FLORIDA CLAIMS ADJUSTER EXAM QUESTIONS WITH COMPLETE SOLUTIONS RATED A+

Severability - Insurance applies separately to each insured as if other insureds did not exist. Abandonment - Property insurance policies usually contain a(n) __________ clause, *stating the insured cannot dump damaged property on the insurer and demand its full value.* Insurable Interest - One wherein economic loss would be suffered from an adverse happening to the subject. Liberalization - 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.. Doctrine of Proximate Cause - 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. Actual Cash Value - The Loss Settlement Valuation that subtracts an allowance for depreciation Warranty - A policy condition, either based on information in the insured's application or inserted by the insurer Conditional 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? Under Mechanical Breakdown Coverage, *new cars are eligible for service up to:* - 36 Months/36,000 Miles Used vehicles: 12 Months/12,000 Miles If financial responsibility doesn't exist at the time of an accident, what happens? - The legally valid claims of others must be satisfied (10/20/10) The owner and operator must provide certification of future responsibility for future accidents 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 - 3 The Business Automobile Policy includes all of the following coverage forms except: - The Trailer Interchange Coverage Form Personal Injury Protection, or PIP, has a __________ per person, per accident limit. - 10,000 Used to insure businesses engaged in selling, servicing, repairing, parking or storing automobiles: - Garage Coverage Form The following examples are referred to as __________ liability limits: 25/50/25 or 10/20/10. - 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? - $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? - $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? - Age & Gender of Insured On a Homeowner's Policy, covers items that are not permanently attached to the dwelling. This is defined as: - 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: - Mortgagee Clause Mortgagee - Homeowner's policy Loss Payee - Automobile policy Which of the following forms is "all-risk" on the dwelling policy? - 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 - 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 - 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 - 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 C. Renters who maintain residential occupancy in any type of building D. All of the Above - D. All of the Above Also included: personal, non-business risk, no more than 2 roomers/boarders, condominium unit owners and cooperative apartment occupants Jeremy owns a home that is recently damaged due to a hurricane. The repair estimate is averaged at $25,000 and Jeremy decides to stay in a hotel because most of the damage is to his bedroom and kitchen. Under a Homeowner's Policy, what coverage will pay for the hotel room bill? A. Fair Rental Value B. Value Obligation C. Loss of Use D. Insurers Duties - C. Loss of Use The insurer will pay any necessary and reasonable expenses associated with a daily living routine. An insured who wishes to purchase flood insurance, but is located in a moderate or low risk flood zone may do so by purchasing a: - Preferred Risk Flood Policy Although Flood Insurance is provided by the Federal Government, those who are not in a "flood zone" may purchase a preferred risk policy to cover them for a flood claim. Used only for Commercial Condominiums, it covers the unit-owners business personal property and the personal property of others in the insured's care, custody or control: - Condominium Unit Owners Form The Commercial Property Contract includes all of the following, except: A. Common Policy Conditions B. Commercial Property Conditions C. Coverage Form D. Commercial Loss Schedule - Commercial Loss Schedule Also included: Declarations, Causes of Loss Form, Endorsements Insures a condominium association against direct physical loss or damage to buildings, business personal property and personal property of others in the care, custody or control of the association and located at the premises: - Condominium Association Form This, along with Condo Unit Owners Form, is located under Condo Coverage. Sometimes referred to as commercial fire and allied lines, this is the form of insurance that covers direct and indirect losses related to properties other than one-to-four family dwellings and farm properties: - Commercial Property Insurance (the question is the definition for this term) Under Commercial Property Policies, Florida law requires an insurer to give the insured at least __________days advance written notice of non-renewal. A. 25 B. 90 C. 45 D. None of the Above - C. 45 Also, notice must state reasons the policy is not to be renewed. When a business's personal property values fluctuate, a single, fixed amount of insurance could produce either over- or under-insurance at any given time. With this option, the limit of coverage is set at an amount somewhat higher than expected peak values. - Value Reporting Replacement Cost is incorrect b/c it calculates monetary value of one's personal property Liberalization states, "The insured gets the benefit of any broadened coverage if the company, within __________ days of inception, adopts a form revision that is broader and without increase in premium." - 45 days Used to cover buildings in the course of construction - Builders Risk Policy Includes: structure being built (including foundations), fixtures and machinery, equipment to service building, owned materials and supplies used for construction. Temporary structures built or assembled on site are also included if not covered by insurance. First developed as an extension of Ocean Marine coverage, to provide coverage for cargo traveling over land, instead of by sea. - Commercial Inland Marine Coverage Definition: to help identify kinds of risks which are eligible for either Ocean or Inland Marine insurance. Protects against *loss of business income* that results from damage to covered property from a covered cause of loss. (BIIC) - Business Income Insurance Coverage Period of restoration begins 72 hours after date of direct damage. In effect, coverage has a 72 hour deductible. Coverage ends on either 1. date when damaged property could be repaired, rebuilt, or replaced 2. date business resumes operations at new, permanent location (whichever comes first) What payment covers several areas of costs related to claims, and are payable in addition to the policy limits? - Supplementary Generally, all costs of litigation are covered (court costs, prejudgment interest, judgement interest, cost of bonds to release attachments) Three full-time employees from a local furniture company are horsing around and one is pushed into a machine that cut his foot. How will the company's General Liability respond? - The GL policy will not pay Coverage excludes liabilities under Workers Comp or similar law or arising from injuries to employees of the insured. The employees would have to file through Workers Comp. Which of the following can be found in a Commercial General Liability Contract? A. Declarations B. Common Policy Conditions C. Occurrence and Claims-Made Forms D. All of the Above - D. All of the Above Also included: Nuclear Energy Liability Exclusion endorsement (other endorsements may be attached) There is __________ coverage for injury, damage or clean-up costs caused by pollutants, subject to minor exceptions. - 0% Under a Commercial General Liability Policy, a basic limit of __________ per person applies to Medical Payments: - $5,000 The Commercial General Liability __________ identifies the named insured and address, states the policy period and premium and miscellaneous information about the insured, and specifies the limits of coverage that apply. - Declarations The Nuclear Energy Liability Exclusion endorsement, in general, __________ all hazards related to nuclear energy. - Excludes Firms involved in Nuclear activities receive protection from special insurer pools organized for that purpose. Toxic wastes escaped from a gas station disposal tank. The insured operator discovers the leak and cleans up the spill. Unfortunately, the waste quickly seeped into the ground and has caused illness among the residents of a neighboring community This is an example of? - Known Loss Insurer should have been notified and further investigation of the spill and effective clean-up would have been observed. Applies to BI or PD which occurs during the policy period, regardless of any later time at which a claim is made: - Occurrence Form vs. Claims-Made: applies only to BI or PD occurring on or after retroactive date for which claim is received/recorded during policy period Applies only to a BI or PD which occurs on or after the retroactive date, and for which the claim is received or recorded by an insured or the company during the policy period: - Claims-Made Retroactive date is stated in Declarations and will normally be same date as issuing company's first claims-made effective date for insured. All of the following are components of Workers Compensation, except: A. Up to $750,000 in Death Benefits B. Reimbursement for Medical Expenses incurred C. Reimbursement for lost wages on percentage basis D. Funeral costs up to $7,500 - Up to $750,000 in Death Benefits Compensation for death is payable if death results within one year of an accident or if it follows disability within five years of accident. The following are classes of disability, except: - Temporary Full Also included: Temporary Partial The measure to determine disability benefits is the __________ of the employee at the time of injury: - Average Weekly Wage Disability - incapacity due to injury to earn same or any other employment wages that employee was receiving at time of injury. Mandatory for risks exceeding certain annual premiums, recognizes the prior loss experience of the risk and applies either a debit for unfavorable experience or a credit for better-than-expected loss results. This is defined as: - The Experience Rating Plan This, along with Retrospective Rating Plan, is a manual rating process until premiums reach a certain level. Under workers compensations, a rate is charged for every __________ of payroll to employees. - $100 The National Council on Compensation Insurance enforces this rating. Under Workers Compensation, Part Four Your Duties if Injuries Occur, an employer is required to: A. Provide the names/addresses of injured persons and witnesses B. Promptly provide any legal papers C. Cooperate and assist as insurer requests D. All of the Above - All of the Above Also included: immediate contact with insurer, providing immediate medical or other services, do nothing to interfere with insured's right of recovery, make no voluntary payments or assume any obligation except at employer's own cost. Under Workers Compensation, Employers Liability includes: A. Claims by others for the liabilities to insureds employees B. Claims by relatives of injured employees for consequential damages C. Claims made by employees that are not subject to Workers Comp Laws D. All of the Above - All of the Above Samantha eats uncooked chicken at a local barbecue joint and becomes violently ill. Which of the following workers compensation benefits would pay for this occurrence? A. A products and completed operations form B. A premises and operations form C. An owners and contractors protective liability form D. None of the Above - None of the Above Samantha is not an employee of the barbecue joint; Workers Comp does not apply. An optional alternative providing for adjustment of premium after expiration, based on a guaranteed basic premium to the insurer to which is added the actual losses incurred by the insured. This is defined as: - Retrospective Rating Plan Under Employer's Liability, the minimum limits of liability are: - A. 100/100/500 $100,000 for all claims in each accident $100,000 per employee for disease $500,000 for all disease claims Under Inside The Premises - Robbery or Safe Burglary of Personal Property, a special limit of __________ per occurrence applies to articles whose principal value is precious metals, precious or semiprecious stones, pearls or furs, and to the physical or intrinsic value of manuscripts, drawings or records: - $5,000 Under Crime Insurance, losses must be discovered within 1 year. This is defined as: - The Discovery Period Crime Insurance is _________ over any other Insurance coverage. - Excess A situation may arise where another form of insurance will pay claim - that insurance would be primary. Cover only losses that both occurred and were discovered during the policy period, or within one year of its expiration. This is defined as: - Loss Sustained One exception to the rule is that Loss Sustained forms will also cover losses that occurred under previous (expired) crime policies and that were discovered during current policy year, as long as crime coverage had continued w/o interruption Any loss discovered during the policy period or within 60 days after its expiration (one year after expiration for losses connected with employee benefit plans) is covered regardless of when it occurred. This is defined as: - Discovery If XYZ restaurant discovers stolen goods taken over a year ago, this is within 2 years of inception date and found within policy period so it's covered. Under Crime Insurance, the insured is covered for loss by: A. Theft B. Burglary C. Robbery D. All of the Above - D. All of the Above Unless the loss is specifically excluded or limited Provides for loss of money and securities outside the premises in the care, custody and control of a messenger or armored car service resulting from theft, disappearance or destruction. This is defined as: - Outside the Premises Also covers robbery of other property under the circumstances. Taking or attempted taking of property from within a locked safe or vault, by unlawful entry, with visible marks of forcible entry, or taking of the safe or vault from inside the premises. This is defined as: - Safe Burglary Exclusions: accounting errors, giving/surrendering property, voluntarily parting, fire (except damage to safe/vault), vandalism, transferring property to someone based on unauthorized instructions or from threat to harm Covers for all types of property, when surrendered away from the premises as a result of a threat to do bodily harm to the insured or an employee, or to a relative or invitee of either, who is (or allegedly is) being held captive. This is defined as: - Extortion