Adjusterpro –practice exam Questions
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Stephen's insurer denied his claim because the peril was not covered. But,
according to Stephen's understanding of the policy, his loss should be covered, so
he filed a dispute. During the trial, the jury agreed that the policy language was
open to interpretation, so they decided in favor of Stephen. This is because:
A. insurance policies are contracts of adhesion.
B. insurance policies are conditional contracts.
C. insurance policies are contracts of utmost good faith.
D. insurance policies are personal contracts. - ANSWER✔✔ A. insurance policies
are contracts of adhesion.
"We will provide the insurance described in this policy in return for the premium
and compliance with all applicable provisions of this policy." In which section of
the insurance policy would this statement be found?
A. Definitions
B. Declarations
C. Insuring Agreement
D. Endorsements - ANSWER✔✔ C. Insuring Agreement
Melinda's home sustained $6,500 in damage when Jared ran into it with his truck.
Melinda received $6,500 from her insurance company, and Jared also paid her
$5,000. Melinda has now profited from this loss and is in violation of:
A. the principle of subrogation.
,B. federal law.
C. the principle of indemnity.
D. state law. - ANSWER✔✔ C. the principle of indemnity.
Sandra rear-ended Randy's car when he stopped quickly for a yellow light that she
was sure they were both going to make. The damage was minor, but Sandra was
worried her premiums would increase if the accident was reported, so she gave
Randy $500 in an effort to keep it just between the two of them. However, Randy
filed the claim with his insurance company and received a settlement check for
$750. What has Randy violated?
A. The principle of insurable interest
B. The principle of subrogation
C. The principle of indemnity
D. The principle of loss minimization - ANSWER✔✔ C. The principle of
indemnity
Darnell is applying for auto insurance with his agent. Currently, he only wants to
get a minimal amount of coverage to keep his premiums as low as possible, so he
decides not to include uninsured motorist coverage on his policy. His agent has
him sign a document giving up his right to this coverage. What is this called?
A. A warranty
B. An express waiver
C. A binder
D. An implied waiver - ANSWER✔✔ B. An express waiver
An insurance policy's declarations page contains all of the following, EXCEPT:
,A. the deductible.
B. the dates of the policy term.
C. the perils insured against.
D. the coverage limit. - ANSWER✔✔ C. the perils insured against.
An economic device used to protect against the risk of realizing unforeseen and
extraordinary financial loss is called:
A. risk avoidance.
B. insurance.
C. indemnification.
D. subrogation. - ANSWER✔✔ B. insurance.
Which of the following does NOT constitute a legal termination of a contract
offer?
A. Rejection by offeree
B. Request for more information
C. Termination by operation of law
D. Revocation by offeror - ANSWER✔✔ B. Request for more information
The Principle of Indemnity is designed to prevent:
A. having multiple payees on a policy.
B. an insured from making a profit.
C. insurers from making a profit.
D. subrogation. - ANSWER✔✔ B. an insured from making a profit.
, Jason's auto policy states that the insurer may cancel coverage if Jason pays a
premium more than 30 days late. However, Jason is currently more than 30 days
late, and has been so five times in the last year, and his insurer has done nothing
about it. When Jason gets into an accident and files a claim, which of the following
would be true?
A. The principle of utmost good faith prevents the insurer from denying coverage
in this case.
B. The principle of utmost good faith allows the insurer to deny coverage in this
case.
C. The principle of estoppel prevents the insurer from denying coverage in this
case.
D. The principle of estoppel allows the insurer to deny coverage in this case. -
ANSWER✔✔ C. The principle of estoppel prevents the insurer from denying
coverage in this case.
Lee, the owner of Antonia's Bakery, wants to expand operations and start catering.
He hires Geoffrey to manage the new catering department and quickly realizes that
he might have made a mistake. Geoffrey makes inappropriate comments to other
employees, seems to be dishonest in his dealings with money, and is a reckless
driver. How would Lee effectively practice risk avoidance in this case?
A. Fire Geoffrey
B. Have a company-wide meeting about appropriate language in the workplace
C. Purchase employee theft coverage
D. Hire another new employee to be Geoffrey's supervisor - ANSWER✔✔ A. Fire
Geoffrey
Natalie's brakes have been squealing for several months. Every time she drives her
car, she's reminded that she needs to have them replaced, but she forgets all about
it as soon as she gets out of the car. Natalie's actions can be considered a:
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