IA Test 22

Question 1

In the case of a first-party automobile physical damage claim in California, the auto insurance company must exercise its right to inspect the damaged vehicle:

Answer Choices: Select the Correct Answer
Within 48 hours of receiving the claims notice.
Anytime within 30 days of receiving the claims notice.
Within 7 business days after receiving the notice of claim.
Within 6 business days after receiving the notice of claim.

Question 1 of 100

Answer 1

Your answer: Within 6 business days after receiving the notice of claim. is correct.

EXPLANATION:
The California Fair Claims Settlement Practices Regulations state that if an insurer chooses to exercise its right to inspect the damaged vehicle on a first-party claim, it must do so within 6 business days of receiving the claims notice.

Question 1 of 100

Question 2

Tommy’s Tip Top TV Store is delivering a new flat screen TV to Jerry’s house. The delivery people set the TV down on the floor in the hallway to get a better grip. While picking it up, the TV makes deep scratches in the wood floor. How will the business auto policy for Tommy’s Tip Top TV Store respond to Jerry’s demand for damage to his floor?

Answer Choices: Select the Correct Answer
There is no coverage for the damage to the floor.
The damage to the floor is covered under the liability coverage of the business auto form.
The damage to the floor is covered under the CGL form.
The damage must result from an auto accident before coverage will apply.

Question 2 of 100

Answer 2

Your answer: The damage to the floor is covered under the CGL form. is incorrect. The correct answer is: The damage to the floor is covered under the liability coverage of the business auto form..

EXPLANATION:
The business auto form provides property damage liability coverage caused by the unloading or loading of property from the time it is picked up until the time it is delivered to its final destination.

Question 2 of 100

Question 3

Under workers compensation coverage, if an employee is injured while participating in a voluntary soft ball game at the optional company picnic, compensation will be:

Answer Choices: Select the Correct Answer
denied.
reduced by 50%
paid as usual.
reduced proportionately by the employees degree of negligence

Question 3 of 100

Answer 3

Your answer: reduced by 50% is incorrect. The correct answer is: denied..

EXPLANATION:
If the injury arises out of voluntary participation in any off-duty recreational, social, or athletic activity not constituting part of the employee’s work-related duties, no benefits will be paid. However, if these activities are a reasonable expectancy of, or are expressly required by the employer, benefits will be paid.

Question 3 of 100

Question 4

Any misinformation provided by an applicant which is such that the insurance company would not have issued a policy if the true facts were known is:

Answer Choices:	Select the Correct Answer
Material misrepresentation.	
Malfeasance.	
Fraud.	
Concealment.	

Question 4 of 100

Answer 4

Your answer: Concealment. is incorrect. The correct answer is: Material misrepresentation. .

EXPLANATION:
This statement defines material misrepresentation, which is deliberately withholding an important fact that would have a bearing on the acceptability and/or pricing of the risk.

Question 4 of 100

Question 5

An inland marine coverage which covers the insured’s merchandise held for sale, such property that is sold but not delivered, customers property in the care and custody of the insured, and property being transported to or from the insured, is a:

Answer Choices:	Select the Correct Answer
Dealers form	
Commercial articles floater.	
Floor plan merchandise coverage form.	
Bailee's customers policy.	

Question 5 of 100

Answer 5

Your answer: Commercial articles floater. is incorrect. The correct answer is: Dealers form.

EXPLANATION:
An equipment dealers form is an example.

Question 5 of 100

Question 6

Betty Jones claims that the bicycle manufactured last year by Darryl Lanier’s firm was the cause of her daughter’s accident. Which of the following coverages would have provided protection for Mr. Lanier?

Answer Choices: Select the Correct Answer
Commercial General Liability
Owners and Contractors Protective Liability
Workers Compensation
Contractual Liability

Question 6 of 100

Answer 6

Your answer: Commercial General Liability is correct.

EXPLANATION:
The general liability policy provides products coverage and would respond to cover this claim.

Question 6 of 100

Question 7

Which of the following is generally not considered to be a legal defense against claims of negligence?

Answer Choices: Select the Correct Answer
The loss to the plaintiff was caused intentionally by the defendant.
A state law gives specific immunity from liability to the defendant.
An intervening cause was the proximate cause of the plaintiff’s injury rather than the defendant’s action (or inaction).
The relevant statute of limitation for filing a lawsuit has expired.

Question 7 of 100

Answer 7

Your answer: An intervening cause was the proximate cause of the plaintiff’s injury rather than the defendant’s action (or inaction). is incorrect. The correct answer is: The loss to the plaintiff was caused intentionally by the defendant. .

EXPLANATION:
Obviously, the fact that the act of the defendant against the plaintiff was intentional, could not be used as a “defense”.

Question 7 of 100

Question 8

Policies issued under the National Flood Insurance Program provide removal coverage for property which is moved to another location to protect it from a flood. This coverage applies for up to:

Answer Choices:	Select the Correct Answer
45 days.	
10 days.	
30 days.	
60 days.	

Question 8 of 100

Answer 8

Your answer: 30 days. is incorrect. The correct answer is: 45 days. .

EXPLANATION:
Removal coverage is designed to avoid loss if the property can be moved elsewhere for protection against flood damage. This coverage is provided for up to 45 days.

Question 8 of 100

Question 9

Registration of a non-licensed independent adjuster in California during an emergency situation is valid for:

Answer Choices:	Select the Correct Answer
90 working days.	
180 days.	
One year.	
120 days.	

Question 9 of 100

Answer 9

Your answer: 180 days. is correct.

EXPLANATION:
Registration of a non-licensed adjuster in an emergency situation is valid for a period of 180 days from the date of a registration letter is sent to the Commissioner from the supervising licensed adjuster or admitted insurer. Before the lapse of that period, the Commissioner may grant a further 180-day extension as deemed appropriate upon written request from the supervising licensed adjuster or the admitted insurer.

Question 9 of 100

Question 10

According to the commercial auto policy definitions, an “accident:”

Answer Choices: Select the Correct Answer
Includes continuous or repeated exposure to the same conditions.
Must be sudden and unexpected.
Must be unexpected and unpreventable.
Is any event that causes injury or damage.

Question 10 of 100

Answer 10

Your answer: Must be sudden and unexpected. is incorrect. The correct answer is: Includes continuous or repeated exposure to the same conditions. .

EXPLANATION:
The auto forms of the past used to simply cover the term “accident.” It did not include continuous or repeated exposure to the same conditions. Many claims were denied because of this restriction. The current forms now include the broader definition and provide better coverage.

Question 10 of 100

Question 11

Tort Law applies to all of the following, EXCEPT:

Answer Choices: Select the Correct Answer
Liability arising from the commission of an unintentional tort.
Liability arising from negligence.
Liability arising from a breach of duty.
Liability arising from breach of contract.

Question 11 of 100

Answer 11

Your answer: Liability arising from breach of contract. is correct.

EXPLANATION:
A tort is a civil wrong, not arising from a contract. Contract law is a completely different branch of law.

Question 11 of 100

Question 12

QUESTION:
The California Insurance Code (CIC) further details the items required on a valid insurance contract. All of the following are required, EXCEPT:

Answer Choices:	Select the Correct Answer
The parties to the contract.	
The insured's mailing address.	
The objects of insurance.	
The policy period.	

Question 12 of 100

Answer 12

Your answer: The insured’s mailing address. is correct.

EXPLANATION:
The California Insurance Code (CIC) requires six specific items of information be included in an insurance policy issued in California. The insured’s mailing address is not one of them.

Question 12 of 100

Question 13

Under what circumstances may an adjuster contact a claimant who is represented by an attorney?

Answer Choices: Select the Correct Answer
If permission is granted by the attorney.
If permission is granted by the claimant.
If permission is granted by the insurance company.
If permission is granted by the court.

Question 13 of 100

Answer 13

Your answer: If permission is granted by the attorney. is correct.

EXPLANATION:
Permission to contact a claimant represented by an attorney must be granted by the attorney representing the claimant.

Question 13 of 100

Submit

Question 14

Premises liability exposure is faced by:

I. Banks.
II. Landlords.
III. Retail stores.
IV. Car dealers.

Answer Choices:	Select the Correct Answer
I, II, III and IV	
I and II only	
II and III only	
I, II, and III only	

Question 14 of 100

Answer 14

Your answer: I, II, III and IV is correct.

EXPLANATION:
All parties/businesses that occupy the covered premises, or have a financial stake in the premises, face liability exposure. The customer is the potential claimant.

Question 14 of 100

Question 15

An insured carries a Personal Property Replacement Cost endorsement attached to her Homeowners policy and has suffered a loss to her personal property. The insured submits a claim for actual cash value (ACV) at the time of the loss, but she intends to make a claim for replacement cost later. What is the time frame in which the insured must notify the insurer that she intends to make the replacement cost claim later?

Answer Choices:	Select the Correct Answer
Within 120 days of the loss.	
Within 180 days of the loss.	
Within 90 days of the loss.	
Within 30 days of the loss.	

Question 15 of 100

Answer 15

Your answer: Within 180 days of the loss. is correct.

EXPLANATION:
The insured must notify the insured within 180 days of the loss of their intention to seek replacement cost coverage at a later date.

Question 15 of 100

Question 16

An insurance company in California has cancelled a Homeowners policy for a reason acceptable by law. How long does the insurer have to return the unearned premium to the insured?

Answer Choices: Select the Correct Answer
The unearned premium must be returned along with the notice provided to the insured that the policy is being cancelled.
Within 30 days of the date of cancellation.
Within 25 days of the date of cancellation.
The unearned premium must be returned within 10 days of mailing the notice of cancellation to the insured.

Question 16 of 100

Answer 16

Your answer: Within 30 days of the date of cancellation. is incorrect. The correct answer is: Within 25 days of the date of cancellation..

EXPLANATION:
When a Homeowners policy is cancelled in California, any unearned premium must be returned to the insured within 25 days of the cancellation date of the policy.

Question 16 of 100

Question 17

When can an adjuster in California operate under a fictitious name?

Answer Choices: Select the Correct Answer
Never.
Only when he or she has obtained written permission from the Commissioner.
For a 30 day period only.
For a 60 day period only.

Question 17 of 100

Answer 17

Your answer: Only when he or she has obtained written permission from the Commissioner. is correct.

EXPLANATION:
Only when he or she has obtained written permission from the Commissioner.

Question 17 of 100

Question 18

All of the following are violations of “good faith duty” by the adjuster, EXCEPT:

Answer Choices: Select the Correct Answer
Paying a settlement within 30 days after an agreement is reduced to writing.
Denying coverage or attempting to settle a claim on the basis of an application which the insurer knows was altered without notice to, or knowledge or consent of, the insured.
Failing to pay the amount of any claim due any person insured by the contract within 60 days after receipt of satisfactory proof of loss from the claimant when such failure is arbitrary, capricious, or without probable cause.
Misrepresenting pertinent facts or insurance policy provisions relating to any coverages at issue.

Question 18 of 100

Answer 18

Your answer: Paying a settlement within 30 days after an agreement is reduced to writing. is correct.

EXPLANATION:
Paying a claim within 30 days after an agreement is reduced to writing is not a violation but a requirement. The other responses are violations of “good faith duty.”

Question 18 of 100

Question 19

The insured’s diamond ring valued at $10,000 has been destroyed in a fire. She is insured by a HO-3 policy. What is the responsibility of the insurance company with respect to this loss?

Answer Choices: Select the Correct Answer
Pay the ACV of the ring
Deny the claim because of the jewelry limitation
Pay the loss and waive the deductible
Pay only the replacement value of the ring and waive any deductible

Question 19 of 100

Answer 19

Your answer: Pay only the replacement value of the ring and waive any deductible is incorrect. The correct answer is: Pay the ACV of the ring.

EXPLANATION:
The policy contains a limitation for the theft of the jewelry. Since the ring was destroyed in the fire the insurer is responsible for the actual cash value of the ring unless the insured purchased replacement cost coverage.

Question 19 of 100

Question 20

Which of the following is the first duty of the insured after suffering a property loss?

Answer Choices: Select the Correct Answer
Take steps to protect the property from further loss.
Have the damaged property appraised.
Hire an outside claims adjuster.
Increase his coverage.

Question 20 of 100

Answer 20

Your answer: Take steps to protect the property from further loss. is correct.

EXPLANATION:
The insured is required to protect the property from further loss. The insurance company will pay all reasonable costs involved in protecting the property from further loss or damage.

Question 20 of 100

Question 21

Samantha misses three days from work because of a lawsuit against her, which requires her appearance in court. She loses $80 in wages each day that she is at court. Her CGL insurance company will pay:

Answer Choices:	Select the Correct Answer
$240	
$300	
$160	
$0	

Question 21 of 100

Answer 21

Your answer: $240 is correct.

EXPLANATION:
The supplementary coverage within a general liability policy provides for wage reimbursement of up to $250.00 per day.

Question 21 of 100

Question 22

Coverage E under the farm forms covers which of the following?

Answer Choices:	Select the Correct Answer
Unscheduled personal property	
Scheduled personal property	
Scheduled real property coverage	
Blanket real property coverage	

Question 22 of 100

Answer 22

Your answer: Scheduled personal property is correct.

EXPLANATION:
Coverage E covers scheduled farm personal property. Each item to be covered is listed and an amount of insurance is stated.

Question 22 of 100

Question 23

Which of the following would not be improvements or betterments?

Answer Choices:	Select the Correct Answer
Carpet	
Furniture	
Interior walls	
Electrical wiring	

Question 23 of 100

Answer 23

Your answer: Furniture is correct.

EXPLANATION:
Improvements and betterments are items added to a tenant’s rented structure that are permanent in nature. The tenant has insurable interest in them during occupancy of the building, and therefore can insure them. Furniture is not an improvement or betterment; it is personal property.

Question 23 of 100

Question 24

Which of the following are qualifications of an applicant for an independent insurance adjuster license in California?

I. Be at least 18 years of age.
II. Must not have committed acts or crimes constituting grounds for denial of a license.
III. Must have had at least 6 months of experience in adjusting insurance claims or the equivalent as determined by the Commissioner.
IV. Must pay the required fees.

Answer Choices:	Select the Correct Answer
I, II, III and IV	
I, II and IV only	
I, II and III only	
II, III and IV only	

Question 24 of 100

Answer 24

Your answer: I, II and IV only is correct.

EXPLANATION:
An applicant must have two years of experience. All the other statements are correct.

Question 24 of 100

Question 25

Under the dwelling insurance program, an endorsement may be attached to the policy to cover dwellings during the course of construction. The insurance company must be advised when construction is completed, and within ____ after the insured takes occupancy of the dwelling. ``` Answer Choices: Select the Correct Answer 30 days 45 days 60 days 90 days ``` Question 25 of 100

Answer 25

Your answer: 30 days is correct. EXPLANATION: When the intended occupant of a dwelling under construction is the named insured, the dwelling under construction endorsement is attached to the dwelling policy to provide coverage. The insurance company must be advised when construction is completed and within 30 days after the insured takes occupancy of the dwelling. Question 25 of 100

Question 26

Which of the following is NOT a part of a Commercial Package Policy? ``` Answer Choices: Select the Correct Answer Declaration page Condition section One or more policy parts Earthquake coverage ``` Question 26 of 100

Answer 26

Your answer: Earthquake coverage is correct. EXPLANATION: Earthquake coverage must be added by endorsement for coverage to apply. Question 26 of 100

Question 27

Which of the following is a true statement regarding crime insurance with computer fraud coverage? Answer Choices: Select the Correct Answer Applies to criminal activity wherein the perpetrator gave false electronic instructions to remove insured’s funds from a bank account Covers acts of employees Covers losses that occur as the result of a messenger of the insured Does not provide coverage on a "worldwide basis" Question 27 of 100

Answer 27

Your answer: Applies to criminal activity wherein the perpetrator gave false electronic instructions to remove insured’s funds from a bank account is correct. EXPLANATION: Computer fraud covers loss of or damage to money, securities and other property due to the use of a computer to fraudulently transfer that property from inside the premises of a banking premises to a place or person (other than a messenger) outside the premises. Question 27 of 100

Question 28

The insured has a communication failure at his premises due to a lightning strike at the phone company. The insured's phone system is damaged and he is out of business for four days. Which endorsement is necessary to provide coverage for the loss of business income? ``` Answer Choices: Select the Correct Answer Non owned and Hired Auto Earthquake Utility Services - Time Element Utility Services - Direct Damage ``` Question 28 of 100

Answer 28

Your answer: Utility Services - Direct Damage is incorrect. The correct answer is: Utility Services - Time Element. EXPLANATION: The Utility Services - Time Element endorsement would cover the loss of business income in this example if the phone system was listed on the endorsement and the cause of the loss was covered by the policy. Question 28 of 100

Question 29

Which endorsement must be attached to a BOP policy for coverage to apply to a freezer that was damaged by the interruption of a power source? Answer Choices: Select the Correct Answer Flood insurance endorsement Earthquake endorsement Utility Services - Time Element endorsement Utility Services - Direct Damage endorsement Question 29 of 100

Answer 29

Your answer: Utility Services - Direct Damage endorsement is correct. EXPLANATION: The Utility Services - Direct Damage endorsement would cover the direct damage to the freezer caused by the power interruption, as long as the freezer was specifically listed on the endorsement. Question 29 of 100

Question 30

An adjuster has procured a photograph of the scene of an accident on a claim that he/she is adjusting. This photograph is placed into the claims file as which of the following types of evidence? ``` Answer Choices: Select the Correct Answer Criminal Real Demonstrative Documentary ``` Question 30 of 100

Answer 30

Your answer: Documentary is correct. EXPLANATION: Documentary evidence is any evidence that is produced in the form of a "document". Most people think of written documentation, however a photograph or a video can be preserved therefore, they are considered to be documentary evidence. Question 30 of 100

Question 31

hich of the following types of property may be insured under a furriers block policy? Answer Choices: Select the Correct Answer Stocks of furs owned by the insured furrier. Customer’s furs entrusted to the furrier for storage. Furs or pelts on the premises of a breeder. Fur garments sold and delivered to customers. Question 31 of 100

Answer 31

Your answer: Customer’s furs entrusted to the furrier for storage. is incorrect. The correct answer is: Stocks of furs owned by the insured furrier.. EXPLANATION: The furriers block policy is used to cover stocks of furs owned by the insured furrier and held for sale. Question 31 of 100

Question 32

In the newest edition of the Commercial Property form, which of the following is now considered part of the building? ``` Answer Choices: Select the Correct Answer Signs permanently attached Vegetated Roofs Outdoor Property Detached signs ``` Question 32 of 100

Answer 32

Your answer: Vegetated Roofs is correct. EXPLANATION: Vegetated roofs are now part of the building and not subject to the tree, shrubs and plants exclusion under covered property nor the tree, shrubs and plants extension of coverage. Question 32 of 100

Question 33

Which of the following Homeowners forms is intended to cover renters? ``` Answer Choices: Select the Correct Answer HO-8 HO-5 HO-3 HO-4 ``` Question 33 of 100

Answer 33

Your answer: HO-8 is incorrect. The correct answer is: HO-4. EXPLANATION: The HO-4 was designed to cover insured's who are renting their place of residence. Question 33 of 100

Question 34

Under the appraisal clause in a commercial inland form, which of the following is true? Answer Choices: Select the Correct Answer The insurer still retains its right to deny the claim entirely It is not binding on all parties The insurer is not bound by the decision of the appraisers and/or umpire The insurer must seek legal action under the appraisal clause to enforce the terms and conditions Question 34 of 100

Answer 34

Your answer: The insurer is not bound by the decision of the appraisers and/or umpire is incorrect. The correct answer is: The insurer still retains its right to deny the claim entirely. EXPLANATION: The insurer is bound by the outcome of the appraisal. They still reserve, however, the right to deny the claim if there is a coverage, rather than a valuation question. Question 34 of 100

Question 35

When is it appropriate for an adjuster to secure a non-waiver agreement with an insured? Answer Choices: Select the Correct Answer If the adjuster senses the claim may be fraudulent in nature. If the adjuster is unsure of coverage. If there is a question of coverage. When the adjuster has verified coverage. Question 35 of 100

Answer 35

Your answer: If the adjuster senses the claim may be fraudulent in nature. is incorrect. The correct answer is: If there is a question of coverage. . EXPLANATION: A properly executed non-waiver agreement allows the insurance company to complete a thorough investigation without implying that coverage is available for the loss. Question 35 of 100

Question 36

Which of the following statements are true regarding eligibility for "low cost automobile insurance" in California? Answer Choices: Select the Correct Answer All of the Statements Listed are True Low cost automobile is now available in all the counties of California as the need is determined by the Commissioner. Eligibility is Based on Income Gross annual income of the household is equal to or less than 250% of the federal poverty level. Question 36 of 100

Answer 36

Your answer: All of the Statements Listed are True is correct. EXPLANATION: All of the statements are true regarding eligibility for low cost automobile insurance in California. Question 36 of 100

Question 37

What is the definition of custom farming? Answer Choices: Select the Correct Answer Farming for others. Sharecropping. Raising specialty crops. Crops grown using genetically modified seeds. Question 37 of 100

Answer 37

Your answer: Farming for others. is correct. EXPLANATION: Custom farming is farming for others for a fee under a contract or agreement. A special endorsement is required if the receipts are in excess of $5,000 per year. Question 37 of 100

Question 38

An ISO Homeowners policy has been issued with $75,000 coverage on the dwelling. What is the automatic amount of insurance coverage on personal property? ``` Answer Choices: Select the Correct Answer $37,500 $7,500 $15,000 $45,000 ``` Question 38 of 100

Answer 38

Your answer: $15,000 is incorrect. The correct answer is: $37,500. EXPLANATION: Personal property is automatically covered for 50% of the amount of the dwelling limit. If replacement cost coverage is purchased on the personal property, the limit of insurance will be increased. The insured can always increase the contents limit for an additional premium. Question 38 of 100

Question 39

Farm liability coverages include each of the following, EXCEPT: ``` Answer Choices: Select the Correct Answer Bodily injury and property damage. Personal injury and advertising injury. Medical payments to others. Professional liability. ``` Question 39 of 100

Answer 39

Your answer: Personal injury and advertising injury. is incorrect. The correct answer is: Professional liability.. EXPLANATION: Professional liability coverage is provided by other types of policies, but not under farm liability coverage. Question 39 of 100 Submit

Question 40

In 2011 Ace Agency writes a fidelity bond for Doe Carpeting. Two months later a claim for theft by one of Doe's employees that occurred back in 2008 is brought against Doe Carpeting. Doe should submit this claim to: Answer Choices: Select the Correct Answer The company with whom Doe had their fidelity bond in 2008 The company with whom Doe currently have their fidelity bond Neither company because the bonding period has expired Both companies because both must share in indemnification Question 40 of 100

Answer 40

Your answer: Both companies because both must share in indemnification is incorrect. The correct answer is: The company with whom Doe currently have their fidelity bond. EXPLANATION: Fidelity bonds contain a superseded suretyship clause. This clause states in essence that the new (current) bond will pay all losses that would have been recoverable under the prior bond if the discovery period under the prior bond had expired. Question 40 of 100

Question 41

Mr. York had his pickup truck stolen while it was parked in a "no parking" zone outside his office. The value of the truck was $18,500. In addition, tools valued at $200, extra tires and hubcaps for the truck valued at $550 and a tarp worth $50 were in the truck. Mr. York has a collision deductible of $500 and a comprehensive deductible of $250. The insurance company will pay what amount? ``` Answer Choices: Select the Correct Answer $18,000 $18,250 $19,050 $18,800 ``` Question 41 of 100

Answer 41

Your answer: $19,050 is incorrect. The correct answer is: $18,800. EXPLANATION: The loss of the truck plus the extra tires and hubcaps would be considered in this claim. These total $19,050 less the deductible of $250 equals $18,800. Question 41 of 100

Question 42

Which of the following statements is correct regarding pollution caused by smoke released from an industrial operation covered under the Commercial Property Policy? Answer Choices: Select the Correct Answer Always covered A gradual release of pollution from industrial operations is not covered Covered on an “excess basis” Covered if caused by a covered cause of loss peril Question 42 of 100

Answer 42

Your answer: Always covered is incorrect. The correct answer is: Covered if caused by a covered cause of loss peril . EXPLANATION: The Commercial Property Policy will not pay for loss or damage caused by or resulting from the discharge, dispersal, seepage, migration, release or escape of pollutants unless the discharge, dispersal, seepage, migration, release or escape was caused by a covered cause of loss.Therefore if a fire or explosion causes the release of pollution, the loss would be covered. The gradual release of smoke from normal agricultural and industrial operations is not a covered cause of loss. Question 42 of 100

Question 43

With inland marine insurance bridges, tunnels, and communication towers are referred to as: ``` Answer Choices: Select the Correct Answer Instrumentalities Subject to the perils of transportation Rolling stock Permanent structures ``` Question 43 of 100

Answer 43

Your answer: Instrumentalities is correct. EXPLANATION: These items are referred to as "Instrumentalities" of transportation. Question 43 of 100

Question 44

The deductible on the Equipment Breakdown form can be stated in which of the following ways? ``` Answer Choices: Select the Correct Answer Fixed dollar deductible Time deductible Percentage of loss deductible All of the responses are correct ``` Question 44 of 100

Answer 44

Your answer: All of the responses are correct is correct. EXPLANATION: The deductible on the form can be stated as a fixed dollar amount per accident, or a time deductible such as five days. The deductible could also be stated as a percentage of the loss. This deductible could also be subject to a minimum and maximum amount. Question 44 of 100

Question 45

Bill Berry was at fault in an automobile accident. Which of the coverages listed would apply to the rental car expense incurred by the other driver while his damaged auto was being repaired? ``` Answer Choices: Select the Correct Answer Property Damage Liability Bodily Injury Liability Additional (supplementary) payments Medical Payments ``` Question 45 of 100

Answer 45

Your answer: Additional (supplementary) payments is incorrect. The correct answer is: Property Damage Liability. EXPLANATION: Property damage coverage covers "loss of use." Therefore, the cost of the rental car would be covered. Question 45 of 100

Question 46

All of the following statements about the limits of insurance under the CGL policy are correct, EXCEPT: Answer Choices: Select the Correct Answer The "Damage to Premises Rented to You" limit applies to any direct damage the insured negligently causes to its rented building. The general aggregate limit does not apply to Products-Completed Operations claims. BI & PD Liability coverage claims are subject to the per occurrence limit. Medical Payments claims are subject to a limit per person. Question 46 of 100

Answer 46

Your answer: The general aggregate limit does not apply to Products-Completed Operations claims. is incorrect. The correct answer is: The "Damage to Premises Rented to You" limit applies to any direct damage the insured negligently causes to its rented building.. EXPLANATION: Damages to Premises Rented to You only extends to claims for damage to a leased building arising out of fire as a result of the insured's negligence. Question 46 of 100

Question 47

Adjusters have a relationship to the legal profession, and must exercise care to avoid the unauthorized practice of law. In California, the insurance code states that nothing in the code will be construed as entitling any person to practice law in the state, UNLESS: Answer Choices: Select the Correct Answer He/she is a licensed independent adjuster. He/she has graduated from an accredited law school. He/she is an active member of the State Bar of California. He/she is a licensed public adjuster. Question 47 of 100

Answer 47

Your answer: He/she is an active member of the State Bar of California. is correct. EXPLANATION: In California, the insurance code states that nothing in the code will be construed as entitling any person to practice law in the state, UNLESS he/she is an active member of the State Bar of California. Question 47 of 100

Question 48

Which of the following does not have to be included in the inspection report required to participate in the California Fair Access to Insurance Requirements (FAIR) Plan? ``` Answer Choices: Select the Correct Answer Structural inspection Condition of surrounding structures Occupancy features Photographs of the occupants ``` Question 48 of 100

Answer 48

Your answer: Photographs of the occupants is correct. EXPLANATION: According to the California Insurance Code (CIC 10093(b)), the inspection must include, but need not be limited to, pertinent structural and occupancy features as well as the general condition of the building and surrounding structures. A representative photograph of the property may be taken as part of the inspection. Question 48 of 100

Question 49

Under the commercial auto policy providing physical damage, which of the following offers the broadest coverage? ``` Answer Choices: Select the Correct Answer Comprehensive. Specified cause of loss. Named perils. Broad named perils. ``` Question 49 of 100

Answer 49

Your answer: Broad named perils. is incorrect. The correct answer is: Comprehensive.. EXPLANATION: Comprehensive coverage would be the broadest because it covers loss that is not defined as collision. The specified cause of loss is a named peril form and thus, is more limited. Question 49 of 100

Question 50

The verdict in a personal injury liability suit was higher than the insured’s underlying liability policy’s limit of insurance. In this situation: Answer Choices: Select the Correct Answer The insured, the insurance company providing the insured’s underlying policy and the company providing the insured’s umbrella policy must agree on an appeal and share the expenses of that appeal. Neither the insured’s underlying insurer nor the umbrella insurer may appeal without the insured’s agreement. The insurance company providing the insured’s umbrella liability policy can appeal the case at its own expense even if the insured and the company providing the underlying policy do not appeal. The case cannot be appealed by any of the parties. Question 50 of 100

Answer 50

Your answer: The insurance company providing the insured’s umbrella liability policy can appeal the case at its own expense even if the insured and the company providing the underlying policy do not appeal. is correct. EXPLANATION: The umbrella insurer has the option to appeal even though the underlying insurer and the insured chooses not to appeal. Question 50 of 100

Question 51

A licensed independent adjuster has received a written or oral request from the California Department of Insurance concerning a claim. How many days does this adjuster have to respond to the inquiry? ``` Answer Choices: Select the Correct Answer 30 days 15 working days 21 calendar days 10 calendar days ``` Question 51 of 100

Answer 51

Your answer: 15 working days is incorrect. The correct answer is: 21 calendar days. EXPLANATION: This adjuster must respond immediately, but no later than 21 calendar days from the date of the request. Question 51 of 100

Question 52

The manager of an independent adjusting company in California leaves the business. The Department of Insurance requires notification of the manager's departure within: ``` Answer Choices: Select the Correct Answer 10 days 30 days 60 days At license renewal ``` Question 52 of 100

Answer 52

Your answer: 30 days is correct. EXPLANATION: The Insurance Department must be advised within 30 days. Question 52 of 100

Question 53

The Earthquake Endorsement will provide coverage to the dwelling and/or personal property with the deductible stated as: Answer Choices: Select the Correct Answer $1,000 5% of the limit that applies to all Section I coverages. $500 $2,500 Question 53 of 100

Answer 53

Your answer: 5% of the limit that applies to all Section I coverages. is correct. EXPLANATION: The Earthquake Endorsement has a base deductible is 5% of the limit that applies to all Section I coverages, but never less than $500. Question 53 of 100

Question 54

Which of the following benefits is not provided by Workers Compensation? ``` Answer Choices: Select the Correct Answer Medical benefits Retirement benefits Disability benefits Death benefits ``` Question 54 of 100

Answer 54

Your answer: Retirement benefits is correct. EXPLANATION: For covered employees with work-related injuries, workers compensation laws provide medical, disability, and death benefits, as well as burial expenses. Retirement benefits are not provided. Question 54 of 100

Question 55

Which of the following policies would be used to cover imports and exports? ``` Answer Choices: Select the Correct Answer Ocean marine Personal Property General Liability Businessowners policy ``` Question 55 of 100

Answer 55

Your answer: Ocean marine is correct. EXPLANATION: Ocean marine pertains to import and export risk, including the cargo being shipped as well as the vessel transporting goods or people. Question 55 of 100

Question 56

The Ordinance or Law Endorsement can be added to a Homeowners form to increase the amount of coverage in ______ increments, up to ______ coverage. ``` Answer Choices: Select the Correct Answer 20% increments, up to 80% coverage. 25% increments, up to 100% coverage. 30% increments, up to 70% coverage. 15% increments, up to 95% coverage. ``` Question 56 of 100

Answer 56

Your answer: 25% increments, up to 100% coverage. is correct. EXPLANATION: Coverage for Ordinance or Law is already included on all Homeowners forms except the HO-8. The Ordinance or Law Endorsement can be attached to the form, increasing the coverage in 25% increments, up to 100% coverage. Question 56 of 100

Question 57

The Homeowner policy provides "worldwide" coverage for the personal property of the insured up to 100% of the personal property limit. Under the Homeowner policy, what is the exception to this worldwide coverage? Answer Choices: Select the Correct Answer Not covered in France Not covered while on a cruise ship Limited coverage when contained in self-storage facilities Not covered in a moving van Question 57 of 100

Answer 57

Your answer: Limited coverage when contained in self-storage facilities is correct. EXPLANATION: Property stored in self-storage facilities is limited to 10% of Coverage C or $1,000, whichever is greater, of the personal property limit. Question 57 of 100

Question 58

A payment bond is what type of instrument? ``` Answer Choices: Select the Correct Answer Financial Guarantee Bond Performance Bond Bid Bond Fidelity Bond ``` Question 58 of 100

Answer 58

Your answer: Financial Guarantee Bond is correct. EXPLANATION: A payment bond guarantees that bills for labor and materials will be paid by the contractor.

Question 59

The insured has a $1,000,000 personal umbrella policy with a $5,000 retention limit. For a $7,000 liability loss not covered under the insured's personal auto policy, but covered under the umbrella policy, the insurance company would pay: ``` Answer Choices: Select the Correct Answer $5,000. $3,000. $2,000. $1,000. ``` Question 59 of 100

Answer 59

Your answer: $2,000. is correct. EXPLANATION: The company will deduct the $5,000 retention limit and pay on the insured's behalf the sum of $2,000. The retention limit acts a deductible when a loss is covered by the umbrella policy but not under the underlying insurance. Question 59 of 100

Question 60

The insured carries a personal auto policy providing a bodily injury limit of $50,000 each person with a per accident injury limit of $100,000. He injures two occupants in another vehicle. Their injuries total $60,000 for Mr. Jones and $50,000 for Mrs. Jones. The insurance company spent $40,000 in defense and investigation costs. How much will the insured's policy pay? ``` Answer Choices: Select the Correct Answer $50,000 $100,000 $140,000 $110,000 ``` Question 60 of 100

Answer 60

Your answer: $100,000 is incorrect. The correct answer is: $140,000. EXPLANATION: The per person limit is $50,000. The most that can be paid for this claim is the $100,000 per accident injury limit plus the $40,000 to defend and investigate the claim. The costs to defend and investigate are supplementary coverages and are in addition to the policy limits. Question 60 of 100

Question 61

QUESTION: Which of the following claims would not be covered by the liability Section II of a Homeowner's Policy? Answer Choices: Select the Correct Answer The insured's neighbor files a claim for damage to his house caused by the named insured's dog. The named insured files a claim for damage to his house caused by his dog. An insured accidentally runs over his neighbor with a golf cart at the local country club. An insured's dog attacks and damages his neighbor's golf cart. Question 61 of 100

Answer 61

Your answer: The named insured files a claim for damage to his house caused by his dog. is correct. EXPLANATION: Section II is liability coverage while a claim for damage to a named insured's house is a property claim. Question 61 of 100 Submit

Question 62

On March 4, 2007, five people were injured at a department store. The store was negligent. Four of the people were injured very seriously and subsequently filed claims against the store’s primary and umbrella polices. But one man whose leg was injured said his injury wasn’t too bad, and he didn’t file a claim against the store at that time. However, in April of 2008, the man’s leg began to bother him, and he had trouble walking. He then saw a doctor and filed a claim for the injury. Since the department store is covered under an occurrence form of commercial umbrella liability policy, which was renewed in 2007, the claim: Answer Choices: Select the Correct Answer Will be covered by the 2007 Commercial Umbrella Liability policy. Will be covered by the 2008 Commercial Umbrella Liability policy. Will not be covered under either the 2007 or 2008 policies. Will be covered by both the 2007 and 2008 polices. Question 62 of 100

Answer 62

Your answer: Will be covered by the 2008 Commercial Umbrella Liability policy. is incorrect. The correct answer is: Will be covered by the 2007 Commercial Umbrella Liability policy. . EXPLANATION: The umbrella is written on the occurrence form and the policy that was in effect at the time of the bodily injury would cover the claim Question 62 of 100

Question 63

All of the following are exclusions under Equipment Breakdown coverage, EXCEPT: ``` Answer Choices: Select the Correct Answer Sudden and accidental loss. Fire losses. Flood. Wear and tear. ``` Question 63 of 100

Answer 63

Your answer: Sudden and accidental loss. is correct. EXPLANATION: The Equipment Breakdown policy covers sudden and accidental loss. It can be modified to cover indirect loss (loss of income) as a result of a direct loss. The commercial property forms would cover a fire loss as a result of a boiler explosion since this would be an ensuing loss. Question 63 of 100

Question 64

When can an adjuster in California use a fictitious name while conducting business? Answer Choices: Select the Correct Answer Never When authorized by the Commissioner to do so When it does not conflict with another’s name in the same business Anytime Question 64 of 100

Answer 64

Your answer: When authorized by the Commissioner to do so is correct. EXPLANATION: No licensee may conduct a business under a fictitious or other business name unless and until he or she has obtained the written authorization of the Commissioner to do so. Question 64 of 100

Question 65

Rudy, a licensed California independent adjuster, has received a letter from a claimant requesting information about a claim. Rudy is required to respond within: ``` Answer Choices: Select the Correct Answer 30 calendar days. 15 working days. 15 calendar days. 10 days. ``` Question 65 of 100

Answer 65

Your answer: 15 working days. is incorrect. The correct answer is: 15 calendar days.. EXPLANATION: Upon receiving any communication from a claimant, regarding a claim, that reasonably suggests that a response is expected, every licensee must immediately, but in no event more than 15 calendar days after receipt of that communication, furnish the claimant with a complete response based on the facts as then known by the licensee. Question 65 of 100

Question 66

Coverage E -- Personal Liability of the standard Homeowners policies covers the insured for all of the following, EXCEPT: ``` Answer Choices: Select the Correct Answer Business activities. Personal activities. Residence activities. Acts of residence employees. ``` Question 66 of 100

Answer 66

Your answer: Personal activities. is incorrect. The correct answer is: Business activities.. EXPLANATION: Coverage E -- Personal Liability coverage under a Homeowners policy does not apply to business activities. Certain business activities can be covered by endorsement. Question 66 of 100

Question 67

In the event of an emergency situation, a non-licensed independent adjuster must register with the Commissioner within: ``` Answer Choices: Select the Correct Answer 48 hours. 30 days. 7 working days. 15 working days. ``` Question 67 of 100

Answer 67

Your answer: 7 working days. is incorrect. The correct answer is: 15 working days.. EXPLANATION: In the event of an emergency situation as declared by the Commissioner, claims arising out of the emergency, catastrophe, disaster, or other similar occurrence may be adjusted by a non-licensed adjuster upon registration with the Commissioner. Registration must occur within 15 working days. Question 67 of 100

Question 68

Collin suffered a work-related injury on the morning of February 5th and was off work completely until he returned to work on full duty on February 19th. Collin had worked for his employer for four years and was paid $42,125 per year. Collin's state sets the TTD rate at 66 2/3rd percent of the average weekly wage. The state sets the maximum compensation rate at $420 per week and the waiting period at 3 days retroactive after 10 days. Collin was not paid for working on February 5th, so how many days of TTD compensation is Collin entitled to receive? ``` Answer Choices: Select the Correct Answer 10 11 14 15 ``` Question 68 of 100

Answer 68

Your answer: 14 is correct. EXPLANATION: Collin is entitled to 14 days of TTD compensation payments. February 5th would be a day he was paid by compensation, but the 19th he would be paid his regular wages because he returned to work that day. 19 minus 5 days is 14 days. Question 68 of 100

Question 69

A building valued at $500,000 is insured at $300,000 on a policy containing an 80% coinsurance clause. How much would be paid on a covered $200,000 loss? ``` Answer Choices: Select the Correct Answer -0- $150,000 $160,000 $200,000 ``` Question 69 of 100

Answer 69

Your answer: $160,000 is incorrect. The correct answer is: $150,000. EXPLANATION: The answer is $150,000. Per the coinsurance clause, the required amount of insurance is 80% of $500,000, which equals $400,000. However, the insured’s limit of $300,000 is only ¾ of the insurance required. That same fraction, ¾, is applied to the loss amount. ¾ of $200,000 is $150,000. Thus there is a “coinsurance penalty” of ¼ of the loss, or $50,000. Question 69 of 100

Question 70

"Sinkhole collapse" is a peril covered under which of the following ISO Commercial Property Cause of Loss forms? ``` Answer Choices: Select the Correct Answer The Basic, Broad and Special forms. The Broad only. The Broad and Special only. The Special only. ``` Question 70 of 100

Answer 70

Your answer: The Basic, Broad and Special forms. is correct. EXPLANATION: Even the Basic Form provides this coverage. Question 70 of 100

Question 71

A "full release settlement" when properly prepared, should include: Answer Choices: Select the Correct Answer The name of the attorney of record. The name of the insurance company. The names of the releasee and releasor. The name of the adjuster resolving the claim. Question 71 of 100

Answer 71

Your answer: The names of the releasee and releasor. is correct. EXPLANATION: Both the full legal names of the releasee and the releasor should be included in a release of all claims. Question 71 of 100

Question 72

A non-residential building in Iowa in a community that was admitted to the NFIP Emergency Program would be provided _______ of coverage for the building. ``` Answer Choices: Select the Correct Answer $50,000 $150,000 $100,000 $35,000 ``` Question 72 of 100

Answer 72

Your answer: $150,000 is incorrect. The correct answer is: $100,000. EXPLANATION: A commercial building in Iowa that is located in a community that was admitted to the NFIP Emergency Program would be provided $100,000 of coverage for the building. Question 72 of 100

Question 73

The Homeowners "Additional Residence Rented to Others" endorsement will provide coverage for an additional structure, used as a residence, that is rented by the insured as a: ``` Answer Choices: Select the Correct Answer A one-family dwelling. A two-family dwelling. A one to four-family dwelling. A one to two-family dwelling. ``` Question 73 of 100

Answer 73

Your answer: A one to four-family dwelling. is correct. EXPLANATION: The Homeowners "Additional Residence Rented to Others" endorsement provides coverage for an additional structure, used as a residence, for one to four families. Question 73 of 100 Submit

Question 74

A large tree has fallen into Paul's yard caused by wind. The claims service representative (CSR) advises Paul to call a contractor to remove the tree and send the bill to the insurance company. The bill is $1,200. However, the policy coverage for the debris removal of a tree that has fallen by wind, is only $500 unless the tree hits the house, which was not the case. What should the adjuster do? Answer Choices: Select the Correct Answer Pay only $500. Pay the $1,200. Pay the $1,200, but then explain the policy provisions and ask to insured to reimburse the insurer for the difference. Negotiate. Question 74 of 100

Answer 74

Your answer: Pay the $1,200. is correct. EXPLANATION: The consumer relied on the statements of the claims representative so the insurance company would be estopped from denying the claim. The insurer had already waived its right to deny full payment of the claim because of the statements of the claims representative. Therefore, the $1,200 should be paid. Question 74 of 100

Question 75

Which of the following types of property would be included under Coverage A of a Building and Personal Property Coverage form? I. A central air-conditioning system. II. Wall-to-wall carpeting. III. Permanently installed intercom system. IV. Fire extinguishers. ``` Answer Choices: Select the Correct Answer I, II, III, and IV I and III only I and II only I, II, and III only ``` Question 75 of 100

Answer 75

Your answer: I, II, III, and IV is correct. EXPLANATION: While the coverage is intended for permanent fixtures and equipment attached to the covered building, it also includes personal property used to maintain or service the premises or fixtures, such as fire extinguishers. Question 75 of 100

Question 76

All of the following are sections of a CGL form, EXCEPT: ``` Answer Choices: Select the Correct Answer Conditions Definitions Prior Acts coverage Who is an insured ``` Question 76 of 100

Answer 76

Your answer: Prior Acts coverage is correct. EXPLANATION: Although wording in the policy could exclude coverage for prior acts and events that happened prior to the policy, that is not a section of the policy. The other three choices are all separate sections of the CGL. Question 76 of 100

Question 77

The plumbing in Mrs. Jones' home suddenly burst and the ceilings were damaged by water. All of the following Homeowners forms would cover the loss, EXCEPT an: ``` Answer Choices: Select the Correct Answer HO-2 form. HO-8 form. HO-3 form. HO-5 form. ``` Question 77 of 100

Answer 77

Your answer: HO-5 form. is incorrect. The correct answer is: HO-8 form.. EXPLANATION: All HO forms (except the HO-8) cover "Accidental Discharge or Overflow of Water or Steam" from a plumbing, heating, air conditioning, or fire protective sprinkler system or from within a household appliance. Question 77 of 100

Question 78

Garagekeepers specified causes of loss coverage would apply to each of the following, EXCEPT: ``` Answer Choices: Select the Correct Answer Fire. Vandalism. Theft. Windstorm. ``` Question 78 of 100

Answer 78

Your answer: Windstorm. is correct. EXPLANATION: Specified causes of loss are named peril coverage for physical damage and are not nearly as broad as comprehensive coverage. Windstorm happens to not be one of the named perils. Question 78 of 100

Question 79

The theft of money and securities is automatically covered under which of the coverages listed below? Answer Choices: Select the Correct Answer Inside the Premises - Theft of Money and Securities. Robbery and Safe Burglary. Premises Burglary. Business Burglary. Question 79 of 100

Answer 79

Your answer: Inside the Premises - Theft of Money and Securities. is correct. EXPLANATION: Robbery and safe burglary, as well as premises burglary require signs of forcible entry or exit. Theft does not. Remember theft is the broadest definition of criminal activity. Question 79 of 100

Question 80

How many days does the liberalization clause provide for under the ISO standard BOP policy form prior to, or during the policy period? ``` Answer Choices: Select the Correct Answer 55 days 30 days 45 days 35 days ``` Question 80 of 100

Answer 80

Your answer: 30 days is incorrect. The correct answer is: 45 days. EXPLANATION: The policy reads, "If we adopt any revision that would broaden the coverage under this policy without additional premium within forty-five days prior to or during the policy period, the broadened coverage will immediately apply to this policy." Question 80 of 100

Question 81

Which of the following is the correct description of the medical expenses limit in the liability section of the Businessowners policy? ``` Answer Choices: Select the Correct Answer Per accident Per person, per occurrence Per incident Per location, per occurrence ``` Question 81 of 100

Answer 81

Your answer: Per person, per occurrence is correct. EXPLANATION: Medical payments under the BOP are based on "per person, per occurrence." The time limit to submit a "medical payments" claim under a BOP policy is one year from the date of the injury. Question 81 of 100

Question 82

A public adjuster represents the interest of: ``` Answer Choices: Select the Correct Answer The insurer The insured The employer The interest of the general public ``` Question 82 of 100

Answer 82

Your answer: The insured is correct. EXPLANATION: The public adjuster represents the interests of the insured and not the insurer. Question 82 of 100

Question 83

What coverage is provided under the BOP for a steam boiler explosion? Answer Choices: Select the Correct Answer The steam boiler itself is covered. The steam boiler and the damage to the building and contents are covered. Steam boiler explosions are excluded under the BOP. A separate limit is provided under the BOP for steam boiler explosions. Question 83 of 100

Answer 83

Your answer: The steam boiler and the damage to the building and contents are covered. is incorrect. The correct answer is: Steam boiler explosions are excluded under the BOP.. EXPLANATION: Steam boiler explosions are excluded under the Businessowners policy. Separate equipment breakdown coverage is required to cover steam boiler explosions. Question 83 of 100

Question 84

When an HO-3 is issued with a $75,000 dwelling limit on a one-family dwelling, what is the automatic amount of insurance on Other Structures? ``` Answer Choices: Select the Correct Answer $15,000 $75,000 $7,500 $37,500 ``` Question 84 of 100

Answer 84

Your answer: $7,500 is correct. ``` EXPLANATION: Other Structures (Coverage B) are automatically covered for 10% of the limit that applies to the dwelling. Insureds can request higher limits if the other structures on their premises are worth more than 10% of the dwelling limit. ``` Question 84 of 100

Question 85

A Commercial Package Policy (CPP) always includes: I. A single Declarations page common to all coverages. II. A single Conditions section common to all coverages. III. A single Exclusions section common to all coverages.

Answer 85

Your answer: I, II and III is incorrect. The correct answer is: I and II only. EXPLANATION: A Commercial Package Policy (CPP) always includes a common Declarations page and Conditions section. It does not include a common Exclusions section, as the items excluded would be specific to the coverage part. Question 85 of 100

Question 86

Which of the following is NOT a claim settlement option for liability claims? ``` Answer Choices: Select the Correct Answer Excessive amounts claimed. Lost wages claimed. Loss of Use. Disfigurement. ``` Question 86 of 100

Answer 86

Your answer: Excessive amounts claimed. is correct. EXPLANATION: Excessive amounts claimed are always contested by the insurer. Liability losses are categorized as "special damages"or "general damages." Special damages include medical expenses and loss of wages or the costs of other known expenses. General damages would include pain and suffering, punitive damages, loss of consortium, disfigurement and disability claims. Question 86 of 100

Question 87

When an insured suffers a property loss, he or she is obligated by the terms of the policy to do all of the following, EXCEPT: Answer Choices: Select the Correct Answer Separate the damaged from the undamaged property. Mitigate the loss. Produce books and records relevant to the claim. Hire a public adjuster to represent them in the claims process. Question 87 of 100

Answer 87

Your answer: Hire a public adjuster to represent them in the claims process. is correct. EXPLANATION: The insured is not obligated to employ a 'public adjuster" to assist in the claim against the insurance company. It is an option on the part of the insured. Question 87 of 100 Submit

Question 88

Which of the following is NOT a correct statement in determining the cost of a "comparable automobile" when a physical damage loss has a occurred? Answer Choices: Select the Correct Answer When comparable automobiles are available or were available in the local market area in the last 90 days, the average cost of two or more comparable automobiles. The cost of a comparable automobile as determined by a computerized automobile valuation service that produces statistically valid fair market values within the United States market. When comparable automobiles are not available or were not available in the local market area in the last 90 days, the average of two or more quotations from two or more licensed dealers in the local market area. If not possible to determine the value using standard methods of value determination, the cost of a comparable automobile shall otherwise be supported by documentation and fully explained to the claimant. Question 88 of 100

Answer 88

Your answer: If not possible to determine the value using standard methods of value determination, the cost of a comparable automobile shall otherwise be supported by documentation and fully explained to the claimant. is incorrect. The correct answer is: The cost of a comparable automobile as determined by a computerized automobile valuation service that produces statistically valid fair market values within the United States market. . EXPLANATION: The computerized method must use values that are fair market values in the local market area. Question 88 of 100

Question 89

In a work-related injury, the loss of a finger would be characterized as what type of disability? ``` Answer Choices: Select the Correct Answer Permanent total Permanent partial Temporary total Temporary partial ``` Question 89 of 100

Answer 89

Your answer: Permanent partial is correct. EXPLANATION: Loss of a finger or limb is defined as a permanent partial injury, and this characterization is used for the establishment of disability benefits to the injured employee. Question 89 of 100

Question 90

Which of the following may cancel a Commercial Package Policy? Answer Choices: Select the Correct Answer The first named insured Any named insured The agent of record None of the responses listed are correct Question 90 of 100

Answer 90

Your answer: The first named insured is correct. EXPLANATION: The first named insured as well as the insurer may cancel a Commercial Package Policy. Question 90 of 100

Question 91

Faulty wiring causes a fire that destroys an insured's home. In insurance terms, the faulty wiring is called a: ``` Answer Choices: Select the Correct Answer Risk Hazard Peril Danger ``` Question 91 of 100

Answer 91

Your answer: Hazard is correct. EXPLANATION: The faulty wiring would be called a hazard. A hazard is something that increases the probability of loss. Question 91 of 100

Question 92

Flood coverage can be purchased under the Commercial Property policy using endorsement CP 10 65, if the property is eligible. If this Commercial Property endorsement is purchased and the property is already covered under a flood policy from the National Flood Insurance Program, then the coverage under this endorsement is considered to be: ``` Answer Choices: Select the Correct Answer Primary Excess over the NFIP maximum limits Pro-rata with the NFIP policy Not applicable ``` Question 92 of 100

Answer 92

Your answer: Excess over the NFIP maximum limits is correct. EXPLANATION: If a NFIP policy is in force or was eligible for purchase at the time the commercial property policy was endorsed for flood coverage, then the endorsement becomes excess coverage over the NFIP policy maximum limits. Question 92 of 100

Question 93

Under the HO-3 form there is no coverage for loss resulting from "earth movement" except when endorsed by which of the following? ``` Answer Choices: Select the Correct Answer Earthquake endorsement. Volcanic eruption endorsement. Collapse endorsement. Explosion endorsement. ``` Question 93 of 100

Answer 93

Your answer: Earthquake endorsement. is correct. EXPLANATION: An insured may add earthquake as an insured peril for Coverages A, B and C by adding the earthquake endorsement. This endorsement defines as a "single earthquake" all earthquake shocks occurring within a 72-hour period. The peril of earthquake is defined to include land shock waves or tremors accompanying a volcanic eruption. Question 93 of 100

Question 94

In crime insurance, which of the following individuals is NOT considered to be a custodian? ``` Answer Choices: Select the Correct Answer Janitor Employee Partner Insured ``` Question 94 of 100

Answer 94

Your answer: Janitor is correct. EXPLANATION: A janitor would not fit the definition of a custodian and would not have custody of the insured property. Only the insured, employee or partner fits into this position. A night watch person also would not be a custodian. Question 94 of 100

Question 95

What is the purpose of the California Fair Access to Insurance Requirements (FAIR) Plan? Answer Choices: Select the Correct Answer To guarantee low cost property insurance to residents of California. To train agents in the solicitation and selling of property insurance. To monitor property insurance rates throughout California. To assure the availability of property insurance to those who are unable to obtain it through the normal insurance market. Question 95 of 100

Answer 95

Your answer: To assure the availability of property insurance to those who are unable to obtain it through the normal insurance market. is correct. EXPLANATION: According to the California Insurance Code (CIC 10090), the purpose of the FAIR Plan is to assure availability of basic property insurance to those who cannot obtain coverage through the normal insurance market. Question 95 of 100

Question 96

Under the HO-4, which of the following are covered? Answer Choices: Select the Correct Answer The house. A detached garage. The insured's contents and personal liability. Excess jewelry coverage. Question 96 of 100

Answer 96

Your answer: The insured's contents and personal liability. is correct. EXPLANATION: The HO-4 is designed for apartment dwellers or those who live in a rented dwelling. Since they don't own the structures, no coverage is needed to cover the real property. Question 96 of 100

Question 97

The methods of financing workers' compensation benefits include voluntary private insurance, excess insurance, qualified self-insurance plans, insurance through state funds, and: ``` Answer Choices: Select the Correct Answer Federal insurance programs. Assumption of the risk. Federal employer assistance programs. Insurance through assigned risk plans. ``` Question 97 of 100

Answer 97

Your answer: Assumption of the risk. is incorrect. The correct answer is: Insurance through assigned risk plans.. EXPLANATION: Assigned risk plans are state plans to assist employers with financing workers' compensation benefits. Question 97 of 100

Question 98

The type of auto body frame that is most often used in today's automobile and is a single molded unit, is known as: ``` Answer Choices: Select the Correct Answer A universal frame. A subframe. A conventional frame. A unibody frame. ``` Question 98 of 100

Answer 98

Your answer: A universal frame. is incorrect. The correct answer is: A unibody frame.. EXPLANATION: A unibody frame is a single molded unit to which the other structures of the automobile are welded. Question 98 of 100

Question 99

How soon must a change in the qualified manager of an adjusting firm be reported to the California Department of Insurance? ``` Answer Choices: Select the Correct Answer Within one year Within 30 days Immediately Does not have to be reported ``` Question 99 of 100

Answer 99

Your answer: Within 30 days is correct. EXPLANATION: A change in the qualified manager, branch manager, officer or partner must be reported to the DOI within 30 days of the change. Question 99 of 100

Question 100

Jonathan, a licensed California independent adjuster, has received a notice of claim from an insured. How soon must is he transmit this notice to the insurer? ``` Answer Choices: Select the Correct Answer Within 5 calendar days Within 10 calendar days Within 21 calendar days Immediately ``` Question 100 of 100

Answer 100

Your answer: Immediately is correct. EXPLANATION: Upon receiving notice of claim, every licensee or claims agent must immediately transmit notice of claim to the insurer. Failure of the licensee or claims agent to immediately transmit notice of claim to the insurer will constitute a separate and distinct violation of California Insurance Code Question 100 of 100