Liability Insurance PAP (Part A) - ANSWER Pays all the sums and insured must legally pay as damage due to BI/PD caused by an accident and resulting from the ownership, maintenance or use of a covered auto.
Coverage Part A through F of a PAP - ANSWER A. Liability
B. Medical Payments
C. UM/UIM
...
NC Claims Adjuster Exam Study Correct
100%
Liability Insurance PAP (Part A) - ANSWER Pays all the sums and insured must legally
pay as damage due to BI/PD caused by an accident and resulting from the ownership,
maintenance or use of a covered auto.
Coverage Part A through F of a PAP - ANSWER A. Liability
B. Medical Payments
C. UM/UIM
D. Physical Damage
E. Insured Duties
F. General Provisions
Certificate of Insurance (COI) - ANSWER A document that proves the existence of
insurance coverage
Occurrence - ANSWER Something that continue to happen and may cause injury later
on.
Accident - ANSWER A sudden unforseen and unintended one time event
Assumption of risk - ANSWER An individual who is aware of the potential risk involved
and chose to expose themselves to it.
Comparative negligence - ANSWER Measures the amount of negligence contributed to
each party. The injured party will not cover damages equal to the percentage of
negligence they contribute.
Contributory Negligence - ANSWER If an insured party contributed to their injury in
anyway due to their own negligence, we will not pay anything.
What state is a contributory state? - ANSWER North Carolina
Negligence - ANSWER Failure to do (or not do) what a reasonable prudent person
would or would not have done in a similar instance.
Temporary Substitute Automobile - ANSWER Not owned by the named insured but
used temporarily as a substitute for the owned auto that is not currently being used.
What is an example of a Temporary substitute Automobile? - ANSWER A dealership
loans an insured a vehicle to drive while their car is getting fixed.
Non Owned Automobile - ANSWER Not owned by the named insured or any relative.
,What is an example of an Non Owned Automobile? - ANSWER An insured borrows a
neighbors car.
If an additional vehicle is not reported to the insurer within 30 days: - ANSWER No
coverage will apply to the added vehicle.
If a vehicle is added to an existing policy (In addition to): - ANSWER It will have the
broadest coverage if insured within 30 days of becoming the owner.
If a replacement vehicle is not reported within 30 days: - ANSWER Part D
(Comprehensive and Collision Coverage) will not apply to the replacement vehicle.
A new vehicle that replaces another vehicle will: - ANSWER Have the same coverages
as the old vehicle if the named insured request to insure it within 30 days of becoming
the owners.
Insured - ANSWER Any blood relative by marriage, adoption, wards, foster children,
living in the same home, including children away at college. Also, any person using
someones car with their permission.
Named insured - ANSWER Listed on the declarations page. Included a spouse wether
they are named in the policy or not, provided they live in the same home.
1st Coverage for watercraft or yacht are: - ANSWER Hull insurance for damage to the
insured boat itself
2nd Coverage for watercraft or yacht are: - ANSWER Protection and indemnity liability
coverage for BI and PD exposures for damage to other people or other peoples boats.
What doesn't watercraft or yacht coverage provide? - ANSWER Coverage for boats
used for hire, charger, or for transporting people for a fee.
How many days removal coverage is provided on the National Flood Insurance
Program? - ANSWER 45 days
Elevation certificates - ANSWER Required on dwellings that are written in the regular
program in certain flood zones in order to properly rate the policy.
Flood insurance policies become effective after: - ANSWER 30 days after receipt of the
coverage application and the premium payment.
The general property form on flood insurance is used to: - ANSWER Insure larger
residential structures and non residential buildings.
, The dwellings form on a flood insurance plan is: - ANSWER Used to ensure residential
property of no more than 4 units and the contents
Flood insurance is available in 2 forms, what are they? - ANSWER 1. Dwelling
2. General property
What does the Federal Emergency Management Agency (FEMA) Do? - ANSWER Sets
program standards for the National Flood Insurance Program.
How many roomers and boarders can a dwelling policy insure? - ANSWER Up to 5
roomers and boarders
How many roomers and boarders can a homeowners policy insure? - ANSWER Up to 2
roomers and boarders.
What is probability? - ANSWER Measuring the chance of an event occuring
What is a risk? - ANSWER The uncertainty of a loss
What is a pure risk? - ANSWER A chance of loss only
What is speculative risk? - ANSWER When there is a chance of gain and a chance of
loss
What is a broker? - ANSWER A person who represents the insurED. They also must be
able to post a bond more than or equal to $15,000 in favor of the state of NC.
What is the characteristics of insurable risk? - ANSWER A low probability of a loss
occurring
Less than catastrophic results
Lost must be measurable
The loss must be significant
The loss must be accidental and unintended
What is insurable risk? - ANSWER A risk an insurance company is willing to accept.
A transfer of risk - ANSWER Insurance
What is the 1st way to prevent adverse selection? - ANSWER Rate up marginal risk
What is the 2nd way to prevent adverse selection? - ANSWER Insurability standards
What is adverse selection (Bad Risk)? - ANSWER When an insured with a high risk of
loss attempt to purchase insurance and are successful in getting the insurance.
Law of Large Numbers - ANSWER As a larger number of events are included, the
difference between actual and expected results become smaller.
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