FLORIDA CLAIMS ADJUSTER EXAM, 6 -20 ALL LINES ADJUSTER -FLORIDA -REVIEW QUESTIONS WITH CORRECT ANSWERS (A+)

Peril Something that causes a loss. Hazard Something that increases the probability that a loss will occur. Warranty A policy condition, either based on information in the insureds application or inserted by the insurer. It is a guarantee of a fact. Misrepresentation An untrue statement by the insured, made in an application for insurance but which does not become a part of the policy. Concealment The failure of the insured to reveal relevant facts known to the insured in applying for insurance. Abandonment Property insurance policies usually contain an abandonment clause, stating the insured cannot dump damaged property on the insurer and demand its full value. Severability The insurance applies separately to each insured as if other insureds did not exist. Proximate Cause The cause having the most significant impact in bringing about the loss under a first-party property insurance policy, when two or more independent perils operate at the same time (i.e., concurrently) to produce a loss. Courts employ a set of rules to resolve causation disputes when a property policy states that it covers or excludes losses "caused by" a peril and there is more than one peril at work in a fact pattern. Under common law, whether the policy provides coverage depends on which peril is chosen as the proximate cause. Direct Loss Physical harm to tangible property. Indirect Loss Economic loss which flows as a result of direct loss. Actual Cash Value(ACV) Replacement Cost minus Depreciation Coinsurance The amount, generally expressed as a fixed percentage, an insured must pay against a claim after the deductible is satisfied. It's ultimately a way for the insured and insurer to share responsibility for the risk. It can also help reduce the cost of the insurance policy premium. Coinsurance can be written on an 80/20, 90/100, or 100% rule. AD Personal Contract Policies cover people who own and operate things, such as automobiles. Conditional Contract Also called a hypothetical contract, is a contract agreement that only requires performance once the delineated conditions are met. This legal agreement requires prior performance of another agreement or clause in order to be enforceable. If the other agreement or condition is performed, then the conditional contract is enforceable and the parties are bound to carry out the terms of the contract. Contract of Indemnity Principle of insurance that provides that when a loss occurs, the insured should be restored to the approximate financial condition he/she occupied before the loss occurred, no better or no worse. Insurable Interest the reasonable concern of a person to obtain insurance for any individual or property against unforeseen events such as death, losses, etc. Waiver 1.) Implied voluntary relinquishment, abandoning a legal advantage, need, claim or right. 2.) Agreement or added clause of a policy that excludes some losses or limits the sum of a claim, or extends coverage to add items not in a normal policy. Express Waiver Occurs when the insurer or its representative knowingly gives up a known right under the insurance contract. Implied Waiver A waiver that is assumed to be in effect from a person's behavior and shows he is waiving a right. Damages Monetary compensation that is awarded by a court in a civil action to an individual who has been injured through the wrongful conduct of another party. Subrogation When an insured has a right to collect damages from another party, but instead elects to claim the damages under his insurance policy, his rights against the other party are transferred to the insurer. Changes All policies provide that any changes to the policy be made by the insurer, in writing. Policy Period The condition states that coverage applies only to losses or occurrences that take place during the policy period. (Prior to the stated date and time of termination). Policy Territory Condition limiting coverage to occurrences or losses that take place only within a stated geographical region. Other Insurance The principle of indemnity dictates against duplicate recovery for the same loss. Cancellation The insured may cancel at any time, for any reason, without advance notice. If the conpany wishes to cancel, it must provide some degree of advance notice so the insured will have time to replace the coverage. Appraisal A written contract of or written agreement for or effecting insurance, or the certificate thereof, by whatever name called, and includes all clauses, riders, endorsements and papers which are a part thereof. Insurance Is a contract whereby one undertakes to indemnify another or pay or allow a specified amount or a determinable benefit upon determinable contingencies. Binder Acts as a temporary contract until the policy is issued. How many days should an insurer give for prior notice of cancellation of a binder? 5 days. Property Insurance Any insurance wherein payment by the insurer will be paid directly to the insured or other specifically named interests. Liability Insurance Payment will be on behalf of the insured to another, based upon the insureds liability to the recipient. Simply stated, Liability is "Negligence of the Insured". Loss Payee Clause A Clause in a contract of insurance that provides, in the event of payment being made under the policy in relation to the insured risk, that payment will be made to a 3rd party rather than to the insured beneficiary of the policy. Mortgage Clause A property insurance provision granting special protection for the interest of a mortgagee named in the policy, in effect setting up a separate content between the insurer and the mortgagee. Other Structures Covers items that are not permanently attached to the main dwelling, such as a shed, fence, etc. Commercial Inland Marine Helps identify the kinds of risk which are eligible for either ocean or inland Marine insurance. Building Ordinance Coverage This endorsement covers the insured for enforcement of laws which require demolition of undamaged portions of buildings. Umbrella Policy Covers a much higher limit and goes above and beyond claims directly relating to your home and auto, it provides your assets from an unforeseen event, such as a tragic accident in which you are held responsible for damages or bodily injuries. Known Loss Prevents an insured from coverage if the insured knew the loss was probable at the time of the insurance contract. Value Reporting The limit of coverage is set at an amount somewhat higher than expected peak values. Commercial Property Insurance Covers direct and indirect losses related to properties other than one to four family dwellings and farm properties. Employee Theft Provides coverage for loss of or damage to money, securities, and other property resulting from theft committed by an employee. Theft is defined as the unlawful taking of money, securities or other property to the deprivation of the insured. Bid Aggreement to fulfill a contractual obligation used frequently in construction and supplying goods. Health Maintenance Organization (HMO) Provides comprehensive health services to its members for a prepaid fixed fee, equivalent to an insurance premium. Preferred Provider Organization (PPO) A selected group of hospital's and medical practitioners in a given area who have joined together in an effort to reduce medical costs. Estoppel Is an equitable principle to the effect that if one intentionally or unintentionally creates the impression that a certain fact exists, and an innocent party relies on that impression and is damaged as a result, the guilty party may be legally prohibited(estopped) from asserting that the fact does not exist. Salvage Motor vehicle or mobile home is a total loss. Junk Any material which is or may have been a motor vehicle or mobile home, with or without all component parts, which is inoperable and which material is in such condition that its highest or primary value is either in its sale or transfer as scrap metal. Fiduciary Agent Agent for a principal/Client. The legal or special relationship of trust, confidence, or responsibility between 2 or more parties. Domestic Insurer Insurer is one formed under the laws of its this state. Foreign Insurer Insurer is one formed under the laws of any state, district territory, or commonwealth of the United States other than this State. Alien Insurer Insurer is an insurer other than a domestic or foreign insurer. Appointment The authority given by an insurer or employer to a licensee to transact insurance or adjust claims on behalf an insurer or employer. Derelict Material which is or may have been a motor vehicle or mobile home, with or without all component parts, which is inoperable and which material is in such condition that its highest or primary value is either in its sale or transfer as scrap metal or component parts or both. Mechanical Breakdown Coverage Covers repairs to mechanical parts of your vehicle that break. Even covers break in events not related to an accident. Sliding Selling an item and stating that it is required by law. What is the Death Benefit amount for PIP ? $5,000 What is the amount for medical and disability benefits afforded by PIP ? $10,000 Who is the Financial Responsibility Law administered by ? The Department of Highway Safety and Motor Vehicles. What are the Basic PIP Benefits ? -Medical-80% of responsible expenses are paid for necessary medical, surgical, X-Ray and dental. -Work Loss-60% of any loss of gross income and loss of earning capacity reimbursed. -Replacement Services-100% for the cost of having household services performed by others. -Death-Effective 01/01/2013 the death benefit will be $5,000 in addition to the $10,000 in medical and disability benefits afforded by PIP. Company or Staff Adjuster Are salaried employees under the supervision of the home, branch or regional claims department of insurers. Fee Adjusters Offer their services on a fee-for-service basis. They represent many insurers. Bureau Adjuster Employee or agent of an adjustment bureau which serves multiple company clients such as the GAB Business Services, Inc and Underwriters Adjusting Company both national firms. Independent Adjuster Are Self-Employed and are not affiliated with either insurers or bureaus. They serve as adjuster representatives of insurers, and their services are compensated on a fee-plus-expenses basis for each loss handled. Public Adjuster Is a claims adjuster who is an advocate for the policyholder in appraising and negotiating an insurance claim. What are the Characteristics of a Personal Auto Policy Declaration Page ? -Liability(Bodily Injury) -Property Damage -Uninsured Motorist -Medical Payments -Personal Injury Protection -Collision Deductible -Comprehensive Deductible -Towing Coverage -Rental Coverage What are examples of Transacting Insurance? -Solictitation of Insurance -Negotiation of Insurance -Effecting Coverage (Binding insurance coverage) -Transacting Insurance Matters(during and after insurance is bound). What are thresholds of the No-Fault Law ? -Significant and permanent loss of a bodily function or -Permanent injury other than scarring and disfigurement or -Significant and permanent scarring or disfigurement or -Death What is the adjusters investigation limited too ? A simple verification of bills and estimates or it may be expanded to include photographs, witness canvasses, or recorded statements as the circumstances require. What are the componets of a investigation process ? -Inquiry -Verification -Comparison What are some reasons for suspension, revocation or termination of a license ? -Transacting Insurance outside of scope of one's license -Misrepresentation or fraud -Sliding -Demonstration of unworthiness or lack of fitness -Misappropriation of funds -Failure to inform Department of financial services, within 30 days, after pleading guilty or no contest to a felony. Florida Unfair Insurance Trade Practices Act Describes certain practices, penalties are provided for misrepresentation to insureds and claimants and business practices such as -Failing to act promptly -Failure to affirm or deny a claim when an insured is entitled there to -Failure to explain claim denials in writing -Failure to maintain complaint-handling procedures such as keeping accurate records of complaints. Comprehensive Coverage Covers all loss except collision or overturn. Standard deductible is $100 per car, $500 per occurrence applies to losses from theft, mischief, and vandalism. What is the minimum requirements for the Financial Responsibility Law ? -The legally valid claims of others must be satisfied(up to the 10/20/10 requirements) -The owner and operator must provide certification of financial responsibility for future accidents. If not satisfied operator's driver's license and the registrations of all owned vehicle's are suspended. What are the basic activities in claims handling ? -Investigation to establish coverage, determine legal liability, and verify if the alleged damages qualify the loss for payment. -Evaluation to determine the fair payment in accordance with the contract and applicable law. -Negotiation of a quality settlement based on facts discovered during the evaluation process. Claim Is the assertion of an alleged legal right against an insurer, which carries with it a demand for appropriate relief. Claims Adjuster One who is involved in the investigation, adjustment, negotiation and/or trial preparations of claims arising under insurance policies. Adjusting Process of disposing of an insurance claim. Loan Receipt A written statement given by the insured to the insurer acknowledging that money received in the settlement of damages is received, not as a final payment, but as an advanced pending the outcome of a claim against the person responsible for the damage. Apportionment Is a provision for computing and assigning to each of two or more contracts covering a claim its proportion of the amount of the loss. How to settle a claim for an Injured Minor ? Under Fl Law, the adjuster should settle a third-party liability claim of an injured minor child with both parents of the injured child, presuming the settlement is for an amount not in excess of $15,000. If it is more than that it must be consummated through the Circuit or County Courts. What are the violations of the Unfair Trade Practices Act ? -Failing to act promptly. -Failure to affirm or deny a claim when an insured is entitled thereto. -Failure to explain claim denials in writing. -Failure to maintain complaint-handling procedures, such as keeping accurate records of complaints. Section 624.155 of the Florida Statues provides ? That any person who is damaged by certain insurer practices is granted a right to sue the insurer for damages. The Principle Of Utmost Good Faith An insurance contract is based, places serious responsibilities on the claim adjuster with regard to conduct, work habits, and specific claims handling activities. What does 10/20/10 mean ? 10=10,000 Livability per person injured-amount that will be paid out for injuries to one person. 20=20,000 Combined Total Liability for all injuries-this is the most paid out for injuries for an accident. 10=10,000 Property Damage-the most paid out for damage caused to property of others. What is SR-22 ? A form of coverage known as a NAMED NOOWNER policy is required, this form offers insurance coverage only while the insured is operating automobiles owned by others. What are the two things that need to happen for financial responsibility that did not exist at the time of the accident ? -The legally valid claims of others must be satisfied(up to the 10/20/10 requirements). -The owner and operator must provide certification of financial responsibility for future accidents. What are the main elements of the FL Law ? -Those who comply with the law have limited immunity from tort suits. -As one may not be able to seek legal liability damages against another for bodily injuries, the law substitutes, under one's own insurance, the coverage defined as Personal Injury Protection(PIP) How many days does a Non-Resident's vehicle physically present in FL have subject to the No-fault law ? 90 days. What are the three penalties for non-compliance with the compulsory insurance requirements ? -The owner is denied the immunities from legal liabilities that are granted to those who comply. -The owner is personalltly liable for payment of PIP benefits to those entitled to such benefits. -The owner's driver's license and vehicle registration are subject to suspension, as under the Financial Responsibility Law. What does Extended PIP do ? -Increases medical benefits from 80% to 100%. -Increases income loss from 60% to 80%. -Applies only to named insured and family members. What does additional PIP do ? -Increases the $10,000 limit by amounts such as $10,000, $25,000, $40,000, and $90,000(again, for a premium increase). -Increases do not impact $5,000 death benefit. -Applies only to insured and family members. Personal Auto Policy Used to insure the automobile exposures of individuals and families. Business Auto Policy Insurers the automobile exposures of Business. What are the kinds of autos owned by businesses and covered under a Business Auto Policy ? -Private Passenge Type Auto-Station Wagons, jeeps, pickups, panel trucks, vans, and utility trailers. -Public Auto- Buses and Taxicabs -Commercial Auto- truck tractors, semi-trailers, commercial trailers, and Service trailers. -Special types of vehicles like cherry pickers, air compressors. Garage Coverage Form Used to insure businesses engaged in selling, servicing, repairing, parking or storing autos. Truckers Coverage Form Used to insure businesses that are hired to transport goods for someone else. Business Auto Coverage Form Used to insure the automobile exposures of all businesses other than garage or trucking businesses. What does Commercial General Liability contract includes ? -Declarations -Common policy conditions -One of the two coverage forms, Occurrence, or Claims-Made -A Nuclear Energy Liability Exclusion endorsement -Various other endorsements may be attached to broaden or restrict the coverage provided by these basic forms. Declarations 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. The policy states that if a company wishes to cancel, How many days must it give prior notice ? 30 days. Nuclear Endorsement Excludes all hazards related to nuclear energy. What is Coverage A ? Bodily Injury and Property Damage Insuring Agreement. Bodily Injury(BI) Physical harm and includes sickness or disease or death resulting there from. Property Damage(PD) Physical injury to tangible property, including loss of use of that property. Occurrence An accident, including. continues or repeated exposure to substantially the same general harmful conditions. Accident A sudden, unexpected event. Coverage Territory Is the U.S. and its territories or possessions , Puerto Rico and Canada, including international waters and airspace between these places. The Coverage Trigger Determines how policy will respond. The Occurrence form Applies to BI or PD which occurs during the policy period, regardless of any later time at which a claim is made. The Claims-Made form 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. Retroactive Date Establishes the original policy date for a serious of claims made policies. Intentionally Injury Coverage excludes injury or damage which is expected or intended by the insured. liquor Liability If the insured is in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages, liability associated with serving liquor to intoxicated or underage persons or in violation of a law is excluded. Employee Injuries Coverage excludes liabilities under a workers compensation or similar law or arising from injuries to employees of the insured. Pollution There a basically no coverage for injury, damage or clean up costs caused by pullutants, subject to minor exceptions. What is Coverage B ? Personal and Advertising Injury. What is Coverage C ? Medical Payments. What are the General Liability Insurance Forms ? -Owners and Contractors Protective Liability(OCP)Form. -Liquor Liability Coverage Form. -Products/Completed Operations Liability Coverage Form -Pollution Liability Coverage and Pollution Limited Form. Professional Liability Insurance Coverage Covers liability arising from rendering of or failure to render professional services. Farm Liability Coverage Form Provides coverage for BI or PD arising out of farming operations of personal activities. The Custom Farming Endorsement Provides coverage for liability arising from the insureds performance of farming operations for another, for a charge under any contract or agreement. The Farm Employers Liability/Medical Payments Endorsement Applies the basic Liability and Medical Payments coverages to injuries to farm employees, but not to employees eligible to receive workers compensation benefits. Employment Related Practices Liability This Form provides employers witg claims- made coverage for liability arising out of claims for injury to an employee because of an employment-related offense. Unauthorized Entity An entity that is required to be licensed or registered with the Florida Office of Insurance Regulation but is operating without the proper authorization is identified as an unauthorized insurer. To be Authorized and transact business in FL what must you have ? Certificate of Authority. General Lines Agent 2-20 Licensed to write property/casualty, surety, or health insurance. Customer Representative 4-40 Must be licensed, appointed by a General Lines Agent and may assist in transactions in the OFFICE ONLY. Limited Customer Representative 4-42 Must be licensed, appointed by a General Lines Agent and transact AUTO insurance in the OFFICE ONLY. All Lines Claims Adjuster 6-20 Investigates, Evaluates, and Negotiates Claims. A General Lines Adjuster is required to do what ? Participate in 24 hrs of continuing education every 2 years. A licensee must notify the Department in writing in how many days for change of name, address, phone number or email ? 30 days. Loss Sustained Cover only losses that both occurred and were discovered during the policy period, or within one year of it's expiration. Discovery Any loss discovered during the policy period or within 60 days after it's expiration is called regardless of when it occurred. Property Covered The policy covers only property the named insured owns or holds or for which the insured is legally liable, and for the benefit of the insured. Safe Depository Covers the named insureds legal liability if it is the safe depository for customers property. Perils covered include burglary, robbery, destruction on damage. Valuation Money is valued at its face value; securities at their value on the day loss is discovered; and other property at actual replacement cost or, if less, cost to repair. Government Crime A slightly different set of basic Crime Coverage Forms is tailored for insuring governmental entities. Guests' Property Covers the named insureds legal liability for guest's property while in a safe deposit box or while the property is inside the premises or in the named insureds possession. Commercial Crime Forms Crime Insurance may be written as a separate policy, with it's own Declaration and Conditions, or as a package policy, bundled together with Employee Dishonesty. Forgery Or Alteration Provides coverage for loss by forgery or alteration of negotiable instruments, such as checks, drafts, promissory notes or similar instruments calling for payment of a sum certain in money. Computer Fraud Will pay for the loss of or damage to money, securities and other property resulting from using a computer to fraudulently transport from inside the insureds promises to a person or place outside the premises, which encompasses anywhere in the world. Extortion 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 being held captive. Clients Property Offers coverage for non-owned property for which the insured is legally liable while the property is on the premises of the insureds client. Lesses of Safe Deposit Boxes Covers theft, disappearance, or destruction of securities; and burglary or robbery of property other than money or securities, all from within designated places of safe depository. Funds Transfer Fraud Is designed to cover loss due to the fraudulent transfer of funds through the use of a telephone or fax machine. Securities Deposited with Others Covers theft, disappearance, or destruction of securities, which have been deposited with a custodian, such as a bank or stockbroker. The deductible The dollar amount that the insured pays before the insurer is required to pay the remainder of the loss is known as? Replacement cost Which loss settlement provides new for old? the claims adjuster's role in the insurance industry includes Give appropriate legal advice and write binding contracts following are examples of a peril Lighting, Explosion and Fire The abandonment clause The clause that prohibits the insured from dumping damaged property on the insurance company and demanding to be paid in full is? Liberalization When a policy change results in broadened coverage with no additional premium, the insured automatically receives the benefit under the principle of? Risk The chance of financial loss is known as? Percentage Hurricane insurance in coastal areas in Florida is written subject to which of the following deductibles? The principle of proximate cause When there is an unbroken connection between an occurrence and the damage that arises from the occurrence, and all the resulting damage happened on account of that occurrence, this is known as? characteristics of a contract Consideration must be given to at least one party Primary When two or more policies apply to the same loss, the one that pays first is called? Mortgagee Clause The clause that protects the lender in a real property policy is the? Indemnity The concept that one should not profit from the payment provided by an insurance policy is known as? Property or first-party insurance Payment the insurance company makes directly to the insured is? Written To be considered an insurance contract, a policy must be? Subrogation When the insured transfers his/her rights to collect for damages to the insurer, it is known as? The insured If an insurance policy is unclear or ambiguous, in whose favor does the policy respond? Insurable interest A partial owner of a building cannot receive full value for the building in the event of a loss because of? Comparative negligence Reduces the insured's damages by the degree of negligence the following are part of an insurance policy Exclusions, Declarations and Endorsementd ACV replacement cost minus depreciation The insured's house is totally destroyed in a fire. The house is insured for $200,000. The adjuster who investigates the claims determines the ACV of the home is $185,000. The Florida Valued Policy Law requires the insurer to pay $200,000 describe a franchise deductible No payment is made until the loss equals or exceeds the amount of the deductible and then the loss is paid in full