TEXAS ADJUSTER EXAM ACTUAL EXAM 100 QUESTIONS
AND CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |AGRADE
The Terrorism Risk Insurance Act defined as a violent act meetin all of the following
criteria EXCEPT
- It must result in damage within the United States or on an air carrier, vessel, or
premises of a U.S. mission
- The minimum loss caused by $5,000,000
- It must involved a minimum of 12 terrorists
- It must be dangerous to life, property, or infrastructure as certified by the US
Secretary of Treasury in consultation with the Secretary of Homeland Security and
the US Attorney General - ANSWER: It must involved a minimum of 12 terrorists
Mike, an insurance agent, is meeting with his client, and he is trying to explain the
difference between perils and hazards that the client faces. Which of the following
would be an example of physical hazards:
- Flood Damage caused by heavy rains
- Bald Tires on client's car
- A tornado that damages the client's home
- Fire that could damage the client's home - ANSWER: Bald tires on the client's car
An insured who wants to add personal liability and medical payments coverage to a
dwelling policy must
- Pay an extra premium to add extended coverage to the policy
- Cancel the dwelling policy and purchase a homeowners policy
- Purchase the DP-3
- Occupy the dwelling and purchase the personal liability endorsement - ANSWER:
Occupy the dwelling and purchase the personal liability endorsement
The jeweler's block coverage policy is used to insure all of the following EXCEPT
- Inventory sold, but not yet delivered to the customer
- Inventory in jewelry store showcase
- Inventory being worn by an employee of the jewelry store to spark customers'
interest
- Customers' jewelry or watches being cleaned or repaired - ANSWER: Inventory
being worn by an employee of the jewelry store to spark customers' interest
All of the following are elements of negligence EXCEPT
- Actual Loss
- Proximate cause
,- Duty Accepted
- Duty Breached - ANSWER: Duty Accepted
Depreciation is a decrease in value of property as a result of all the following EXCEPT
- Obsolescence
- Refinishing
- Wear and tear
- Age - ANSWER: Refinishing
All insurance contracts require that an exchange of value take place between the
insured and insurer. The value added by the insured is the premium paid. The value
added by the insurer is:
- Found in the declarations page
- Found in the conditions section
- To cover all losses
- The promise to pay for any covered loss. - ANSWER: The promise to pay for any
covered loss.
Actual cash value is determined by which of the following formulas?
- Replacement cost + depreciation
- Replacement cost - total value
- Replacement cost + total value
- Replacement cost - depreciation - ANSWER: Replacement cost - depreciation
According to the commercial building and personal property coverage form, signs
attached to the building are covered for:
- $2500
- $0
- $1000
- $500 - ANSWER: $2500
All of the following are products of liability claims EXCEPT
- A customer at a cafe is eating pecan pie and a pecan chips her tooth
- A customer eating at a coffee shop gets burned when the waiter drops a tray of hot
food
- A customer buys a hair dryer and while using it gets burned
- A customer buys an alarm clock and it shorts causing a fire at the customer's house
- ANSWER: A customer eating at a coffee shop gets burned when the waiter drops a
tray of hot food
All insurance contracts have several parties; the party known as the second party
would be
,- The agent
- The insurance company
- The insured
- The Department of Insurance - ANSWER: The insurance company
If a claim is made by an insured in an insurance policy, it is considered
- An indirect loss
- A 1st party claim
- A third party claim
- A direct loss - ANSWER: A 1st party claim
What are two types of breakdown primarily covered by equipment breakdown
insurance?
- Leakage at any valve or cracking of any part of an internal combustion gas turbine
- Alignment and calibration
- Computer viruses and obsolescence
- Explosion and mechanical breakdown - ANSWER: Explosion and mechanical
breakdown
What part of the valuable papers and records floater states that if an insured does
not keep the valuable papers and records in the required container when they are
not being used or when the business is closed, losses by fire will not be covered?
- Fireproof container warranty
- Receptacle Warranty
- Container representation
- Safe and Vault promise - ANSWER: Receptacle Warranty
If Gina borrows Rachel's vehicle and is involved in an accident and it is determined
Gina is at fault, whose insurance policy would be considered primary?
- Both would be
- Gina's
- The 3rd party
- Rachel's - ANSWER: Rachel's
All of the following are covered by the broad cause of loss EXCEPT
- A tree limb breaks, falls, and causes damage to the restaurant's roof
- The weight of ice, sleet, or snow causes the collapse of the roof
- The creek behind the restaurant overflows due to heavy rain and causes flood
damage to the building
, - A dishwasher accidentally discharges and causes water damage to business
personal property - ANSWER: The creek behind the restaurant overflows due to
heavy rain and causes flood damage to the building
What level of fiduciary responsibility do adjusters have to adhere to?
- Normal
- Extraordinary
- Legal
- Expert - ANSWER: Extraordinary
All of the following are homeowners cause of loss coverages EXCEPT
- Comprehensive
- Special
- Broad
- Basic - ANSWER: Comprehensive
If an adjuster makes comments that give an insured the feeling that a loss is covered
and the adjuster also fails to tell the insured that no coverage actually exists, this is
an example of
- Statement of fact
- Legal issue
- Waiver
- Estoppel - ANSWER: Estoppel
A policy that covers any loss that is not specifically excluded by the policy is
- an open peril policy
- a specific named perils policy
- A broad peril policy
- a named peril policy - ANSWER: An open peril policy
The eligibility for the homeowner's policy states that the dwelling must be occupied
by
- The agent
- The owner
- The tenant
- The company - ANSWER: The owner
A policy that combines two types of insurance (ex. property and liability) into a single
policy is called
- A blanket policy
- A monoline policy
AND CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |AGRADE
The Terrorism Risk Insurance Act defined as a violent act meetin all of the following
criteria EXCEPT
- It must result in damage within the United States or on an air carrier, vessel, or
premises of a U.S. mission
- The minimum loss caused by $5,000,000
- It must involved a minimum of 12 terrorists
- It must be dangerous to life, property, or infrastructure as certified by the US
Secretary of Treasury in consultation with the Secretary of Homeland Security and
the US Attorney General - ANSWER: It must involved a minimum of 12 terrorists
Mike, an insurance agent, is meeting with his client, and he is trying to explain the
difference between perils and hazards that the client faces. Which of the following
would be an example of physical hazards:
- Flood Damage caused by heavy rains
- Bald Tires on client's car
- A tornado that damages the client's home
- Fire that could damage the client's home - ANSWER: Bald tires on the client's car
An insured who wants to add personal liability and medical payments coverage to a
dwelling policy must
- Pay an extra premium to add extended coverage to the policy
- Cancel the dwelling policy and purchase a homeowners policy
- Purchase the DP-3
- Occupy the dwelling and purchase the personal liability endorsement - ANSWER:
Occupy the dwelling and purchase the personal liability endorsement
The jeweler's block coverage policy is used to insure all of the following EXCEPT
- Inventory sold, but not yet delivered to the customer
- Inventory in jewelry store showcase
- Inventory being worn by an employee of the jewelry store to spark customers'
interest
- Customers' jewelry or watches being cleaned or repaired - ANSWER: Inventory
being worn by an employee of the jewelry store to spark customers' interest
All of the following are elements of negligence EXCEPT
- Actual Loss
- Proximate cause
,- Duty Accepted
- Duty Breached - ANSWER: Duty Accepted
Depreciation is a decrease in value of property as a result of all the following EXCEPT
- Obsolescence
- Refinishing
- Wear and tear
- Age - ANSWER: Refinishing
All insurance contracts require that an exchange of value take place between the
insured and insurer. The value added by the insured is the premium paid. The value
added by the insurer is:
- Found in the declarations page
- Found in the conditions section
- To cover all losses
- The promise to pay for any covered loss. - ANSWER: The promise to pay for any
covered loss.
Actual cash value is determined by which of the following formulas?
- Replacement cost + depreciation
- Replacement cost - total value
- Replacement cost + total value
- Replacement cost - depreciation - ANSWER: Replacement cost - depreciation
According to the commercial building and personal property coverage form, signs
attached to the building are covered for:
- $2500
- $0
- $1000
- $500 - ANSWER: $2500
All of the following are products of liability claims EXCEPT
- A customer at a cafe is eating pecan pie and a pecan chips her tooth
- A customer eating at a coffee shop gets burned when the waiter drops a tray of hot
food
- A customer buys a hair dryer and while using it gets burned
- A customer buys an alarm clock and it shorts causing a fire at the customer's house
- ANSWER: A customer eating at a coffee shop gets burned when the waiter drops a
tray of hot food
All insurance contracts have several parties; the party known as the second party
would be
,- The agent
- The insurance company
- The insured
- The Department of Insurance - ANSWER: The insurance company
If a claim is made by an insured in an insurance policy, it is considered
- An indirect loss
- A 1st party claim
- A third party claim
- A direct loss - ANSWER: A 1st party claim
What are two types of breakdown primarily covered by equipment breakdown
insurance?
- Leakage at any valve or cracking of any part of an internal combustion gas turbine
- Alignment and calibration
- Computer viruses and obsolescence
- Explosion and mechanical breakdown - ANSWER: Explosion and mechanical
breakdown
What part of the valuable papers and records floater states that if an insured does
not keep the valuable papers and records in the required container when they are
not being used or when the business is closed, losses by fire will not be covered?
- Fireproof container warranty
- Receptacle Warranty
- Container representation
- Safe and Vault promise - ANSWER: Receptacle Warranty
If Gina borrows Rachel's vehicle and is involved in an accident and it is determined
Gina is at fault, whose insurance policy would be considered primary?
- Both would be
- Gina's
- The 3rd party
- Rachel's - ANSWER: Rachel's
All of the following are covered by the broad cause of loss EXCEPT
- A tree limb breaks, falls, and causes damage to the restaurant's roof
- The weight of ice, sleet, or snow causes the collapse of the roof
- The creek behind the restaurant overflows due to heavy rain and causes flood
damage to the building
, - A dishwasher accidentally discharges and causes water damage to business
personal property - ANSWER: The creek behind the restaurant overflows due to
heavy rain and causes flood damage to the building
What level of fiduciary responsibility do adjusters have to adhere to?
- Normal
- Extraordinary
- Legal
- Expert - ANSWER: Extraordinary
All of the following are homeowners cause of loss coverages EXCEPT
- Comprehensive
- Special
- Broad
- Basic - ANSWER: Comprehensive
If an adjuster makes comments that give an insured the feeling that a loss is covered
and the adjuster also fails to tell the insured that no coverage actually exists, this is
an example of
- Statement of fact
- Legal issue
- Waiver
- Estoppel - ANSWER: Estoppel
A policy that covers any loss that is not specifically excluded by the policy is
- an open peril policy
- a specific named perils policy
- A broad peril policy
- a named peril policy - ANSWER: An open peril policy
The eligibility for the homeowner's policy states that the dwelling must be occupied
by
- The agent
- The owner
- The tenant
- The company - ANSWER: The owner
A policy that combines two types of insurance (ex. property and liability) into a single
policy is called
- A blanket policy
- A monoline policy
