Scribd
Upload
3 views4 pages

Property and Casualty Adjuster Practice Questions

The document outlines various questions and answers related to general property insurance knowledge, insurance terms, and Texas statutes. It includes topics such as coverage under the Standard Fire Policy, the definition of deductible, and the minimum liability limits required in Texas. Additionally, it discusses the implications of multiple claims on homeowners' insurance policies under Texas law.

Uploaded by

mkfryktories
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
3 views4 pages

Property and Casualty Adjuster Practice Questions

The document outlines various questions and answers related to general property insurance knowledge, insurance terms, and Texas statutes. It includes topics such as coverage under the Standard Fire Policy, the definition of deductible, and the minimum liability limits required in Texas. Additionally, it discusses the implications of multiple claims on homeowners' insurance policies under Texas law.

Uploaded by

mkfryktories
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

DOMAIN I: GENERAL PROPERTY INSURANCE PRODUCT

KNOWLEDGE (40%)

1. Knowledge – Easy
Q: What perils are covered by the Standard Fire Policy?
A. Fire and Lightning
B. Fire and Windstorm
C. Fire, Lightning, and Theft
D. Lightning and Earthquake
Correct Answer: A
Explanation: The Standard Fire Policy covers only fire and lightning as perils. All other perils require separate or
extended coverage.

2. Comprehension – Moderate
Q: Under a Homeowners HO-3 policy, which of the following is covered under Coverage A?
A. A detached shed used for business
B. A pool house rented to a non-relative
C. A garage attached to the dwelling
D. A neighbor’s fence
Correct Answer: C
Explanation: Coverage A applies to the dwelling and attached structures. Detached structures are under Coverage B
and may be excluded if used for business.

3. Application – Hard
Q: A business has a commercial property policy with an 80% coinsurance clause. The building is insured for
$120,000, its ACV is $200,000, and the insured suffers a $40,000 loss. How much will the insurer pay?
A. $40,000
B. $30,000
C. $24,000
D. $38,000
Correct Answer: B
Explanation:
Formula: (Insurance Carried ÷ Insurance Required) × Loss
= (120,000 ÷ 160,000) × 40,000 = $30,000
The insured didn’t meet the 80% requirement (160,000), so the claim is reduced proportionally.
DOMAIN II: INSURANCE TERMS & RELATED CONCEPTS
(40%)

4. Knowledge – Easy
Q: What is the term for the amount the insured must pay before insurance covers a loss?
A. Premium
B. Coinsurance
C. Deductible
D. Reserve
Correct Answer: C
Explanation: A deductible is the amount the policyholder must pay out-of-pocket before the insurer pays on a
covered loss.

5. Comprehension – Moderate
Q: Which of the following best describes subrogation?
A. The insured assigns policy rights to another
B. The insurer pays a claim and seeks reimbursement from a third party
C. The process of replacing damaged property
D. The insured shares part of the loss
Correct Answer: B
Explanation: Subrogation gives the insurer the right to recover from a third party after paying the insured's claim
(usually when another party caused the damage).

6. Application – Hard
Q: An insured files a claim. The adjuster and the insurer disagree on the amount of the loss. What is the proper
process to resolve this under standard policy provisions?
A. The claim is denied automatically
B. The insured must file a lawsuit
C. The appraisal clause is triggered
D. Arbitration is mandatory
Correct Answer: C
Explanation: If there is a dispute over the value of loss, the policy allows either party to invoke the appraisal clause,
where each party selects an appraiser and they jointly select an umpire.

DOMAIN III: TEXAS STATUTES & RULES (20%)


7. Knowledge – Easy
Q: What are the minimum limits of liability required under the Texas Financial Responsibility Law?
A. 10/20/10
B. 15/30/15
C. 30/60/25
D. 25/50/25
Correct Answer: C
Explanation: Texas law mandates liability limits of $30,000 per person, $60,000 per accident for bodily injury, and
$25,000 for property damage.

8. Comprehension – Moderate
Q: What does the Texas Windstorm Insurance Association (TWIA) provide coverage for?
A. Earthquake and sinkhole losses
B. Fire and theft in rural areas
C. Windstorm and hail in designated catastrophe areas
D. Flood and water backup damage
Correct Answer: C
Explanation: TWIA provides windstorm and hail insurance in high-risk coastal areas where private insurers often
won’t offer coverage.

9. Application – Moderate
Q: A Texas adjuster fails to report a felony conviction within 30 days. What is the likely consequence under Texas
Insurance Code?
A. Immediate imprisonment
B. Cease and desist order only
C. Suspension or revocation of license
D. Mandatory fine and continuing education
Correct Answer: C
Explanation: Texas law requires notification of felony convictions within 30 days. Failure to do so can result in
disciplinary actions, including license suspension or revocation.

10. Analysis – Hard


Q: An insured homeowner files three claims in three years—one was unpaid, one due to wind, and one for fire.
Which is true under Texas law?
A. The insurer must renew the policy
B. The insurer can non-renew due to three claims
C. The insurer can cancel the policy midterm
D. The insurer can charge a surcharge over 25%
Correct Answer: B
Explanation: Under Texas Insurance Code, an insurer may refuse to renew a homeowners policy if the insured has
made three or more claims in three years, unless they’re from natural causes and unpaid—which doesn’t seem to be
the case here.

You might also like