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 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'...
Arkansas Adjuster Practice Exam
questions and answers
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 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. - answer Insured Contracts
What is a reserve, in insurance terms? - 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? - 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? - answer Assuming
to know what Gale wants
Which of the following automobile components is NOT covered by a
Mechanical Breakdown Insurance policy? - 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. - 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. - 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? -
answer ??
,Kirk is adjusting an auto liability claim submitted by Christine, who has
retained an attorney to represent her in the claim. Kirk should: - answer ??
An individual must re-qualify for her license under the Arkansas Insurance
Code: - 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? -
answer The insurer will not cover any of the damage, since Nancy left the
windows open.
When would a default judgment occur? - 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: - 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 - 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? - answer Insurable Interest
Which of the following does not describe one of the implied warranties of
Ocean Marine Insurance? - 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: -
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: - 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. -
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
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