Adjuster Pro Texas Questions &
Answers
All of the following pieces of information can be found in the conditions section of an
insurance policy EXCEPT: - ANSWERSCauses of loss that are not covered
Which of the following best defines the principle of indemnity? - ANSWERSAfter a loss,
the insured should be restored to his approximate financial condition before the loss
SureTrust Insurance was founded and operates in Texas. In Texas, Suretrust is
considered - ANSWERSa domestic insurer
What is a reserve, in insurance terms? - ANSWERSA pool of collected premiums that
the insurer sets aside to pay claims
Which of the following would you find in the Conditions section of an insurance policy? -
ANSWERSThe insured's duty after a loss
Which of the following is found in the declarations page of an insurance policy? -
ANSWERSThe name of the insured party
Which of the following refers to being restored to the financial condition you were in
before a loss? - ANSWERSIndemnification
Dr. Nelson routinely schedules her patients for lab tests that they dont need so she can
charge their insurers for more money. Dr. Nelson is: - ANSWERScommitting health
insurance fraud
Six Starts Development Company has just purchased several large properties in Las
Vegas. As a result of this large purchase, they are a little short on money and decide to
save money by not purchasing insurance on their new properties. Six Stars is
practicing: - ANSWERSRisk retention
Which of the following people committed soft fraud? - ANSWERSRafael accidentally
slipped on a wet floor at the supermarket. Although his only injury was a sprained ankle,
he claimed he had back and neck pain when he sued the supermarket in an effort to get
more money in the settlement.
When a car stops short in front of Mike's car, he manages to hit the brakes in time and
avoids a collision. To Mike's surprise, the other driver then throws the car into reverse
and backs into Mike's car! The other drivers actions are an example of: -
ANSWERSHard fraud
,When Louise goes online and fills out phony applications with XYZ Auto Insurance in
order to print the temporary insurance cards and sell them for a profit on the black
market, she is: - ANSWERSCommitting hard fraud
Lucy has insurance on an expensive necklace she likes to wear to work every day. After
work, she takes it off and leaves it in her car's cupholder so she can put it back on in the
morning on her way to work. Lucy's behavior would be considered a: -
ANSWERSMorale hazard
When an insurer issues an insurance policy, the actual item, person, or organization
that is being insured is called the: - ANSWERSRisk
Which of the following situations does not involve an instance of "pure risk" -
ANSWERSLoss of money invested in the stock market
Which of the following is an example of how some insurers are fighting back against
insurance fraud? - ANSWERSStarting fraud busting units staffed with former detectives
and police officers
Which of the following is NOT a form of insurance fraud? - ANSWERSIncreasing your
insurance coverage when you think a loss is likely
Steve has just purchased a wedding ring for his new bride. If something were to happen
to the ring, he'd be out of a lot of money, so he purchases an insurance policy. He is
able to do this because: - ANSWERSThe ring is a pure risk
Haley takes a bottle of water into a store, pours some of it on the floor when no one is
looking, and then pretends to slip and fall. She cries out for help in apparent pain until
someone comes to her aid. She then sues the store for her fake injury in an effort to
collect an insurance settlement. What has Haley committed? - ANSWERSHard fraud
After an earthquake, Jake's home is still standing, but it is a little shaken. The damage is
not extensive but Jake wants to cash in on the situation, so he takes a sledgehammer to
some of his extra belongings and adds them to his claim. Jake has committed: -
ANSWERSProperty insurance fraud
Which of the following is an example of a hazard? - ANSWERSSandra's home is in an
area of Los Angeles that is often hit by earthquakes
Risk avoidance is a risk management technique that: - ANSWERSEliminates risk
An "occurrence" is defined as: - ANSWERSAn unexpected event that causes loss
When Sally applies for an auto policy, her agent issues her a _______ so that she can
benefit from insurance protection while he underwrites the policy. - ANSWERSBinder
, Jane's shed burns to the ground during a tornado, when the high winds break a wall of
the shed, knocking over a lantern inside. What is the proximate cause of the loss? -
ANSWERSWind
During a storm, lightning strikes a tree in Harry's yard and starts a fire that spreads to
his shed where he keeps all his equipment for his landscaping business. In addition to
the shed, Harry has to purchase all new equipment to stay in business. The cost to
replace the equipment would be considered: - ANSWERSA direct loss
Clark is filling out an application for an insurance policy. The application asks for his
birth date, and Clark writes 1/24/67. His actual birthday is 1/24/63, but he likes to
appear younger so he uses a different date. This would be called: -
ANSWERSMisrepresentation
Jason's auto policy states that the insurer may cancel coverage if a premium is more
than 30 days late. However, Jason is currently more than 30 days late, and has been so
five times in the last year, and his insurer has done nothing about it. When Jason gets
into an accident and files a claim, which of the following is most likely to happen? -
ANSWERSThe insurer will pay the claim because of the implied waiver they have made
by not canceling Jason's policy the previous times he was late with his payments.
What is a binder? - ANSWERSTemporary coverage for an insurance applicant until the
policy is issued
In order to qualify for an insurance policy, Lydia's Fine Jewels must agree to have a
security guard on the premises 24/7. This is called a: - ANSWERSWarranty
Which of the following statements about the principle of estoppel is TRUE? -
ANSWERSEstoppel protects the insured party from an insurer who initially approves
coverage, but then later denies coverage after the insured pays for repairs.
Driving home after a 14-hour shift Sam falls asleep at the wheel and plows into Sandra's
home, causing extensive damage to the East wall and roof. As a result, Sandra and her
family must move into a hotel until the repairs are completed. The cost of staying in a
hotel is: - ANSWERSAn indirect loss
When Jim is involved in an accident, he immediately calls his insurer and files a claim.
When his insurer denies the claim, it is required to provide Jim with: - ANSWERSA
reason for denying the claim
Sue decides to get a valued insurance policy on her antique car. She and her insurance
company agree to a value of $85,000. Three years later, the car is destroyed when a
tree falls on it in a parking lot. The car depreciates at $2,000 a year, and its replacement
cost is 100,000. Ignoring any deductible, how much can Sue expect her insurer to
indemnify her? - ANSWERS$85,000
