CCA Insurance Policies and Coverage 3

Question 1

Under a claims-made liability policy, a 'retroactive date' of January 1, 2020 means:

Accepted Answer

Occurrences before January 1, 2020 are not covered even if the claim is made during the policy period

Answer

The retroactive date sets the earliest point in time from which occurrences can give rise to covered claims; incidents before that date are excluded regardless of when the claim is made.

Question 2

Which provision in a property insurance policy requires the insured to carry insurance equal to a specified percentage of the property's value or face a penalty at the time of loss?

Accepted Answer

Coinsurance clause

Answer

The coinsurance clause (e.g., 80% coinsurance) penalizes insureds who underinsure their property by requiring them to share in the loss proportionally.

Question 3

A homeowner's policy excludes flood damage. The insured suffers a loss from storm surge during a hurricane. The adjuster should:

Accepted Answer

Deny the flood portion and pay only wind damage if separable

Answer

When a covered peril (wind) and an excluded peril (flood) combine to cause damage, the adjuster must segregate the damages; only wind-caused losses are covered.

Question 4

What does 'additional insured' status on a liability policy typically grant?

Accepted Answer

The additional insured is covered under the named insured's policy for specified liability arising from the named insured's operations

Answer

Additional insured status extends the named insured's liability coverage to a third party (e.g., a property owner) for claims arising out of the named insured's work or operations.

Question 5

An 'umbrella' policy differs from an 'excess' liability policy primarily because an umbrella policy:

Accepted Answer

Can drop down to provide primary coverage for claims not covered by underlying policies

Answer

An umbrella policy can 'drop down' to cover gaps in the underlying policy or claims not covered by the primary policy, while a pure excess policy only sits above the primary limits.

(CCA) Certified Claims Adjuster Practice Test

(CCA) Certified Claims Adjuster Practice Test

CCA Insurance Policies and Coverage 3