Arizona Adjuster Exam Questions and
Answers38
BOP qualifiers - ANSWERS -An apartment building, motel
BOP - ANSWERS -is provided on an occurrence basis, not a claims-made basis.
Business income form dependent properties - ANSWERS -is not also know as extended business
operations interruption coverage
Extra Expense Coverage BOP - ANSWERS -indemnifies the insured for costs incurred to maintain
business operations after direct physical damage to covered property. Coverage begins
immediately after a direct loss and the bOP can provide up to 12 months of coverage or until
the business resumes normal operations.
HIPPA - ANSWERS -The portability of health insurance.
Which of the following is not true of a Cease and Desist order - ANSWERS -A license holder who
receives one must immediately stop transacting insurance business
Unintentional violations of insurance law fines - ANSWERS -up to 250 for each violation
trying to settle a claim without the insured knowledge is - ANSWERS -Unfair claims settlement
practice
p4
Private insurance: - ANSWERS -Makes a profit
,Kerry accidentally set his kitchen on fire while frying a turkey for the holidays. The fire results in
$32,000 in damage to his home, which is valued at $175,000. However, Kerry only has a
$120,000 homeowners policy limit. Assuming Kerry's policy has the 80% coinsurance
requirement, approximately how much of the damage will Kerry be responsible for paying?
(Round all numbers to three decimal places.) - ANSWERS -In order to be fully insured, Kerry
should have a limit of at least $140,000 (since 175,000 x 0.8 = $140,000). To calculate his
coinsurance penalty, take the coverage that Kerry has (120,000) and divide it by the coverage he
should have ($140,000), and the answer is 0.857. This means that the insurer will pay 85.7% of
partial losses. Multiply Kerry's partial losses by .857 to calculate how much the insurer will cover
($32,000 x 0.857 = $27,424). Kerry will be responsible for the rest, so we subtract the insurer's
portion from the total damages ($32,000 - $27,424) and the answer is $4,576.
Common law is based on - ANSWERS -courts decisions and customs
Captive insurer - ANSWERS -created by a large companies to be their own personal insurance
company. They solely exist to serve the parent company
Commercial Automobile Insurance Procedure (Arizona) - ANSWERS -Similarly, high-risk
commercial consumers who have trouble finding automobile insurance in the voluntary market
may find coverage through the Commercial Automobile Insurance Plan (CAIP). Coverages
available under CAIP are more limited than those available to drivers of private passenger
vehicles. Under this plan, commercial consumers may only obtain Bodily Injury and Property
Damage Liability with basic limits, unless higher limits are required by law. Physical Damage
Coverage is only available for light pick-up trucks and motorcycles. Like private drivers,
commercial drivers apply for this coverage through the WAAIP.
Coverage E (HO) - ANSWERS -Personal Liability-
Pays for bodily injury and property damage to third party.
Applies even if the insured property causes a third party damages. never pays the insured.
100,000 min coverage.
,Coverage F (HO) - ANSWERS -Medical Payments- No fault coverage.
Medical expenses incurred by third party due to an accident on insured premises. Only
necessary, reasonable medical charges.
1000 minimum limit.
Additional Coverages section 2 (HO) - ANSWERS -Property to others
First Aid
Claim Expenses
Loss Assessment
Limited Fungi, Wet or Dry Rot, or Bacteria Coverage - ANSWERS -This endorsement defines fungi
as "any type or form of fungus, including mold or mildew, and any mycotoxins, spores, scents or
byproducts produced or released by fungi."
It also provides a specified amount of additional coverage for loss caused by fungi.
This liability coverage has its own sub-limit within the total Coverage E limit.
Home Day Care - ANSWERS -This endorsement may provide both property and liability coverage
as long as the business is conducted by the insured on their residence premises and scheduled
in the endorsement.
Watercraft Liability - ANSWERS -Specifically, this endorsement is intended for watercraft
powered by motors with more than 25 horsepower and sailing vessels 26 feet or more in length.
This coverage does not apply to watercraft being operated in racing activities (except for sailing
vessels), craft that are being rented to others, or to craft used to carry people for a fee
Dwelling policy - ANSWERS -Is for people and business who are not eligible for homeowners
insurance.
Covers property only, not liability
, Dwelling vs Homeowners - ANSWERS -homeowners insurance requires someone to reside at the
property.
Homeowners requires the owner be an actual person.
Dwelling does not require someone to reside
Dwellings can be held by businesses or companies.
Farms are not eligible for either- they must be covered by a farm policy
Dwelling coverage forms - ANSWERS -DP-1: basic form
DP-2: broad form
DP-3: special form
DP-1 - ANSWERS -Basic form
named peril coverage:
covers only fire, lightning, and internal explosions.
Endorsements:
VMM (Vandalism and malicious mischief)
Extended coverage endorsement : WCSHAVVER
WCSHAVVER - ANSWERS -W- windstorm
C- civil Commotion
S- smoke
H- hail
A- aircraft
V- vehicles
V- volcanic eruption
E- external explosion
Answers38
BOP qualifiers - ANSWERS -An apartment building, motel
BOP - ANSWERS -is provided on an occurrence basis, not a claims-made basis.
Business income form dependent properties - ANSWERS -is not also know as extended business
operations interruption coverage
Extra Expense Coverage BOP - ANSWERS -indemnifies the insured for costs incurred to maintain
business operations after direct physical damage to covered property. Coverage begins
immediately after a direct loss and the bOP can provide up to 12 months of coverage or until
the business resumes normal operations.
HIPPA - ANSWERS -The portability of health insurance.
Which of the following is not true of a Cease and Desist order - ANSWERS -A license holder who
receives one must immediately stop transacting insurance business
Unintentional violations of insurance law fines - ANSWERS -up to 250 for each violation
trying to settle a claim without the insured knowledge is - ANSWERS -Unfair claims settlement
practice
p4
Private insurance: - ANSWERS -Makes a profit
,Kerry accidentally set his kitchen on fire while frying a turkey for the holidays. The fire results in
$32,000 in damage to his home, which is valued at $175,000. However, Kerry only has a
$120,000 homeowners policy limit. Assuming Kerry's policy has the 80% coinsurance
requirement, approximately how much of the damage will Kerry be responsible for paying?
(Round all numbers to three decimal places.) - ANSWERS -In order to be fully insured, Kerry
should have a limit of at least $140,000 (since 175,000 x 0.8 = $140,000). To calculate his
coinsurance penalty, take the coverage that Kerry has (120,000) and divide it by the coverage he
should have ($140,000), and the answer is 0.857. This means that the insurer will pay 85.7% of
partial losses. Multiply Kerry's partial losses by .857 to calculate how much the insurer will cover
($32,000 x 0.857 = $27,424). Kerry will be responsible for the rest, so we subtract the insurer's
portion from the total damages ($32,000 - $27,424) and the answer is $4,576.
Common law is based on - ANSWERS -courts decisions and customs
Captive insurer - ANSWERS -created by a large companies to be their own personal insurance
company. They solely exist to serve the parent company
Commercial Automobile Insurance Procedure (Arizona) - ANSWERS -Similarly, high-risk
commercial consumers who have trouble finding automobile insurance in the voluntary market
may find coverage through the Commercial Automobile Insurance Plan (CAIP). Coverages
available under CAIP are more limited than those available to drivers of private passenger
vehicles. Under this plan, commercial consumers may only obtain Bodily Injury and Property
Damage Liability with basic limits, unless higher limits are required by law. Physical Damage
Coverage is only available for light pick-up trucks and motorcycles. Like private drivers,
commercial drivers apply for this coverage through the WAAIP.
Coverage E (HO) - ANSWERS -Personal Liability-
Pays for bodily injury and property damage to third party.
Applies even if the insured property causes a third party damages. never pays the insured.
100,000 min coverage.
,Coverage F (HO) - ANSWERS -Medical Payments- No fault coverage.
Medical expenses incurred by third party due to an accident on insured premises. Only
necessary, reasonable medical charges.
1000 minimum limit.
Additional Coverages section 2 (HO) - ANSWERS -Property to others
First Aid
Claim Expenses
Loss Assessment
Limited Fungi, Wet or Dry Rot, or Bacteria Coverage - ANSWERS -This endorsement defines fungi
as "any type or form of fungus, including mold or mildew, and any mycotoxins, spores, scents or
byproducts produced or released by fungi."
It also provides a specified amount of additional coverage for loss caused by fungi.
This liability coverage has its own sub-limit within the total Coverage E limit.
Home Day Care - ANSWERS -This endorsement may provide both property and liability coverage
as long as the business is conducted by the insured on their residence premises and scheduled
in the endorsement.
Watercraft Liability - ANSWERS -Specifically, this endorsement is intended for watercraft
powered by motors with more than 25 horsepower and sailing vessels 26 feet or more in length.
This coverage does not apply to watercraft being operated in racing activities (except for sailing
vessels), craft that are being rented to others, or to craft used to carry people for a fee
Dwelling policy - ANSWERS -Is for people and business who are not eligible for homeowners
insurance.
Covers property only, not liability
, Dwelling vs Homeowners - ANSWERS -homeowners insurance requires someone to reside at the
property.
Homeowners requires the owner be an actual person.
Dwelling does not require someone to reside
Dwellings can be held by businesses or companies.
Farms are not eligible for either- they must be covered by a farm policy
Dwelling coverage forms - ANSWERS -DP-1: basic form
DP-2: broad form
DP-3: special form
DP-1 - ANSWERS -Basic form
named peril coverage:
covers only fire, lightning, and internal explosions.
Endorsements:
VMM (Vandalism and malicious mischief)
Extended coverage endorsement : WCSHAVVER
WCSHAVVER - ANSWERS -W- windstorm
C- civil Commotion
S- smoke
H- hail
A- aircraft
V- vehicles
V- volcanic eruption
E- external explosion
