MS adjuster license
exam QUESTIONS &
ANSWERS(RATED A)
Jerome was shopping at ABC Imports when a light fixture fell from the ceiling and hit him on the head.
Jerome's injuries resulted in an extended hospital stay, so he sued ABC Imports and was awarded
$400,000. Assuming ABC Imports carries a CGL with a General Aggregate of $750,000 and a per
occurrence limit of $250,000, what is the maximum that ABC's insurer will pay for Jerome's injuries? -
ANSWER $250,000
Strict Liability: - ANSWER holds a person liable for his actions regardless of how much care he
demonstrates.
Wendy hires Jim to build an addition to her house. Jim takes the job and finishes it in good time.
Unfortunately, as Wendy is walking across the threshold of the new addition, a floorboard gives way and
Wendy falls into the crawl-space below, injuring her leg and back. Which commercial general liability
coverage could help cover the cost of Wendy's injuries? - ANSWER Completed Operations Liability
In which case would the insured be indemnified by her auto liability coverage? - ANSWER NOT: None;
liability coverage never indemnifies the insured. OR she causes property damage to her neighbor
Lucille owns her own woodworking business, building custom items such as dressers, wooden trunks,
and mantelpieces. A fire destroys her entire operation and Lucille files a claim with her insurer. Which of
the following would be covered under Coverage A of the Building and Personal Property Coverage Form
in her commercial property policy? - ANSWER A bandsaw permanently affixed to the floor
, In which of these situations could a Mississippi insurer cancel a policy after 60 days with sufficient
notice? - ANSWER The policyholder's son has his license suspended during the policy period.
Bonnie's PAP includes Comprehensive coverage. Which of the following losses could this coverage pay
for? - ANSWER Bonnie's car catches fire
Sam suffers $6,000 in injuries when Nicole runs a red light and crashes her uninsured car into Sam's.
Sam's own insurance company, ABC Insurance, immediately pays him $5,000 for his injuries. Sam then
ponders whether to file a $6,000 lawsuit against Nicole. Why can't Sam sue Nicole for the full amount of
his injuries? - ANSWER By accepting payment from ABC Insurance, Sam subrogated a portion of his rights
against Nicole to ABC Insurance.
In order to be a licensed adjuster, a person must be at least ____ years old. - ANSWER 18
Grant works at ABC Convenience. One day, a man pulls up in an expensive car and pays cash for his gas
with a hundred dollar bill. Grant accepts the bill without checking its validity. When Grant's manager
checks the bill later, he discovers it is a fake. Which commercial crime coverage could protect ABC
Convenience from financial loss associated with accepting the fake hundred dollar bill? - ANSWER Money
orders and counterfeit paper currency
States that allow private insurers to offer workers' comp coverage as an alternative to the state workers'
comp fund are called: - ANSWER competitive
The Employee Retirement Income Security Act (ERISA): - ANSWER requires that every fiduciary of an
employee benefit plan and every person who handles funds or other property of those plans must be
bonded
Bill lives in Mississippi and has the minimum auto liability coverage required for the state. He causes an
accident that results in $35,000 in property damage and $50,000 in bodily injury to another person. How
much will Bill have to pay out of pocket for this accident? - ANSWER $10,000 in property damage and
$25,000 in medical expense
Which of the following statements regarding scheduled fidelity bonds is FALSE? - ANSWER All employees
are bonded for the same aggregate amount.
,D'Anton spills coffee in his lap while driving, causing him to veer off the road and smash into a telephone
pole. Which part of his Auto Insurance Policy will help him pay for the repairs to his car? - ANSWER
Collision coverage
If an insurer decides to cancel a personal auto policy (for a reason other than non-payment of premiums)
after the policy has been in effect for 60 days, the insurer must provide written notice to the insured
__________ in advance. - ANSWER 30 days
Acme Construction, Inc. has one contractor and one receptionist. The contractor makes $25/hr, and the
receptionist makes $10/hr. The contractor worked exactly 8 hours in 2010, so he made $200. The
receptionist worked 10 hours, so she made $100. Therefore, Acme's entire payroll for 2010 was $300.
Assume that, for every $100 of payroll, the WC rate for contractors is $50 and the rate for receptionists is
$5. How much did Acme owe in WC premiums? - ANSWER $105
Bobby just purchased an insurance policy for his home from XYZ Insurance. Which of the following would
be a reason this policy may not be legally binding? - ANSWER NOT: Bobby has an outstanding warrant for
selling marijuana
Farmer Scott owns a farm and raises goats, producing a lot of manure. Occasionally, after a strong rain,
some of the waste washes into a nearby river. Which insurance coverage can protect Scott from any
liability caused by the goat waste runoff? - ANSWER Farm pollution liability
John moved out of his house and put it up for sale three months ago. While he was waiting for the house
to sell, John's plumbing pipes froze and burst in the icy temperatures, which eventually led to water
damaging the cabinetry and hardwood floors. Which of the following statements would most likely be
TRUE? - ANSWER NOT: Bc John's house was still covered under an HO-3, the damage would be covered.
Which of the following is found in the declarations page of an insurance policy? - ANSWER The name of
the insured party.
Under the Longshore and Harbor Workers' Compensation Act, how much would the surviving spouse of
a deceased worker receive in benefits? - ANSWER 50% of the deceased worker's average weekly wage
Phil runs a locomotive repair business, which is insured under a commercial property policy. One night,
some blasting powder is accidentally ignited and blows a crowbar through one of the engines. No one is
, hurt, but the locomotive is severely damaged. Which coverage option may help cover the cost of
repairing the engine from this unfortunate event? - ANSWER Legal liability coverage
Which of the following insurance protections is NOT offered by a garagekeeper's insurance policy? -
ANSWER NOT: Specific causes of loss OR Comprehensive coverage
Carmen was making $450 per week working in a mitten factory until she lost her thumb in a work-
related accident. Her Workers' Compensation benefits will pay _____ per week for _____ weeks. -
ANSWER $300; 60
Making false or misleading statements about a policy's terms or benefits is unfair and considered: -
ANSWER misrepresentation
Randy owns a clothing store. One day, he notices a shady character with a backpack who is hanging
around acting nervous. Randy becomes suspicious and approaches the young man. As the boy makes an
effort to avoid him, Randy grabs his arm and detains him until the police arrive. Not finding any stolen
merchandise, the police let the boy go. Two weeks later Randy is notified that he will be sued for
violation of the young man's civil rights. This is an example of what type of personal injury covered under
Randy's Commercial General Liability policy? - ANSWER False Arrest, Detention, or Imprisonment
After a tornado severely damaged their building, the owners of ABC Online Marketing have to rent
another building for a few months while repairs are underway. Which additional coverage would help
cover the cost of renting this other building? - ANSWER NOT: additional covered property endorsement
OR Fixed cost insurance
Stephanie owns a house that she rents out for $2,500 a month. A massive kitchen fire forces her tenants
to move out while the interior is overhauled. After two months, the repairs are complete, and Stephanie
contacts her tenants, only to find that they've found a new place to live. It takes Stephanie another
month and a half to find new tenants. Assuming that Stephanie had a $100,000 DP-2 policy, what is the
maximum amount she could receive for lost rental income under Coverage D? - ANSWER $5,000
Which statement about the Federal Employers Liability Act is TRUE? - ANSWER NOT: It provides benefits
in the form of monthly payments and medical coverage to coal miners
