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Texas Claims Adjuster Licensing > State Exam Review > Flashcards

State Exam Review Flashcards

0
Q

What are the required amount of CE credit and in what timeframe?

A

30 hours and 2 years

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1
Q

What are the duties of the Commissioner?

A

Administer, enforce, carry out the insurance code

Determines TDI policy, adopts rules, hears appeals

Some examples:
Suspend or cancel license of any agent for cause
Examine the records of any insurance company at any time
Examine the records of ant licensed agent at any time

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2
Q

What is the grace period to renew your license?

A

90 days

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3
Q

Who does the agent represent?

A

Insurance company

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4
Q

Who does a broker represent?

A

Policyholder

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5
Q

What type of agent must be appointed by an insurance company?

A

PCA

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6
Q

What can only a PCA do?

A

Sign a policy

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7
Q

3 things the Property and Casualty Guaranty Fund wii pay

A
  • Up to $25,000 of unearned premium
  • $300,000 of any claim other than workers compensation
  • 100% of workers compensation claims
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8
Q

What can be issued if a person participates in Unfair Trade Practices?

A

Cease and desist order

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9
Q

Deceptive Trade Practices Act, what is it unlawful for a consumer to do?

A

Drop charges filed against agent unless they have $5,000,000 in assets

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10
Q

What is twisting?

A

Making misleading comparisons

Incomplete comparisons

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11
Q

If an agent knowingly commits Unfair Trade Practices, the damages may be

A

Tripled

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12
Q

Define Fair Credit Reporting Act

A

Protects consumers right to privacy.

If insurance is denied, the reason why and the credit reporting agency contact information.

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13
Q

What is a peril?

A

The event that causes the loss

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14
Q

Domestic insurer

A

Operating in the state it is domiciled in

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15
Q

Foreign insurer

A

An insurer domiciled in another state

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16
Q

Alien insurer

A

An insurer domiciled in another country

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17
Q

What is the difference between admitted and non-admitted companies?

A 
Admitted
Overseen by TDI
Regulated
Has a COA
Must maintain financial responsibility

Non-admitted
Not regulated
Overseen by stamping office
Surplus lines

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18
Q

Concealment

A

Failure to disclose a known truth

Omission

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19
Q

What type of insurance can only be purchased through a government insurance program?

A

Flood

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20
Q

What are the reasons to cancel midterm on a PAP?

A

Nonpayment of premium
Fraudulent claims
Suspension or revocation of drivers license

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21
Q

What are the reasons to cancel a Homeowners policy midterm?

A

Nonpayment of premium
Fraudulent claims
Increase in hazard

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22
Q

Explain PAP 10/10/30?

A

10 days notice for new business
10 days notice for nonpayment
30 days notice for non renewal

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23
Q

Explain 10/10/60 for BAP

A

10 days new business
10 days non payment
60 days for non-renewal

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24
Q

What percentage of the home’s value must be insured in order to receive replacement costs?

A

80%

If not, you will get ACV

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25
Q

What is coverage E on a Texas Dwelling policy?

A

Additional living expenses

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26
Q

What form is Coverage E on Texas Dwelling policy provided on and what is the amount?

A

Coverage E
20% of Coverage A

DP2 and DP3

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27
Q

What is always excluded for trees/shrubs/plants?

A

Wind

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28
Q

Can domestic servants file against HO liability?

A

Yes

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29
Q

Can domestic servants file a Workers Compensation claim?

A

No

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30
Q

What items are not covered for damage by wind or hail on a HO policy?

A

Antennas, greenhouses, cloth awnings, satellite dishes

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31
Q

What is vacancy and what is important around the timeframe?

A

Vacancy is no tenants or contents

After 60 days, voids or limits coverage

Is going to void those loses that could of been limited if not vacant such as sprinkler damage, vandalism, water damage, glass breakage, theft

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32
Q

Under Homeowners Policies what is not covered off premises?

A 
Boats
Trailers
Campers
Watercraft 
Building materials 
Property at secondary residence
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33
Q

What is necessary to qualify for a Homeowners policy?

A

You must own and occupy the structure to qualify

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34
Q

On homeowners policies, what is the maximum limit for Coverage B?

A

This is detached structures

10% of Coverage A

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35
Q

What is the standard deductible on HO2, HO3, HO5?

A

1% of Coverage A

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36
Q

What is this the basic limit of liability on Homeowners policies?

A

E - BI & PD $100,000 per occurrence

F - Med Pay $1,000 per person

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37
Q

What is the difference between HO2 valuation and HO3/HO5?

A

HO2 is ACV

HO3/HO5 is replacement

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38
Q

What is the statue of limitations for Medical Payments on homeowners policy?

A

3 years

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39
Q

Under PAP, what constitutes as a “your covered auto”?

A

Vehicle listed in declarations
Trailer owned by insured
Newly acquired additional vehicle (coverage ends after 30 days)
Newly acquired replacement vehicle (coverage drops to liability after 30 days)
Vehicle or trailer used as a temporary substitute due to breakdown, repair, servicing or loss of covered auto.

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40
Q

What must be true in order to file a UM claim?

A

You cannot be at fault

The other person doesn’t have insurance or enough insurance
Hit and run
Other insurance company is insolvent or doesn’t pay claim

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41
Q

How much notice must be given to a non-renewal on a PAP?

A

30 days for PAP nonrenew

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42
Q

How much notice must be given on a PAP for non-payment?

A

10 days for non-payment

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43
Q

What is TE and what are the max amount payable for expenses?

A

Transportation Expenses
Is a coverage extension for comprehensive (other than collision)
Gives $20 a day $600 a month for total theft of vehicle
Waiting period is 48 hours
Must notify police
Only for private passenger vehicles

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44
Q

What is the policy territory for PAP?

A

United States and its territories, Canada and Puerto Rico

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45
Q

What vehicles are ineligible for a PAP?

A

Less than 4 wheels

Vehicle used for business

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46
Q

Collision with an animal is covered by what coverage?

A

Either collision or comprehensive

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47
Q

Damage to a rental car is covered by what coverage?

A

Liability - Property Damage (you damaged someone’s property)

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48
Q

What coverage must be rejected in writing on a PAP?

A

PIP/Med

Uninsured/ under insured

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49
Q

What is the minimum PAP coverage?

A

30/60/25

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50
Q

What two forms are required to have a Commercial Property policy?

A

Cause of loss

Coverage

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51
Q

What does the standard pollution policy specifically cover?

A

Is the only way to cover clean up

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52
Q

What are two exclusions to Employee Dishonesty?

A

Inventory losses

Employer not knowing about a previous dishonest act

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53
Q

Medical payments for CGL must be incurred within what timeframe?

A

1 year

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54
Q

How much coverage is Medical payments on CGL?

A

$5,000 per person

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55
Q

What is the coverage and timeframe for medical payments for TBOP?

A

1 year

$5,000

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56
Q

What is the coverage and timeframe for medical payments for Auto?

A

$500

3 years

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57
Q

What is the timeframe in order to have Boiler and Machinery paid out in replacement value?

A

18 months

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58
Q

What is open cargo form?

A

Provides continuous coverage until canceled

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59
Q

What is the basic deductible for Commercial Property?

A

$250

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60
Q

What is the basic deductible for TBOP?

A

$500

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61
Q

What are some examples of Supplemental Payments?

A

Defense costs
Premium bonds
Loss of earnings if required to be in court

These are in addition to other coverages

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62
Q

What Commercial Property Policy loss form covers theft?

A

Special

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63
Q

What TBOP loss form covers theft?

A

Broad & special

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64
Q

What 6 categories of businesses qualify for a TBOP?

A 
Apartments
Self-storage
Trade contractors 
Offices
Restaurants
Mercantile
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65
Q

What is specifically excluded on a TBOP?

A

Money & Securities

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66
Q

What is the advantage of insuring property with a Special form?

A

Covers All Risks perils

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67
Q

For both Commercial Property Policies and TBOP, what is not covered after 60 days of vacancy?

A 
Sprinkler leakage
Vandalism
Water damage
Glass breakage 
Theft
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68
Q

What are the coverage extensions for Commercial Property policies?

A

Newly acquired building (30 days)
Newly acquired personal property on premises (30 days)
Personal property off premises (30 days)
Personal effects of employees and others
Valuable papers
Outdoor property including signs
$250 per plant, tree, shrub
Glass breakage $100 per pane, $500 per occurrence

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69
Q

What are the 3 reasons to deny a WC claim?

A

Employee created an occasion to be hurt by performing actions not part of job

Injury or death by willful intention

Intoxication on job causing harm to employee (employer did not know)

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70
Q

Is workers compensation in Texas elective or compulsory?

A

Workers compensation in Texas is elective

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71
Q

Who are beneficiaries of Texas Workers Compensation?

A

Spouse till death or remarriage

Children till 18 or 25 if in college

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72
Q

What happens to the money if someone doesn’t have children or spouse (beneficiaries)?

A

Death benefits are paid to the subsequent injury fund if there are no beneficiaries.

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73
Q

What is the minimum number of employees needed to qualify for Texas Workers Compensation?

A

1 employee

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74
Q

Who does the Jones Act protect?

A

Master and crew of vessels

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75
Q

Define extraterrestrial benefits/ clause

A

Texas benefits are available to Texas workers injured anywhere in the world.

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76
Q

What is flood?

A

Overflow of inland or tidal waters
Rapid accumulation of surface waters (inundation of normally dry area)
Mudslide

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77
Q

What covers physical damage to a boat?

A

Hull

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78
Q

When are you responsible for a SIR, self insurance retention?

A

If an underlying policy does not pay

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79
Q

What are the standard amounts for a SIR, self insurance retention?

A

$1,000 personal

$10,000 for commercial

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80
Q

Principle, obligee and surety

A

Principle - obligor - is the contractor
Obligee is the customer
Surety - protects the obligee to ensure the principle carries out contract.

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81
Q

Liquidated demand

A

100% of Homeowners policy of total loss by fire.

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82
Q

The premium for controlled business which a licensee is permitted to transact in any calendar year must be

A

25% from general public

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83
Q

A temporary emergency license is issued for an initial period of

A

3 months

90 days

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84
Q

Who holds a company appointment?

A

PCA

Property Casualty Agent

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85
Q

Licenses renew how often?

A

Every 2 years

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86
Q

Misrepresentation is:

A

Telling a lie

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87
Q

Who do agents represent?

A

Insurance company

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88
Q

When must a licensed agent report a change of address?

A

Immediately

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89
Q

Twisting is:

A

Giving a misleading comparison to the insured to induce them to buy.

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90
Q

What is a hazard?

A

The increase in the possibility that a loss might occur

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91
Q

The type of insurance company that the policyholder is considered an owner with the right to vote and share in profits

A

Mutual company

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92
Q

The principle that states that an insured should be restored to approximately the same financial condition after a loss as before the loss is known as

A

Indemnity

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93
Q

Staying at a hotel while home is being repaired after a fire is what type of loss?

A

Indirect

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94
Q

What is risk?

A

Uncertainty of loss

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95
Q

What kind of risk is insurable?

A

Pure risk

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96
Q

In a legal contract, agreement refers to

A

Offer and acceptance

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97
Q

Concealment is

A

Failure to disclose a known truth

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98
Q

A peril is

A

Cause of loss

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99
Q

What part of an insurance policy personalizes the policy as to who and what are insured

A

Declarations

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100
Q

What is ACV

A

Actual cash value

Replacement - depreciation

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101
Q

What type of policy insures against all risks off loss that is not specifically excluded by the policy

A

Open peril policy

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102
Q

The condition that provides a means to settle the amount of loss when the insured Bd the insurance company cannot agree

A

Appraisal

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103
Q

What does a binder do

A

Provides temporary protection for the insured between the time the application is made and the policy is issued or the binder expires

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104
Q

An additional loss that results from a direct loss to property

A

Consequential loss

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105
Q

In liability policies, supplementary payments are

A

Payable in addition to the policy limits

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106
Q

Homeowners policies proved liability coverage for

A

Property damage and bodily injury

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107
Q

What is the minimum amount of coverage that is available for Coverage E, liability, on the Homeowners policy?

A

$100,000

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108
Q

Section II of a homeowners policy covers

A

Bodily injury or property damage caused by the personal activities of an insured

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109
Q

An HO-2 form sets limits on

A

Money
Jewelry
Business contents

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110
Q

What is a representation?

A

A statement at time of application

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111
Q

Under which extension of coverage would a policy provide a rental car if your vehicle had been stolen and missing at least 48 hours?

A

Transportation expense

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112
Q

Under the claims-made CGL form, the first date that a loss may occur and still be covered under the policy is

A

Retroactive date

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113
Q

In the Boiler and Machinery policy, the items insured under the policy are defined in the

A

Object definition form

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114
Q

The Extra Expense coverage provides

A

Coverage that will permit the insured to continue in business without interruption following property damage loss

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115
Q

A person retained by the insured to have care, custody and control of property inside the premises and who has no other duties is

A

Watchperson

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116
Q

The crime coverage form that covers theft losses caused by employees has 2 important exclusions

A

Inventory losses

Prior dishonest acts of the employee

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117
Q

The premium charged for a standard Worker’s Compensation policy is primarily based on

A

Payrolls

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118
Q

Workers Compensation includes basic benefits

A

Medical Expenses
Loss of Income
Rehabilitation

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119
Q

The employer must be notified within how many days of injury when it comes to Workers Compensation

A

30 days

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120
Q

If there is no spouse or child and the worker dies, the benefits are paid to the

A

Subsequent Injury Fund

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121
Q

The party to the surety bond who promises to do or not to do a specific thing is the

A

Principle

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122
Q

What type of Ocean Marine insurance provides physical damage coverage for the ship

A

Hull

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123
Q

Something that increased the chance of a loss occurring due to a peril

A

Hazard

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124
Q

Actual cash value

A

Replacement cost less depreciation

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125
Q

All Risk insurance forms

A

Name the exclusions

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126
Q

What is considered an offer

A

The applicant submits an application to the company

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127
Q

What are two optional coverages obtained by endorsement to a BAP?

A

PIP

Uninsured

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128
Q

What coverage extension includes Transportation Expense?

A

Other than Collision

Comprehensive

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129
Q

Damage to an rental auto caused by the insured is covered under which section of PAP?

A

Liability

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130
Q

The failure to do what a reasonable prudent person would do under the circumstances

A

Negligence

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131
Q

Proximate causes requires that

A

An uninterrupted negligent series of events causes injury or damage

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132
Q

What is the acceptance of an offer

A

The insurance company issues the policy applied for

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133
Q

The principle of indemnity

A

Restores the insured to the same condition held prior to a loss

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134
Q

Occurrence is

A

A one time happening and or a continuous repeated exposure

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135
Q

After paying a claim, an insurance company may have the right to pursue legal action against the negligent party.
This right is called

A

Subrogation

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136
Q

As an inducement to buy insurance, promising to return a portion of the commission to the insurance buyer is known as

A

Rebating

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137
Q

Controlled business law

A

25% or more of policies must come from the general public

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138
Q

Publishing or circulating false and malicious statements about the financial conditions of an insurer with the intent to cause injury is

A

Defamation

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139
Q

In this state, a domestic insurance company is defined as a company that

A

Is incorporated in this state

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140
Q

Newly organized insurance companies operating in Texas are examined by TDI at least once each year during their initial

A

3 years of operations

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141
Q

Representation

A

Statement made by the insured that certain conditions exists at the time of application

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142
Q

The purpose of the Texas Property and Casualty Guaranty Association is to

A

Protect the public from the failure of impaired insurance companies
$25,000 unearned premium
$300,000 of any claim
100% for workers compensation

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143
Q

What is the insuring agent section of an auto policy?

A

Contains the insurance company promise to pay on behalf of the insured

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144
Q

What is insurance

A

Protection against certain losses by transferring risks from individuals to a group

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145
Q

Hazard

A

Any condition that increases the chance of loss or frequency or severity of loss

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146
Q

Subsequent injury fund

A

Pays for subsequent injuries that make someone lifetime disabled
Funded by unpaid death benefits

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147
Q

Impairment Income Benefits

A

Are paid when someone has a permanent partial disability

%of disability X 3 = additional # of weeks salary

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148
Q

Supplemental income benefits

A

Must be 15% or lore disabled and salary will be supplemented up to 80% of AWW

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149
Q

Lifetime income benefits

A

A worker is paid for the remainder of their life for loss of 2 of the same body parts or paralysis as long as the injuries occurred at the same employer

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150
Q

What is Part 1 of Texas Workers Compensation

A

The medical coverage

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151
Q

Extraterritorial clause

A

TX benefits are paid to TX workers while working anywhere in the world

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152
Q

Part 2 of Texas Workers Compensation

A

Employers liability

$100,000 coverage

Provides for subrogation
Suits from spouses and children
Employees suing for product liability

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153
Q

Part 3 Texas Workers Compensation

A

Other states insurance

Covers workers temporarily in a state not listed in part 1.

Can collect benefits from a different state if you are working there

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154
Q

Premiums on Texas Workers Compensation are

A

Based on payroll

Each $100

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155
Q

Texas Workers Compensation Fund

A

Takes good risks as well as bad
Must keep a 3:1 ratio

Financed by revenue bonds

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156
Q

What are the 3 forms available Texas Dwelling Policy

A

DP1 - Basic
DP2 - Broad
DP3 - Special

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157
Q

What are the coverages on TDP?

A

A - Dwelling (ACV for DP1 basic, replacement for DP2 broad and DP3 special)
B - Other Structures (ACV for DP1 basic, replacement for DP2 broad and DP3 special)
C - Personal Property (ACV for DP1, DP2, DP3)
D - Fair Rental Value (20% of Coverage A for DP1, DP2, DP3)
E - Additional Living Expenses (not covered on DP1, 20% of Coverage A for DP2, DP3)

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158
Q

What does Coverage A on TDP cover?

A

The dwelling itself
Appliances provided by landlord
Materials used to make repairs

Basic DP1 is ACV
Broad DP2 is Replacement
Special DP3 is replacement

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159
Q

What does Coverage B of TDP cover?

A

Detached structures
10% of Coverage A

Basic DP1 is ACV
Broad DP2 is replacement
Special DP3 is replacement

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160
Q

What does Coverage C of TDP cover?

A

Contents
Personal Property

10% of Coverage C if off premises or belongs to others

Is ACV for all forms

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161
Q

What does Coverage D of TDP cover?

A

Fair Rental Value

Loss of rents during repair

Max limit is 20% of Coverage A

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162
Q

What does Coverage E cover on TDP?

A

Additional living expenses

20% of Coverage A

Is excluded on Basic DP1

Only covered on Broad DP2 and Special DP3

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163
Q

What is the coverage for trees, shrubs and plants on TDP?

A

$500 each
Max is 5% of Coverage A

Wind is excluded

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164
Q

What are the coverages for Homeowners Insurance

A 
A - Dwelling 
B - Other Structures (10% of Coverage A) 
C - Contents (Personal Property)
D - Loss of Use (20% of Coverage A)
E - BI & PD ($100,000 per occurrence)
F - Med Pay ($1,000 per person)
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165
Q

What are the forms for Homeowners for houses

A

HO2, HO3, HO5

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166
Q

What form covers apartments

A

HO4

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167
Q

What form covers condos

A

HO6

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168
Q

What is the standard deductible for Homeowners

A

1% of Coverage A

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169
Q

What is the standard deductible on Renters and Condo?

A

1% of Coverage C

170
Q

What forms have ACV for Coverage A - Dwelling?

A

HO8(Victorian homes)
HO2(Broad)
HO6(condos)

171
Q

What forms have ACV for B - Other structures

A

HO2(broad)
HO8(Victorian homes)
HO6(condos)

172
Q

What forms have replacement value for Coverage A - Dwelling?

A

HO3

HO5

173
Q

What forms have replacement value for Coverage B - Other Structures?

A

HO3

HO5

174
Q

What forms have ACV for Coverage C - contents

A

All forms have ACV for contents

175
Q

What is the valuation for Coverage D - Loss of Use for all forms?

A

Loss of use is 20% of Coverage A

176
Q

What form is all risk on Homeowners for all coverages?

A

HO5

HO3 is only all risks for Coverage A - Dwelling and Coverage B - Other Structures

177
Q

What does Coverage E cover in homeowners?

A

BI & PD
$100,000 per occurrence

3 year time limit

178
Q

What does Coverage- F cover in homeowners?

A

Med Pay
$1,000 per person

3 year time limit

Key word is first aid

179
Q

What are the limits for Coverage B on homeowners?

A

Detached structures are covered up to 10% of Coverage A

180
Q

What are some details on Coverage C on homeowners?

A

Automatically given 50% of Coverage A

Property located away from premises is 10% of Coverage C, but needs to at least be $1,000

181
Q

What are the limits for Coverage D on homeowners?

A

20% of Coverage A for loss of use

182
Q

What is the coverage for trees/plants/shrubs on homeowners

A

$500 each

5% of coverage A

183
Q

Damage to property of others under homeowners?

A

Up to $1,000 replacement costs

Damaged caused by children under 13 are automatically covered

184
Q

What are the coverages under PAP?

A

A - bodily injury (30,000/60,000)
B - property damage (25,000 per occurrence)
B1 - medical payments ($500 per person)
B2 - personal injury protection ($2,500 per person)
C - uninsured motorist bodily injury ($30,000/$60,000)
Uninsured property damage ($25,000 per occurrence with a $250 deductible)
D - comprehensive, collision, towing, rental

185
Q

What is Part B on PAP?

A

B1 Medical Payments
3 years to report
$500 per person

B2 PIP
3 years to report
80% of actual income or essential services

186
Q

What is Part C of PAP

A

Uninsured / underinsured motorist

Property damage has a $250 deductible

187
Q

What does Section II of BAP cover?

A

Liability BI & PD

188
Q

What does Part 3 of BAP cover?

A

Physical damage coverages

Collision
Comprehensive
Specified causes of loss

189
Q

The CGL is composed of what 3 coverages?

A

A - bodily injury and property damage
B - personal and advertising injury
C - medical payments (1 year timeframe to report)

190
Q

What is coverage A on CGL

A

Bodily injury and property damage

191
Q

What is coverage b on CGL

A

Personal and advertising injury

192
Q

What is coverage c on CGL

A

Medical payments

193
Q

What is the deductible on Commercial property policy?

A

$250

194
Q

What form covers theft in commercial?

A

Special

195
Q

What forms cover theft in TBOP?

A

Broad and special

196
Q

What are the coverages on TBOP?

A

A - building (replacement on all forms)
B - property (replacement on all forms)
C - business liability ($300,000 per occurrence)
D - medical payments ($5,000 per person)

197
Q

What is the deductible on TBOP?

A

$500

198
Q

What is the SIR

A

Self insured retention
$1,000 on personal
$10,000 on commercial

199
Q

What are the 3 forms on TBOP?

A

Standard
Broad
Special

200
Q

Who owns a mutual insurance company?

A

Policyholders

201
Q

An admitted company is different from a non-admitted company because

A

Admitted companies are authorized to do business in the state
Non-admitted companies are exempt from most rate regulation
Admitted companies must meet certain minimum standards of financial strength

202
Q

Who can place insurance directly with a county mutual?

A

PCA
Property & Casualty Agent

A PCA is the only one, no matter what type of insurance, who can sign a risk.

203
Q

What are the insurance coverages that is purchased through a government insurance program?

A

Flood insurance

204
Q

The general purpose of liability insurance is to cover

A

Unintentional torts

205
Q

What is blanket coverage?

A

The term used to describe a policy that covers more than one item of property in a single amount of insurance

206
Q

What is the standard mortgage clause

A

The bank always gets paid

If the insured is disqualified from receiving the benefits, the bank can still collect under the policy to the extent of its interest

207
Q

What does unoccupied mean?

A

No tenants

Has contents

208
Q

What is vacancy?

A

No tenants or contents

209
Q

A poorly maintained building is an example of

A

A morale hazard in property insurance

210
Q

The Texas Dwelling Form 3 does not cover damage to personal property in the dwelling caused by wind or hail unless

A

The wind or hail first causes an opening in a roof or wall

211
Q

In order for a dwelling insured on a Texas Dwelling Policy to be covered on a replacement cost basis, the amount of insurance must be equal to at least what percentage of the replacement value of the property?

A

80%

212
Q

What loss provides an example of how Texas Dwelling Special Form is broader than the Basic Form?

A

Additional Living Expenses are covered in Special

213
Q

Additional Living Expenses is provided in Texas Dwelling Form in what amount

A

20% of Coverage A

214
Q

What is the one exception to tree damage?

A

Wind or windstorm damage is excluded

215
Q

A domestic servant can sue under which policy for damages received in the home?

A

Homeowners

216
Q

A windstorm causes a tree to blow over, damaging an insured dwelling. Removal of the tree is paid for under what extension of coverage in the Homeowners Policy?

A

Debris removal

217
Q

Under a Texas Homeowners Policy, all coverage on a dwelling is suspended if the dwelling has been vacant more than

A

60 days

218
Q

What is the standard deductible on a Homeowners Form 3

A

1% of Coverage A

219
Q

The basic limit of liability for Section II of a Homeowners policy is

A

$100,000

220
Q

What coverage is not provided by Homeowners Form 2?

A

Replacement cost

HO2 only provides ACV

221
Q

In order for medical expenses to be covered by Section II of the Homeowners Policy, the expenses must be incurred within:

A

3 years of the accident

222
Q

What is the maximum amount available for daily transportation expenses on a PAP?

A

$20 a day

223
Q

What vehicles are eligible for transportation expenses?

A

Private passenger vehicles only

224
Q

Garage Liability Policy

A

Provides protection for premises and operations, products and completed, and auto liability.

Includes BI and PD when the insured is legally liable and Supplemental payments when applicable.

225
Q

Garage Keepers

A

Adds physical damage to property you don’t own but have care, custody or control of.

226
Q

Garage Policy - Liability-Premises & Operations

A

Protects the insured against liability as a result of them assuming responsibility for what occurs on the premises or for actions and that are part of the regular garage operations

227
Q

Garage Liability - products and completed operations

A

Protects against the insured against liabilities arising out of products or services that are supplied as a result of garage business

228
Q

What coverages can pay out for injuries to passengers in an individual’s auto insured on a PAP?

A

PIP
UM
Medical Payments

229
Q

What coverage in PAP could pay for damage to an insured car caused by collision with an animal

A

Collision or comprehensive

230
Q

On PAP, what coverages must be rejected in writing?

A

PIP

UM

231
Q

If you damage a rental car on vacation, what part of PAP covers the damages

A

Liability- Property Damage

232
Q

What is a major requirement of UM

A

The other driver must be at fault and not have insurance or not have enough insurance

233
Q

What is the maximum limit of PIP coverage available from the Texas Auto Insurance Plan?

A

$2,500

234
Q

On a Commercial Property Policy what two forms are required to secure a policy?

A

Cause of Loss form and Coverage form

235
Q

The taking of property by means of forcible entry into or exit from the premises, leaving visible marks of force at the point of entry or exit.

A

Burglary

236
Q

The difference between standard and limited pollution coverage forms in the CGL program is the coverage afforded for

A

Cleanup costs

237
Q

What Is not covered by Employee Dishonesty Insurance?

A

Loss of merchandise discovered while taking inventory

Previous dishonest act not disclosed previously

238
Q

Expenses payable under the Medical Payments (Coverage C) of the CGL must be incurred and reported to the insurance company by the claimant within

A

1 year

239
Q

Property insured on the Boiler & Machinery Policy is valued at replacement cost of damaged property is repaired or replaced within

A

18 months

240
Q

What is the deductible for Commercial Property Policy?

A

$250

241
Q

Which form provides automatic coverage for any shipment of property in which the shipper has an interest?

A

Open Cargo Policy

242
Q

Defense costs are provided under what section of the general liability policy?

A

Supplementary Payments

243
Q

In Commercial Property Policy, which Cause of Loss form includes coverage for theft of personal property?

A

Special form

244
Q

What is the greatest advantage of insuring property with the Business Owners Special Form instead of Broad Form

A

Special Coverage is “all risk” on business personal property

245
Q

In order for property insured on a Texas Business Owners Policy to be covered on a replacement cost basis, the amount of insurance must be at least what percentage of the replacement value of the property?

A

80%

246
Q

The Money and Securities Coverage in Texas Business Owners Policy provides coverage for loss of money and securities except for

A

Employee theft

247
Q

What is the per person medical payments limit provided by the Texas Business Owners Policy?

A

$5,000

248
Q

What is the minimum occurrence limit of the Employer’s Liability protection in the Workers Compensation and Employer’s Liability Policy

A

$100,000

249
Q

Who is protected by the Jones Act?

A

Crew of sea vessels

250
Q

A person who is blind in one eye is hired by an employer. If the employee suffers an injury on the job that results in a total loss of sight, what will pay the benefits due to this employee?

A

Subsequent Injury Fund

251
Q

An employer must notify the Texas Workers Compensation Commission of a claim within

A

8 days

252
Q

If a worker is killed on the job, the surviving spouse can collect compensation benefits

A

Fir life or until they remarry

253
Q

By law, the Texas Workers Compensation Insurance Fund must maintain a premium to surplus ratio of not more than

A

Three to one

3:1

254
Q

What is the minimum number of employees required before an employer is eligible to purchase Workers Compensation Insurance

A

1 employee

255
Q

The Workers Compensation policy will pay Texas benefits to an eligible employee injured anywhere in the world. This provision is known as

A

Extraterrestrial Benefits

256
Q

What covers physical damage to a boat or vessel owned by the insured?

A

Hull insurance

257
Q

What is the SIR, self-insured retention for personal and commercial?

A

Personal- $1,000

Commercial - $10,000

258
Q

If the principle of a surety bond does not perform the bonded work, which pays the bond

A

The surety

259
Q

If you own a parking garage and want coverage for damages to vehicles left in your care, custody and control, you need

A

Garage Keepers

260
Q

Newly acquired additional vehicle

A

Has same coverage for 30 days then you lose all coverages.

261
Q

Newly acquired replacement vehicle

A

Physical damage (comprehensive and collision) drops after 30 days

Liability is automatic for remaining policy period.

262
Q

PAP exclusions for physical damage

A
  • while the vehicle is used to carry people or property for a fee
  • wear & tear, freezing, mechanical breakdown or road wear to tires
  • sound reproduction equipment, unless permanently installed ($1,500)
  • tapes, CDs
  • camper or trailer not listed in the declarations
  • Temporary substitute (rental car) this is covered under liability- property damage
  • TV antennas, awnings, etc
  • CB radio, radar detector, phone, unless permanently installed
  • Custom furnishings, unless charged a premium (custom vans, pickups)
  • while racing
  • government destruction or confiscation
263
Q

What is included on a HO policy that is never included on a dwelling policy?

A

Theft is not covered on a dwelling policy

Dwelling also doesn’t include liability coverage

264
Q

Boiler and Machinery, where are the items insured defined?

A

Object Definition Form

265
Q

ACV formula

A

Replacement value - depreciation

266
Q

What does Homeowners Coverage A provide protection for?

A

Dwelling

House and all attached structures

267
Q

List all of the possible premises covered under your HO policy

A 
Vacant land
Rented premises such as a party room or wedding venue
Cemetery lot
Storage unit
Does not include farmland 
Temporary residence such as a hotel room
268
Q

Examples of Personal Injury

A

Libel, slander, false arrest, detention, malicious prosecution, wrongful eviction, wrongful entry, and publication violating privacy

269
Q

Examples of Advertising Injury

A

Damages arising from oral or written publication caused by libel, slander, publication violating privacy, misappropriation of ideas, and copyright or trademark infringement.

270
Q

What can the insured and insurer go into if they do not agree on the amount for property?

A

Appraisal

271
Q

What can the insured and insurer go into if they do. It agree on liability?

A

Arbitration

272
Q

What is the coverage for trees/shrubs/plants on s HO policy?

A

$500 each or 5% of Coverage A

273
Q

What is coverage for trees/shrubs/plants for Commercial Policy?

A

$250

274
Q

Define liability and give an example of what it covers.

A

Any type of injury caused by the actions of the insured.

The insured damaged a third party.

275
Q

Do you pay a deductible for liability?

A

No

276
Q

Do you pay a deductible for property claims?

A

Yes

277
Q

Define “running down clause “ that is part of hull insurance

A

Pays for the damage the owner is liable to another vessel when it runs over another boat

Will fix your boat and the other boat

278
Q

How are supplementary payments made in relation to the policy limits?

A

Supplementary payments are paid in addition to the policy limits

279
Q

Mobile Equipment

A 
Bulldozers, 
farm machinery, 
forklifts, 
vehicles on crawler treads, 
or vehicles principally used off public roads
280
Q

What is listed on the declarations page of a Commercial Policy?

A

Describes the covered property
Designates primary and optimal coverages
Indicates limits, perils, mortgagee and deductible information

Also used to activate any optional coverage forms or cause of loss forms

281
Q

Burglary

A

The taking of property by means of forcible entry or exit from the premises, leaving visible marks of force and violence at the place of entry or exit

282
Q

Robbery

A

The taking of property by violence, fear, or threat of violence from any person in custody of the property

283
Q

Mysterious Disappearance

A

Any unexplained absence of covered property, even though it might not have been because of a criminal act

284
Q

What are the different perils between the Broad & Basic form of a Commercial Property Policy?

A 
Broad includes:
Falling Objects
Weight of snow, ice, sleet
Collapse
Glass breakage 
Water damage
285
Q

For Commercial Inland Marine Floater policies, what are the exclusions for the Jewelers Block?

A

Showroom windows

Employee Theft

286
Q

Explain what an Errors and Omissions Policy is and an example of who would need one

A

When the product an agent sales is his/her knowledge, skills, and advice

Professional liability insurance

Is necessary for insurance agents

287
Q

What is the part of an insurance contract that includes the promise to pay in the event of a loss?

A

Insuring agreement

288
Q

What part of the insurance contract includes dispute resolution?

A

Conditions

289
Q

What part of an insurance contract spells out the perils that are not covered?

A

Exclusions

290
Q

What part of an insurance contract has amendments added to change the original contract terms?

A

Endorsements

291
Q

What is considered flood?

A

Overflow of inland or tidal waters
Rapid accumulation of surface waters
Inundation of normally dry areas
Mudslides

292
Q

What is discovery period?

A

The amount of time the insured has to determine the amount of losses that occurred during the policy period

1 year for employee dishonesty

293
Q

What is another name for Employee Dishonesty?

A

Fidelity Bond

294
Q

What are the 3 types of employee dishonesty forms

A

Name Schedule - covers specific employees
Position Schedule - covers employees in specific positions
Blanket Schedule - covers all employees

295
Q

Who does the surety indemnify?

A

Obligee

296
Q

Who does the surety then subrogate?

A

Principle

297
Q

What is an accident?

A

Single event, normally sudden and unexpected in nature

298
Q

Occurrence

A

Single event that can occur over a period of time

An occurrence can be an accident
An accident cannot be an occurrence

299
Q

What are some examples of an occurrence?

A

Workers compensation
Carpel tunnels
Black lung

Damage from smoke stacks

300
Q

Negligence

A

Failure to exercise the standard of care required by law to protect others from harm

Failure to act prudently

Failure to act responsible

301
Q

Binder

A

Temporary written evidence of coverage issued at time of sale

302
Q

Representation

A

Statements made by the applicant to insurance company during the process of obtaining a policy

303
Q

Proximate Cause

A

Unbroken connection between the peril and the loss without the intervention of a new and independent cause

304
Q

The purpose of insurance is to restore an insured to their previous financial condition

A

Indemnity

305
Q

An insurance policy must be canceled

A

In writing

306
Q

Insured duties after a loss

A

Proof of loss must be submitted within 90 days
If loss is a theft, the insured must notify police
Inform the insurer of the details of the loss, all interest in the property, and the existence of any other insurance
Complete a signed and sworn statement to the insurer
Protect property from further damage after a loss (mitigate damages)

307
Q

If an insured is found to have misrepresented or concealed facts around obtaining a policy, coverage may be

A

Voided

308
Q

What are the elements of a contract?

A

Consideration
Legal purpose
Agreement
Competent parties

If any of these are missing, it is not a valid contract

309
Q

Depreciation

A

Decline in value

310
Q

3 different types of hazards

A

Physical - things you can touch, feel, see, etc tangible things

Moral - previous actions, history

Morale - attitude

311
Q

What is an example of a liability loss?

A

Your negligence causing damage to someone else

312
Q

Formula for Coinsurance

A

Amount carried/amount required X loss

Did/should X loss

313
Q

Insurance companies will go into a pro-rata distribution if

A

Duplicate policies exists

314
Q

Hazard

A

Something that increases the chance of a loss

315
Q

Defamation

A

Statement or literature that is false or malicious and derogatory used to damage another insurer

316
Q

Rebating

A

Offer to pay or promise anything of value not specified through the insurance contract to encourage a customer to purchase insurance

317
Q

Unfair Discrimination

A

You cannot discriminate against rate

It is illegal to permit unfair discrimination between individuals of the same class

318
Q

Examples of Unfair Trade Practices

A 
Misrepresentation 
False advertising 
Defamation 
Boycott, coercion, intimidation 
Unfair discrimination 
Rebating and unlawful inducements
Unfair competition 
False use of statistics 
Disparaging remarks
319
Q

How many days does an adjuster have to acknowledge the claim?

A

15 days

320
Q

How many days does an adjuster have to settle a claim if no fraud present?

A

30 days

321
Q

How many days does an adjuster have to settle a case of fraud is thought to be present?

A

45 days

322
Q

Who are not considered witnesses?

A

Minors

323
Q

Where is an adjuster’s place of business considered?

A

Your current location

324
Q

What do you do in the event that your claimant advises that they have hired an attorney?

A

Stop all communications

325
Q

Workers Compensation premiums are based on

A

Payroll

326
Q

Who pays workers compensation premiums?

A

The employer

327
Q

What part of the Workers Compensation policy is responsible for paying out on the event that a 3rd party is liable for the injuries?

A

Part 2

Basic limit is $100,000

328
Q

Abandonment

A

On partial losses or property that can be repaired, the insurance company will not accept the damaged property in return for full insured value

329
Q

Deductible

A

What you pay for each loss before insurance company pays

330
Q

Betterments

A

Improvements that enhance the value of property more than replacement value

331
Q

TX Fire

A

ACV only
Standard Mortgage Clause
Exclusions- Money
Vacancy rules - 60 days coverage is suspended

332
Q

What are the first 3 things an adjuster must do after they get claim

A
  1. The policy is active (in force) at time of claim
  2. Is vehicle on policy
  3. Is driver on policy
333
Q

If you own a parking garage and want coverage for damages to vehicles left in your care, custody and control, you need

A

Garage Keepers

334
Q

Newly acquired additional vehicle

A

Has same coverage for 30 days then you lose all coverages.

335
Q

Newly acquired replacement vehicle

A

Physical damage (comprehensive and collision) drops after 30 days

Liability is automatic for remaining policy period.

336
Q

PAP exclusions for physical damage

A
  • while the vehicle is used to carry people or property for a fee
  • wear & tear, freezing, mechanical breakdown or road wear to tires
  • sound reproduction equipment, unless permanently installed ($1,500)
  • tapes, CDs
  • camper or trailer not listed in the declarations
  • Temporary substitute (rental car) this is covered under liability- property damage
  • TV antennas, awnings, etc
  • CB radio, radar detector, phone, unless permanently installed
  • Custom furnishings, unless charged a premium (custom vans, pickups)
  • while racing
  • government destruction or confiscation
337
Q

What is included on a HO policy that is never included on a dwelling policy?

A

Theft is not covered on a dwelling policy

Dwelling also doesn’t include liability coverage

338
Q

Boiler and Machinery, where are the items insured defined?

A

Object Definition Form

339
Q

ACV formula

A

Replacement value - depreciation

340
Q

What does Homeowners Coverage A provide protection for?

A

Dwelling

House and all attached structures

341
Q

List all of the possible premises covered under your HO policy

A 
Vacant land
Rented premises such as a party room or wedding venue
Cemetery lot
Storage unit
Does not include farmland 
Temporary residence such as a hotel room
342
Q

Examples of Personal Injury

A

Libel, slander, false arrest, detention, malicious prosecution, wrongful eviction, wrongful entry, and publication violating privacy

343
Q

Examples of Advertising Injury

A

Damages arising from oral or written publication caused by libel, slander, publication violating privacy, misappropriation of ideas, and copyright or trademark infringement.

344
Q

What can the insured and insurer go into if they do not agree on the amount for property?

A

Appraisal

345
Q

What can the insured and insurer go into if they do. It agree on liability?

A

Arbitration

346
Q

What is the coverage for trees/shrubs/plants on s HO policy?

A

$500 each or 5% of Coverage A

347
Q

What is coverage for trees/shrubs/plants for Commercial Policy?

A

$250

348
Q

Define liability and give an example of what it covers.

A

Any type of injury caused by the actions of the insured.

The insured damaged a third party.

349
Q

Do you pay a deductible for liability?

A

No

350
Q

Do you pay a deductible for property claims?

A

Yes

351
Q

Define “running down clause “ that is part of hull insurance

A

Pays for the damage the owner is liable to another vessel when it runs over another boat

Will fix your boat and the other boat

352
Q

How are supplementary payments made in relation to the policy limits?

A

Supplementary payments are paid in addition to the policy limits

353
Q

Mobile Equipment

A 
Bulldozers, 
farm machinery, 
forklifts, 
vehicles on crawler treads, 
or vehicles principally used off public roads
354
Q

What is listed on the declarations page of a Commercial Policy?

A

Describes the covered property
Designates primary and optimal coverages
Indicates limits, perils, mortgagee and deductible information

Also used to activate any optional coverage forms or cause of loss forms

355
Q

What are the different perils between the Broad & Basic form of a Commercial Property Policy?

A 
Broad includes:
Falling Objects
Weight of snow, ice, sleet
Collapse
Glass breakage 
Water damage
356
Q

For Commercial Inland Marine Floater policies, what are the exclusions for the Jewelers Block?

A

Showroom windows

Employee Theft

357
Q

Explain what an Errors and Omissions Policy is and an example of who would need one

A

When the product an agent sales is his/her knowledge, skills, and advice

Professional liability insurance

Is necessary for insurance agents

358
Q

What is the part of an insurance contract that includes the promise to pay in the event of a loss?

A

Insuring agreement

359
Q

What part of the insurance contract includes dispute resolution?

A

Conditions

360
Q

What part of an insurance contract spells out the perils that are not covered?

A

Exclusions

361
Q

What part of an insurance contract has amendments added to change the original contract terms?

A

Endorsements

362
Q

What is considered flood?

A

Overflow of inland or tidal waters
Rapid accumulation of surface waters
Inundation of normally dry areas
Mudslides

363
Q

What is discovery period?

A

The amount of time the insured has to determine the amount of losses that occurred during the policy period

1 year for employee dishonesty

364
Q

What is another name for Employee Dishonesty?

A

Fidelity Bond

365
Q

What are the 3 types of employee dishonesty forms

A

Name Schedule - covers specific employees
Position Schedule - covers employees in specific positions
Blanket Schedule - covers all employees

366
Q

Who does the surety indemnify?

A

Obligee

367
Q

Who does the surety then subrogate?

A

Principle

368
Q

What is an accident?

A

Single event, normally sudden and unexpected in nature

369
Q

Occurrence

A

Single event that can occur over a period of time

An occurrence can be an accident
An accident cannot be an occurrence

370
Q

What are some examples of an occurrence?

A

Workers compensation
Carpel tunnels
Black lung

Damage from smoke stacks

371
Q

Negligence

A

Failure to exercise the standard of care required by law to protect others from harm

Failure to act prudently

Failure to act responsible

372
Q

Binder

A

Temporary written evidence of coverage issued at time of sale

373
Q

Representation

A

Statements made by the applicant to insurance company during the process of obtaining a policy

374
Q

Proximate Cause

A

Unbroken connection between the peril and the loss without the intervention of a new and independent cause

375
Q

The purpose of insurance is to restore an insured to their previous financial condition

A

Indemnity

376
Q

An insurance policy must be canceled

A

In writing

377
Q

If an insured is found to have misrepresented or concealed facts around obtaining a policy, coverage may be

A

Voided

378
Q

What are the elements of a contract?

A

Consideration
Legal purpose
Agreement
Competent parties

If any of these are missing, it is not a valid contract

379
Q

Depreciation

A

Decline in value

380
Q

3 different types of hazards

A

Physical - things you can touch, feel, see, etc tangible things

Moral - previous actions, history

Morale - attitude

381
Q

What is an example of a liability loss?

A

Your negligence causing damage to someone else

382
Q

Formula for Coinsurance

A

Amount carried/amount required X loss

Did/should X loss

383
Q

Insurance companies will go into a pro-rata distribution if

A

Duplicate policies exists

384
Q

Hazard

A

Something that increases the chance of a loss

385
Q

Defamation

A

Statement or literature that is false or malicious and derogatory used to damage another insurer

386
Q

Rebating

A

Offer to pay or promise anything of value not specified through the insurance contract to encourage a customer to purchase insurance

387
Q

Unfair Discrimination

A

You cannot discriminate against rate

It is illegal to permit unfair discrimination between individuals of the same class

388
Q

Examples of Unfair Trade Practices

A 
Misrepresentation 
False advertising 
Defamation 
Boycott, coercion, intimidation 
Unfair discrimination 
Rebating and unlawful inducements
Unfair competition 
False use of statistics 
Disparaging remarks
389
Q

How many days does an adjuster have to acknowledge the claim?

A

15 days

390
Q

How many days does an adjuster have to settle a claim if no fraud present?

A

30 days

391
Q

How many days does an adjuster have to settle a case of fraud is thought to be present?

A

45 days

392
Q

Who are not considered witnesses?

A

Minors

393
Q

Where is an adjuster’s place of business considered?

A

Your current location

394
Q

What do you do in the event that your claimant advises that they have hired an attorney?

A

Stop all communications

395
Q

Workers Compensation premiums are based on

A

Payroll

396
Q

Who pays workers compensation premiums?

A

The employer

397
Q

What part of the Workers Compensation policy is responsible for paying out on the event that a 3rd party is liable for the injuries?

A

Part 2

Basic limit is $100,000

398
Q

Abandonment

A

On partial losses or property that can be repaired, the insurance company will not accept the damaged property in return for full insured value

399
Q

Deductible

A

What you pay for each loss before insurance company pays

400
Q

Betterments

A

Improvements that enhance the value of property more than replacement value

401
Q

TX Fire

A

ACV only
Standard Mortgage Clause
Exclusions- Money
Vacancy rules - 60 days coverage is suspended

402
Q

What are the first 3 things an adjuster must do after they get claim

A
  1. The policy is active (in force) at time of claim
  2. Is vehicle on policy
  3. Is driver on policy
403
Q

What does an agent do?

A

Solicits insurance
Takes or transmits an application for insurance
Receives or delivers a policy
Examines or inspects a risk
Collects or transmits any premium for insurance
Adjusts a claim on behalf of an insurance company

404
Q

PCA

A

Must be appointed by company
Only one who can sign a policy
Appoints ISRs
Can only work for 1 company at a time

405
Q

ISR

A

Appointed by a PCA
No outside solicitation
Can only represent 1 company at a time
Is paid a salary with an option for commission or bonus

406
Q

MGA

A

Supervisory responsibility
Cannot deal with the insuring public
May not sign or execute policies

407
Q

Survivors Temporary License

A

Issued to surviving spouse and children

May not write new business

408
Q

Emergency PCA

A

90 days

May conduct business of the agency

409
Q

Surplus Lines Agent

A

Must be a PCA or MGA or both

Is appointed

410
Q

Risk Manager

A 
Evaluates risks
Advises on how to reduce losses and exposure to risk
Is not an agent
Cannot collect commissions
Can collect a fee for services
411
Q

Unfair Claim Settlements

A

The rights for claimants in Texas are protected

412
Q

Texas Certified Self-Insurer

A

Every self-insurer must be a member

Protects impaired insurers

413
Q

Risk

A

Chance of loss

414
Q

Hazard

A

Any condition that increases the chance of a loss

415
Q

Peril

A

The event that causes a loss

416
Q

Loss

A

Reduction in the value of an asset

417
Q

Which type of company does Law of Large Numbers benefit

A

Admitted
The greater the numbers, the more accurate statistics will be that permit an insurer to predict the frequency and severity of losses and calculate a premium to spread the cost of risk among all policyholders

418
Q

Domestic Insurer

A

Located in the state they are incorporated or domiciled

419
Q

Foreign Insurer

A

Located in a different state

420
Q

Alien Insurer

A

Located in a different county

421
Q

Elements of a contract

A

Consideration - Both parties assume some type of responsibility
Legal Purpose
Agreement - offer and acceptance
Competent Parties

422
Q

Offer and Acceptance

A

Offer - applicant submitting application

acceptance - insurance of policy

Texas Claims Adjuster Licensing (12 decks)

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