1. Which of the following sequences is most likely in the correct chronological order?
A. Negotiate a settlement, then complete the investigation.
B. Determine the cost of repairs, then investigate the claim.
C. Acknowledge the claim, then open a line of communication with the claimant. Correct
D. Determine the amount of damages, then see if the claim is covered under the policy.
Explanation
The correct chronological order in claims handling begins with acknowledging the claim, which establishes the initial contact and sets the process in motion. Opening communication follows naturally to gather details and explain next steps. Investigating coverage, determining damages, and negotiating settlements occur later in the sequence.
2. A Flood Insurance Rate Map:
A. outlines the special hazard areas and flood zones in a community. Correct
B. details the locations of every WYO (Write Your Own) insurer in the country.
C. shows which areas of a community currently have NFIP insurance coverage.
D. rates each building insured by the NFIP on a scale of 1 to 10, based on its durability.
Explanation
A Flood Insurance Rate Map (FIRM) is an official FEMA map that delineates Special Flood Hazard Areas and risk zones within a community. This mapping is used for floodplain management, insurance rating, and regulatory purposes.
3. Which Alabama Residual Market program provides high risk Workers' Compensation coverage for employers who cannot obtain it in the voluntary market?
A. Alabama Insurance Underwriting Association
B. Alabama Workers Compensation Fund
C. Alabama WC Subsidy Fund
D. Alabama Workers Compensation Insurance Plan Correct
Explanation
The Alabama Workers Compensation Insurance Plan (assigned risk plan) is the residual market mechanism for workers' compensation. It provides coverage to employers deemed high-risk who cannot secure insurance in the standard voluntary market.
4. Under Jacqueline's Personal Injury Protection, all of the following would be covered for bodily injuries except:
A. Jacqueline's sister who also has PIP. Correct
B. Jacqueline.
C. Jacqueline's husband.
D. Jacqueline's cousin who lives with her.
Explanation
PIP typically covers the named insured, resident relatives, and passengers. However, if Jacqueline's sister has her own PIP policy, that policy would be primary for her injuries due to the 'other insurance' clause, making her not covered under Jacqueline's PIP to prevent duplicate recovery.
5. In a Personal Auto Policy, the definition of "Your Covered Auto" can refer to any of the following vehicles, EXCEPT:
A. a car that Ed just purchased two days ago.
B. a pickup truck listed on Bob's declaration page.
C. a van that Luke is renting while his own is being repaired. Correct
D. a trailer that Tim's neighbor let him borrow.
Explanation
Your covered auto' includes: 1) vehicles described in the declarations, 2) private passenger autos, pickups, or vans you acquire during the policy period (if reported within a specified timeframe), and 3) any trailer you own. A rental van is covered as a 'temporary substitute auto,' but it is a separate category, not part of the 'your covered auto' definition.