Practice Exam Questions I Flashcards
If an adjusting firm intends to add a new branch office in California, what action must be taken to comply with the state insurance code?
Answer Choices: Select the Correct Answer
Report the new location to the Commissioner immediately.
Report the new location within 30 days.
Must first obtain a branch office certificate.
No action needs to be taken.
The correct answer is: Must first obtain a branch office certificate.
EXPLANATION:
Adjusters cannot conduct business from any location other than that shown on the records of the Commissioner as his/her place of business unless he or she has received a branch location certificate for that location.
Under which of the following scenarios would damage to a watercraft be covered under a Homeowners policy?
Answer Choices: Select the Correct Answer
The insured’s covered watercraft is located in an storage facility with three walls surrounding it, and excessive wind enters the facility and causes damage to the boat.
The insured’s covered watercraft is located in an enclosed building, but the wind blows off the roof and rain enters the boat and ruins the dashboard.
The insured’s covered watercraft is stored in the insured’s garage, the insured leaves the garage door up and a large thunderstorm comes through the area, causing water and wind damaged to the boat.
The insured’s covered watercraft was damaged while tied to the insured’s dock when large waves bring water into the boat and ruin the dashboard.
The correct answer is: The insured’s covered watercraft is located in an enclosed building, but the wind blows off the roof and rain enters the boat and ruins the dashboard.
EXPLANATION:
Watercraft is covered under a Homeowners policy for the perils of “windstorm or hail” but only if the boat is located inside a fully enclosed building when the damage occurs.
Part One of the NCCI standard workers’ compensation policy specifies the:
Answer Choices: Select the Correct Answer
The schedule showing the dollar limit of the policy coverage.
Amount of coverage that federal programs will pay.
Statutory provisions of the policy.
The schedule showing the dollar amount paid for exemplary damages.
Statutory provisions of the policy. is correct.
EXPLANATION:
Part One of the standard workers’ compensation policy specifies the statutory (state-specific) provisions of the policy.
Temporary total disability benefits are paid under which section of the NCCI standardized workers’ compensation policy?
Answer Choices: Select the Correct Answer
Part Two.
Part Four.
Part One.
Part Three.
Part One. is correct.
EXPLANATION:
Part One of the standardized workers’ compensation policy is the part of the policy where you will find the statutory benefits paid. Temporary total disability benefits are statutory benefits.
Which of the following statements BEST describes how coverage will apply under a Commercial General Liability policy when a product is manufactured in the United States and a claim occurs in Italy?
The correct answer is: The policy will pay the claim but only if the lawsuit is brought within the policy’s coverage territory.
An insured has his dwelling covered under a DP-2 policy. A 100-year snow storm hit the area where his covered dwelling is located and the weight of the ice and snow caused the roof to cave in. This caused extensive damage to the roof, the personal property inside the dwelling, the foundation of the home, the walkway leading to the outdoor swimming pool, and the pool itself. Which of the following damaged property would be covered by the policy?
Answer Choices: Select the Correct Answer
The roof and the personal property located inside the covered dwelling.
The roof and the foundation of the home. All other damaged items are specifically excluded.
The roof, personal property, and swimming pool. The foundation of the home and the walkway are excluded.
The roof, the foundation, and the walkway are all covered as part of the structure.
The correct answer is: The roof and the personal property located inside the covered dwelling.
EXPLANATION:
The roof and the personal property inside the home are covered. All the other answer choices include items that are specifically excluded under the broad form peril “Weight of Ice, Snow or Sleet”.
Under a standardized Identity Fraud Expense endorsement, what is the maximum amount that will be paid, PER DAY, for lost income?
Answer Choices: Select the Correct Answer
$250
$500
$200
$150
The correct answer is: $200
EXPLANATION:
The maximum amount that will be paid for the income lost for time taken to meet with law enforcement officials, or to complete affidavits is $200.
Which of the following coverages is included as “no-fault” coverage on the standardized Personal Auto policy?
The correct answer is: Medical Payments and Physical Damage.
EXPLANATION:
Part B - Medical Payments and Part D - Physical Damage coverage are both “no-fault” coverages provided by the standardized Personal Automobile policies.
The insuring agreement of a Personal Umbrella policy provides coverage for all of the following, EXCEPT:
Answer Choices: Select the Correct Answer
Personal injury damages for which the insured is legally liable for personal injury in excess of the retained limit.
Damages for which the insured is legally liable for bodily injury and property damage in excess of the retained limit.
Postjudgment interest that accrues after the entry of a judgment.
Defense costs in addition to the policy limits.
The correct answer is: Postjudgment interest that accrues after the entry of a judgment.
EXPLANATION:
Postjudgment interest is NOT covered under the insuring agreement of a Personal Umbrella policy.
All of the following statements are TRUE regarding an interline endorsement used in a Commercial Package policy (CPP), EXCEPT:
Answer Choices: Select the Correct Answer
It can apply to one or more coverage parts.
It may be a mandatory endorsement.
It may be an optional endorsement.
It can apply to two or more coverage parts.
The correct answer is: It can apply to one or more coverage parts.
EXPLANATION:
Interline endorsements are used in the CPP to simplify coverages and conditions among many different forms and apply only to two or more coverage parts.
Corinne has submitted her California Adjuster license application and fee. Now, she is required to pay the fee for an original license. The amount of this fee is:
The correct answer is: $188.
EXPLANATION:
The fee for the original license fee is $188.
Farmer Alex has his credit card stolen while he is at the farmer’s market one day. The thief charges $2,000 to the card before Alex can cancel the card. Which of the following statements best describes how Alex’s loss would be covered under his Farm Property policy?
The correct answer is: His loss would be covered under the additional coverages.
EXPLANATION:
Alex’s loss would be covered under the Additional Coverage - Credit Card and Electronic Fund Transfer Cards or Other Access Devices; Forgery; or Counterfeit Currency.
In California, for an injured employee to receive temporary disability workers compensation for the first three days of disability, the disability period must extend beyond:
The correct answer is: 14 days.
EXPLANATION:
Total disability compensation for the first three days of disability is not payable unless the disability continues for more than 14 days.
Gavin, the named insured under a Personal Auto policy, his daughter Tabitha, and two of her friends are riding in the covered auto when Gavin accidentally runs a stop sign, striking another vehicle. Everyone in Gavin’s vehicle was injured as well as the driver and two passengers in the other car. How long do Tabitha’s friends have to submit their medical expense claims for coverage under Part B of Gavin’s standardized Personal Auto policy?
Answer Choices: Select the Correct Answer
Within six months of the date of the accident.
Within two years of the date of the accident.
Within three years of the date of the accident.
Within 18 months of the date of the accident.
The correct answer is: Within three years of the date of the accident.
EXPLANATION:
Reasonable medical and funeral expenses will be paid under Part B - Medical Payments if they are submitted within three years of the date of the accident.
Which of the following statements is TRUE regarding the “Indentity Fraud Expense” endorsement to a Homeowners policy?
Answer Choices: Select the Correct Answer
It provides $5,000 to cover the expenses incurred as the direct result of any one “identity fraud” event first discovered during the policy period.
It provides $15,000 to cover the expenses incurred as the direct result of any number of “identity fraud” events occurring during the policy period.
It provides $5,000 to cover the expenses incurred as the direct result of any number of “identity fraud” events occurring during the policy period.
It provides $15,000 to cover the expenses incurred as the direct result of any one “identity fraud” event first discovered during the policy period.
The correct answer is: It provides $15,000 to cover the expenses incurred as the direct result of any one “identity fraud” event first discovered during the policy period.
EXPLANATION:
The Identity Fraud Expense endorsement provides $15,000 to cover the expenses incurred as the direct result of any one “identity fraud” event first discovered during the policy period.