Arkansas Insurance Adjuster Practice Exam

Which of the following is FALSE regarding Andrew's situation with his friend Mario?

1. After receiving his monetary sum, Mario can sue Andrew for recurring back pain.

2. Andrew has a form of coverage to avoid a lawsuit.

3. Andrew has a form of coverage called Guest Voluntary Settlement.

4. Andrew can decide whether his friend's injuries be covered under his base liability policy.

The correct answer is: After receiving his monetary sum, Mario can sue Andrew for recurring back pain.

In this scenario, the statement regarding Mario suing Andrew for recurring back pain is indeed false because when a monetary sum is given to settle a claim, it typically signifies that there has been an agreement or settlement reached between the two parties. In such instances, Mario would likely be waiving his right to pursue further legal claims against Andrew related to that specific injury, including any ongoing pain that may arise after the settlement. The other statements about Andrew's coverage options are accurate. For example, Andrew having coverage to avoid a lawsuit indicates that he has some form of liability insurance that may protect him against claims from guests, such as Mario. Additionally, the mention of Guest Voluntary Settlement refers to a specific type of coverage that allows for the resolution of claims without the need for litigation. Finally, stating that Andrew can determine if his friend's injuries are covered under his base liability policy speaks to the discretion he has in how he manages claims under his insurance coverage. Therefore, the correct understanding of the first statement helps clarify why it is false, while the other statements reinforce the types of insurance coverage Andrew possesses and the implications of settling the claim with Mario.