PRACTICE QUESTIOS FOR FLORIDA CLAIMS ADJUSTER

PRACTICE QUESTIOS FOR FLORIDA CLAIMS ADJUSTER For purposes of insurance, a "loss" is best defined as: - CORRECT ANSWER-an unwelcomed, unplanned reduction in economic value An automatic sprinkler system in a hotel building is a risk reduction measure because it: - CORRECT ANSWER-reduces the amount of damage that a fire is likely to do Insuring a new restaurant against business failure is not possible because business success or failure is: - CORRECT ANSWER-a speculative risk Which of the following is an example of pure risk? - CORRECT ANSWER-the possibility of a business being flooded Zenith Insurance Company issues a policy to Best Manufacturing Company. A dispute arises between Zenith and Best on the meaning of an ambiguous clause in their contract. The matter goes to court, which can be expected to interpret the clause in a manner that: - CORRECT ANSWER-favors Best Manufacturing The fact that insurance policy language is written by an insurance company and is nonnegotiable makes insurance policies: - CORRECT ANSWER-contracts of adhesion Which of the following correctly identifies three elements that must be present to create an enforceable contract? - CORRECT ANSWER-acceptance, consideration, and offer Rhonda's parents bought her a car for her sixteenth birthday and made her responsible for maintaining and insuring it. However, when Rhonda applied for auto insurance after getting her driver's license, she was told that she could not enter into a binding insurance contract because, according to the law in her state, a 16-year-old does not qualify as a(n): - CORRECT ANSWER-competent party A fire severely damages Carl's home, making it uninhabitable. He moves his family to a hotel while the house is repaired. The additional expenses incurs in housing the family are considered what type of loss? - CORRECT ANSWER-indirect Butch's Meat Market loses electrical power during a flood. The business closes for several days, during which time there is no refrigeration and a large quantity of meat spoils. The loss of the meat is what type of loss? - CORRECT ANSWER-consequential "Replacement cost minus physical depreciation" describes which type of loss valuation method? - CORRECT ANSWER-actual cash value From a property insurance perspective, which of the following is NOT a basic type of construction? - CORRECT ANSWER-steel For an insurer to pay a property insurance claim, when must the policyholder have an insurable interest in the insured property? - CORRECT ANSWER-at the time of the loss Ken's house has an exterior layer of brick that covers wooden walls supported by wooden 2-by-4 studs. What type of construction does Ken's house have? - CORRECT ANSWER-masonry veneer Corinne purchased her home with a 10 percent down payment and a 90 percent mortgage from Sidney Bank. Why does Sidney Bank have an insurable interest in Corinne's house? - CORRECT ANSWER-The bank faces the possibility of a loss if Corinne's house is damaged or destroyed. All of the following are perils EXCEPT: texting while driving theft lightning windstorm - CORRECT ANSWER-texting while driving A dump truck collided with a tall oak tree in Marian's front yard. The tree fell onto her house, breaking a glass picture window and knocking a lamp off the table inside it. Sparks from the lamp started a fire that destroyed half the house. What is the proximate cause of the damage to Marian's house? - CORRECT ANSWER-the collision All of the following causes of loss are commonly listed as excluded perils in open perils property insurance policies, EXCEPT: wear and tear flood war vandalism - CORRECT ANSWER-vandalism While a homeowner is out of town, a group of teenagers break into her house, throw a beer party, and damage the interior without stealing anything. Connie's resulting property insurance claim will be covered if her policy covers what peril(s)? - CORRECT ANSWER-vandalism Laura owns poisonous snakes on her property, which she uses for venom research purposes. One of the snakes escaped and within hours bit a neighbor who sued Laura. Though Laura was not negligent in her ownership of the snakes, the plaintiff easily won the suit based on the doctrine of: - CORRECT ANSWER-strict (absolute) liability Which one of the following incidents is an example of vicarious liability? Rudy is held responsible for an accident caused by his employee. Dominic is held responsible for food poisoning due to a pizza he delivered. Edie is held responsible for striking a pedestrian with her bicycle. Lilly is held responsible for her cat's injury to Lilly's guest. - CORRECT ANSWER-Rudy is held responsible for an accident caused by his employee. Bill's children have grown up and moved away, but the tree house that he built for them now draws other neighborhood children despite his handmade "No Trespassing" sign. If a neighbor's child is injured by falling from the tree house, Bill might be held liable for the child's injuries under what legal doctrine or principle? - CORRECT ANSWERattractive nuisance Lorraine was parking her car when her brakes failed, and she struck the car next to her, which was owned by Marty. In this case, all the following statements are correct EXCEPT: The rolling of Lorraine's car into Marty's car was the proximate cause of the damage. The costs to repair Marty's car represent compensable damages. The accident was a breach of duty on Lorraine's part. Lorraine had a duty to keep her car from striking Marty's car. - CORRECT ANSWERThe rolling of Lorraine's car into Marty's car was the proximate cause of the damage. The gradually expanding brown spot on the ceiling of his barbershop suggests that Edmond might have a plumbing leak, but he ignores it because any drips from the ceiling fall into a sink. When the ceiling collapses because of water damage, Edmond finally submits an insurance claim that the insurer denies because his policy has an exclusion for: - CORRECT ANSWER-water leakage or seepage Many endorsements are attached to Bettie's policy. If she examines them closely, she will probably find one or more endorsements that do all the following EXCEPT: expand coverage to cover a specific exposure add exclusions eliminate an exclusion cancel the policy - CORRECT ANSWER-cancel the policy Why do insurance policies use quotation marks with certain words and phrases? - CORRECT ANSWER-to identify words and phrases that are defined in the policy Which one of the following is NOT a type of provision found in property and casualty insurance policies? declarations insertions definitions conditions - CORRECT ANSWER-insertions The standard mortgage (mortgagee) clause in a property insurance policy covering real property does which of the following? -It requires the lender to purchase property insurance on the mortgaged property.