Arizona Adjuster - Property & Casualty Exam
Simulator - Series 13-36 Completely Solved
Under the BOP, how much would be paid for any one tree, shrub, or plant in case of a
covered cause of loss? - ANSWER-The policy provides a limit of no more than $1,000
on any one tree, shrub, or plant with a total limit of $2,500. The older
forms provided $500.
Name the coverage that applies to the extra cost the insured incurs to make temporary
repairs and speed up the permanent
repairs or replacement of damaged covered equipment under an Equipment Breakdown
policy. - ANSWER-This is called expediting expense coverage.
The homeowner policy written to cover only personal property and personal liability is
called an: - ANSWER-This is the HO-4 also referred to as a tenant's homeowner policy
or renters insurance.
When a first party claim is made, what must be listed on the payment draft? - ANSWER-
When a claim payment is made, an indication of the type of coverage under which the
payment is made must be stated
on the draft payment.
Which of the following would NOT meet the definition for coverage to apply under the
uninsured motorist coverage in
Arizona?
The insured was struck as a pedestrian by an uninsured motorist.
One who has coverage in excess of the financial responsibility requirement.
An uninsured motorist that causes an accident resulting in bodily injury without making
contact with that
person.
An uninsured motorist makes contact with the claimant's vehicle. - ANSWER-In Arizona,
there must be contact with the uninsured motorist and the claimant, or the claimant's
vehicle. Unless the claimant
can provide additional and confirming testimony, facts and/or evidence that another
unidentified vehicle caused the accident.
All of the following are sections of a CGL form, EXCEPT:
Conditions.
Definitions.
Prior Acts coverage.
Who is an insured. - ANSWER-Prior Acts coverage.
Although wording in the policy could exclude coverage for prior acts and events that
happened prior to the policy, that is not
,a section of the policy. The other three choices are all separate sections of the CGL.
Under an HO-3 policy, what coverage is provided for watercraft lost due to theft?
None; watercraft is excluded.
None; theft is not covered.
Up to the actual cash value of the watercraft.
$1500 maximum, under Special Limits. - ANSWER-$1500 maximum, under Special
Limits is correct.
Under personal property coverage, HO policies have several categories of property with
"special limits." Among them is
"watercraft of all types, including their trailers" For this property, the special limit is
$1500. Theft of watercraft and their
accessories are covered on the insured's residence premises only and not off the
premises. A watercraft policy is needed for
the broader coverage.
Telemarketers who transmit pre-recorded messages to consumers who have not
agreed to accept such messages will be fined up to:
$10,000 aggregate.
$10,000 per call.
$16,000 per call.
$16,000 aggregate. - ANSWER-The correct answer is: $16,000 per call.
Beginning September 1, 2009 the penalty for transmitting pre-recorded messages to
those who have not agreed to them is
$16,000 per call
Which of the following is correct in order for the additional coverage of collapse to be
available in the special BOP?
The collapse must be such that the building can not be used as intended.
The remaining part of the structure standing must be demolished.
The remaining part of the structure must be judged unsound to rebuild on.
The building must be leaning, settling or in danger of collapsing. - ANSWER-The correct
answer is: The collapse must be such that the building can not be used as intended.
The definition of collapse in the policy is the "abrupt falling down or caving in of the
structure or part of the structure" and it
must render the building as unusable as intended.
Dan insures a home for adequate limits under a DP-2. If a flood causes $1,000 in
damage, what is the maximum the
insurer will pay, disregarding deductibles?
$0.
$750.
$900.
$1,000. - ANSWER-$0 is correct.
Flood is an excluded peril under all the dwelling forms unless fire ensues and then only
the loss caused by fire is covered.
,Under the commercial property condominium association form, coverage is based on:
The commercial property form.
The association agreement and bylaws.
The special cause of loss form.
State and local ordinances. - ANSWER-The correct answer is: The association
agreement and bylaws.
The coverage provided by the form will be based on the condominium association
agreement and by laws.
Which of the following terms most closely supports insurable interest?
Actual cash value.
Indemnity.
Replacement cost.
Fair market value. - ANSWER-Indemnity is correct.
Insurable interest is economic interest or financial stake in property. You have insurable
interest when you have something
to lose if the property is lost, stolen, or destroyed. When you have insurable interest,
you are keen to keep that property safe
from harm. You obtain insurable interest in three main ways: when you own property,
have property of others in your
possession, or have legal title to property through a lien,. If there is a insured loss, you
will be indemnified, or made whole,
only up to your insurable interest. Thus the term indemnity supports insurable interest.
A deductible that is commonly used in aircraft physical damage insurance is usually:
A flat deductible.
A franchise deductible.
A percentage of the value of the aircraft.
A disappearing deductible. - ANSWER-A percentage of the value of the aircraft. is
correct.
The deductible is usually expressed as a percentage of the value of the aircraft.
Agent Rice informs the insured that he needs to run the motor vehicle records of all of
the drivers in the household per company requirements. This is an example of Agent
Rice's:
Fiduciary Authority.
Expressed Authority.
Apparent Authority.
Implied Authority. - ANSWER-Implied Authority is correct.
Implied authority is the authority the agent believes he has in order to do his job
properly. In order to write auto insurance,
the agent needs to know what is on the motor vehicle driving record of all the drivers in
the household.
All of the following events are considered acts of terrorism, EXCEPT:
, Acts of riot and civil commotion.
Acts considered dangerous to human life, property or infrastructure.
Acts resulting in damage within or outside the United States.
Acts committed by an individual or individuals acting on behalf of any foreign person or
foreign interest. - ANSWER-Acts of riot and civil commotion. is correct.
Acts of riot and civil commotion are not covered by the Act. These are perils that are
covered by property insurance policies.
When would the Personal Auto Policy respond to a loss with a three wheeler?
When used in an emergency situation.
Never.
On the insured's premises.
Off road use. - ANSWER-The correct answer is: When used in an emergency
situation. .
The PAP policy makes an exception to the less than four wheel rule. In cases of an
emergency this type of a vehicle would
be covered for liability coverage.
What is the binding authority of a Surplus Lines Broker?
Those lines for which the broker is appointed.
A surplus broker does not have the authority to bind risks.
Those lines specified in a written contract.
Those lines based on the type of surplus lines broker's license. - ANSWER-The correct
answer is: A surplus broker does not have the authority to bind risks..
Only the non-admitted insurer may bind coverage. The broker submits the information
to the insurance carrier for approval
and they can either bind or reject the risk.
Disregarding defense and settlement costs (supplementary payments), a general
aggregate limit: - ANSWER-Is the most that will be paid for the sum of Bodily Injury and
property Damage Liability coverage and Personal and Advertising Injury Liability
coverage.
A general aggregate limit is the most the policy will pay for the sum of bodily injury,
property damage, personal injury and
advertising injury liability claims.
Which of the following autos are eligible for coverage under a business auto policy?
A sedan.
A truck-tractor.
A trailer.
All would be eligible. - ANSWER-All would be eligible is correct.
Basically any type of licensed motor vehicle is eligible for the business auto policy.
A dry cleaner wants to insure the pressure boilers used in the business. They also
would like to cover some equipment and accessories that can be used in the boilers but
