for depreciation is defined as? A. Actual Cash Value B. Replacement Cost C. "Old for New" D. None of the Above - CORRECT ANSWER-A. Actual Cash Value *A policy condition,* either based on information in the insured's application or inserted by the insurer, is defined as: A. Warranty B. Misrepresentation C. Concealment D. None of the Above - CORRECT ANSWER-A. Warranty The following are basic characteristics of a property or liability insurance contract, except: A. Personal Contract B. Conditional Contract C. Loss of Settlement Contract D. Contract of Adhesion - CORRECT ANSWER-C. Loss of Settlement Contract The Insurer's responsibility to pay for a property loss *may be conditioned* on the insured having used reasonable means to avoid the loss, to protect the property against further loss, and to give the insurer proof of the loss is defined as? A. Conditional Contract B. Adhesion Contract C. Indemnity Contract D. All of the Above - CORRECT ANSWER-A. Conditional Contract "may be conditioned" Which of the following is not one of the "Thresholds" in the "No-Fault" law? A. Death of the Insured B. Temporary Injury of the Insured C. A permanent loss of a bodily function D. Permanent scarring on the face of the insured - CORRECT ANSWER-B. Temporary Injury of the Insured Also included: permanent injury other than scarring and disfigurement Under Mechanical Breakdown Coverage, new cars are eligible for service up to: A. 36 Months/36,000 Miles B. 24 Months/36,000 Miles C. 12,000 Months/12,000 Miles D. 12 Months/36,000 Miles - CORRECT ANSWER-A. 36 Months/36,000 Miles Used vehicles: 12 Months/12,000 Miles If financial responsibility doesn't exist at the time of an accident, which of the following things must happen to avoid penalties? A. The legally valid claims of others must be satisfied (up to 10/20/10) B. The owner and operator must provide certification of future responsibility for future accidents C. Both A & B D. None of the Above - CORRECT ANSWER-C. Both A & B As to required proof for future accidents by purchase of auto liability insurance, the insurer must make a filing (Form SR-22) certifying that coverage is in effect, and this certification must remain on file for __________ years: A. 1 B. 3 C. 4 D. 2 - CORRECT ANSWER-B. 3 The Business *Automobile* Policy includes all of the following coverage forms except: A. The Garage Coverage Form B. The Trailer Interchange Coverage Form C. The Truckers Coverage Form D. The Business Auto Coverage Form - CORRECT ANSWER-B. The Trailer Interchange Coverage Form Personal Injury Protection, or PIP, has a __________ per person, per accident limit. A. 10,000 B. 20,000 C. 1,000 D. Depends on the damaged property - CORRECT ANSWER-A. 10,000 Used to insure businesses engaged in selling, servicing, repairing, *parking or storing automobiles:* A. Servicing Coverage Form B. Garage Coverage Form C. Truckers Coverage Form D. None of the Above - CORRECT ANSWER-B. Garage Coverage Form The following examples are referred to as __________ liability limits: 25/50/25 or 10/20/10. A. Split B. Single C. Straight D. None of the Above - CORRECT ANSWER-A. Split 10/20/10 = 10,000 per person injured 20,000 all injuries combined 10,000 property damage Example of straight liability limit = $30,000 Jeremy has a not at fault accident. If he has PIP with a $1,000 deductible, how much can he expect his PIP coverage to pay toward his medical bills that total $3,000? A. $1,600 B. $1,000 C. $2,400 D. $3,000 - CORRECT ANSWER-A. $1,600 3000 (bills) - 1000 (deductible) = 2000 x .80 (eighty percent) Frank has a not-at-fault accident, he has basic PIP, no deductible and Med pay of $5,000. How much will his Med Pay contribute to medical bills of $15,000? A. $15,000 B. $5,000 C. $3,000 D. $0, Frank is not-at-fault - CORRECT ANSWER-B. $5,000 Medical Payment limits apply per person; Frank will receive full amount towards medical bills. Which of the following is not one of the rating factors for a Homeowner's Policy? A. Type of Construction B. Location of Risk C. Age & Gender of Insured D. Proximity to Fire Department - CORRECT ANSWER-C. Age & Gender of Insured On a Homeowner's Policy, covers items that are *not permanently attached to the dwelling.* This is defined as: A. Other Structures B. Excess Structures C. Personal Property D. Dwelling - CORRECT ANSWER-A. Other Structures Examples include sheds, fences, pool houses, detached car ports, etc. A lender has an insurable interest in a home and finds protection in the: A. Loss Payee Clause B. Mortgagee Clause C. Lender Clause D. Additional Insured Clause - CORRECT ANSWER-B. Mortgagee Clause Mortgagee - Homeowner's policy Loss Payee - Automobile policy Which of the following forms is "all-risk" on the dwelling policy? A. DP-1, or the Basic Form B. DP-2, or the Broad C. DP-3, or the Special Form D. None of the Above - CORRECT ANSWER-C. DP-3, or the Special Form When the basic liability limits provided by the policy are insufficient for an insureds needs, two coverage forms are used to provide the *additional amounts* of coverage: A. Excess Liability B. Umbrella C. Both A & B D. None of the Above - CORRECT ANSWER-C. Both A & B Which of the following is not covered under Coverage C, Personal Property? A. A fire breaks out in the residence and an overnight guest loses his clothes in the fire B. A fish dies because he has been left alone for a week without food C. The insureds daughters tennis racket is stolen from her locker D. The insureds suitcase and clothing, valued at $1,500, are stolen from his hotel - CORRECT ANSWER-B. A fish dies because he has been left alone for a week without food Animals are listed as an "exclusion" under a Homeowner's policy. All of the following are eligible for a *Homeowner's Policy,* except? A. An apartment tenant B. A condominium owner C. Four-family dwelling owner-occupant D. A business condo owned by a local insurance company - CORRECT ANSWER-D. A business condo owned by a local insurance company Commercial property is not eligible for a Homeowner's policy. Which of the following are characteristics of Homeowner's Insurance? A. Protects against economic loss to residences and household property and legal liabilities B. Owner-occupants of 1-4 family dwellings