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GEORGIA ADJUSTER REAL EXAM | GA
ADJUSTER REAL EXAM LATEST VERSION |
ALL QUESTIONS AND ANSWERS (VERIFIED
ANSWERS) LATEST EDITION 2024
Which of the following is true regarding the Difference in Conditions (DIC) policies? Each DIC contract is unique to the risk that it covers. No two contracts are the same. However, one of the features of most DIC policies is that the policy needs to be accompanied by a named peril property policy to provide the all-risk coverage that is intended. ------CORRECT ANSWER---------Each DIC policy is an individually written contract that contains provisions unique to the particular risk that it covers. Which of the following would be covered by the physical damage coverage of your Business Auto Policy? Excluded for coverage are nuclear, organized racing, freezing, but other than collision coverage will cover the factory installed disc player. ------CORRECT ANSWER--------- Your car's factory installed disc player was stolen. Which of the following examples of losses paid under an HO-3 also would be paid under an HO-2 homeowners policy? An HO-3 covers losses on an open peril basis. An HO-2 covers losses on a named peril basis. Both forms cover damage to the dwelling caused by ash or dust from a volcanic eruption. ------CORRECT ANSWER---------Damage to the dwelling caused by ash or dust from a volcanic eruption Insurance is the transfer of Insurance is the transfer of financial responsibility associated with a potential of a loss (risk) to an insurance company. ------CORRECT ANSWER---------Risk CGL Coverage B (Personal Injury and Advertising Injury) will cover
Personal injury and advertising injury do not cover professional advertisers, do not cover intentional injury, and do not guarantee the product will perform as advertised. ---- --CORRECT ANSWER---------Inadvertent injury to others caused in the course of advertising the insured's product. Which of the following is NOT consideration on the part of an insured? The binding force in any contract is consideration. Consideration on the part of the insured is the payment of premiums and the health representations made in the application. Consideration on the part of the insurer is the promise to pay in the event of loss. ------CORRECT ANSWER---------Promise to submit timely claims All of the following are examples of transacting insurance in Georgia EXCEPT Any of the following acts is considered to constitute an act of "transacting insurance" in Georgia: solicitation and inducement to insurance, preliminary insurance negotiations, effectuation of an insurance contract, and transactions of matters subsequent to and arising out of effectuation of an insurance contract. ------CORRECT ANSWER--------- None of the above. All are examples of transacting insurance. Under the provisions of the business income coverage form, all of the following are true, EXCEPT Business Income will pay beyond the expiration date of a policy. It will pay until the business is restored or the limits of coverage are exhausted. ------CORRECT ANSWER- --------The insured is reimbursed for the loss from the date of loss to date of restoration or policy expiration date, whichever comes first. Other than collision would cover financial losses due to Other than collision includes losses caused by falling objects, fire, theft, windstorms, hail, and vandalism. ------CORRECT ANSWER---------Damage to your car caused by wind or hail. Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT Conditions are part of the policy structure. Consideration is an essential part of a contract ------CORRECT ANSWER---------Conditions
When an employee benefit plan pays the premium for a fiduciary liability policy, what provision must be included in that policy? If the premiums are paid from the fund, the policy must allow for subrogation against the individual trustees involved in any loss. ------CORRECT ANSWER---------Subrogation The failure to disclose all known facts is called Withholding information that is material to the risk to be insured is concealment and makes a policy voidable. ------CORRECT ANSWER---------Concealment Which common policy condition prohibits the insured from changing the rights or duties as defined under the policy to any other person or entity without the written consent of the insurance company? Under the "transfer of rights and duties under the policy" condition, the insured cannot transfer any rights or duties under the policy to any other person or organization without the written consent of the insurance company. ------CORRECT ANSWER--------- Transfer of rights and duties under the policy Pins & Alley, which is owned and operated by Bob Balls, has a commercial general liability policy. Spencer, an employee, was injured while demonstrating the latest, marble bowling ball. Spencer inadvertently dropped the ball on his own foot causing several bone fractures. Will the commercial general liability policy owned by Pins & Alley cover this loss? Employees are not covered for bodily injury or personal injury to an insured or co- employee, or a spouse, parent or sibling of the employee under a CGL policy. ------ CORRECT ANSWER---------No, because injuries to employees are excluded. An advertising company has its annual holiday party for employees and customers, after which a customer who had too much to drink is involved in an automobile accident. Occupants of the other car involved in the accident sue the company for serving the customer too much alcohol. Will the company's businessowners policy provide coverage?
The liquor liability exclusion applies only to insureds in the business of manufacturing, distributing, selling, serving, or furnishing alcoholic beverages. In this case, the company's businessowners policy most likely will have to pay. ------CORRECT ANSWER---------Yes, none of the exclusions will apply Bulk carriers are used to transport Bulk carriers are used to carry coal, grain, phosphates, and other loose cargo. The ship itself is the container for the cargo. ------CORRECT ANSWER---------Loose cargo All of the following are classes of inland marine risks EXCEPT The 4 classes of inland marine risks are the following: domestic shipments and transportation risks; bridges, tunnels, and other instrumentalities of transportation and communication; commercial property floater risks; and personal property floater risks. --- ---CORRECT ANSWER---------Common Carrier Cargo Liability An insurance agency could purchase an errors and omission insurance policy, which would provide protection in the event of any of the following events EXCEPT Errors and omissions insurance protects an insured against actions claiming the insured has failed to act in a professional manner. It does not cover claims arising out of criminal wrongs. ------CORRECT ANSWER---------The agency loses commission income from policies that were not issued by the insurer. Bob has a personal auto policy with Part C, UM/UIM limits of $100/$300. He is injured by Jennifer, who has Part A, Bodily Injury Liability limits of $50/$100. The police determine that Jennifer is at fault for the accident. Bob has $125,000 in medical expenses. How much will Bob's Part C, UM/UIM pay? Underinsured motorist coverage acts as excess over the at fault motorist's coverage. Because of the per-person limits of Bob's underinsured motorist coverage, the policy will pay the amount necessary to bring payment up to the per-person limit (in this case, $100,000). The policy will not pay more than the limits of liability. ------CORRECT ANSWER---------$50,
All of the following statements regarding continuing education requirements in this state are true EXCEPT The licensees may not repeat the same CE courses in the same renewal period. All the other statements are true. ------CORRECT ANSWER---------Producers may repeat the same courses to meet the required CE hours for a licensing period. An insured has a personal property replacement cost endorsement under her homeowners policy. If an expensive painting and an antique chair are stolen from the insured's home, what will the insured receive on the claim under that endorsement? The personal property replacement cost endorsement excludes property such as art and antiques. ------CORRECT ANSWER---------Nothing Which of the following is an example of an agent's fiduciary responsibilities? Fiduciary refers to a position of trust. When an agent is handling the premiums that belong to an insurance company, they are acting in a fiduciary capacity. ------CORRECT ANSWER---------Forwarding premiums to the insurer Super Value Store has a commercial general liability policy written with a general aggregate limit of $300,000 and an occurrence limit of $100,000. A customer injured on the premises was awarded $45,000 for medical expenses and loss of earnings, and $60,000 for pain and suffering. The court costs and attorney fees were $15,000. How much will the CGL policy pay? The policy would pay up to the occurrence limit plus, as supplementary payments, the cost of the court and attorney fees over and above the limit. ------CORRECT ANSWER-- -------$115, Within the first 60 days of coverage under a dwelling policy, how much notice is required for the cancellation of a policy? No matter what the reason, if a policy is canceled within the first 60 days, only 10 days advance notice is required. ------CORRECT ANSWER---------10 days
In insurance, the offer is usually made by the applicant, in the form of the application. Acceptance takes place when an insurer's underwriter approves the application and issues a policy. ------CORRECT ANSWER---------When an insurer approves a prepaid application In order to be covered by the U.S. Longshore and Harbor Workers Compensation Act, a worker must meet the requirements of the A worker is covered under the LHWCA only if he or she meets a "situs and a status" test. The injury must occur on the navigable waters or on an adjoining wharf, pier, dock, or similar facility used in the loading, unloading, building, or repairing vessels. In addition, the individual must have been engaged in maritime employment when injured. ------CORRECT ANSWER---------Situs and status test What are the two causes of loss covered under the Glass Coverage Form? Breakage and accidentally or maliciously applied chemicals are the only two causes of loss listed in the Glass Coverage form. ------CORRECT ANSWER---------Breakage and accidentally or maliciously applied chemicals General-cargo ships are used to transport General cargo ships are generally used to carry break-bulk cargo. Break-bulk cargo is cargo that is too large to be carried in a container or boxed goods, or too small to justify use of a full container. ------CORRECT ANSWER---------Break bulk cargo All of the following are options of the insurer in the loss settlement of a standard fire policy EXCEPT In most cases, the insurer will pay the ACV or appraised value of a loss. The SFP does give the insurer with two other options in the loss settlement process: 1) take possession, or 2) repair, rebuild, or replace. ------CORRECT ANSWER---------Pay replacement cost value Walt has $500,000 auto liability coverage, $100,000 HO liability, and a $3 million personal umbrella with $2,000 SIR. How much would the umbrella pay after a $600, auto liability loss?
Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance? Defamation is making statements which are false as to the financial condition of any insurer and which are calculated to injure any person engaged in the business of insurance. ------CORRECT ANSWER---------Defamation An insured's business is damaged because of a fire and he is forced to close business temporarily for repairs. As a result the insured lost income. What type of loss is this? ----
- CORRECT ANSWER---------Consequential also known as Indirect Loss The insured crashes into a porch and the person sitting on the porch. The person on the porch is injured. The insured's insurance policy has a limit set at $500,000. This amount applies to the total of damages for any bodily injury and property damage resulting from one accident. Which type of limit of liability does the insured have? This single dollar limit of liability applying to the total of damages for bodily injury and property damage combined resulting from one accident or occurrence -----CORRECT ANSWER--------- Combined Single If a liability policy had split limits of 100/300/100, what is the maximum amount that would be payable in the event of injury to a single person? The first limit shown is the most the policy will pay for bodily injury to any one person -----CORRECT ANSWER----- ----$100, What kind of liability would a person with a swimming pool have? Any conduct that is inherently dangerous imposes this liability. The claimant does not have to prove anythhing. -----CORRECT ANSWER---------Absolute An agent license can be issued -----CORRECT ANSWER---------Only to individuals
If a policy has been in affect for at least 60 days or is due for renewal, a cancellation may only be affected for this reason -----CORRECT ANSWER---------A change in the risk that substantially increases the hazard insured against An insurer that holds a Certificate of Authority in the state in which it transacts business is considered to be -----CORRECT ANSWER---------Authorized Insurer An insured must get advanced warning if the premiums will be increased by more than Written notice of an increase in premiums that exceed this amount of the current policy's premium must be delivered or mailed to the insured at least 45 days before the effective date of the change -----CORRECT ANSWER---------15% The insurance principle that states if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost. ----- CORRECT ANSWER---------Indemnity Insurance is a contract by which one seeks to protect another from -----CORRECT ANSWER---------Loss The loss settlement based on the reasonable and fair portion that the lost or damaged part bears to the total value of the set In the event of a loss to only part of a pair or set, losses will be settled either by repairing or replacing the damaged part or by paying the difference between the actual cash value before and after the loss. Provides the insurer a method of settling a loss when only a part of the insured pair or set is damaged. The insurer will pay for the loss or damage to an insured item, plus the amount that the loss of one item detracts from the value of undamaged item(s) of the pair or set. -----CORRECT ANSWER---------Pair and Set Clause The essential parts of an insurance policy -----CORRECT ANSWER---------Insuring clause, Exclusions, Conditions
Collision coverage is provided only for dealers Autos held for sale by a dealer are listed individually in the policy No coverage is provided for autos stored for more than 45 days at a location not shown in the declarations Specific causes-of loss coverage is not available for physical damage coverage ** Collision coverage is not limited to a specific risk. Autos held for sale are covered when auto designation Symbol 31 (dealer's autos) is shown on the declaration page. The specific causes of loss coverage is available for physical damage coverage ----- CORRECT ANSWER---------No coverage is provided for autos stored for more than 45 days at a location not shown in the declarations In the Personal Auto Policy, owned trailers being owned by an insured auto are automatically covered for -----CORRECT ANSWER---------Uninsured Motorist Coverage (BI/PD) and UM under Part A of a Personal Auto Policy The following symbol is available to an insured with vehicles subject to no-fault coverage -----CORRECT ANSWER---------Symbol 5 A personal automobile policy MAY be cancelled by the insurer for the following reason - ----CORRECT ANSWER---------The insured's automobile is used to carry passengers for hire With respect to commercial auto policies, the Garage Coverage Form provides liability protection for all the following except The insured's business income losses due to personal injury The insured's business premises The insured's business products and work performed The insured's business autos -----CORRECT ANSWER---------The insured's business income losses due to personal injury
When a policy is cancelled for a reason other than nonpayment of premium or if the policy is nonrenewed, the insurer must notify the insured of his/her possible eligibility for insurance through -----CORRECT ANSWER---------The Georgia Automobile Insurance Plan Business Auto Coverage applies only to those autos which are identified as "covered autos" in the declarations of the policy. Covered autos are identified by -----CORRECT ANSWER---------A symbol What would not qualify as a hired auto? Hired automobiles include those that are leased, hired, rented or borrowed excluding autos that are owned by employees -----CORRECT ANSWER---------An auto borrowed from an employee Who is does the Garage Coverage Form insure? -----CORRECT ANSWER---------Auto businesses such as auto dealers, service stations, auto repair shops Who is not an insured for liability on a BAP? A Business Auto Policy defines who is not an insured; the owner of a car the insured borrows is one of them. -----CORRECT ANSWER---------The owner of a car the insured borrows What is a true statement concerning underinsured motorist coverage under a personal auto policy? -----CORRECT ANSWER---------Coverage applies only to the extent that the underinsured motorist limits exceeds the bodily injury limits carried by the operator of the other vehicle. A situation where a jewelers block would cover a loss. Property covered in transit by registered mail (precious and semi-precious stones, metals available for sale, jewelry sold but not delivered, raw materials to be used to create jewelry )
The following are necessary in order for a claims adjuster to determine coverage for a particular loss -----CORRECT ANSWER---------Policy form, Policy exclusions, Numbers of any attached forms or endorsements Diminution Value (DV) could be -----CORRECT ANSWER---------Inherent, Claims related , Repair related The two types of compensatory damages -----CORRECT ANSWER---------Special and General The adjuster's first step in determining if the insured is totally or partially liable ----- CORRECT ANSWER---------Completing a loss report Program made up of private insurers that write and service National Flood Insurance policies on a no risk-bearing basis through a special arrangement with the Federal Insurance Admin. WYO retains part of the flood insurance premium to pay for commissions and administrative costs. The remaining premiums, plus investment, are used to cover losses. -----CORRECT ANSWER---------WYO Program (Write Your Own) True statements concerning coinsurance in the event of a total loss.The coinsurance clause does not operate and the face amount of the policy is paid. Encourage insurance to value EXCEPT -----CORRECT ANSWER---------The coinsurance formula will be applied to total losses When a mortgagee is named in a mortgagee clause attached to a fire or other direct damage policy -----CORRECT ANSWER---------the loss reimbursement will be paid to the mortgagee as their interest may appear; and, the mortgagee's rights of recovery will not be defeated by any act or neglect of the insured. The mortgagee is also given other rights, such as bringing a suit in their own name to recover damages.
The true statement concerning underinsured motorists coverage under a personal auto policy -----CORRECT ANSWER---------Coverage applies only to the extent that the underinsured motorists limits exceed the bodily injury limits carried by the operator of the other vehicle FAIR Plans are state insurance pools that provide property insurance to high risks areas, such as neighborhoods that have deteriorated or are in urban decay. What does the acronym FAIR stand for? -----CORRECT ANSWER---------Fair Access to Insurance Requirements Under the Commercial Crime coverage part, loss resulting from employee theft is Employee Theft covers losses resulting from the theft of covered property by employees. Property covered under this form includes money, securities, and property other than money or securities. -----CORRECT ANSWER---------Excluded unless a limit of insurance is shown in the Declarations for Employee Theft coverage The damage coverage would pay for the loss of the a product that is damaged and can't be sold -----CORRECT ANSWER---------Utility service - direct damage The broadest form of hull coverage and provides all-risks coverage on the aircraft both while it's on the ground and while it in flight -----CORRECT ANSWER---------The All- Risks Ground and Flight Aircraft Hull This is a true statement regarding single dwellings that are insured to at least 80% of the replacement value? -----CORRECT ANSWER---------They are automatically provided with replacement cost coverage or the maximum allowed under the regular flood insurance program When an Umbrella Policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays Retention is the equivalent of a deductible in property insurance. -----CORRECT ANSWER---------The excess over the self-insured retention.
subsidies. Managed by FIA (Federal Insurance Association), a branch of FEMA ----- CORRECT ANSWER---------To fill the gap left by private insurers in flood coverage NOT one of the 3 requirements for property to be eligible for FAIR plan coverage? Property eligible for FAIR plan coverage must be located in a specific area defined by the state, must be considered insurable based on reasonable underwriting standards, and must not have been able to purchase coverage through the normal insurance market. -----CORRECT ANSWER---------It must be valued at an amount under the maximum value amount set by the state True statement regarding a boatowners policy are true EXCEPT Automatic coverage is provided on replacements for the boat listed in the declarations provided the insured notifies the insurer within 45 days of purchase and pays any additional premium required. -----CORRECT ANSWER---------Replacements for the boat listed in the Declarations are automatically covered, if the insured notifies the insurer within 60 days and pays the additional premium. Full replacement cost is defined as It does not consider depreciation if the proper amount of insurance is maintained. These policies require that the amount of insurance written be 80% or more of the replacement cost of the property at the time of loss -----CORRECT ANSWER---------Full replacement of property at its current cost, new and without reduction for depreciation What provision would pay coverage for defense expenses at no additional premium? This is a provision in an insurance policy that provides additional amount of coverage for specific loss expense, -----CORRECT ANSWER---------Additional coverage clause The maximum limit of coverage available under a liability policy during a policy year regardless of the number of clams that may be made or the number of accidents that may occur -----CORRECT ANSWER---------Aggregate limit of liability The classification of risk of loss. Pure risk is the probability of loss with no chance for gain. Generally insurable.
Speculative risks involve uncertainty as whether the final outcome will be gain or loss. Generally uninsurable. -----CORRECT ANSWER---------Pure risk and Speculative risk Which of the following policies does NOT contain an automatic reinstatement provision? An aggregate limit is reduced by the payment of claims. It is possible for an insured to run out of coverage before the expiration of the policy. Aggregate limits are restored on the anniversary date of the policy -----CORRECT ANSWER---------General liability written with an aggregate limit The property condition that precludes the insured from simply turning over damaged property to the insurer and claiming a total loss is called. Until the insurer has determined that the loss is total, the insured must protect the property from further loss. -----CORRECT ANSWER---------Abandonment Which of the following property clauses allows the extension of a major coverage, applying to specific losses not already insured? The extensions of coverage clause allows the extension of a major coverage to apply to specific type loss to property not specifically insured. -----CORRECT ANSWER--------- The extensions of coverage clause The other insurance provision that limits the liability of the insurer to a portion of the loss no greater than the amount the insurer bears to all the insurance covering the property is called...to preserve the principle of indemnity -----CORRECT ANSWER---------Pro rata liability What do individuals use to transfer their risk of loss to a larger group? Transfer financial responsibility (risk) The mechanism whereby an insured is protected against loss by a specified future contingency or peril in return for the present payment of premium. Because many other individuals with the same or similar risk of loss are paying premiums, funds are available to indemnify those who actually suffer that loss. -----CORRECT ANSWER------ ---Insurance
