Texas Adjuster Exam 1 (118) with
Complete Solutions
Which of the following losses would be paid under Part D - Other Than Collison
coverage of the Personal Auto policy? - ANSWER-The INSDs car was stolen and never
recovered.
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. Who would be covered for their injuries under Part
B of Gavin's policy? - ANSWER-Gavin, Tabitha, and Tabitha's friends
A business covered by a standard Businessowners policy is shut down due to the acts
of a civil authority. Which of the following additional coverages would NOT be subject to
a waiting period before coverage would apply? - ANSWER-Extra Expense are not
subject to the normal 72 hour waiting period
The Texas Department issues emergency adjuster licenses in case of an emergency
arising out of a disaster. An emergency license is valid for ____ days. - ANSWER-90
days and can be extended by the Commissioner for an additional 90 days.
The perils most frequently covered by Difference in Conditions policy are - ANSWER-
Earthquake and flood bc these are excluded under most property policies.
An additional coverage provided by Part D of the Personal Watercraft policy includes
coverage for "salvage liability." This is best described as - ANSWER-A maritime law
requiring watercraft owners to recover items that have gone overboard.
Which of the following relieves the financial burden on the claimant by making certain
payments to the claimant even before the claim is negotiated? - ANSWER-Advance
payment (when liability is clear)
An insured is covered under a standard Businessowners Policy for replacement cost
coverage and has sustained a fire loss to the building. Due to changes in the building
codes in his town, it's going to cost $20,000 extra just to comply with the new building
codes and make the repairs. How much, if any, will the BOP pay for these extra costs? -
ANSWER-$10,000 - the limited amount. The policy will provide "Increased Cost of
Construction" coverage through an "additional coverage," but these costs are limited to
$10,000
, All of the following would be considered an "insured" on a Homeowners policy, EXCEPT
- ANSWER-A non-related tenant living in the insured residence.
Any policy limits expressed on a standard NCCI WC policy, relate to - ANSWER-Part 2 -
all other limits relating to WC coverage are set by state law.
A contractor in need of a bid bond to obtain a contract is an example of a - ANSWER-
Principal. The bond company is the guarantor and the owner (receiving the benefit of
the bond, would be the obligee.
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-I and II only always
Which of the following Ocean Marine implied warranties is considered to be the most
important? - ANSWER-Seaworthiness
A Personal Automobile policy provides liability coverage on a single limit basis for
$100,000. A covered accident caused by Mr. Jones involves a $75,000 liability
judgement to Mr. Allen for his injuries and $25,000 liability judgment for the damage to
his car. In addition, $20,000 in legal bills are incurred defending the insured. The
company will pay - ANSWER-$120,000 - Legal expenses are in addition to the limit of
liability. the single limit covers both bodily injury and property damage liability. The
policy will pay the total cost of damages and defense in the lawsuit.
All of the following statements are TRUE if Builders' Risk coverage is written on a
completed value basis, EXCEPT - ANSWER-All premiums must be paid up front before
construction can begin.
What is the main purpose of an adjuster's interim or status report? - ANSWER-To report
on the ongoing status of the claim.
Which of the following statements is TRUE regarding an "open peril" property insurance
policy? - ANSWER-Provides coverage for all perils, unless that peril is specifially
excluded.
Homeowners policies cover all the following EXCEPT - ANSWER-A 2-family dwelling
occupied by tenants who are renting the covered premises from the named insured.
With regards to worker's comp insurance, a "retroactive period" is - ANSWER-A
specified number of days of disability after which compensation will be paid for each day
since the date of the injury
Complete Solutions
Which of the following losses would be paid under Part D - Other Than Collison
coverage of the Personal Auto policy? - ANSWER-The INSDs car was stolen and never
recovered.
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. Who would be covered for their injuries under Part
B of Gavin's policy? - ANSWER-Gavin, Tabitha, and Tabitha's friends
A business covered by a standard Businessowners policy is shut down due to the acts
of a civil authority. Which of the following additional coverages would NOT be subject to
a waiting period before coverage would apply? - ANSWER-Extra Expense are not
subject to the normal 72 hour waiting period
The Texas Department issues emergency adjuster licenses in case of an emergency
arising out of a disaster. An emergency license is valid for ____ days. - ANSWER-90
days and can be extended by the Commissioner for an additional 90 days.
The perils most frequently covered by Difference in Conditions policy are - ANSWER-
Earthquake and flood bc these are excluded under most property policies.
An additional coverage provided by Part D of the Personal Watercraft policy includes
coverage for "salvage liability." This is best described as - ANSWER-A maritime law
requiring watercraft owners to recover items that have gone overboard.
Which of the following relieves the financial burden on the claimant by making certain
payments to the claimant even before the claim is negotiated? - ANSWER-Advance
payment (when liability is clear)
An insured is covered under a standard Businessowners Policy for replacement cost
coverage and has sustained a fire loss to the building. Due to changes in the building
codes in his town, it's going to cost $20,000 extra just to comply with the new building
codes and make the repairs. How much, if any, will the BOP pay for these extra costs? -
ANSWER-$10,000 - the limited amount. The policy will provide "Increased Cost of
Construction" coverage through an "additional coverage," but these costs are limited to
$10,000
, All of the following would be considered an "insured" on a Homeowners policy, EXCEPT
- ANSWER-A non-related tenant living in the insured residence.
Any policy limits expressed on a standard NCCI WC policy, relate to - ANSWER-Part 2 -
all other limits relating to WC coverage are set by state law.
A contractor in need of a bid bond to obtain a contract is an example of a - ANSWER-
Principal. The bond company is the guarantor and the owner (receiving the benefit of
the bond, would be the obligee.
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-I and II only always
Which of the following Ocean Marine implied warranties is considered to be the most
important? - ANSWER-Seaworthiness
A Personal Automobile policy provides liability coverage on a single limit basis for
$100,000. A covered accident caused by Mr. Jones involves a $75,000 liability
judgement to Mr. Allen for his injuries and $25,000 liability judgment for the damage to
his car. In addition, $20,000 in legal bills are incurred defending the insured. The
company will pay - ANSWER-$120,000 - Legal expenses are in addition to the limit of
liability. the single limit covers both bodily injury and property damage liability. The
policy will pay the total cost of damages and defense in the lawsuit.
All of the following statements are TRUE if Builders' Risk coverage is written on a
completed value basis, EXCEPT - ANSWER-All premiums must be paid up front before
construction can begin.
What is the main purpose of an adjuster's interim or status report? - ANSWER-To report
on the ongoing status of the claim.
Which of the following statements is TRUE regarding an "open peril" property insurance
policy? - ANSWER-Provides coverage for all perils, unless that peril is specifially
excluded.
Homeowners policies cover all the following EXCEPT - ANSWER-A 2-family dwelling
occupied by tenants who are renting the covered premises from the named insured.
With regards to worker's comp insurance, a "retroactive period" is - ANSWER-A
specified number of days of disability after which compensation will be paid for each day
since the date of the injury
