Arkansas Insurance Adjuster Practice Exam

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Prepare for the Arkansas Insurance Adjuster Exam with flashcards and multiple choice questions, each offering hints and explanations. Equip yourself for your test confidently!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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What does the insuring agreement for Part A-Liability in a personal auto policy state regarding settling liability cases?

The insurer has the right to settle liability cases out of court
The insurer will cover the costs to defend the insured in court in subsequent lawsuits related to the same occurrence, even after the policy limit is reached
The insurer will cover the costs to defend the insured in court, up to the policy limit
The insurer will pay for 'bodily injury' or 'property damage' to any 'insured' because of an auto accident

The correct answer is: The insurer has the right to settle liability cases out of court

The insuring agreement for Part A-Liability in a personal auto policy states that the insurer has the right to settle liability cases out of court. This means that the insurance company can choose to resolve a liability claim without going to court, if they believe it is in the best interest of the insured and the company. Option B is incorrect because it states that the insurer will cover costs for subsequent lawsuits, but not necessarily for settling the initial case. Option C is also incorrect as it only mentions coverage for court-related costs and not the right to settle out of court. Option D is incorrect because it is a general statement about what the insurer will cover, not specifically related to settling liability cases.