PENNSYLVANIA PUBLIC ADJUSTER EXAMINATION--SERIES

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PENNSYLVANIA PUBLIC ADJUSTER EXAMINATION--SERIES

16-19 SET 1

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -46 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation Question 1: The standard deductible for each coverage under the "emergency flood

program" is:

Answer:

The standard deductible for the emergency program is $2,000. Both building and contents coverages have a deductible.Question 2: The federal crop program that covers the revenue of the entire farm as opposed to a

specific crop is called:

• Group Risk Income Protection
• Crop Revenue Coverage
• Adjusted Gross Revenue
• Income Protection Plan

Answer:

• Group Risk involves the average county revenue. Crop revenue compares the early market price of

the crop to the harvest price and Income protection involves a combination of both low harvest prices and low yield. All of those can be tied to a specific crop depending on the farm. Adjusted Gross revenue insures the revenue of the entire farm as opposed to a specific crop.

Question 3: Which of the following statements is correct regarding the responsibilities of the insurance company when paying liability claims?

• The insurer may refuse to pay the cost to defend or settle a claim if the type of loss is not

covered by the policy.

• The insurer must defend or settle all claims brought against the insured during the policy

period.

• The insurer must defend or settle all claims brought against the insured for up to five years

beyond the policy period.

• The insurer may refuse to defend or settle a claim until the court establishes legal liability.

Answer:

• The insurer is not required to defend or cover claims made against the insured that are not covered

by the policy.Question 4: A commercial building is insured for $150,000 and is worth $250,000. A $100,000 loss occurs. The policy contains an 80% coinsurance clause. How much will the insurer pay?

A. $75,000

B. $100,000

C. $150,000

D. $250,000

Answer:

• To comply with the 80% coinsurance clause the insured should have carried $200,000 of coverage

on the building. The insured is covered for 75% of what should have been carried and therefore, the insurer would pay $75,000.Question 5: Under business income coverage, what coverage continues payment of income after the period of restoration is complete?

• Maximum period of Indemnification
• Extension of coverage
• Agreed value
• Extended Business Income

Answer:

• The coverage is called Extended Business Income and will allow for payment after the period of

restoration is complete up to a maximum of 60 days. This is included in the form automatically.Coverage can be extended for a longer period by paying an additional premium.Question 6: A tenant leases space in a building. The tenant's space is damaged by fire. When will the Commercial Property policy pay for the damage?

• When the owner of the building submits proof of loss for the damage
• If the tenant pays for the damage
• Will only pay if the lease agreement charges the tenant with the repairs
• Will not pay

Answer:

• When the owner of the building submits a proof of loss for the damage and the loss is paid.

Question 7: Which of the following statements correctly applies to a named perils policy?

• Only the perils described in the declarations are covered.
• All direct damage to property is covered, unless the policy specifically excludes the peril.
• Only the perils listed by name are covered under the policy.
• All indirect damage to property is covered.

Answer:

• Only the perils listed by name are covered under the policy.

Question 8: A claim has occurred and the statute of limitation is about to expire. The law requires that first party claimants be given a _____ day notice and third party claimants must be given a _____ day notice.

Answer:

A first party claimant must be given a 30 day notice and a third party claimant must be given a 60 day notice of the expiration of the statute of limitations.

Question 9: A large tree has fallen into Paul's yard caused by wind. The claims service representative (CSR) advises Paul to call a contractor to remove the tree and send the bill to the insurance company. The bill is $1,200. However, the policy coverage for the debris removal of a tree that has fallen by wind, is only $500 unless the tree hits the house, which was not the case.What should the adjuster do?

• Pay only $500.
• Pay the $1,200.
• Pay the $1,200, but then explain the policy provisions and ask the insured to reimburse the

insurer for the difference.

• Negotiate.

Answer:

• The consumer relied on the statements of the claims representative so the insurance company would

be estopped from denying the claim. The insurer had already waived its right to deny full payment of the claim because of the statements of the claims representative. Therefore, the $1,200 should be paid.Question 10: Vandalism and malicious mischief (V&MM) covers:

• Intentional acts.
• Damage to a wall caused by a burglar stealing a painting.
• Unintentional acts.
• All of the perils included in extended coverage.

Answer:

• V&MM covers loss caused by intentional and malicious damage to insured property. Vandalism or

malicious mischief does not include loss by pilferage, theft, burglary or larceny.Question 11: Under a Businessowners policy, the "Hired Non-Owned" coverage endorsement

would cover:

• The employer who uses his/her auto for personal use.
• Vehicles borrowed by the insured.
• The employee who uses his/her vehicle on personal business.
• The owner of a hired or non-owned vehicle.