SDPCP - South Dakota Property and Casualty Producer

Question 21: After coverage for a storm-damaged roof is accepted without dispute, the insurer and the insured still cannot agree on the actual dollar cost of repairing the covered damage, so either party formally demands the policy's dispute resolution procedure meant specifically for this kind of disagreement.

when coverage itself is disputed

when the insured misses a premium payment

when parties disagree on the loss amount

when the policy period has expired

Question 22: Once appraisal is invoked, each party first selects its own competent and impartial appraiser to represent its position, and the policy then directs those two appraisers to jointly select a neutral third person to serve in a specific role if the two appraisers cannot agree.

a second adjuster

a subrogation trustee

a mortgagee representative

an umpire

Question 23: After each side's appraiser separately estimates the value of a disputed loss and the two figures differ, the umpire reviews both positions, and the policy specifies exactly how many of the three participants must agree on a figure before that amount becomes binding on both parties.

agreement of any two of the three

a unanimous vote of all three

the umpire alone decides

the higher of the two appraisals

Question 24: A commercial building carries two separate property policies from different insurers that both apply to the same fire loss, and neither policy excludes the other's existence, so the adjuster must first determine which contract provision controls how the two insurers divide responsibility for paying the claim.

the policy's subrogation clause

the policy's other insurance clause

the policy's appraisal clause

the policy's assignment clause

Question 25: After paying a homeowner's claim for damage caused by a neighbor's negligently maintained tree that fell during a windstorm, the insurer wants to recover what it paid from the neighbor who was actually at fault, and the producer explains which legal right lets the company pursue that reimbursement.

the doctrine of insurable interest

the principle of indemnity alone

the right of subrogation

the duty of utmost good faith

Question 26: A policyholder collects full payment from the insurer for water damage to a fence and then wants to also sue the contractor whose faulty grading actually caused the loss, hoping to keep both recoveries, so the claims manager explains which doctrine prevents that kind of double payment.

the doctrine of contribution

the coinsurance requirement

the principle of estoppel

the insurer's right of subrogation

Question 27: Before the insurer settles a covered auto claim, the insured privately signs a release letting the at fault driver off the hook in exchange for a small cash payment, without telling the insurer or obtaining its consent, so the adjuster must identify which duty the insured has violated.

the duty not to impair subrogation

the duty to cooperate with defense

the duty to provide proof of loss

the duty of continued insurable interest

Question 28: An insured secretly accepts a cash settlement from the at fault driver and releases all further claims against that driver, then files a claim with the insurer for the same accident, and the insurer learns of the release only afterward, prompting a question about the insurer's available response.

the insurer must pay the claim fully

the insurer may reduce or deny payment

the insurer must sue the driver anyway

the release automatically voids the entire policy

Question 29: A general contractor and a subcontractor agree in their construction contract that neither party's property insurer will pursue the other for damages after a covered loss, preserving their working relationship even if one side's negligence caused the damage, and the producer must name this kind of advance agreement.

an assignment of benefits

a hold harmless agreement

a waiver of subrogation

an indemnification clause

Question 30: An insurer wants to begin pursuing the negligent third party for reimbursement immediately after a covered fire loss is reported, before any appraisal has been completed and before a single dollar of the claim has actually been paid out to the insured, and counsel must advise on timing.

the right arises upon claim reporting

the right arises at policy issuance

the right arises after litigation begins

the right arises only after payment

Question 31: An applicant completes and signs a property insurance application, pays the initial premium to the producer, and submits both to the insurer for underwriting review, and the training manual asks which party in this transaction is actually making the offer to contract.

the applicant makes the offer

the insurer makes the offer

the producer makes the offer

the underwriter makes the offer

Question 32: An insured who disputes the meaning of an ambiguous phrase buried in a standard homeowners policy learns that courts will generally interpret that unclear wording against the insurer that drafted it, since the insured had no real opportunity to negotiate any of the printed language before signing.

it is an aleatory contract

it is a contract of adhesion

it is a unilateral contract

it is a conditional contract

Question 33: During the application process, an applicant states an honest belief about the age of a roof without personally verifying the exact date of installation, and this statement only needs to be substantially accurate rather than perfectly precise for the application to remain legally acceptable, illustrating a specific concept.

it is a warranty

it is a concealment

it is a representation

it is a waiver

Question 34: An underwriter begins evaluating a new commercial property risk and starts by reviewing the single document that records the applicant's own signed statements about the property, its use, and its loss history, since this document forms the primary foundation for the entire underwriting decision that follows.

the inspection report

the credit report

the loss run summary

the application

Question 35: An insurer declines to issue a homeowners policy largely because of negative information contained in a consumer report the underwriter ordered during the application process, and federal law requires the insurer to send the applicant a specific kind of notice explaining that the report played a role in the decision.

an adverse action notice

a certificate of authority

a proof of loss form

a binder confirmation letter

Question 36: After sending an adverse action notice to a declined applicant, the insurer must include specific information so the applicant can actually follow up and challenge anything inaccurate in the report that influenced the decision, and the compliance officer must identify what this notice is required to disclose.

the underwriter's personal contact information

the reporting agency's name and address

the exact premium that was quoted

the applicant's original credit score number

Question 37: An applicant who receives an adverse action notice after being declined for coverage wants to find out exactly what information the reporting agency has on file and to challenge anything that seems inaccurate, and the producer explains which basic right federal law gives consumers in this exact situation.

the right to demand free coverage

the right to change the underwriter

the right to dispute inaccurate information

the right to void the policy

Question 38: Before ordering a consumer report on an applicant, an insurer must have a legitimate, legally recognized reason for requesting that report in the first place, such as evaluating an application for insurance, rather than pulling the file out of simple curiosity, and compliance training names this requirement.

a written court order is required

the applicant's employer must consent

a state license exam is required

a permissible purpose is required

Question 39: An insurer sends every new customer a written document describing what kinds of personal financial information the company collects, how that information is used internally, and with which outside parties it might be shared, and the compliance manual asks what this required document is generally called.

the privacy notice

the adverse action notice

the certificate of coverage

the declarations page

Question 40: An insurer physically attaches the signed application to the issued policy and both documents are delivered together to the new policyholder, and the producer explains what legal status the application then holds within the overall insurance contract from that point forward.

it becomes a separate side agreement

it becomes part of the contract

it becomes legally irrelevant afterward

it becomes a binder replacement

SDPCP South Dakota Property and Casualty Producer - Set 5 - Part 2