N.C. Claims Adjuster License Exam
Inception\/Expiration Date
(Ans- an insurance policy covers the insured starting at 12:01am on the
day on which coverage begins and expires at 12:01am on the expiration
day of the policy.
Occurrence Date
(Ans- Date of which the loss occurred
Identification of parties involved
(Ans- The loss report should include the names and addresses of the
parties involved in the loss, the names and addresses of any injured
person(s) and the names and addresses of any witness(s).
Policy Form\/Number
(Ans- Identifies the type of coverage purchased (policy form) and the
policy number for the particular policy purchased by the insured.
Description of the Loss
(Ans- Information concerning how, when and where the accident or loss
happened is an essential element in any loss report.
Coverage
(Ans- Shows the type of coverage(s) purchased as well as the limits of
coverage purchased.<\/p>\n\n\n\n
Damages – Special Compensatory damages
(Ans- Are amounts paid to compensate the plaintiff for direct expenses
such as medical treatment, lost wages (both past and future), funeral
expenses and rehabilitation expenses required because of bodily injury.
Special damages are paid for losses that can be determined and
documented. They are often referred to as “out-of-pocket” expenses.
Damages – General Compensatory Damages
(Ans- Are paid for losses that cannot be specifically measured and
itemized in order to compensate the plaintiff for things such as pain and
suffering, loss of the use of an arm or leg, loss of vision, physical
disfigurement and\/or loss of consortium.
Damages – Punitive Damages
(Ans- Are typically awarded to the plaintiff in addition to compensatory
damages when the defendants conduct has been especially malicious.
Punitive damages are awarded to punish the defendant and to deter others
from engaging in similar actions.
Unfair Claims Settlement Practices
(Ans1. Knowingly misrepresenting relevant facts or policy provisions relating to
the coverage at issue. 2. Failing to acknowledge with reasonable
promptness communications pertaining to claims. 3. Failing to adopt and<\/p>\n\n\n\n
implement reasonable standards for the prompt investigation of claims. 4.
Arbitrary and unreasonable refusal to pay claims. 5. Failing to affirm or
deny coverage of claims within a reasonable time after proof of loss has
been completed. 6. Not attempting in good faith to make prompt, fair and
equitable claims settlement when the insurer’s liability has become
reasonably clear. 7. Compelling insureds to institute suits to recover
amounts due under a policy by offering substantially less to settle
immediately. 8. Attempting to settle claims for less than the amount for
which a reasonable person would believe one was entitled based on written
or printed advertising material accompanying or made a part of an
application. I. Attempting settlement of claims on the basis of applications
that were altered without notice to knowledge of or consent of insureds.
Total Losses on Motor Vehicles\/Miscellaneous Provisions
(Ans1. If the insurer and the claimant are unable to reach an agreement as to
the value of the vehicle, the insurer shall base any further settlement offer
not only on the published regional average value of similar vehicles, but
also on the value of the vehicle in the local market. 2. Local market value
shall be determined by using either the local price of a comparable vehicle
or if no comparable vehicle can be found, quotations from at least two
qualified dealers within the local market area. Additionally, if the claimant
represents that the vehicle was in better than average condition, the insurer
shall give due consideration to the condition of the claimant’s vehicle prior
to the accident. 3. When a motor vehicle is damaged in an amount which
equals or exceeds 75 percent of the preaccident actual cash value, an
insurer shall “total loss” the vehicle by paying the claimant the preaccident<\/p>\n\n\n\n
value and in return, receiving possession of the legal title for salvage
purposes. 4. The insurer will be responsible for all reasonable towing and
storage charges until three days after the owner and the storage facility are
notified in writing that the insurer will no longer reimburse the owner or
storage facility for storage charges. 5. Loss and claims payments shall be
mailed or otherwise delivered within 10 business days after the claim is
settled.
After Market Parts
(Ans- An after market part is any part made by a non original manufacturer.
Speculative Risk
(Ans- When there is a chance of gain as well as a chance of loss.
Insurance is not intended to protect against this type of risk.
Pure Risk
(Ans- When there is a chance of loss only.
Insurable Risk
(Ans- One that an insurance company is willing to accept.
Characteristics of Insurable Risk
(Ans1. Low probability of loss occurring, 2. Less than catastrophic results, 3.
The loss must be measurable, 4. The loss must be significant, 5. The loss
must be accidental and unintended.<\/p>\n\n\n\n
NC Adjuster License Practice Exam
Manny is purchasing a Commercial Property policy with a Business Income
form included. Manny can select from any of the following as a method to
provide coverage, while avoiding the coinsurance requirement, EXCEPT:
(Ans- The maximum monthly limit of indemnity optional coverage
The traditional definition of actual cash value (ACV) is:
(Ans- Replacement cost minus depreciation
Sam and Dan are working to clean out the gutters around the roof on
Sam’s house. Sam and Dan are standing at the top of separate ladders
that are propped against the side of Sam’s house, when Dan’s ladder
begins to wobble and ultimately falls into Sam’s ladder. Both men and their
ladders crash to the ground. Whose injuries will be covered by Sam’s
Homeowners policy under Coverage E – Personal Liability?
(Ans- Only Dan’s injuries would be covered
Torts that can be covered by insurance policies include all of the following,
EXCEPT:
(Ans- Intentional torts purposely committed to cause harm to another.
The insured has a $1,000,000 personal umbrella policy with a $5,000
retention limit. For a $7,000 liability loss not covered under the insured’s
personal auto policy, but covered under the umbrella policy, the insurance
company would pay: (Ans- $2,000<\/p>\n\n\n\n
All of the following is considered an “insured” under a CGL policy,
EXCEPT:
(Ans- Lawyers of the named insured
What specific type of liability policy gives an owner protection against
liability claims arising out of the acts of its independent contractors?
(Ans- Owners and Contractors Protective Liability Policy.
Which of the following would be eligible for coverage under a
Businessowners policy?
(Ans- A small retail store
Which of the following is NOT a correct statement in determining the cost of
a “comparable automobile” when a physical damage loss has a occurred?
(Ans- The cost of a comparable automobile as determined by a
computerized automobile valuation service that produces statistically valid
fair market values within the United States market
All of the following statements are TRUE of North Carolina automobile
liability policies, EXCEPT
(Ans- If the insured carries limits greater than the minimum financial
responsibility limits required by state law, they are not required to carry
Uninsured\/Underinsured Motorists coverage.<\/p>\n\n\n\n
The basic limit for Coverage F — Medical Payments of the standard
Homeowners forms is:
(Ans- $1,000 per person
Oliver Dogwood was in an auto accident which destroyed his car. While
investigating the accident, Adjuster Doright found that Mr. Dogwood paid
$1,000 for the vehicle. After checking with others he found the same
vehicle with an asking price of $1,700, a retail price of $2,150 and a dealer
price of $1,750. What amount will Mr. Dogwood receive?
(Ans- $2,150
When a claims representative is collecting information from a third-party
claimant, which of the following is the information that should be obtained
first?
(Ans- The nature and extent of the injuries or property damage claimed.
The Business Auto uses Symbol 7 to cover “specifically described autos”
identified in the declarations. An auto acquired during the policy period will
only be covered:
(Ans- If the insured insures all of their vehicles with the company or it
replaces a covered auto..
What coverage under the BOP automatically applies if a customer slips and
falls on the named insured’s premises, regardless of legal liability?
(Ans- Medical expense coverage<\/p>\n\n\n\n
NC Claims Adjuster Exam Study Guide
Liability Insurance PAP (Part A)
(Ans- Pays all the sums and insured must legally pay as damage due to
BI\/PD caused by an accident and resulting from the ownership,
maintenance or use of a covered auto.
Coverage Part A through F of a PAP
(AnsA. Liability
B. Medical Payments
C. UM\/UIM
D. Physical Damage
E. Insured Duties
F. General Provisions
Certificate of Insurance (COI)
(Ans- A document that proves the existence of insurance coverage
Occurrence
(Ans- Something that continue to happen and may cause injury later on.
Accident
(Ans- A sudden unforeseen and unintended one time event
Assumption of risk
(Ans- An individual who is aware of the potential risk involved and chose to
expose themselves to it.
Comparative negligence
(Ans- Measures the amount of negligence contributed to each party. The
injured party will not cover damages equal to the percentage of negligence
they contribute.<\/p>\n\n\n\n
Contributory Negligence
(Ans- If an insured party contributed to their injury in anyway due to their
own negligence, we will not pay anything.
What state is a contributory state?
(Ans- North Carolina
Negligence
(Ans- Failure to do (or not do) what a reasonable prudent person would or
would not have done in a similar instance.
Temporary Substitute Automobile
(Ans- Not owned by the named insured but used temporarily as a
substitute for the owned auto that is not currently being used.
What is an example of a Temporary substitute Automobile?
(Ans- A dealership loans an insured a vehicle to drive while their car is
getting fixed.
Non Owned Automobile
(Ans- Not owned by the named insured or any relative.
What is an example of an Non Owned Automobile?
(Ans- An insured borrows a neighbor\u2019s car.
If an additional vehicle is not reported to the insurer within 30 days:
(Ans- No coverage will apply to the added vehicle.
If a vehicle is added to an existing policy (In addition to):
(Ans- It will have the broadest coverage if insured within 30 days of
becoming the owner.
If a replacement vehicle is not reported within 30 days:
(Ans- Part D (Comprehensive and Collision Coverage) will not apply to the
replacement vehicle.<\/p>\n\n\n\n
A new vehicle that replaces another vehicle will:
(Ans- Have the same coverages as the old vehicle if the named insured
request to insure it within 30 days of becoming the owners.
Insured
(Ans- Any blood relative by marriage, adoption, wards, foster children,
living in the same home, including children away at college. Also, any
person using someone\u2019s car with their permission.
Named insured
(Ans- Listed on the declarations page. Included a spouse whether they are
named in the policy or not, provided they live in the same home.
1st Coverage for watercraft or yacht are:
(Ans- Hull insurance for damage to the insured boat itself
2nd Coverage for watercraft or yacht are:
(Ans- Protection and indemnity liability coverage for BI and PD exposures
for damage to other people or other peoples boats.
What doesn’t watercraft or yacht coverage provide?
(Ans- Coverage for boats used for hire, charger, or for transporting people
for a fee.
How many days removal coverage is provided on the National Flood
Insurance Program?
(Ans- 45 days
Elevation certificates
(Ans- Required on dwellings that are written in the regular program in
certain flood zones in order to properly rate the policy.<\/p>\n\n\n\n
Flood insurance policies become effective after:
(Ans- 30 days after receipt of the coverage application and the premium
payment.
The general property form on flood insurance is used to:
(Ans- Insure larger residential structures and non residential buildings.
The dwellings form on a flood insurance plan is:
(Ans- Used to ensure residential property of no more than 4 units and the
contents
Flood insurance is available in 2 forms, what are they?
(Ans1. Dwelling<\/p>\n\n\n\n
Insurance Adjuster Study Questions
Lender Interest Provisions
(Ans- Protects lender interest by allowing the lender certain rights in the
policy.
Coinsurance Penalty
(Ans- A property insurance provision that penalizes the insured’s loss
recovery if the limit of insurance purchased by the insured is not equal to or
greater than a specified percentage (commonly 80 percent) of the value of
the insured property.
Underinsured
(Ans- A situation resulting from a failure to carry enough coverage on the
value of a property, especially when there are coinsurance implications.
Coinsurance
(Ans- A type of insurance in which the insured pays a share of the payment
made against a claim.
Franchise Deductible
(Ans- A minimum amount of loss that must be incurred before insurance
coverage applies. A franchise deductible differs from an ordinary deductible
in that, once it is met, the entire amount of the loss is paid, subject to the
policy limit. Franchise deductibles can be stated either as a dollar amount
or as a percentage of the policy limit.
Percentage Deductible
(Ans- Requires the insured party to pay a deductible equal to the
percentage of the value of the insured risk.
Fixed Deductible<\/p>\n\n\n\n
(Ans- One specific, predetermined amount that a policyholder must pay
out-of-pocket before he can be indemnified.
3 Typed of Deductibles
(Ans- Fixed, Percentage, Franchise
Deductible
(Ans- The amount the policyholder must pay out-of-pocket before the
insurer will pay for losses.
Replacement Cost (RC)
(Ans- A method of valuation based on the cost of replacing an item at
current market price, regardless of depreciation.
Valued Policy
(Ans- A valuation method that assigns a set of values to each insured item.
Value is determined prior to the issuance of policy. Avoids the confusion of
assessing appreciation or depreciation.
Annual Depreciation Formula
(Ans- Replacement Cost \/ the items useful life
Accumulated Depreciation Formula
(Ans- Items annual depreciation X it’s age
Depreciation
(Ans- An items estimated loss of value due to wear, tear and age.
Actual Cash Value
(Ans- A valuation method that takes into account an items depreciation.
Actual Cash Value (ACV) Formula
(Ans- Replacement Cost (RC) – depreciation
3 methods of Valuation<\/p>\n\n\n\n
(Ans- Actual Cash Value (ACV), Replacement Cost (RC), Agreed Value
(Valued Policy)
Valuation
(Ans- The process of estimating what an item is worth.
Subrogation
(Ans- The transfer of rights that allows the insurer to recover it’s losses
after it has indemnified a policyholder.
Lender Interest
(Ans- A lender’s financial stake in an insured item.
Insurable Interest
(Ans- Direct financial interest in protecting something or someone.
Misrepresentation
(Ans- A false, distorted, or deceitful statement of fact or opinion even if
made unintentionally.
Estoppel
(Ans- Legal principle that prevents an insurer from denying coverage if the
insured has reasonable come to believe that he has such coverage, based
on the insurer’s practices. Protects the insured.
Waiver
(Ans- Voluntary surrender of a right, claim, or privilege.
Express Waiver
(Ans- Voluntarily giving up rights, claims or privileges through a written
statement.
Implied Waiver<\/p>\n\n\n\n
Insurance Adjuster Exam: Questions &
Answers
Which kind of losses are covered under a standard fire policy?
(Ans- Direct
All fires are not covered by the Standard Fire policies, only those that:
(Ans- are hostile and have a flame or glow
At what time does a fire policy go into affect?
(Ans- 12:01am standard time at the location of the insured’s property
A property is insured under two Standard Fire policies for $25,000 each. A
fire causes $10,000 worth of damage. What is the maximum amount the
insured may collect under each policy?
(Ans- $5,000
A fire burning in the middle of the living room would be considered:
(Ans- a hostile fire
An insured’s house is damaged by fire caused by a neighbor’s negligence.
The insurance company will attempt to recover damage from the neighbor.
This is called:
(Ans- subrogation
Which of the following statements are true concerning requirements of the
standard fire policy?
(Ans- The insured must separate damaged from undamaged property in
the event there is a loss AND If a loss occurs, the insured normally has 60
days to file a proof of loss with the insurer<\/p>\n\n\n\n
Which types of property are excluded from coverage under the basic fire
policy?
(Ans- accounts, currency, deeds, and securities
Who is insured under the Standard Fire policy?
(Ans- the named insured and his legal representatives
An agreement which affords temporary insurance protection until the policy
is issued is called:
(Ans- a binder
as a general rule, a complete fire insurance policy would be made up of:
(Ans- the Standard Fire policy with one or more forms attached
The one condition listed below which will not void a fire policy:
a) false swearing
b) misrepresentation
c) over-insurance
d) concealment
(Ans- over-insurance
replacement cost minus depreciation:
(Ans- Actual Cash Value (ACV)
The Standard Fire policy with an extended coverage endorsement attached
covers which of the following:
(Ans- riot
A loss due to order of Civil Authority:
(Ans- is excluded unless the loss occurs because of an order by Civil
Authorities for the purpose of controlling a fire
The term “unoccupancy” refers to the absence of :
(Ans- persons from a building<\/p>\n\n\n\n
Suppose a fire occurs on February 26th. On April 30th, the insurance Texas Adjuster Exam: Questions & Insurance for ocean vessels is the __<\/strong> type of insurance? Adjuster Pro – Florida Certified Adjuster Adjuster – Independent Agency Authority \u2013 apparent Adjuster Pro – Insurance Adjuster Testinsurance Adjuster Test Study Guide 4 Parts of Legal Contract Unilateral Contract Texas All Lines Adjuster Test Adjuster – Emergency Agency Authority \u2013 implied Answer Homeowners Insurance Practice Exam Coverage A or B will not be on what homeowners policy form? Florida Claims Adjuster Exam Review (6- Proximate Cause order to be enforceable. If the other agreement or condition is performed, Subrogation All Lines Adjuster Exam: Questions & A Covered Auto includes those vehicle(s) listed on the Declarations, plus An insured has taken inventory of his merchandise and discovers a Adjuster Licensing Exam Questions & What is the type of negotiation that is also sometimes called positional or Texas All lines adjuster license Principle of indemnity Market value- the amount the property is worth in a competitive market. N.C. Claims Adjuster License ExamInception\/Expiration Date(Ans- an insurance policy covers the insured starting at 12:01am on theday on which coverage begins and expires at 12:01am on the expirationday of the policy.Occurrence Date(Ans- Date of which the loss occurredIdentification of parties involved(Ans- The loss report should include the names and addresses of theparties involved in the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-117258","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/117258","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=117258"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/117258\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=117258"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=117258"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=117258"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
company notifies the mortgagee the insured has not filed a proof of loss. To
protect their interest, the mortgagee must file a proof of loss within
_<\/em><\/strong> days after what date? (Ans- 60 days after April 30th
For recovery under the Standard Fire policy, a party must:
(Ans- be named in the policy and show an insurable interest in the
property at the time the loss occurs
What is the requirement on how much experience one must have to be
elected the insurance commissioner in Georgia?
(Ans- None
Once elected, how long is the insurance commissioner’s term?
(Ans- 4 years
Is there a limit on the number of terms an insurance commissioner can
serve?
(Ans- No
Who is Georgia’s current insurance commissioner?
(Ans- Ralph Hudgens
What two capacities does Georgia’s insurance commissioner serve?
(Ans1. Chief Officer of Insurance Dept.<\/p>\n\n\n\n\n
What happens if the Insurance Commissioner has to resign early?
(Ans- No election; the Chief Deputy will take over
What is the requirement to serve as Chief Deputy in Georgia?
(Ans- must have a bond in the amount of $15,000<\/li>\n\n\n\n
Answers
If an automobile policy has split limits of 30\/60\/25. What is the maximum
amount of liability coverage that would be paid in a covered loss where
three people are involved.
(Ans- $30,000
Which of the following statements best describes an inland marine policy?
(Ans- Pertains to Cargo with no fixed location
Alex is traveling through College Station and hits a deer, and the damages
are $1500. He has comprehensive coverage with a $500 deductible. What
will you pay?
(Ans- $1000
This department is responsible for making rates and determines the rates
charged by the insurer
(Ans- Actuarial department
Johnny has 30\/60\/25 limits on his auto policy, and he negligently ran into a
parked car driven by Steve Garcia. What is the maximum amount of
coverage that can be provided for the damage to Steve’s car?
(Ans- 25,000
Your customer has HO-B homeowners policy with a Coverage A limit os
$300,000. His mortgage payment is $1,400 per month. He can’t stay in his
home for 1 month due to a claim that was caused by smoke. He is staying
in a local hotel for 1 month. The cost of the hotel is $900 for the moth. How
much will you pay your policyholder for Additional Living Expenses
(Ans- $900<\/p>\n\n\n\n
(Ans- oldest
Your insured has a homeowners policy with a Coverage A limit of $50,000,
His coverage B limit is $20,000. His deductible is 1%. He has 30 trees that
are damaged during the fire. How much are you going to pay on his claim?
(Ans- 2500
If you have a covered loss, in excess of a limit, you can apply that excess
towards the deductible. This best describes?
(Ans- Absorbing the deductible
What type of contract exists when the insurance policy is valid even though
there is an unequal exchange?
(Ans- Aleatory Contract
What is the intentional or unintentional impression by the insurance
company that a certain fact exists when it does not?
(Ans- Estoppel
An event that results in an insured loss \/ damages.
(Ans- Occurrence
Joseph ross owns a 2014 Toyota Avalon. while at the mall shopping,
someone hit his car and left a big dent on the right side of his car. He does
not know who hit his car, and there are no witnesses to this accident. What
type of insurance protection does he need to protect him from financial loss
in this situation
(Ans- Comprehensive
Morris has a Texas Dwelling policy on his property. His property burns
down in a fire. He claims that he has also sustained a financial loss
because he is not able to rent the property to his tenants. What can you tell
him?
(Ans- He has coverage for loss of fair Rental Value<\/p>\n\n\n\n
Glossary
Accumulated Depreciation
(Ans- The total decrease in an item’s value over a period of time. Formula:
(Annual Depreciation x Number of years used)
Actual Cash Value (ACV)
(Ans- A valuation method used by insurers to reflect an item’s current
market value right before being damaged or destroyed. Formula:
(Replacement cost – Accumulated Depreciation)
Adhesion
(Ans- One of the characteristics of an insurance contract. Means that one
party (the insurer) sets the terms, and the other (the insured) can ‘take it or
leave it.’
Adjusted Gross Revenue (CropInsurance)
(Ans- Narrowest (and least expensive) form of Crop Revenue Insurance.
Insures farm revenue as a whole instead of individual crops. Guarantees a
percentage of the insured farm’s average revenue.
Adjuster
(Ans- An agent who, for compensation, processes insurance claims. Can
represent either the insured or the insurer.
Adjuster – Emergency
(Ans- Adjusters who are temporarily licensed by the insurance
commissioner to handle claims during catastrophes or emergencies that
produce an overwhelming number of claims in a short period of time.<\/p>\n\n\n\n
(Ans- Self-employed adjusters who contract with multiple insurers at the
same time. Paid on a commission or fee-plus-expenses basis for each
claim. Also called: Fee Adjuster, Bureau Adjuster
Adjuster \u2013 Public
(Ans- An adjuster who is hired to represent the claimant and help
determine a fair indemnification.Usually specializes in appraisals and
negotiation. Paid commission, usually a percentage of final settlement.
Adjuster – Staff
(Ans- Salaried employee of one insurance company who can work locally,
regionally, or nationally. Also called: Company Adjuster
Advance Payment Settlement
(AnsA settlement option that lets the insurer offer some financial relief to the
claimant before the claim has been fully settled. The insurer makes
advance payments to the claimant, which are then subtracted from the final
settlement amount. Often used when a claimant suffers bodily injury and is
unable to work.
Agency Authority
(Ans- The Agent’s authority to act on behalf of someone else, usually an
insurer. This authority is derived from the agent’s contract with the insurer.
Agency Authority \u2013 express
(Ans- Authority that is expressly given to the agent in writing. Allows agent
to act on behalf of the principal.
Agency Authority \u2013 implied
(Ans- Authority that an agent possesses by implication of his behavior,
regardless of whether this authority is expressly granted in writing.<\/p>\n\n\n\n
(Ans- Authority that an agent possesses based on the appearance of
representing an insurer.
Agent
(Ans- Someone who has received authority from an insurer to sell or
service insurance policies.
Aggregate Limit
(Ans- A type of policy limit found in some health, liability, and property
damage policies. It represents the total amount the insurer will pay for all
losses.
Agreement
(Ans- One of the four requirements of a legally binding contract. All parties
involved must agree to the terms of the contract. Can also refer to a binder,
which is the preliminary substance of a contract.
Agricultural Producer
(Ans- A business that grows, harvests, and sells crops for profit.
Aleatory
(Ans- A characteristic of insurance contracts; means depending on an
unknown future event.”
Answer
(Ans- In liability cases, the defendant’s response to a complaint. There are
three possible answers: 1)accept complaint and pay for damages, 2) deny
the complaint, or 3) accept the complaint with a right to insert evidence into
the case.
Annual Depreciation
(Ans- An item’s Replacement cost divided by the number of years in its
expected lifespan.<\/p>\n\n\n\n
What is insurance?
(Ans- protection against financial loss
what is a premium
(Ans- a scheduled amount to be paid for an insurance policy.
What are premiums used for
(Ans- premiums are collected into a “pool” or “reserve to pay out claimants
when needed.
how can insurance companies afford to pay for an individuals catastrophic
loss?
(Ans- the insurer collects premiums from all policy holders and uses them
to pay out the claims of a few.
what is Indemnity
(Ans- payment for damages, that is not more or less than the amount
caused by the damage.
principle of indemnity
(Ans- insurance will pay no more or less than the actual financial loss
suffered
indemnification may also include
(Ansrepairs to property
reimbursement for additional living expenses
rental cars and hotels
costs directly associated with a loss<\/p>\n\n\n\n
(Ans1. Agreement<\/p>\n\n\n\n\n
legal contract \u2013 agreement
(Ans- mutual intent by offeror and offeree
six special characteristics of insurance contracts
(Ans1. Personal<\/li>\n\n\n\n
what kind of contract is an insurance policy?
(Ans- Personal contract
what is a contract of adhesion
(Ans- the insured must accept the entire contract with all of its terms and
conditions
Utmost Good Faith
(Ans- An obligation to act in complete honesty and to disclose all relevant
facts.
Aleatory Contract
(Ans- a contract where the values exchanged may not be equal but depend
on an uncertain event<\/li>\n<\/ol>\n\n\n\n
(Ans- insurance agrees that they must pay in event of a claim. the insured
can stop paying premiums at any point.
only the insurer has promised to perform an action.
Conditional Contract
(Ans- A type of an agreement in which both parties must perform certain
duties and follow rules of conduct to make the contract enforceable.
Acronym for the four sections of an Insurance policy
(AnsDICE
D – declarations page
I – Insuring Agreement
C- Conditions
E – Exclusions
Decelerations section
(AnsAlways the first section – establishes the following
Names of both parties
Policy number
Location and description of insured item
Dates of the policy
Amount and limit of coverage
Deductible
Premium
Definitions section
(Ans- Defines terms used to write policy including “collusion” “decay” “like
kind and quality”
Includes important language for adjusters to know<\/p>\n\n\n\n
Accumulated Depreciation
(Ans- The total decrease in an item’s value over a period of time. Formula:
(Annual Depreciation x Number of years used)
Acreage Reporting Date
(Ans- The deadline for providing the insurer with an acreage report, which
is used to determine the amount of coverage needed and the premium
charged for a particular crop.
Actual Cash Value (ACV)
(Ans- A valuation method used by insurers to reflect an item’s current
market value right before being damaged or destroyed. Formula:
(Replacement cost – Accumulated Depreciation)
Actual Production History
(Ans- A history of a farmer’s crop yields over a multi-year period, which is
used to determine the normal production level of a farm.
Adhesion
(Ans- Characteristic of an insurance contract. Means that one party (the
insurer) sets the terms, and the other (the policyholder) can “take it or leave
it.”
Adjusted Gross Revenue (Crop Insurance)
(Ans- Narrowest (and least expensive) form of Crop Revenue Insurance.
Insures farm revenue as a whole instead of individual crops. Guarantees a
percentage of the insured farm’s average revenue.
Adjuster
(Ans- An agent who, for compensation, processes insurance claims. Can
represent either the insured or the insurer.<\/p>\n\n\n\n
(Ans- Adjusters who are temporarily licensed by the insurance
commissioner to handle claims during catastrophes or emergencies that
produce an overwhelming number of claims in a short period of time.
Adjuster – Independent
(Ans- Self-employed adjusters who contract with multiple insurers at the
same time. Paid on a commission or fee-plus-expenses basis for each
claim. Also called: Fee Adjuster, Bureau Adjuster
Adjuster – Public
(Ans- An adjuster who is hired to represent the claimant and help
determine a fair indemnification. Usually specializes in appraisals and
negotiation. Paid commission, usually a percentage of final settlement.
Adjuster – Staff
(Ans- Salaried employee of one insurance company who can work locally,
regionally, or nationally. Also called: Company Adjuster
Advance Payment Settlement
(Ans- A settlement option that lets the insurer offer some financial relief to
the claimant before the claim has been fully settled. The insurer makes
advance payments to the claimant, which are then subtracted from the final
settlement amount. Often used when a claimant suffers bodily injury and is
unable to work.
Agency Authority
(Ans- The Agent’s authority to act on behalf of someone else, usually an
insurer. This authority is derived from the agent’s contract with the insurer.
Agency Authority – express
(Ans- Authority that is expressly given to the agent in writing. Allows agent
to act on behalf of the principal.<\/p>\n\n\n\n
(Ans- Authority that an agent possesses by implication of her behavior,
regardless of whether this authority is granted in writing.
Agency Authority \u2013 apparent
(Ans- Authority that an agent possesses based on the appearance of
representing the insurer.
Agent
(Ans- Someone who has received authority from an insurer to sell or
service insurance policies.
Aggregate Limit
(Ans- A type of policy limit found in some health, liability, and property
damage policies. It represents the total amount the insurer will pay for all
losses (as opposed to an occurrence limit, which denotes the total amount
the insurer will pay per occurrence).
Agreement
(Ans- One of the four requirements of a legally binding contract. All parties
involved must agree to the terms of the contract. Can also refer to a binder,
which is the preliminary substance of a contract.
Agricultural Producer
(Ans- A business that grows, harvests, and sells crops for profit.
Aleatory
(Ans- A characteristic of an insurance contract. Means “depending on an
unknown future event.” An insurance contract will only pay IF and WHEN
covered damages occur. Neither party knows how much the contract will
end up paying when they enter into the contract.<\/p>\n\n\n\n
(Ans- In liability cases, the defendant’s response to a complaint. There are
three possible answers:
1) accept complaint and pay for damages,
2) deny the complaint, or 3) accept the complaint with a right to insert
evidence into the case.
Annual Depreciation
(Ans- An item’s Replacement cost divided by the number of years in its
expected lifespan.
Appraisal
(Ans- A negotiation method which allows the claimant and the insurer each
to select an appraiser. The two appraisers in turn select an Umpire. The
appraisers then work together to determine a settlement amount. If they
cannot agree, the Umpire steps in. Agreement by any two of the three is
binding.
Arbitration
(Ans- A negotiation method in which the opposing parties each submit
their evidence to a mutually-agreed-upon and neutral third party, called an
arbitrator. The arbitrator reviews the positions of each opposing side, and
makes a final and legally binding decision.
Arbitrator
(Ans- The mutually-agreed-upon and neutral third party in an arbitration
who reviews the positions of each opposing side, and makes a final and
legally binding decision.
Artificially Generated Current
(Ans- Also called “artificial current.” A peril covered in some property
insurance policies. It includes sudden and accidental damage from any
electrical current, except currents that are naturally generated, such as
lightning or static electricity.<\/p>\n\n\n\n
What is a homeowners policy?
(Ans- multi-line policies with six different policy forms, only significant
difference is the perils.
What is Section I of the homeowners policy?
(Ans- Property
What is Section II of the homeowners policy?
(Ans- Casualty aka Liability
What is Section I-Property Coverage A?
(Ans- Dwelling
What is Section I- Property Coverage B?
(Ans- Other Structures
What is Section I- Property Coverage C?
(Ans- Personal Property
What is Section I- Property Coverage D?
(Ans- Loss of Use
What is Section II- Casualty Coverage E?
(Ans- Personal Liability
What is Section II- Casualty Coverage F?
(Ans- Medical Payments to Others
What is the Homeowners Tenants form?
(Ans- HO-4<\/p>\n\n\n\n
(Ans- Tenant form HO-4
There is only enough coverage of A and B to offset betterment’s and
improvements on what form?
(Ans- The Condominium Owners form HO-6
Coverage A-Dwelling in the homeowners policies insures what?
(Ans- the building in which you live and any permanently attached property
such as water heaters, furnaces, central units and carpeting.
Coverage B-Other Structures in the homeowners policies insures what?
(Ans- protects structures on your property other than your house, such as
sheds, detached garages, and swimming pool
How is Coverage B calculated?
(Ans- 10% of Coverage A
Coverage C-Personal Property in the homeowners policies insures what?
(Ans- Covers your stuff on and off the residence premises\u2026anywhere on
earth.
How is Coverage C calculated?
(Ans- 50% of Coverage A but can be raised
What are some exclusions on Coverage C?
(Ans- Property insured elsewhere, animals, electronics designed to be
operated from a motor vehicle and tapes, property of tenants, business
data on paper
Coverage C Limited Property will give how much for money, gold or silver?
(Ans- $200
Coverage C Limited Property will give how much for securities?
(Ans- $1500<\/p>\n\n\n\n
20 All Lines Adjuster)
Peril
(Ans- Something that causes a loss.
Hazard
(Ans- Something that increases the probability that a loss will occur.
Warranty
(Ans- A policy condition, either based on information in the insureds
application or inserted by the insurer. It is a guarantee of a fact.
Misrepresentation
(Ans- An untrue statement by the insured, made in an application for
insurance but which does not become a part of the policy.
Concealment
(Ans- The failure of the insured to reveal relevant facts known to the
insured in applying for insurance.
Abandonment
(Ans- Property insurance policies usually contain an abandonment clause,
stating the insured cannot dump damaged property on the insurer and
demand its full value.
Severability
(Ans- The insurance applies separately to each insured as if other
insureds did not exist.<\/p>\n\n\n\n
(AnsThe 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
(Ans- Physical harm to tangible property.
Indirect Loss
(Ans- Economic loss which flows as a result of direct loss.
Actual Cash Value(ACV)
(Ans- Replacement Cost minus Depreciation
Coinsurance
(Ans- 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.
Personal Contract
(Ans- Policies cover people who own and operate things, such as
automobiles.
Conditional Contract
(Ans- 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<\/p>\n\n\n\n
then the conditional contract is enforceable and the parties are bound to
carry out the terms of the contract.
Contract of Indemnity
(Ans- 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
(Ans- the reasonable concern of a person to obtain insurance for any
individual or property against unforeseen events such as death, losses, etc.
Waiver
(Ans1.) 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
(Ans- Occurs when the insurer or its representative knowingly gives up a
known right under the insurance contract.
Implied Waiver
(Ans- A waiver that is assumed to be in effect from a person’s behavior and
shows he is waiving a right.
Damages
(Ans- 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.<\/p>\n\n\n\n
(Ans- 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
(Ans- All policies provide that any changes to the policy be made by the
insurer, in writing.
Policy Period
(Ans- 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
(Ans- Condition limiting coverage to occurrences or losses that take place
only within a stated geographical region.
Other Insurance
(Ans- The principle of indemnity dictates against duplicate recovery for the
same loss.
Cancellation
(Ans- 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
(Ans- 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.<\/p>\n\n\n\n
Answers
The insured has filed a claim under the “Business Income Department
Properties – Broad Form” because the primary buyer of products and
services from the business has filed for bankruptcy under this form the
primary buyers business would be known as
(Ans- A recipient location
recipient location
(Ans- Businesses who support insured by being the primary buyer for their
products
HO-3 (special form)
(Ans- covers the dwelling and other structures on a risk-of-direct-physical
loss basis. All direct physical losses are covered except those losses
specifically excluded. Personal property is covered on a named perils basis
HO-5 Comprehensive Form
(Ans- provides open perils coverage (“all-risks coverage”) on the dwelling,
other structures and personal property.
HO-2 (broad form)
(Ans- covers the dwelling, other structures, and personal property on a
named perils basis
HO-4 (contents broad form)
(Ans- Only covers a tenant’s personal property on a named perils basis
The dwelling is insured for 200,000 under DP-2 dwelling policy how much
coverage applies to the barn?
(Ans- Nothing farm property are not eligible under the dwelling policy.<\/p>\n\n\n\n
any trailers or wagons owned by the Named Insured, any newly acquired
vehicles, and any vehicle used as a _<\/em><\/strong>.
(Ans- Temporary Substitute Auto
The covered auto is defined in the policy as all of the following EXCEPT:
A) any additional auto acquired in the past 30 days.
B) any auto shown in the declarations.
C) any auto used as a temporary substitute while an insured auto is being
repaired.
D) any trailer owned by the insured or spouse.
(Ans- Answer: A
An additional auto acquired during the policy period is considered a
covered auto. However, some restrictions do apply. For example, if the
newly acquired auto is in addition to any vehicle shown on the declarations,
it must be insured within 14 days of the purchase date. If it replaces one of
the cars, the insured does not need to add it during that policy period.
Coverage F on homeowners policy provides
(Ans- Medical payments to others; pays all necessary medical expenses for
up to three years after an accident.
Coverage F: Medical Payments to Others
(Ans- Does not apply to the insured or members of the insured’s
household
Not liability coverage and is not base on fault<\/p>\n\n\n\n
substantial shortage of valuable stock. He submits a claim to his insurance
carrier that provides his coverage under a Business Owners Policy. What
coverage is provided by the BOP?
(Ans- No coverage would apply, there is no coverage for missing property
when there is no physical evidence to show cause of loss
Arbitration (ADR)
(Ans- Neutral third party hears a dispute and makes a decision both
parties have agreed to follow.
Mediation
(Ans- A method of settling disputes outside of court by using the services of
a neutral third party, called a mediator. The mediator acts as a
communicating agent between the parties and suggests ways in which the
parties can resolve their dispute. Not binding.
Difference between Arbitration and Meditation?
(Ans- Mediation is not binding, Arbitration is.
Mediation-Arbitration
(Ans- If the parties cannot reach a settlement through mediation, an
arbitrator will resolve the dispute.
The building and personal property coverage form provides coverage for
outdoor signs
(Ans- Whether attached to the building or not for up to 2,500 if damaged by
a peril insured against.
Building and Personal Property Coverage Form
(Ans- Commercial Property coverage form that covers buildings, the
insured’s business personal property, and the personal property of others
located at the business premises<\/p>\n\n\n\n
Answers
The amount the insured must pay in a loss before any payment is due is
known as?
(Ans- Deductible
What is a partial legal defense that reduces the amount of damages that a
person can recover based upon the amount that this person’s own
negligence contributed to the loss
(Ans- Comparative Negligence
What is a situation involving a person other than an insured?
(Ans- Third Party Loss
The part of the insurance policy that details the rights and duties of the
insured and the insurance company in the policy?
(Ans- Conditions
An event that results in an insured loss and damages?
(Ans- Occurrence
What is the value of your property, based on the current cost to replace it
minus depreciation?
(Ans- Actual Cash Value
Mary has a Homeowner’s policy. Her Coverage A limit of liability is
$250,000 and her Coverage B limit of liability is $125,000. Her policy has a
2% deductible. What is her deductible?
(Ans- $5,000<\/p>\n\n\n\n
hard-bargaining negotiation?
(Ans- Distributive
What is the responsibility to another for one’s negligence?
(Ans- Liability
What is the failure to use that degree of care which an ordinary person of
reasonable prudence would use under similar circumstances?
(Ans- Negligence
What is the intentional misrepresentation of a material fact that may void a
contract?
(Ans- Fraud
What is the process when an insurer and an insured have a dispute
regarding the amount of the damage?
(Ans- Appraisal
This type of Auto Coverage pays for your damages if you were involved in
a hit and run:
(Ans- Uninsured Motorist
What is the cost associated with replacing property at current market
prices?
(Ans- Replacement Cost
What is the period a policy is in force, from the beginning or effective date
to the expiration date?
(Ans- Policy Period
What is making an oral or written statement that is false or maliciously
critical of, or derogatory to, the financial condition of any insurer that is
calculated to injure any person engaged in the insurance business?
(Ans- Defamation<\/p>\n\n\n\n
insurance terms and concepts Chapter 1
Law of Large Numbers
(Ans- the more examples used to develop any statistic, the more reliable
the statistic will be
Underwriting
(Ans- The process and insurance company uses to decide whether to
except or reject an application for a policy insurance. underwriters evaluate
the risk and exposure of a potential policyholders they decide how much
coverage the policyholder should receive how much they should pay for it
or whether even to except the risk and insure them. underwriting involves
measuring risk exposure and determining the premium that needs to be
charged to ensure that risk.
peril
(Ans- A cause of property losses I.E, fire, lightning, explosion, windstorm,
hurricane, collapse of building, vandalism, accidental discharge, theft.
Hazard
(Ans- Is a situation that poses a level of threat to life, Heath, property, or
environment.
Direct loss
(Ans- Direct physical loss to property
Indirect loss
(Ans- A loss that arises as a result of damage to property, other than the
direct loss to the property. If you own a taxi and someone totals out your
taxi, you can’t make money because you can’t drive your taxi for fares.<\/p>\n\n\n\n
(Ans- Insurance will not pay more than the cost of the incident
Property insurance
(Ans- Covers the loss of real and personal property from perils such as fire,
theft, windstorm
Insuring Agreement
(Ans- Summarizes the major promises of the insurer in exchange for
premium payments by their customer.
Deductible
(Ans- Amount you must pay before you begin receiving any benefits from
your insurance company
Cancellation
(Ans- Termination of an insurance policy by insurance company or insurer
before the renewal date. All notices must be done in writing.
Limit of Liability
(Ans- The maximum amount for which an insurer is liable. The policy of
declarations specifies limits.
Loss settlement
(Ans- The process used to determine the amount of the loss.
Methods used to settle losses
(Ans- Actual cash value- value of the property, based on the current cost
to replace it, minus applicable depreciation.
Replacement cost- the cost associated with replacing property at current
market prices.
Agreed value- the amount that the insured and insurer agree upon during
the time of policy inception.<\/p>\n\n\n\n
This amount is accepted by the buyer and seller.
Casualty insurance
(Ans- Protects a person from financial loss arising from bodily injury or
property damage to others arising out of : ownership of property, operation
of a motor vehicle, personal activities, business activities, robbery, and
Worker’s comp.
Liability
(Ans- A person is legally liable for an accident if that person is found
responsible for bodily injury or property damage to another party. Usually
based upon the negligent acts of that person.
negligence (n)
(Ans- carelessness
Tort
(AnsA civil wrong committed against someone else. This breach would
determine if that person is negligent. The essential elements used to
determine negligence :
duty owed
Duty breached
Proximate cause
Damages
Punitive Damages
(Ans- Money a court requires a defendant to pay in order to punish and
make an example of the defendant. “Punitive” (punished or punishment by
the court<\/p>\n","protected":false},"excerpt":{"rendered":"