Exam (elaborations)
ADJUSTER PRO EXAM PREP QUESTIONS WITH C0RECT MARKING SCHEME
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ADJUSTER PRO EXAM PREP QUESTIONS WITH C0RECT MARKING SCHEME
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Name: Score:188 Multiple choice questions
Term
In a Business Owners Policy, Business Income coverage:
allows coverage to be added for motorcycles and motor homes.
C. provides coverage from 72 hours after a loss occurs, up to a maximum of 12 months.
Premises & Operations and Products & Completed Operations
Claims-Made Form1 of 188
Term
Leslie's property sustained damage in a recent flood. Her repair costs total $80,000 for her
home and $15,000 for her detached garage. Leslie has a dwelling form flood policy with a
$100,000 limit. Ignoring any deductible, how much can Leslie expect to receive in
indemnification for this claim?
Coverage F in a HO policy pays for medical expenses of third parties who are injured on
the insured's property.
Umbrella policy
$8,000 - Jane's policy represents ¼ the total coverage and therefore pays ¼ of the
damages
Under the dwelling form flood policy, Leslie has a $100,000 limit for her home, which will
cover the $80,000 in damage. The policy will also pay up to 10% of the Coverage A limit
for the detached garage ($10,000). So, Leslie can expect to receive $90,000 in
indemnification for this claim.2 of 188 Term
Frank purchases a homeowners policy worth $700,000 with a 4% deductible. A few months
later, a heavy hailstorm destroys his roof, porch, and windows, causing $50,000 in damages.
Frank should expect __________ from the insurance company to pay for the damages.
Premises & Operations and Products & Completed Operations
Frank's deductible is 4% of $700,000, or $28,000. Subtract the deductible from Frank's
covered losses of $50,000, and the result is $22,000.
60 days' notice.
25% of Coverage C (or maximum $10,000)3 of 188
Term
cause of loss or damage
peril
C. Lightning
H0-5
criminal4 of 188
Term
HO-4 only covers _______
D. A county department of motor vehicles.
B. Replacement cost minus total depreciation
a renter's personal property, not the structure
applies to covered injuries before any available Medical Payments coverage.5 of 188 Term
All of these insureds have had their policy for at least 60 days. Which of the following is NOT a
valid reason for the insurer to cancel the insured's policy?
Amy filed a claim in which the damage exceeded the policy limit.
George failed to disclose material information when he applied for his policy.
Bob failed to implement loss control measures after receiving notification from his
insurer to do so.
Laura's insured risk has changed substantially, beyond what her insurer should have
reasonably expected.6 of 188
Term
In the context of insurance adjusting, who is the principal?
Agency Authority - Implied
Individual Named Insured
the insured to give the insurance company a yearly report detailing the values of covered
equipment. If the insured fails to supply this report, the insurer may apply a coinsurance
penalty on covered losses.
The source of the adjuster's authority7 of 188
Term
"Comprehensive form" of homeowners insurance; provides all-peril coverage for both
structures and contents.
HO-6 "Unit Owner's Form"
H0-5
Aleatory
H0-88 of 188 Term
The agent's authority to act on behalf of someone else (the principal), usually an insurer. This
authority is derived from the agent's contract with the principal. It can be apparent, express, or
implied.
H0-4
60 days' notice.
Agency Authority
Tree and Shrub Replacement pays up to $500 per plant for the replacement of trees,
shrubs, or other plants destroyed by a covered peril.9 of 188
Term
List all HO Open Peril Forms
Duty, Breach of Duty, Damages, and Causation.
HO-3 "Special Form", HO-5 "Comprehensive Form", HO-7 "Mobile Home Form"
applies to covered injuries before any available Medical Payments coverage.
Freezing is excluded from Part D - Coverage for Damage to Your Auto.10 of 188
Term
In a Dwelling policy, Coverage A provides protection for:
land surrounding the principal dwelling.
construction tools left outside next to the building.
structures attached to the principal dwelling.
a detached garage.11 of 188
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