Herb owns a processing plant outside of town that services all the local farmers. He's
been using over-the-road transportation but wants to streamline
... [Show More] his business by using
the railroads. He contacts ABC Railway Transport and the two come to an agreement:
ABC Railway will run a sidetrack onto Herb's business premises, if Herb agrees not to
hold ABC Railway responsible for certain liabilities that could result from the sidetrack's
use. This agreement would fall under __________ in Herb's Commercial General
Liability policy. - CORRECT ANSWER-Insured Contracts
What is a reserve, in insurance terms? - CORRECT ANSWER-A pool of collected
premiums that the insurer sets aside to pay claims
Norris borrows Arnold's truck to pick up some lumber from the hardware store. On the
way to the store, Norris collides with a car, injuring the three people inside. The driver
suffers $15,000 in injuries, one passenger suffers $25,000, and the other passenger
suffers $20,000. Norris has a PAP with liability limits of 50/100/50, and Arnold's policy
has liability limits of 25/50/10. How much will the primary policy pay for the injuries? -
CORRECT ANSWER-$50,000
Alice is an adjuster and is currently negotiating a settlement with Gale. Which of the
following actions that Alice could take would be disrespectful towards Gale, and thus
hinder the negotiation process? - CORRECT ANSWER-Assuming to know what Gale
wants
Which of the following automobile components is NOT covered by a Mechanical
Breakdown Insurance policy? - CORRECT ANSWER-Tires (Drive train, steering
assembly, engine ARE covered by a mechanical breakdown insurance policy)
Which of the following statements applies to replacement cost valuation?
A. An actual cash value policy will pay out more than a replacement cost value policy.
B. Replacement cost valuations take into account the depreciated value of an item.
C. Under replacement cost valuation, insurers may safeguard the principle of indemnity
by requiring policyholders to replace insured items before making full reparations.
D. Replacement cost valuations provide cheaper premiums for the policyholder than an
actual cash value insurance policy. - CORRECT ANSWER-Under replacement cost
valuation, insurers may safeguard the principle of indemnity by requiring policyholders
to replace insured items before making full reparations.
James and Eric want to play a prank on Bob for Halloween. They dress up like headless
horsemen and throw ignited Jack O'Lanterns at his house. Unfortunately, one of the
inflamed pumpkins catches the porch on fire, causing $3,500 in damages. Bob doesn't
find this tomfoolery very entertaining and sues both James and Eric for the cost of the
repairs. In court, James and Eric would be:
A. intentional tort.
B. a joint tortfeasor.
C. a tortfeasor.
D. the plaintiffs. - CORRECT ANSWER-A Joint Tortfeasor
Under the Longshore and Harbor Workers' Compensation Act, how much would the
surviving spouse of a deceased worker receive in benefits? - CORRECT ANSWER-??
Kirk is adjusting an auto liability claim submitted by Christine, who has retained an
attorney to represent her in the claim. Kirk should: - CORRECT ANSWER-??
An individual must re-qualify for her license under the Arkansas Insurance Code: -
CORRECT ANSWER-To get her license reinstated after a suspension.
After a rain storm, Nancy realizes that she left her bedroom windows open the entire
time. Now there is extensive water damage to her area rug and furniture, and the laptop
that had been sitting on her desk is ruined. Nancy has a Broad Form homeowners
policy, so she calls her insurance company and files a claim. What is the likely result of
Nancy's claim? - CORRECT ANSWER-The insurer will not cover any of the damage,
since Nancy left the windows open.
When would a default judgment occur? - CORRECT ANSWER-When a defendant does
not answer a complaint
After recovering money through subrogation demands, the insurer may not take money
from the insured's recovered deductible to cover its own expenses unless: - CORRECT
ANSWER-it hired an attorney to recover the money.
Which item would NOT belong in an adjuster's initial report on a claim?
A. A list of all known circumstances surrounding the claim
B. The date that the adjuster first contacts the claimant
C. The final settlement amount
D. A detailed list of the damages being claimed - CORRECT ANSWER-The final
settlement amount
Agnes purchased a home ten years ago in an upcoming neighborhood for $75,000. The
home's value has since tripled to $225,000! Agnes still has $25,000 left on her
mortgage, but has increased her dwelling coverage to $225,000 to keep up with the
home's appreciation. When it burns to the ground in a fire, her mortgage company
wants to be indemnified $75,000 because the value of the home has tripled. Which
policy condition protects against this claim? - CORRECT ANSWER-Insurable Interest
Which of the following does not describe one of the implied warranties of Ocean Marine
Insurance? - CORRECT ANSWER-The vessel must not travel in stormy or otherwise
dangerous weather conditions.
Patricia is a new adjuster whose primary goal is her employer's financial benefit. This
goal makes Patricia susceptible to the ethical challenge of: - CORRECT ANSWER-bias
for the insurer.
Phil heads over to visit his friend Josh, who is sick with the flu. While at the house, Josh
fails to cover his mouth when he coughs and Phil ends up contacting the flu. Phil files a
claim with Josh's insurer for medical expenses and lost income while Phil is out sick
from work. The insurer denies the claim because: - CORRECT ANSWER-disease
transmitted from the insured to a third party is excluded
Allen works as an adjuster for Insurer B. Which of the following is FALSE?
A. Insurer B is bound by Allen's words or decisions that he makes while on the job.
B. Allen is an agent of Insurer B.
C. Insurer B has given Allen express authority to perform on its behalf.
D. Allen is a salaried employee who only sells Insurer B's products. - CORRECT
ANSWER-Allen is a salaried employee who only sells Insurer B's products
Sarah suffers acute back pain. Not satisfied with the specialists in her own network,
Sarah elects to see a back specialist outside the network established by her healthcare
provider. Her healthcare provider pays the amount that the same appointment would
reasonably have cost with an in-network specialist, and Sarah has to pay the additional
costs out of her own pocket. Which type of healthcare provider does Sarah belong to? -
CORRECT ANSWER-Preferred Provider Organization
Jack has been appointed to manage Margaret's financial estate, but Margaret requires
Jack to be bonded. What kind of bond might Jack seek? - CORRECT ANSWER-A
fiduciary bond
Which of the following is NOT a risk management technique?
A. Risk equality
B. Risk retention
C. Risk reduction
D. Risk avoidance - CORRECT ANSWER-Risk equality
An oral or written statement providing temporary insurance coverage until an insuranc [Show Less]