AL Practice Exam - Adjusting
1. The insured carries a BOP policy with protective systems such as a sprinkler system.
If the system becomes inoperative, the insured must advise the insurance company of
the problem within _______ if the system cannot be restored to working order - Answers
-48 hours Your Answer
2. Tina has two policies (Policy X and Policy Y) that cover the same risk on a pro rata
basis. Policy X has a limit of $100,000 and Policy Y has a limit of $25,000. When Tina
suffers a loss totaling $75,000, how will the two policies respond? - Answers -. Policy X
will pay $60,000 and Policy Y will pay $15,000
C.
D.
This provision in Ocean Marine insurance obligates insurers of various interests to
share the cost of losses associated with a captain's decision to voluntarily sacrifice a
part of the ship or its cargo. - Answers -General Average
Which of the following incidents would a liability insurance policy cover? - Answers -D. A
man slips inside a grocery store and injures himself.
Which of the following does NOT apply to commercial property insurance? - Answers -
B. Because of their complexity, commercial policies only offer named-peril coverage.
Which of the following perils is excluded from coverage in a National Flood Insurance
Program policy? - Answers -C. Water-main breakage
Sam, who has a typical HO-3 policy, is forced to evacuate his home by civil authorities
due to rising flood waters in his neighborhood. It takes a month before Sam is allowed
to come back to his home. During this time, he has spent $3,000 in hotel expenses, on
top of his monthly mortgage payment of $850. When he files a claim, how much will
Sam receive under Coverage D - Loss of Use? - Answers -A.
D. $0
Which of the following insurance packages will indemnify a policyholder for a variety of
hospital-related expenses such as nursing care, supplies, and rooming charges? -
Answers -A. Hospitalization Expense insurance
Which of the following statements about Alabama's approach to Workers' Comp
insurance is true? - Answers -A. WC is compulsory, and Alabama has no state WC
fund.
B.
,Barry lives in Texas, but wants to obtain an independent adjuster license in Alabama.
He can get this license without passing the Alabama adjuster licensing exam if: -
Answers -D. he has passed the Texas exam and received an all-lines adjuster license in
Texas.
Driving home after a 14-hour shift, Sam falls asleep at the wheel and plows into
Sandra's home, causing extensive damage to the East wall and roof. As a result,
Sandra and her family must move into a hotel until the repairs are completed. The cost
of staying in a hotel is: - Answers -D. an occurrence
When Emma is found guilty of arson for burning down her $175,000 home, her
insurance policy is voided and she receives no indemnification for the loss. Emma still
had $155,000 left on her mortgage at the time of the fire. Under the mortgagee clause,
Emma's mortgage lender can recoup: - Answers -A. the total amount left on the loan -
$155,000.
Grace purchased a recliner from XYZ Furniture. After getting it home, she decided to try
out the new chair. While leaning back, the chair breaks and Grace injures her neck. She
sues XYZ Furniture and is awarded $300,000. The costs for the legal defense come to
$45,000. XYZ Furniture's CGL policy has a Products-Completed Operations Aggregate
limit of $750,000, with a per occurrence limit of $250,000. How much will XYZ Furniture
have to pay out-of-pocket for this claim? - Answers -D. $50,000
Under which circumstance would it be legal for an insurer to charge one insured more
than another insured for the same coverage? - Answers -C. When the insured is
statistically more likely to experience a loss
Peter works as a real estate agent and uses the internet extensively for sales leads and
advertising. One day, he finds another realtor's ad online and copies it, using his own
information as the contact info. This generates a lot of business for Peter, but
unfortunately Peter gets a call one day and is informed that he is being sued for
copyright infringement. This is an example of what type of claim covered under Peter's
Commercial General Liability policy? - Answers -C. Advertising Injury
When would a default judgment occur? - Answers -A. When a defendant does not
answer a complaint
Cameron is fully insured by a DP-2 on his $130,000 home. His monthly mortgage
payment is $775 per month, and he usually pays $400 per month in groceries. When a
kitchen fire damages his house, causing $61,000 in damage, he forced to move out for
a month while the repairs can be made. Cameron's hotel bill for the month comes to
$1,250 and he spends $600 eating at restaurants. Based only on this information, how
much indemnification can Cameron expect to receive for this claim? - Answers -A.
B. Coverage A - $61,000; Coverage E - $1,450
C.
D.
, Which of the following are eligible for a Fortified Home Hurricane designation? -
Answers -B. Single family homes with permanent foundations
Risk avoidance is a risk management technique that: - Answers -B. eliminates risk.
Veronica owns a pottery business and is insured under a commercial property policy.
She was in the process of building an extra structure for the sole purpose of kiln firing
her pottery, but after 40 days of waiting for it to be completed, she moved her business
to a new location without any intention of moving back. Her Builder's Risk Coverage
Form was terminated because: - Answers -D. the property is abandoned.
Due to decreased demand, the market price of beets dropped dramatically during the
recent growing season. Consequently, Michelle's crop of beets did not make as much
money as she was expecting this year, based on her production history and the harvest-
time futures price. However, Michelle is insured for this type of situation. What kind of
insurance does she have? - Answers -A.
B.
C. Crop-Revenue
D.
Which of the following activities could be a useful negotiation technique? - Answers -B.
Reviewing video footage with the claimant that contradicts the claimant's position
Which of the following homeowners policies provide coverage on an open-peril basis for
personal property without endorsement? - Answers -A. HO-5
D.
Eloise borrows Uriah's car so she can run to the grocery store to pick up a few things.
While out, she rear-ends a minivan, injuring the driver and 3 other passengers. Each of
the passengers suffers $45,000 in injuries, and the driver suffers $40,000. Uriah has a
liability policy with limits of 50/100/50, while Eloise carries the minimum liability
coverage for Alabama. How much will the primary policy pay for this occurrence? -
Answers -B. $100,000
Lucille owns her own woodworking business, building custom items such as dressers,
wooden trunks, and mantelpieces. A fire destroys her entire operation and Lucille files a
claim with her insurer. Which of the following would be covered under Coverage A of
the Building and Personal Property Coverage Form in her commercial property policy? -
Answers -B.. A bandsaw permanently affixed to the floor
D.
Which of the following statements about Crop-Hail insurance is FALSE? - Answers -It is
subsidized by the FCIC.
1. The insured carries a BOP policy with protective systems such as a sprinkler system.
If the system becomes inoperative, the insured must advise the insurance company of
the problem within _______ if the system cannot be restored to working order - Answers
-48 hours Your Answer
2. Tina has two policies (Policy X and Policy Y) that cover the same risk on a pro rata
basis. Policy X has a limit of $100,000 and Policy Y has a limit of $25,000. When Tina
suffers a loss totaling $75,000, how will the two policies respond? - Answers -. Policy X
will pay $60,000 and Policy Y will pay $15,000
C.
D.
This provision in Ocean Marine insurance obligates insurers of various interests to
share the cost of losses associated with a captain's decision to voluntarily sacrifice a
part of the ship or its cargo. - Answers -General Average
Which of the following incidents would a liability insurance policy cover? - Answers -D. A
man slips inside a grocery store and injures himself.
Which of the following does NOT apply to commercial property insurance? - Answers -
B. Because of their complexity, commercial policies only offer named-peril coverage.
Which of the following perils is excluded from coverage in a National Flood Insurance
Program policy? - Answers -C. Water-main breakage
Sam, who has a typical HO-3 policy, is forced to evacuate his home by civil authorities
due to rising flood waters in his neighborhood. It takes a month before Sam is allowed
to come back to his home. During this time, he has spent $3,000 in hotel expenses, on
top of his monthly mortgage payment of $850. When he files a claim, how much will
Sam receive under Coverage D - Loss of Use? - Answers -A.
D. $0
Which of the following insurance packages will indemnify a policyholder for a variety of
hospital-related expenses such as nursing care, supplies, and rooming charges? -
Answers -A. Hospitalization Expense insurance
Which of the following statements about Alabama's approach to Workers' Comp
insurance is true? - Answers -A. WC is compulsory, and Alabama has no state WC
fund.
B.
,Barry lives in Texas, but wants to obtain an independent adjuster license in Alabama.
He can get this license without passing the Alabama adjuster licensing exam if: -
Answers -D. he has passed the Texas exam and received an all-lines adjuster license in
Texas.
Driving home after a 14-hour shift, Sam falls asleep at the wheel and plows into
Sandra's home, causing extensive damage to the East wall and roof. As a result,
Sandra and her family must move into a hotel until the repairs are completed. The cost
of staying in a hotel is: - Answers -D. an occurrence
When Emma is found guilty of arson for burning down her $175,000 home, her
insurance policy is voided and she receives no indemnification for the loss. Emma still
had $155,000 left on her mortgage at the time of the fire. Under the mortgagee clause,
Emma's mortgage lender can recoup: - Answers -A. the total amount left on the loan -
$155,000.
Grace purchased a recliner from XYZ Furniture. After getting it home, she decided to try
out the new chair. While leaning back, the chair breaks and Grace injures her neck. She
sues XYZ Furniture and is awarded $300,000. The costs for the legal defense come to
$45,000. XYZ Furniture's CGL policy has a Products-Completed Operations Aggregate
limit of $750,000, with a per occurrence limit of $250,000. How much will XYZ Furniture
have to pay out-of-pocket for this claim? - Answers -D. $50,000
Under which circumstance would it be legal for an insurer to charge one insured more
than another insured for the same coverage? - Answers -C. When the insured is
statistically more likely to experience a loss
Peter works as a real estate agent and uses the internet extensively for sales leads and
advertising. One day, he finds another realtor's ad online and copies it, using his own
information as the contact info. This generates a lot of business for Peter, but
unfortunately Peter gets a call one day and is informed that he is being sued for
copyright infringement. This is an example of what type of claim covered under Peter's
Commercial General Liability policy? - Answers -C. Advertising Injury
When would a default judgment occur? - Answers -A. When a defendant does not
answer a complaint
Cameron is fully insured by a DP-2 on his $130,000 home. His monthly mortgage
payment is $775 per month, and he usually pays $400 per month in groceries. When a
kitchen fire damages his house, causing $61,000 in damage, he forced to move out for
a month while the repairs can be made. Cameron's hotel bill for the month comes to
$1,250 and he spends $600 eating at restaurants. Based only on this information, how
much indemnification can Cameron expect to receive for this claim? - Answers -A.
B. Coverage A - $61,000; Coverage E - $1,450
C.
D.
, Which of the following are eligible for a Fortified Home Hurricane designation? -
Answers -B. Single family homes with permanent foundations
Risk avoidance is a risk management technique that: - Answers -B. eliminates risk.
Veronica owns a pottery business and is insured under a commercial property policy.
She was in the process of building an extra structure for the sole purpose of kiln firing
her pottery, but after 40 days of waiting for it to be completed, she moved her business
to a new location without any intention of moving back. Her Builder's Risk Coverage
Form was terminated because: - Answers -D. the property is abandoned.
Due to decreased demand, the market price of beets dropped dramatically during the
recent growing season. Consequently, Michelle's crop of beets did not make as much
money as she was expecting this year, based on her production history and the harvest-
time futures price. However, Michelle is insured for this type of situation. What kind of
insurance does she have? - Answers -A.
B.
C. Crop-Revenue
D.
Which of the following activities could be a useful negotiation technique? - Answers -B.
Reviewing video footage with the claimant that contradicts the claimant's position
Which of the following homeowners policies provide coverage on an open-peril basis for
personal property without endorsement? - Answers -A. HO-5
D.
Eloise borrows Uriah's car so she can run to the grocery store to pick up a few things.
While out, she rear-ends a minivan, injuring the driver and 3 other passengers. Each of
the passengers suffers $45,000 in injuries, and the driver suffers $40,000. Uriah has a
liability policy with limits of 50/100/50, while Eloise carries the minimum liability
coverage for Alabama. How much will the primary policy pay for this occurrence? -
Answers -B. $100,000
Lucille owns her own woodworking business, building custom items such as dressers,
wooden trunks, and mantelpieces. A fire destroys her entire operation and Lucille files a
claim with her insurer. Which of the following would be covered under Coverage A of
the Building and Personal Property Coverage Form in her commercial property policy? -
Answers -B.. A bandsaw permanently affixed to the floor
D.
Which of the following statements about Crop-Hail insurance is FALSE? - Answers -It is
subsidized by the FCIC.
