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24 Cards in this Set
- Front
- Back
- 3rd side (hint)
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The transfer of risk from one party to another is called |
Insurance |
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The Principle of Indemnity is designed to prevent |
an insured from making a profit |
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Which of the following refers to being restored to the financial condition you were in before a loss? |
Indemnification |
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An economic device used to protect against the risk of realizing unforeseen and extraordinary financial loss is called |
Insurance |
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Indemnification may include payment for |
1) repairs to property 2)reimbursement for additional living expenses 3)rental cars, hotel 4)costs directly associated with a loss, as allowed under the policy |
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Review: What is insurance Insurance::Transfers risk of financial losses from one party to another Insured:: Individual or organization that pays premiums in exchange for protection Insurer:: Company, group, or government agency offering financial protection |
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Review: Legal Contract Insurance Policy:: A legally binding contract in which the insurer agrees to take on specified risks in exchange for the insured's premiums Principle of indemnity:: Restoration to previous financial condition; no more, no less Four qualifications of a contract 1) Agreement 2)Consideration 3)Competent parties 4)Legal purpose |
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Which of the following terms can be defined as a policy provision that omits certain risks from coverage?
1)Exclusions 2)Conditions 3)Insuring Agreement 4)Declarations |
Exclusions
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Which of the following injuries would be covered by Medical Payments Coverage?
1) Injury to the insured while he is using his car as a taxi cab 2) Injuries sustained by members of a car pool while riding in the insured’s car 3) Injuries sustained while the insured is riding on a motorcycle 4) None of the responses would be covered.
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Injuries sustained by members of a car pool while riding in the insured’s car
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An adjuster's license will usually be revoked for which of the following?
1) Having been convicted of a felony 2) Denying claims that are not covered 3) Failing to report a change of address 4) Having been convicted of a misdemeanor |
Having been convicted of a felony
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Tom purchases an auto policy with limits of $25/50/25 and his wife Jane also purchases a policy with limits of $50/100/25. Both policies cover the same covered autos. Tom and Jane are not aware what the other has purchased. If an accident occurs and several people are injured, what is the most in liability coverage that will be available if these two people are sued by the injured parties?
1) 150,000 which is the maximum bodily injury limit per accident for the two policies combined 2)Depends on who was driving, Tom or Jane as to what liability limit applies 3)If the policies are from the same company, Jane’s limit of $100,000 being the highest of the two would apply 4)Nothing as this seems to be a fraud situation |
3) If the policies are from the same company, Jane’s limit of $100,000 being the highest of the two would apply
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Satisfactory evidence of financial responsibility can be established in most states by all of the following, EXCEPT
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Offering property as collateral
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What is the difference between a witness and an expert witness?
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An expert witness can draw conclusions from observations
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Additional Info An expert witness is allowed to draw conclusions whereas a witness is not. |
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An insured submits a claim. The adjuster acknowledges receipt of the claim. Nothing more is heard from the adjuster after repeated attempts by the claimant to contact the adjuster. This is considered to be:
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An unfair claims practice act. |
Explanation:
Failing to acknowledge with reasonable promptness pertinent communications with respect to a claim is considered an unfair claims practice. |
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Under the Personal Auto Policy the Supplementary Payments coverage is:
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In addition to the limit of liability
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Explanation: Supplementary Payments are in addition to the Limits of Liability. |
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What commercial auto form is used to cover taxis and bus companies?
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Motor carrier form.
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Explanation:
The Motor Carrier form would be used to cover these types of vehicles. This form is used for a risk carrying persons or property. |
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An insurance company that permits different rate classifications for individuals of the same class and same hazard may be guilty of
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Unfair discrimination
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Explanation:
Persons in the same underwriting group with equal or the same characteristics must be treated the same for the rating of premiums. |
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What is the reason for the New York financial responsibility law?
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To provide some form of compulsory insurance to make drivers financially responsible for at-fault accidents..
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Explanation:
To provide some form of compulsory insurance to require owners and operators of vehicles to be financially responsible in the case of automobile accidents. |
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On what date must an adjuster license be renewed?
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December 31 – even numbered years
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Explanation:
The adjuster license expires December 31 of even numbered years and may be renewed for the ensuing two calendar years. |
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A business auto policy has a $100,000 limit of insurance for liability coverage. As a result of an automobile accident involving a covered auto, two people are injured. The first injured party sues the named insured and wins a $150,000 judgment. The insurer pays its limit of insurance. If the other injured party later sues the insured, the insurer will:
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Deny further obligations to the insured as a result of the other injured party..
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Explanation:
The duty of the insurer ends when it has exhausted its limits by the payment of claims as a result of a single covered claim. |
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In claims adjusting during the interviewing of a party involved in a liability claim, there are three types of questions. These are "direct" questions, "open-ended" questions and "leading" questions. A direct question is seeking brief answers about the facts; an open-ended question is seeking more elaboration of the facts and leading questions are suggesting to the person being interviewed that a particular answer would be what the adjuster would prefer. Which of the following would be considered a direct question?
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Did the Pontiac skid before impact? How far? .
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Explanation:
This is considered a "direct" question. It is asking a brief question about the facts known by the interviewee without elaboration or leading the person being interviewed to answer the question the way the adjuster would prefer. |
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The Terrorism Risk Insurance Act and its extensions is an agreement between:
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Between the Federal Government and the insurance companies.
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Explanation:
This is an agreement between the Federal Government and insurance companies to provide coverage for acts of terrorism. |
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All of the following are violations of "good faith duty" by the adjuster, EXCEPT
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Paying a settlement within 30 days after an agreement is reduced to writing
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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." |
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