GA Claims Adjuster Licensing Exam Flashcards

Questions and Answers

What is a speculated up-front deposit that can be adjusted upon review of exposure?

It refers to an initial payment that may change based on the assessment of risk exposure.

An insured's right of recovery against a negligent third party may be transferred to the insurer under the:

Assignment clause

Indemnity clause

Consideration clause

Subrogation clause (correct)

A wrongful act is considered to be a __________.

tort

Policies that pay full current cost for property that has been destroyed, without making any depreciation are written on what basis?

Replacement cost basis Signup and view all the answers

OSCAR or open peril coverage forms:

List the policy exclusions Signup and view all the answers

What is the clause in the Standard Fire Policy that limits the liability of the insurer to a portion of the loss?

Pro-rata liability Signup and view all the answers

Furniture, which is destroyed when a building burns down, is an example of what kind of loss?

Direct Signup and view all the answers

As a name peril contract, the Standard Fire Policy covers:

Perils specified in the policy Signup and view all the answers

Each of the following may be a legal defense against negligence except:

Apparent authority Signup and view all the answers

Under the doctrine of proximate cause, which of the following would be considered fire damage?

All of the above Signup and view all the answers

If property is sold, the policy may not be assigned to the new owner 'except with the written consent of the Company'. This is known as a:

Assignment clause Signup and view all the answers

After the initial notification of a loss, the insured is required to submit a signed proof of loss within ______ days for every policy except for what type of coverage which allows for 120 days?

60 days; Commercial Crime Coverage Signup and view all the answers

Usually when an insurer cancels, all earned premiums are kept and unearned premium is returned to the policyholder, this is known as:

Short-rate cancellation Signup and view all the answers

What are the differences between theft and larceny?

None Signup and view all the answers

What do burglary and robbery have in common, and what's different?

Theft; Burglary is breaking in/out and robbery is threatening or harmful Signup and view all the answers

What coverage does Community Eligibility apply to?

Flood insurance through FEMA Signup and view all the answers

What's the difference between Emergency Program and Regular Program in the National Flood Insurance Program?

Emergency applies to homes in communities that are normally not a flood hazard. Regular programs are awarded to an entire community that is eligible due to flood hazard. Signup and view all the answers

What is the flood coverage on a regular program in a 1-4 Family Dwelling?

$250,000 Signup and view all the answers

On what policy can you add the Flood Program endorsement?

None! It has its own policy through the Federal Government. Signup and view all the answers

What is Difference in Conditions (DIC) Insurance?

A separate insurance policy that provides open-perils coverage to fill in the gaps left by flood coverage if a home is worth over $250K. Signup and view all the answers

What is the waiting period on NFIP coverage?

30 days after policy purchase Signup and view all the answers

What is the coverage change waiting period for the NFIP?

5 days Signup and view all the answers

Give examples of the flood peril.

An overflow of inland or tidal waters, unusual or rapid accumulation or runoff of surface waters, mudflow or mudslide, collapse of land along the shore of a lake as a result of erosion. Signup and view all the answers

What kinds of things does flood insurance cover?

Your house and your things (dwelling and personal property). No indirect charges. Signup and view all the answers

What does dwelling coverage extension for flood insurance cover, and how much is it?

Structures not attached to dwelling (O.S. or Appurtenant structures). 10% of Dwelling limit. Signup and view all the answers

Contents coverage of flood insurance is limited to what?

Personal property damaged or destroyed by the flood itself and belongs to the insured and resident spouse/relatives. Signup and view all the answers

What are the coverages of flood insurance?

Dwelling, Contents, Debris Removal Signup and view all the answers

How are damaged items valued in flood coverage?

Dwelling - replacement cost, Contents - Actual Cash Value Signup and view all the answers

What kind of property is not covered by flood insurance?

Basements and underground structures, animals, money/accounts/bills, land, anything else covered by other policies. Signup and view all the answers

What is the formula for Loss Valuation on flood insurance?

(amount of insurance purchased / 80% Dwellings Total replacement cost) x Loss Amount Signup and view all the answers

What is the standard deductible on flood insurance?

$1K for Dwelling and $1K for Content Signup and view all the answers

What is Personal Inland Marine Insurance?

Floaters or policies for worldwide coverage of personal property on an open-peril basis. Signup and view all the answers

Is flood excluded from Personal Inland Marine Insurance?

False Signup and view all the answers

What are the floaters available on Personal Inland Marine Insurance?

Personal Articles Floaters, Personal Property Floaters, and Personal Effects Floaters Signup and view all the answers

What perils are covered under Personal Inland Marine Insurance floaters?

All; open-peril Signup and view all the answers

Which PIMI floater would be appropriate for a diamond ring? Why?

Personal Articles Floater - itemizes valuables such as jewelry and furs Signup and view all the answers

What is a Personal Effects Floater good for, and what deductible does it have?

World-wide open peril coverage of personal property for people who are traveling, with no deductible. Signup and view all the answers

What is a Personal Property Floater good for and what kind of limit do they have?

World-wide open peril coverage of personal property, usually for special occasions like weddings or exhibitions. Signup and view all the answers

Does personal inland marine insurance cover flood?

True Signup and view all the answers

All of the following coverage is available under a Standard Flood Insurance Policy issued by the National Flood Insurance Program except:

Loss of Use Signup and view all the answers

The maximum number of days that a Standard Flood Insurance Policy will cover property removed is:

45 days Signup and view all the answers

If the limits of insurance available under the National Flood Insurance Program are inadequate, where can additional coverage be purchased?

Difference in Conditions Policy Signup and view all the answers

Define Yacht.

A sailboat with an auxiliary inboard motor. Signup and view all the answers

Why does Yacht insurance get a Lay-Up warranty?

During months when a watercraft is not in use, a discount is applied to premium. Signup and view all the answers

What are navigational limits?

Limits coverage of a watercraft to a described geographical area. Signup and view all the answers

Wave damage and damage caused by striking an underwater object is a peril covered by what insurance?

Federal Longshoremen and Harbor Workers Compensation Insurance. Signup and view all the answers

What are the three coverages and limits under Comprehensive Personal Liability?

Personal Liability - $25K per occurrence, Medical Payments - $500, Damage to Property of Others - $250 per occurrence. Signup and view all the answers

The acronym PMML represents which of the following?

hazards (Probably Makes More Loss or Please Make My Lunch), physical, moral, morale, legal Signup and view all the answers

The acronym ARRT is for?

Personal risk management; avoidance, retention, reduction, transfer Signup and view all the answers

The acronym DECAL is for?

Insurable risk; definite and measurable, economically feasible, not catastrophic, accidental, law of large numbers Signup and view all the answers

The acronym FALS-ID is for?

Personal injury; false arrest, defamation, copyright infringement, libel, slander, invasion of right of private occupancy. Signup and view all the answers

The acronym CAL-CSI is for?

Defenses against negligence; comparative, contributory, intervening cause, assumption of risk, statute of limitations, last clear chance. Signup and view all the answers

The acronym OSCAR is for?

Open peril aka special/all-risk/comprehensive. Signup and view all the answers

The acronym ACCL is for?

Parts of a contract; agreement, competent parties, consideration, legal purpose. Signup and view all the answers

The acronym DICEED is for?

Parts of a contract; declarations, insuring agreements, conditions, endorsements, exclusions, definition. Signup and view all the answers

The acronym U-HID is for?

Uninsured motorist claim; Uninsured/Underinsured, Hit & Run, Insolvent (insurer), Denied Coverage. Signup and view all the answers

The acronym COUP is for?

What is covered by collision; car, object, upset, pedestrian/pothole. Signup and view all the answers

The acronym DDPB (Don't Drink Peanut Butter) is for?

Negligent Liability; Duty to Act, Breach of Duty, Damages, Proximate Cause. Signup and view all the answers

The acronym WWNI is for?

'We will never insure' or standard exclusions; wear and tear, war, nuclear, intentional loss. Signup and view all the answers

The acronym AMStAR is for?

Methods of valuation; agreed value, market value, stated value, replacement cost, actual cash value. Signup and view all the answers

The acronym WC-SHAVER is for?

Extended coverage; windstorm, civil commotion, smoke, hail, aircraft, vehicle, explosion, riot. Signup and view all the answers

The acronym WSH is for?

Exclusions for tree/shrub/plant coverage; wind, hail, smoke. Signup and view all the answers

The acronym FLI is for?

DP1 perils; fire, lightning, internal explosions. Signup and view all the answers

The acronym APE is for?

Personal inland marine insurance floaters; articles, property, effects. Signup and view all the answers

The acronym SWIMSWAM is for?

Yacht definition; sailboat with auxiliary inboard motor. Signup and view all the answers

The acronym SIR is for?

'Deductible' on an umbrella policy; self-insured retention. Signup and view all the answers

The acronym DRTCC is for?

Types of unfair trade practices; rebating, coercion, twisting, defamation, commingling. Signup and view all the answers

The acronym DOPLA is for?

DP coverages; Dwelling, Other Structures, Personal Property, Loss of Fair Rental Value, Additional Living Expenses. Signup and view all the answers

The acronym MR.LC is for?

Types of property that can be scheduled on a business income/extra expenses from Dependent Properties Endorsement. Signup and view all the answers

The acronym CPP is for?

Commercial Package Policy. Signup and view all the answers

The acronym BPP is for?

Building and Personal Property Coverage. Signup and view all the answers

What are the Coverage components in Personal Auto Policy (PAP)?

Cov A - Liability 25/50 BI, 25 PD Minimum; Cov B - Medical Payments ($1K per person in vehicle); Cov C - UM/UIM (same minimum as liability); Cov D - Physical Damage: Collision (Ded.$500) & OTC (Ded.$500); Cov E - Duties after a Loss; Cov F - General Provisions. Signup and view all the answers

Which of the following would be considered an 'offer'?

The applicant submits an application to the company with payment. Signup and view all the answers

When a person decides not to buy insurance because of the cost, what method of handling risk management has been undertaken?

Risk retention Signup and view all the answers

Something that increases the chance of a peril occurring is known as a ___________.

hazard Signup and view all the answers

Which of the following is not an element for the formation of a valid contract?

Incompetent parties Signup and view all the answers

What is a temporary contract of insurance that commits the insurer before the policy is issued called?

Binder Signup and view all the answers

A term that blocks all attempts to change conduct or reassert a right previously waived, and it usually applies after the other party has begun to rely on the conduct or waiver is known as?

Estoppel Signup and view all the answers

Oily rags in a garage are a what kind of hazard?

Physical Signup and view all the answers

Insurance is a means of ________ risk?

transferring Signup and view all the answers

Which of the following is an insurable risk?

Hail damage to the roof of a car Signup and view all the answers

In which of the following would you have an 'insurable interest'?

Both A and B Signup and view all the answers

The insurance contract is considered a contract of indemnity because:

An insured may collect no more than the amount required to restore him/her to the same financial condition he/she was in prior to a loss. Signup and view all the answers

Who owns a mutual insurance company?

Its policyholders Signup and view all the answers

All the following statements concerning binders are false except:

Most property and casualty agents bind coverage. Signup and view all the answers

A non-exclusive agent:

Represents more than one insurance company. Signup and view all the answers

The action which, in a natural and continual sequence, produces a loss is known as the:

Proximate cause. Signup and view all the answers

What are required discounts to offer on GA auto policies?

Defensive driving and good student discount; must offer at least 10% discount. Signup and view all the answers

For someone who is less than 25 years old to qualify for the Defensive Driving Discount, they must have committed no traffic offenses for the previous five years.

False Signup and view all the answers

Where can you find the customized equipment endorsement and what kind of limit is used?

On the Personal Auto Policy; scheduled limits are used on customized equipment. Signup and view all the answers

What is an Additional Insured?

An individual or organization listed as covered by a primary insurance agreement. Signup and view all the answers

Can two people share a single coverage of a car?

True Signup and view all the answers

What are additional coverage limits on Dwelling Policies?

Additional coverages are 10% of the limit of A under Coverage E - Additional Living Expenses. Signup and view all the answers

Collapse is a peril or additional coverage?

True Signup and view all the answers

What are the Crime Coverage Forms?

A - Employee dishonesty, B - Forgery and alteration, C - Theft, disappearance, destruction, D - Robbery and safe burglary (PP), E - Premises burglary, F - Computer fraud, G - Extortion, H - Premises theft/outside robbery, Q - Robbery and safe burglary ($). Signup and view all the answers

What are Homeowners Policy Coverages?

Sect I - Property; A - Dwelling (80%-100% Value of home), B - Other Structure (10%A), C - Personal Property (50%A), D - Loss of Use (~30%A), Add.Cov - Trees/Shrubs/Plants, Debris Removal, Fire Dept, Reasonable Repairs, Lost Earnings; Sect II - Liability; E - Personal Liability (100K), F - Medical Payments (1K - 3rd party only), Supp Pay - First Aid to Others, Damage to the Property of Others, Loss Assessment (1K), Endorsements - Mobile Home, Earthquake, Personal Property Replacement Cost, Scheduling, Inflation Guard, Sewer/Septic, etc. Signup and view all the answers

What policy does Medical Payment pay to both 1st and 3rd parties?

Personal Auto Policy Signup and view all the answers

In a liability loss, the person to whom the insured has caused damage is referred to as the:

Third party Signup and view all the answers

All the following are required elements to prove negligent liability, except:

Intervening cause Signup and view all the answers

Because the insurance company writes the policy languages and the insured has little to no control over the content, any ambiguity in the wording is resolved in favor of the insured, therefore insurance policies are said to be _____________.

Contracts of adhesion Signup and view all the answers

Which of the following represent the insured's premium deposit?

A speculated up-front deposit that can be adjusted upon review of exposure Signup and view all the answers

Study Notes

Flood Insurance

Community Eligibility applies to flood insurance through FEMA.
The National Flood Insurance Program (NFIP) has two tiers: the Emergency Program for communities not typically flood-prone, and the Regular Program for communities meeting eligibility due to their flood hazard.
Flood coverage for a 1-4 Family Dwelling under the Regular Program is set at $250,000.
Flood insurance has a waiting period of 30 days after policy purchase and a 5-day waiting period for coverage changes.
Common flood perils include overflow of inland waters, rapid water accumulation, mudflow, and erosion.
Coverage covers dwelling, personal property, and debris removal but excludes basements, vehicles, and money.
The standard deductible for flood insurance is $1,000 for both dwelling and contents.

Personal Inland Marine Insurance

Covers personal property on an open-peril basis worldwide, termed as floaters.
Personal Articles Floater is recommended for valuable items like jewelry.
Personal Effects Floater provides coverage for items while traveling, with no deductible.
The coverage under floaters is comprehensive and includes all perils.

Housing and Coverage Policies

A Standard Flood Insurance Policy does not include Loss of Use coverage.
The maximum coverage period for property removal under a Standard Flood Insurance Policy is 45 days.
Dwelling Policies cover additional structures at 10% of the dwelling limit, applicable to DP2 and DP3 forms.
Medical payments in Personal Auto Policies apply to both first and third parties.

Insurance Definitions and Key Concepts

Terms like indemnity imply restoration to the financial state prior to loss without over-compensation.
A mutual insurance company is owned by its policyholders.
Binders are temporary insurance contracts confirming coverage before policy issuance.
Proximate cause relates to the action directly producing a loss.

Liability and Risk Management

Negligent liability requires proof of duty, breach, damages, and proximate cause. Intervening cause is not a necessary element.
The insured's right of recovery against a negligent third party is governed under the subrogation clause.
Contracts of adhesion favor the insured in the event of ambiguities in policy wording.

Coverage and Exclusions

Policies written on a replacement cost basis pay full current costs without depreciation deductions.
Open peril coverage lists specific exclusions rather than covering all perils.
Coverage forms include various types such as employee dishonesty, forgery, theft, and robbery.

Common Acronyms and Their Meanings

PMML - Physical, Moral, Morale, Legal hazards related to losses.
ARRT - Risk management methods: Avoidance, Retention, Reduction, Transfer.
DICEED - Components of an insurance contract: Declarations, Insuring Agreements, Conditions, Endorsements, Exclusions, Definitions.
AMStAR - Methods of valuation: Agreed Value, Market Value, Stated Value, Replacement Cost, Actual Cash Value.

Insurance Requirements and Discounts

Required discounts for Georgia auto policies include Defensive Driving and Good Student discounts, with a minimum discount of 10%.
For Defensive Driving Discount qualification, applicants should have no traffic offenses in the last three years.

These notes summarize the critical aspects of flood insurance, personal inland marine coverage, liability concepts, and various insurance policies relevant for the GA Claims Adjuster Licensing Exam.### Fire Damage Under Proximate Cause

Fire damage includes smoke damage, water damage from sprinkler systems, and damages caused by firefighters breaking down doors.
All forms of damage resulting from a fire are covered under the doctrine of proximate cause.

Policy Assignment

Property insurance policies cannot be assigned to new owners without the written consent of the company.
This restriction is known as the assignment clause.

Proof of Loss Submission

After notifying of a loss, the insured must submit a signed proof of loss within 60 days.
Commercial Crime Coverage allows for a 120-day submission period for proof of loss.

Cancellation of Insurance

In the event of an insurer's cancellation, all earned premiums are retained, while unearned premiums are refunded to the policyholder.
This process is known as short-rate cancellation.

Theft vs. Larceny

There are no significant differences between theft and larceny, as both involve unlawful taking of someone else's property.

Burglary vs. Robbery

Both burglary and robbery involve theft; however, burglary requires breaking in or out of a property, while robbery involves threats or violence against a person.

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Description

Prepare for the GA Claims Adjuster Licensing Exam with these flashcards. This resource covers essential aspects of flood insurance and the National Flood Insurance Program. Test your knowledge with key terminology and definitions critical for success on the exam.