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Adjuster Pro
State Insurance Claims Adjuster-Pro Certification
Insurance Claims Adjuste-Pro Exam
Course Title and Number: Insurance Claims Adjuste-Pro Exam Exam Title: Board Exam Exam Date: Exam 2024- 2025 Instructor: [Insert Instructor’s Name] Student Name: [Insert Student’s Name] Student ID: [Insert Student ID]
Examination
180 minutes
Instructions:
**1. Read each question carefully.
- Answer all questions.
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- Ensure all answers are final before submitting the exam.
- Please answer each question below and click Submit when you have** **completed the Exam.
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Adjuster Pro: State Insurance Claims Adjuster Certification 2024- Adjuster Pro - Insurance Adjuster Exam Review Questions and Answers | 100% Pass Guaranteed | Graded A+ | Read All Instructions Carefully and Answer All the Questions Correctly Good Luck: - Adjuster Pro Exam Test Questions and Answers What is insurance? - protection against financial loss what is a premium - a scheduled amount to be paid for an insurance policy. What are premiums used for - premiums are collected into a "pool" or "reserve to pay out claimants when needed. Definitions section - Defines terms used to write policy including "collusion" "decay" "like kind and quality" Includes important language for adjusters to know Insuring agreement section - What is covered and how Which causes of loss are covered Any services provided Any exclusions to coverage The maximum limit of policy coverage in dollars
Stockholder provide capital and participate in profit or losses "Non participation" insurers - no dividends go to policy holders Mutual Insurance Company - No shareholders Policy holders elect board of directors "Participating" insurers - policy holders participate in dividends Re-insurer - Provides insurance for insurers to reduce exposure to loss Pays percentage of insurers loss or any loss over a certain amount Reciprocal Insurers - Unincorporated Non profit Operated by attorney in fact Members pay into individual accounts Cost of claims shared by whole groups Fraternal Benefit Societies - Also called fraternal associations Non profit mutual aid organizations Engage in charitable activities Provide some type of insurance to members Typically consist of people with similar religion, ethnicity or occupation Fraternal Benefit Societies insurance - Used to fund altruistic activities Must be assessable by law Members are both providers and recipients
If claims payment ability is impaired, members help pay the difference captive insurers - Created by businesses in order to retain risk Exist to provide insurance for their "parent" All profit belongs to parent company Permitted in some states Risk retention groups - Authorized by the federal liability risk retention act of 1986 Owned by their members Provide commercial liability RRG Requirements - Members must be involved in similar business endeavors Don't need to be licensed in multiple states Classification based on location - Domestic Insurer - adhere to law of a state, located in that state Foreign insurer - adhere to laws in the US but can be located elsewhere Alien insurer - obey laws of another country all together how can insurance companies afford to pay for an individuals catastrophic loss? - the insurer collects premiums from all policy holders and uses them to pay out the claims of a few.
- aleatory
- unilateral
- conditional what kind of contract is an insurance policy? - Personal contract what is a contract of adhesion - the insured must accept the entire contract with all of its terms and conditions Utmost Good Faith - An obligation to act in complete honesty and to disclose all relevant facts. Aleatory Contract - a contract where the values exchanged may not be equal but depend on an uncertain event Unilateral Contract - insurance agrees that they must pay in event of a claim. the insured can stop paying premiums at any point. only the insurer has promised to perform an action. Conditional Contract - A type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable. Acronym for the four sections of an Insurance policy - DICE D - declarations page I - Insuring Agreement C- Conditions
E - Exclusions Decelerations section - Always the first section - establishes the following Names of both parties Policy number Location and description of insured item Dates of the policy Amount and limit of coverage Deductible Premium
Insurable risk - Adequate premiums Definable risk Unexpected losses Substantial loss Exclusions Law of large numbers Adequate Premiums - Potential loss can't be too much for insurer to pay Insurer must b able to cover claims and expenses If premiums must be set too high, the risk is not insurable Difneable risk - Insurer can define exact conditions under which the item is covered by the policy Item it's self is defineable Item has precise value Unexpected loss - Unforeseeable Unexpected Reasonably unpreventable Random in nature Substantial loss - Must cause substantial economic hardship Exclusions - Insurer must be able to exclude large scale disasters and catastrophic events
Law of large numbers - Insurer must be able to cover large numbers of similar risks Spreads risk across more policies Helps insurers predict losses more accurately Similar risks can mean, cars houses, persons lives, similar business etc Adverse Selection - when someone buys health insurance because they know they will probably file a claim 4 risk management techniques - Avoidance Reduction Transferenc e Retention Risk avoidance - Eliminates risk by not taking action that involves risk Risk reduction - Taking measures to reduce risk that is involved Also called risk mitigation Risk Transference - Management of sever risk by transferring risk to someone else Most common example is Insurance Risk retention - Acknowledging the risks and preparing to handle the unexpected losses as they occur Policy Period - The time frame, beginning with the inception date to the expiration date, during which insurance coverage
signed Implied waiver - assumed based on actions Estoppel - Legal principle that prevents an insurer from denying coverage if the insured has reasonably come to believe that he has such coverage based on insurers practices Types of hazards - Physical, Moral, Morale, legal Moral hazard - Results from the policy holders deliberate decision Involves reckless behavior because of the financial security offered by insurance Is a type of behavioral hazard Morale hazard - Occur when someone exhibits risky behavior because of having insurance. Physical hazard - Physical conditions that increase the chance of loss. Types of physical hazards - Environmental - pot holes in road Material - asbestos in a old house Operational - poorly managed engine Occupant - working in a coal mine Legal hazard - Increased chance of loss because
of legal action fraud - Deceiving an insurer to profit from an insurance policy Hard and soft fraud - Hard fraud - planning or faking a loss Soft fraud - exaggerating a claim to inflate the indemnity proximate cause - Unbroken chain of events between an occurrence and a loss - then that occurrence is the proximate cause of the loss occurrence - An event, incident, or condition that causes damage Occurrence as proximate cause - The original occurrence causes damage that leads to more damage Direct loss - Physical harm to tangible property Indirect loss - Economic loss that results from the direct or physical loss Insurance claims - Demand for payment in accordance with terms of the policy First party claims - Claim filed by a policy holder against his or her own insurance policy
interest to you Lender interest - A lenders financial stake in an insured item Lender Interest Provisions - Allow the lender to be listed as a payee on the policy Endure the lender is notified if the policy is canceled, reduced, or expires Provide compensation for the lender in the event of an act or an omission by insurer party Permit lender to pay premiums to maintain coverage Limits on lender provisions - Lender may only collect up to its financial interest in a property Lender may never change or cancel an insurance policy Actual Cash Value - Same as fair market value and depreciation value ACV offers lower premiums for less coverage Formula: replacement cost minus depreciation Depreciation formula - allocation of original costs over the estimated useful life of a tangible asset 3 Types of Deductibles -
Fixed Percentage Franchise Fixed deductible - Specific set amount percentage deductible - Insured party pays a percentage of the total cost, insurance pays rest Franchise Deductible - Policy kicks in only after a loss exceeds a predetermined amount If losses are above the deductible then insurance pays 100% broad evidence rule - ACV does not simply come down to RC minus depreciation Takes into account any evidence available to determine value Coinsurance - Valuation - Process of estimating an items worth Replacement cost policy - No depreciation. Based on replacement cost at the time of loss Higher premiums Used on home insurance mostly Replacement cost - Cost to replace at today's market value
- The loss or injury to the plaintiff was a direct result of the breach of duty of the defendant Degrees of Liability - Full liability- the insured party is 100% at fault for damages to a third party Partial liability - the insured party is only partially at fault, or shares fault, with a third party. The third party had some parts in his own damages No liability - the insured party has 0% or no liability Assumption of risk - Claimant knew he had the potential to experience damage Contributory Negligence - A legal defense that may be raised when the defendant feels that the conduct of the plaintiff somehow contributed to any injuries or damages that were sustained by the plaintiff. Comparative Negligence - A theory in tort law under which the liability for injuries resulting from negligent acts is shared by all parties who were negligent (including the injured party), on the basis of each person's proportionate negligence. Dangerous Instrumentality Doctrine - States that anyone involved in the use of inherently dangerous products or machines is held 100% liable for their own damages. strict (absolute) liability - liability is imposed regardless of
negligence or fault Policy limit - The maximum amount the insurance company will pay for covered losses Single limits - Establishes maximum payout for liability damages caused by the policy holder Split limits - Establishes 3 different limits on how much the policy will pay out
- Maximum payout for bodily injury for each person injured
- Maximum payout for multiple persons
- Maximum payout for property damage Aggregate limits - 2 limits
- Max payout for damage or injury per occurrence
- Maximum payout amount the policy will pay per term Res Ipsa - Means "the thing speaks for itself" and is only applied n rare instances when no one knows how exactly the accident happened Statutory law - Based on written laws Common law - Based on court decisions and customs when statutory law does not provide an answer Tort - Any civil wrongdoing, whether intentional or unintentional Tort law - Body of law that addresses and provides remedies
