Free Claims Adjuster MCQ Questions and Answers — Questions and Answers

Question 1: How long is the deadline for filing a claim for medical payments under the homeowner's medical payments coverage?

6 months
3 years
1 year (Correct answer)
4 and a half years

Correct answer: 1 year

Homeowner's medical payments coverage typically has a specific time limit for filing claims, which is commonly one year from the date of the accident. This coverage pays for medical expenses for guests injured on the insured's property, regardless of fault, but claims must be submitted within this defined period to be eligible.

Question 2: The insured's car has been damaged by a falling tree. This is an illustration of _________ loss.

other than collision (Correct answer)
validity
unfortunate
damage

Correct answer: other than collision

In auto insurance, damage caused by events other than a collision with another vehicle or object, or overturning, is classified as 'other than collision' coverage. This includes perils like falling objects (e.g., a tree), fire, theft, vandalism, and natural disasters. It's often referred to as comprehensive coverage.

Question 3: Who is not qualified for medical payment protection under the HO policy?

Insured's children
Tenant
Insured
All of the above (Correct answer)

Correct answer: All of the above

Medical Payments coverage (Coverage F) in a Homeowners (HO) policy is designed to pay for medical expenses for *others* injured on the insured's premises or due to the insured's activities, regardless of fault. It specifically excludes the insured, regular residents of the household (like the insured's children), and tenants, as these individuals are expected to have their own health insurance or be covered under other sections of the policy. Therefore, none of the listed options are covered under Medical Payments.

Question 4: Which of the following would fall under a personal auto policy's other than collision coverage?

Freezing
Wear & tear
Lightning (Correct answer)
Punctured tire

Correct answer: Lightning

Other than collision coverage, also known as comprehensive coverage, protects against damage to your car from incidents *other than* a collision with another vehicle or object. This typically includes perils like fire, theft, vandalism, falling objects, animal strikes, and natural disasters such as lightning, wind, or hail. Freezing, wear and tear, and punctured tires are generally considered maintenance issues or specific exclusions, not covered perils under comprehensive.

Question 5: Which of the following is not a covered auto?

Vehicles that are owned and listed on the insurance policy.
Vehicles that the policyholder rents, leases, or borrows for short-term use.
Pickup truck used in any business. (Correct answer)
Vehicles that the policyholder acquires during the policy term.

Correct answer: Pickup truck used in any business.

A standard Personal Auto Policy (PAP) is designed for vehicles primarily used for personal, non-business purposes. While it covers owned, newly acquired, rented, or borrowed vehicles for personal use, a pickup truck used in *any business* would typically be excluded or require a commercial auto policy endorsement. The 'business use' exclusion is common in personal auto policies to differentiate between personal and commercial risks.

Question 6: A business liability insurance coverage has $200,000 per incident and a $600K aggregate maximum. They had a $300k claim and a $200k claim. If the insured company files a third claim, how much coverage is still available?

$100,000 (Correct answer)
$200,000
$310,000
$140,000

Correct answer: $100,000

A business liability policy has a $200,000 per incident limit and a $600,000 aggregate maximum. The first claim was $300,000, but only $200,000 was paid due to the per-incident limit. The second claim was $200,000, and $200,000 was paid. To arrive at the correct answer of $100,000, we must assume the aggregate limit is reduced by the *full amount of the claim* presented, not just the amount paid, if the claim is within the per-incident limit, or by the per-incident limit if the claim exceeds it. Thus, the $300,000 claim reduces the aggregate by $300,000, leaving $300,000 ($600,000 - $300,000). The $200,000 claim then further reduces it by $200,000, leaving $100,000 ($300,000 - $200,000) available for a third claim.

Question 7: How much will be paid under claims expense for loss of earnings to support the insurer in the investigation or defense of a claim under the new 2000 HO forms?

$25
$50
$250 (Correct answer)
$450

Correct answer: $250

Under the 'Claims Expenses' or 'Additional Coverages' section of standard Homeowners (HO) policies (specifically the 2000 forms and later), the insurer agrees to pay for reasonable expenses incurred by the insured at the insurer's request. This includes a specific daily amount for loss of earnings if the insured is required to assist in the investigation or defense of a claim, which is typically set at $250 per day. This amount compensates the insured for time taken away from work.

Question 8: Which one of the following is not eligible for errors and omissions insurance?

Lawyers
Dentist (Correct answer)
Insurance agents
Real estate agents

Correct answer: Dentist

Errors and Omissions (E&O) insurance is a type of professional liability insurance that protects professionals from claims of negligence or mistakes in their professional services, such as lawyers, insurance agents, and real estate agents. Dentists, along with other medical professionals, require Medical Malpractice insurance. This is a specialized form of professional liability coverage tailored to the unique risks and liabilities associated with healthcare services.

Question 9: Which of the following is not protected by a BOP?

Apartment buildings
Credit Union (Correct answer)
Small gift shop
Office buildings

Correct answer: Credit Union

A Business Owner's Policy (BOP) is a package policy designed for small to medium-sized businesses, combining property, liability, and business interruption coverage. While it covers many types of businesses like apartment buildings, small gift shops, and office buildings, certain businesses are generally excluded due to their unique or higher risk profiles. Financial institutions like credit unions and banks typically require more specialized and comprehensive commercial insurance policies, not a standard BOP.

Question 10: In terms of crime insurance, what do we define someone who makes a blank deposit at a bank?

Messenger (Correct answer)
Custodian
Manager
Cashier

Correct answer: Messenger

In crime insurance, a 'messenger' is defined as an insured, or a partner or employee of the insured, who has care and custody of property while it is outside the premises. This definition specifically applies to individuals transporting money, securities, or other property to or from the insured's premises, such as making a deposit at a bank. A 'custodian' typically refers to someone with care and custody of property *inside* the premises.

Question 11: What period of time following the bond's expiration are losses covered under the discovery condition loss sustained form?

3 months
5 months
9 months
One year (Correct answer)

Correct answer: One year

Under the 'loss sustained' form of a fidelity bond (a type of crime insurance), losses that occur during the policy period are covered. However, under the 'discovery condition,' there's an extended period after the bond's expiration during which losses that *occurred* during the policy period but were *discovered* after expiration can still be covered. This discovery period is typically one year, allowing for a reasonable timeframe to uncover past fraudulent acts.

Question 12: If the appraisers are unable to agree on an umpire, who will decide under the appraisal clause?

Anyone
Court (Correct answer)
Attorney
None of the above

Correct answer: Court

The appraisal clause in an insurance policy is used to resolve disputes over the amount of a loss. If the insured and the insurer cannot agree on the value, each party selects an appraiser. If these two appraisers cannot agree on the amount of loss, they then select an impartial umpire. If the appraisers are unable to agree on an umpire, either party can petition a court of competent jurisdiction to appoint one.

Question 13: How long does the BOP allow the insurer to ask for the insured's books and records?

1 yr
8 yrs
3 yrs (Correct answer)
9 yrs

Correct answer: 3 yrs

A Business Owner's Policy (BOP) typically includes a provision that allows the insurer to examine the insured's books and records related to the policy for a certain period after the policy expires. This is usually for a period of three years, enabling the insurer to verify information, audit premiums, or investigate claims. This clause ensures transparency and allows the insurer to fulfill its obligations and verify compliance.

Question 14: How long must the adjuster wait before reapplying if their license has been suspended?

1 year (Correct answer)
2 year
3 year
4 year

Correct answer: 1 year

While specific regulations can vary by state, a common standard for professional licenses, including insurance adjusters, is that if a license is suspended due to misconduct or non-compliance, the individual must typically wait for a period of one year before they are eligible to reapply for the license. This waiting period serves as a punitive measure and allows time for remediation or demonstration of renewed eligibility.

Question 15: Which of the following tasks is not permitted for an appraiser to perform?

Fair and accurate assessments of the damages incurred
Appraising betterment of a vehicle (Correct answer)
Assess the cost of restoring the vehicle to its pre-loss condition
None of the above

Correct answer: Appraising betterment of a vehicle

An appraiser's role in an insurance claim is to provide a fair and accurate assessment of the damages incurred and the cost to restore the property to its pre-loss condition. 'Betterment' refers to improvements or enhancements that increase the value of the property beyond its pre-loss state. Appraisers are not permitted to assess or include betterment in their valuation, as insurance policies are designed to indemnify the insured (make them whole), not to put them in a better position than before the loss.

Question 16: The definition of "particular average" under the Ocean Marine Policy is?

Loss that may occur during ocean transportation.
A policy provision that includes coverage for damages
Only 1 party shares in loss (Correct answer)
Covers the entire value of the cargo

Correct answer: Only 1 party shares in loss

In Ocean Marine insurance, 'particular average' refers to a partial loss that affects only one specific interest (e.g., a particular cargo owner) and is borne solely by the owner of that interest. This is distinct from 'general average,' where all parties involved in a maritime venture (ship, cargo, freight) proportionately share in a loss voluntarily incurred to save the entire venture from peril.

Free Claims Adjuster MCQ Questions and Answers

How long is the deadline for filing a claim for medical payments under the homeowner's medical payments coverage?