UTAH PROPERTY CASUALTY INSURANCE ADJUSTER EXAM SOLVED 100%

A - UTAH: A person applying for an adjuster's license in Utah must (BSPEBS): - Answer * Be at least 18 years old * SSN * Personal History * Experience * Business Record * Submit a non-refundable fee B - UTAH: A non-resident agent (a new agent) moving into Utah must apply within __________ days to become a resident licensee. - Answer 90 C - UTAH: Qualifications: A licensee must - - Answer * At least 18 years old * Good faith * No controlled business * No grounds for denial, suspension, or revocation D - UTAH: To become a consultant, a person must have had a training period of at least __________ of the last 4 years. - Answer 3 E - UTAH: A producer must biennially complete __________ credit hours of continuing education. __________ must be ethics. - Answer 24 3 must be ethics F - UTAH: For a producer, __________ __________ means insurance issued on one's own property or the property of relatives by blood or marriage. - Answer Controlled business G - UTAH: A promotional gift is an inducement if a person must complete an __________ to receive it. - Answer Application H - UTAH: The commissioner must examine every insurer and rate an organization at least once every __________ years. - Answer 5 I - UTAH: Who may be held liable for an unpaid claim under an illegal contract? - Answer The person issuing the contract J - UTAH: What may the commissioner do if a person commits insurance fraud? - Answer Suspend or revoke the person's license. K - UTAH: An insurer must cease using a rate within __________ days if the rate is rejected. - Answer 60 L - UTAH: Each insurer must notify the commissioner within __________ days after terminating the appointment of any agent or organization. - Answer 10 M - UTAH: A producer or consultant must keep documentation of completing continuing education requirements for __________ years after the end of each 2-year licensing period. - Answer 2 N - UTAH: A licensee must notify the commissioner within __________ days after any change of address, phone #, or business email and before using an assumed name in Utah. - Answer 30 O - UTAH: A licensee may be required to wait for up to __________ years after revocation before applying for a new license. - Answer 5 P - UTAH: The commissioner may place a licensee on probation for up to __________ months. __________ for a new licensee. - Answer 24 for existing licensees 12 for new licensees Q - UTAH: Each authorized insurer must file all rates, supplementary rate information, and the filing fee with the commissioner within __________ days after the rate's effective date. The exception? - Answer 30 EXCEPTION: Rate changes to an assigned risk plan must be filed immediately. R - UTAH: Each insurer must respond to any request from the commissioner for rate information within __________ days. - Answer 45 S - UTAH: An insurer may request approval to charge a higher rate for a specific risk and may be used if not disapproved within __________ days. - Answer 10 T - UTAH: Licensees must notify persons about privacy practices at least once every __________ months? - Answer 12 U - UTAH: A licensee must give a person __________ days to opt out of privacy disclosures. - Answer 30 1-1: A __________ insurance company is owned by its policy holders. - Answer Mutual 1-2: If an insurance company wants to transfer all or part of the risk it has accepted, it would do so by which type of insurance? - Answer Reinsurance 1-3: A __________ insurance company is organized under the laws of another state within the U.S. Organized in another country? - Answer Foreign Insurer Alien Insurer if another country 1-4: The __________ department of an insurance company accepts the insurance risk. - Answer Underwriting 1-5: Who represents the insurance company when selling an insurance policy? - Answer Producer / Agent 1-6: What type of authority does the public assume an agent has when quoting insurance, completing applications, and accepting premiums? - Answer Implied 1-7: A producer has each of the following responsibilities EXCEPT: A: Fiduciary duty B: Forwarding premiums to the insurer on a timely basis C: Reporting material facts that may affect underwriting D: A duty to recommend only high rate policies - Answer A duty to recommend only high rate policies 1-8: A federal regulation that protects consumer privacy is the __________. - Answer Fair Credit Reporting Act 1-9: Dishonest tendencies that increase the probability of loss is what type of hazard? - Answer Moral hazard 1-10: Each of the following must be included in an insurance risk EXCEPT: A: Calculable chance of loss B: Excluded catastrophic perils C: Large group with dissimilar members D: Accidental losses - Answer Large group with dissimlar members Included (ACE): Accidental Losses Calculable chance of Loss Excluded catastrophic perils 1-11: __________ restores the insured to the same economic condition that existed before the loss. - Answer Indemnity 1-12: Each of the following is an element of a legal contract EXCEPT: A: Consideration B: Legal purpose C: Agreement/Offer-Acceptance D: Indemnity - Answer Indemnity 1-13: A statement in the application that is guaranteed to be true is called a __________. - Answer Warranty 1-14: Each of the following is a factor considered by an underwriter EXCEPT what? What is the acronym for those factor considered? A: Hazards B: Marital status C: Claims history D: Outside factors - Answer Marital status Acronym of factors (HONC): Hazards Other factors that depend on the type of risk being insured Nature of the risk Claims history 1-15: What calculation is a company's loss ratio? - Answer Paid losses + reserves / by total earned premiums 1-supp-1: Insurable risks must include a large number of homogeneous units or groups with the same perils and includes __________ which is, as the number of units in a group increases, the more likely it is to predict a particular outcome. - Answer The Law of Large Numbers 1-supp-2: What is the acronym for managing risk? - Answer S - Share T - Transfer A - Avoid R - Reduce R - Retain 1-supp-3: Under the Fair Credit Reporting Act; Disallowed Information: A report must not include lawsuits over __________ years old and bankruptcies over __________ years old. - Answer Lawsuits - 7 years BK - 10 years 1-supp-4: Under the Fair Credit Reporting Act; Inaccuracies: An agency must forward to the applicant incorrect information given out by the agency within __________ previous years. - Answer 2 1-supp-5: Under the Fair Credit Reporting Act; Applicant Challenge: A credit reporting agency must reinvestigate any applicant's challenge of accuracy within __________ months. - Answer 6 1-supp-6: An insurer has either applied for authorization to do business in a state and was declined or has not applied, so they are not authorized to do insurance business in a state. This type of insurer is called a __________. Can they do any business in the state? - Answer Non-admitted (Unauthorized) insurer. Surplus and Excess Lines insurance can be placed through non-admitted carriers, though. 1-supp-7: An insurer is authorized by a state's Commissioner of Insurance to do business in a state and has received a Certificate of Authority to do business is called a __________. - Answer Admitted (Authorized) insurer. 1-supp-8: Reinsurance Companies; Types of Insurance An agreement that allows ceding and reinsurance companies the opportunity to negotiate coverage for individual risks and discuss among each other about the underwriting of each case is what type of agreement? - Answer Facultative Agreement 1-supp-9: Reinsurance Companies; Types of Reinsurance An agreement that automatically covers all risks contained in the subject lines of business is what type of agreement? - Answer Treaty Ageement 1-supp-10: Residual Markets - Insurers agree to apportion among themselves those risks that are unable to obtain insurance through normal channels is a __________? - Answer Risk Sharing Plan 1-Supp-17: Federal Regulations - Terrorism Risk Insurance Act: The insurer deductible is __________% of all covered losses. - Answer 20% Mnemonic: "T"errorism = "T"wenty 1-Supp-19: Federal Regulations - Terrorism Risk Insurance Act: The insurance companies' share of losses in excess of the deductible (amounts paid or losses exceeding insurer's deductible) is __________%, while the federal government is responsble for __________%. - Answer 15% insurance companies 85% federal government 2-1: A policy form that alters or adds to the provisions of a property and casualty insurance contract is an __________. - Answer Endorsement 2-3: If the insured does not agree with the insurer's decision regarding a claim, what process helps decide the outcome? - Answer Arbitration 2-4: Each of the following is a direct loss EXCEPT: A: Loss of income B: Fire damage C: Cracked windshield D: Broken pipe water damage - Answer Loss of income / living expenses are indirect losses 2-5: __________ is the method of loss valuation that values damaged property at the cost to replace it with property of like kind and quality, at current prices, and without deduction for depreciation. - Answer Replacement Value 2-6: __________ is the method of loss valuation that values damaged property at the repair or replacement cost minus depreciation - Answer ACV - Actual Cash Value 2-7: A __________ insures one or more items of property on a single policy and the specific amount of each item is listed. For example: 1 farm policy = $100,000 1 barn policy = $200,000 - Answer Scheduled limit 2-8: The duties and obligations of the INSURED are found under what part of the insurance policy? - Answer Conditions 2-9: A Liberalization Clause serves what purpose? - Answer Broadens coverage automatically to all policies without a premium change. 2-10: Each of the following is a typical policy exclusion EXCEPT: A: Ordinance or law B: Flood C: Fire D: Neglect - Answer Fire is a basic peril that is covered. The others are usually specifically excluded. 2-11: Who has the broadest coverage under an insurance policy? - Answer Named Insured 2-12: Which of the following is NOT true of co-insurance? A: It is a common policy provision B: It encourages the insured to maintain insurance to value C: It applies in the event of a total loss D: The higher the co-insurance percentage purchased, the lower the rate the insured pays - Answer NOT TRUE: It applies in the event of a total loss. TRUE: It applies in the event of a partial loss. Total losses are typically paid in accordance with the valued policy law. 2-supp-1: An accident that includes continuous or repeated exposure to the same general harmful conditions and is called an __________. - Answer Occurrence 2-supp-2: A sudden, unforeseen, unintended and unplanned event from which loss or damage results is called an __________. - Answer Accident 2-supp-3: A proportionate cancellation of insurance that refunds premium to the insured based on the precise number of days of coverage was in effect is a __________. The __________ is the premium charged and retained by the insurer for the number of days coverage was actually in place. The __________ is the premium refunded to the insured for the number of days coverage was NOT in place. - Answer Pro-rata Cancellation Earned Premium Unearned Premium 2-supp-4: A cancellation of insurance that incurs a financial penalty is called a __________. Sometimes, when the insured cancels the policy before its expiration date, this is issued. When it is issued, the insurer retains a portion of the unearned premium to cover costs. - Answer Short Rate Cancellation 2-supp-5: A cancellation of insurance that is retroactive to the effective date of the policy. No coverage is provided and the insurer must refund the policy premium paid by the insured. - Answer Flat Cancellation 2-supp-6: The primary cause of loss. If only 1 peril caused the loss, __________ is the 1st event in the unbroken chain of events that resulted in the loss. If 2 or more perils caused or contributed to the loss, it is the peril having the most significant impact generating the loss or damage. - Answer Proximate Cause 2-supp-7: A fire that was intentionally set and stays within its intended boundaries (e.g. fireplace) and results in smoke damage to the inside of the fireplace. - Answer Friendly Fire Property insurance does NOT cover damage from friendly fire. 2-supp-8: A quality within property that causes it to damage or destroy itself. Includes rust, rot, and fading paint. - Answer Inherent Vice Property insurance does NOT cover damage from inherent vices. Think, ordinary wear and tear. 2-supp-9: A legal agreement issued by an insurance company or a producer that provides temporary proof of insurance until the insurer is able to issue a policy. It is issued for a specific time period, max 60 days, and automatically ends when the policy is issued. It contains the name of the insurer, amount, and type of insurance, as well as specific perils insured against. - Answer Binder 2-supp-10: The right of the insurer to take possession of damaged property after paying for its loss. - Answer Right of Salvage 2-supp-11: A principle holding that when 2 perils simultaneously cause the loss, they are both the proximate cause. What happens when one of the causes is excluded by the policy? - Answer Concurrent Causation The insurer must pay the loss even if one of the perils is EXCLUDED by the policy. 2-supp-12: The existence of 2 or more policies covering the same exposures that DO NOT have the same policy periods is called a __________. It may create a coverage gap when underlying liability policies and an umbrella policy do not agree on effective dates or coverages. - Answer Non-concurrency 2-supp-13: The maximum amount payable for loss (per location per person) from all occurrences within a policy period regardless of the number of separate accidents. - Answer Aggregate Limit 2-supp-14: A property that contains personal property but has no occupants. - Answer Unoccupancy See Vacancy: Card 2-supp-16 and Card 5-4 2-supp-15: Designed to provide coverage on a worldwide basis to 3rd parties and does not pay benefits directly to an insured. - Answer Umbrella Policy 2-supp-16: A provision that eliminates or limits coverage for buildings that don't contain sufficient personal property to support intended occupancy or use. - Answer Vacancy See Unoccupancy: Card 2-supp-14 and Card 5-4 2-supp-17: This type of property coverage provides insurance for all causes of loss that are NOT specifically excluded under the policy. Typical exclusions are flood and earthquake. - Answer Open Perils 2-supp-18: Insures property located at more than 1 location OR more than 1 type of property at the same location, OR both. - Answer Blanket Limit 2-supp-19: Insures a single item of property on a single policy for a __________. - Answer Specific Limit Compare with Card 3 - 10: Combined Single Limit 3-1: A __________ is a civil wrong committed by one person against another. Which ones are covered? Which ones are not? - Answer Tort Liability insurance covers most UNINTENTIONAL torts and excludes INTENTIONAL torts. 3-2: Which damages are awarded to the injured party for the ACTUAL medical expenses incurred? - Answer Compensatory Damages Under this, there are: Specific Damages which are paid for specific, tangible losses, and General Damages which cannot be objectively calculated such as Pain and Suffering. 3-3: What document reports How and When a loss happened? - Answer Notice of Loss The insured must notify the insurer of a loss. 3-4: Payment of necessary medical expenses without regard to negligence is covered by what insurance coverage? - Answer Medical Payment Coverage Will also pay for surgical, x-ray, dental, ambulance, hospital, nursing, and funeral expenses incurred by a 3rd party on the insured's premises. 3-5: Each of the following are elements of negligence EXCEPT: A: A duty owed B: Duty is violated (breach) C: Foreseeable consequences (damages) D: Intervening cause - Answer The 3rd element is "breach of the duty is the proximate cause of the damages." Duty Breach Cause (proximate cause) Damages (Foreseeable) Intervening Cause is a defense against a claim for negligence. 3-6: Name three common law defenses for when a claimant accuses an insured of negligence. - Answer Contributory Negligence: If the injured claimant was 1% negligent, it bars recovery from the insured. Assumption of the Risk Intervening Cause: 2nd distinctly negligent act occurs after the 1st cause, but before damages occur, and interferes with the chain of events. 3-7: Name two statutory law defenses for when a claimant accuses an insured of negligence. - Answer Statute of Limitations: After the specific amount of time has passed, as listed in the statute, may bar recovery. Comparative Negligence: Damages are reduced in proportion to the claimant's own % of negligence. 3-8: __________ liability is designed to prevent the insured from collecting more than the actual extent of his loss by allowing a policy to pay its share of the loss. - Answer Pro-Rata Liability Instead of each insurance policy paying its full coverage. 3-9: __________ is the most the policy will pay for the sum of all the losses occurring within a policy period. - Answer Aggregate The payment for an accident during a policy period reduces the amount of insurance available for all future accidents that occur for the remainder of the policy period. 3-10: The __________ of Liability applies to bodily injury, property damages, or both. - Answer Combined Single Limit Applies to claims arising out of one occurrence. Compare with Card 2-Supp-19: Specific Limit 4-1: Which of the following is not eligible under the Dwelling Program? A: Dwelling has no more than 5 roomers B: Dwelling has no more than 4 apartment units C: Dwelling includes a piano school D: Dwelling is located on farm property - Answer Dwelling is located on farm property as these can be insured under a different property policy. Incidental business occupancies such as schools, daycares, studios, and offices are allowed as long as the primary purpose of the dwelling is a personal residence. 4-2: Which dwelling program form covers the building on an OPEN PERIL basis? - Answer DP-3 Special Form Covers the dwelling and other structures on an open peril basis which covers all perils except those specifically excluded. DP-2 is the General Form 4-3: Which dwelling form pays for losses to the dwelling on an actual cash-value basis? - Answer DP-2 and DP-3 Both pay for losses to a dwelling on a replacement cost basis. 4-4: An attached carport is covered under what coverage? What else does it cover? - Answer Coverage A - Dwelling