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ADJUSTER PRO PRACTICE EXAM
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ADJUSTER PRO PRACTICE EXAM
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ADJUSTER PRO PRACTICE EXAMStu has a collection of rare comic books. He wants to purchase theft insurance for his
collection, separate from his home and other property. What term most accurately
describes the type of policy Stu would purchase? - Answers -Monoline Policy
Which of the following statements does NOT apply to the Standard Fire Policy? -
Answers -It automatically covers wind and vandalism.
Which of the following refers to being restored to the financial condition you were in
before a loss? - Answers -Indemnification
The fee paid by the insured in exchange for an insurance policy is called a: - Answers -
premium
Haley takes a bottle of water into a store, pours some of it on the floor when no one is
looking, and then pretends to slip and fall. She cries out for help in apparent pain
until someone comes to her aid. She then sues the store for her fake injury in an
effort to collect an insurance settlement. What has Haley committed? - Answers -Hard
fraud
Cindy, a drunk driver, accidentally crashes into Nancy's house, causing $22,000 in
damage. On top of that, Nancy tries to get the adjuster to add an additional $20,000
for punitive damages to punish Cindy for driving while intoxicated. However, Nancy
fails in her attempts at negotiation. This is because: - Answers -the adjuster does not
have authority to negotiate for punitive damages.
Bill's new home is in the final stages of construction, and he has purchased an HO-2
policy to insure his financial interest in the property. This morning, Bill's contractor
calls to tell him that an electrical fire has destroyed his new kitchen, and all of the
crown molding that was supposed to be installed today has been stolen. It will be
$15,000 to rebuild the kitchen and another $4,200 to replace the trim. How will Bill's
insurer respond when he files a claim? - Answers -His insurer will pay $15,000 to
rebuild the kitchen and nothing for the stolen trim.
Tim's $2,500 boat trailer was stolen from his driveway. Ignoring any deductibles, how
much can Tim receive for his stolen trailer when he files a claim against his
homeowners policy? - Answers -$1,500
For loss settlement purposes, most homeowners policies: - Answers -pay for damages
to personal property at actual cash value, and damages to structures at replacement
cost.
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? - Answers -The insurer will not cover any of the
damage, since Nancy left the windows open.
Sherrie's roof and fence are damaged in a violent windstorm. Sherrie has a typical
HO-3 policy with a $150,000 limit for Coverage A - Dwelling. Assuming she has no
endorsements, how much coverage does she have available for the damage to her
fence? - Answers -$15,000
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: - Answers -disease
transmitted from the insured to a third party is excluded.
Mark is on vacation in Italy when his luggage is stolen, including a $2,000 laptop, a
$500 suitcase, and $400 in clothes. Mark has an HO-3 homeowners policy. Excluding
any applicable deductible, which of the following statements is TRUE? - Answers -
Mark's homeowners policy will cover $2,400 of this loss.
Which of the following losses may qualify for coverage under Coverage F - Medical
Payments? - Answers -Kevin accidentally shoots himself in the foot with a nail gun while
he is helping Joe build a deck in
Joe's backyard.
Veronica owns a pottery business and is insured under a commercial property policy.
She was in the process of building an extra structure for the sole purpose of kiln
firing her pottery, but after 40 days of waiting for it to be completed, she moved her
business to a new location without any intention of moving back. Her Builder's Risk
Coverage Form was terminated because: - Answers -the property is abandoned.
A fire burns down Jenny's Hardware, leaving virtually nothing salvageable. Which of
the following items would NOT be covered under Coverage B of the Building and
Personal Property Coverage Form in her commercial property policy? - Answers -A
paint mixer permanently affixed to the floor
After Tony, the owner of XYZ Cleaners, accidentally starts a fire, XYZ Cleaners burns
to the ground, taking all the garments with it. Afterwards, Tony has to rent a new
building and purchase new equipment and supplies. He is also responsible for all the
clothing that was in his care. Which type of coverage in his commercial property
policy could help Tony with the cost of paying for his customers' destroyed clothing? -
Answers -Legal Liability Coverage
A fire in Sarah's factory causes her to shut the factory doors for 50 days. To limit her
loss of income and keep production going, Sarah spends $125,000 renting equipment
, and another building. Sarah's commercial property policy doesn't have Business
Income Coverage, but it does include Extra Expense Coverage. The limit on her Extra
Expense coverage is $100,000 and she has Limits of Loss Payment of 40%/80%/100%
during her period of restoration. How much indemnification will Sarah receive for her
extra expenses? - Answers -$80,000
Helen's business is growing rapidly, so she decided to add an annex onto her office
and hire another worker. While under construction, a storm blows down most of the
annex structure, forcing Helen to restart from scratch. Her commercial policy
provides insurance coverage equal to 75% of the property value, despite the fact that
her policy requires 80% coverage to be fully insured. Which coverage extension
could help Helen rebuild at replacement cost? - Answers -None - Extensions are only
available if the policyholder maintains the minimum level of insurance of
80% to value
A fire burns down Jenny's Hardware, leaving virtually nothing salvageable. Which of
the following items would NOT be covered under Coverage A of the Building and
Personal Property Coverage Form in her commercial property policy? - Answers -An
employee's laptop which she uses for work
Honey's Bakery is a local coffee shop run by two sisters. In a rush to leave one
afternoon, their new employee forgets to turn off the gas stove. The leaking gas
causes an explosion, destroying the kitchen. Which condition in their commercial
property policy could help the sisters cover the cost of the damage? - Answers -Control
of Property
Francis owns a small shoe store. Since his business isn't particularly risky, he has a
commercial property policy that provides named-peril coverage to his building and
personal property, without any additional coverages. Which Causes of Loss form
does Francis have attached to his coverage form? - Answers -Basic Form
Which of the following perils is excluded from coverage in a National Flood Insurance
Program policy? - Answers -Water-main breakage
When a severe flood is imminent, Erica goes out and spends $1,200 on sandbags,
$760 on plastic sheeting and lumber, and $1,500 on a pump. Then she hires two
neighbors to help her flood-proof her house with these materials. She and her
neighbors work together for 16 hours, and she pays them the federal minimum wage
for their labor. After the flood passes, Erica files a claim for these expenses.
Assuming the federal minimum wage at that time is $7.00 per hour, how much will her
flood policy indemnify her? - Answers -$2,872
Jackie lives in an area recently devastated by a hurricane and has filed a claim with
her insurance company, ABC Insurance. Jerry, an adjuster contracted by ABC
Insurance, pulls up to Jackie's house in a truck with the ABC Insurance logo on the
side, and wearing a shirt with the ABC Insurance logo on the front. Although Jackie
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