New York Test, deck 2
The Refrigerated Property Coverage endorsement to a Homeowners policy includes a _____ deductible. $50 $100 $150 $200
$100
In New York, when an injured worker dies from his/her on the job injuries and he/she has no dependents, a sum of _______ will be paid to the surviving parents or the deceased worker's estate. $5,000 $6,000 $10,000 $50,000
$50,000
Typical state workers' compensation laws stipulate that the amount of weekly disability benefits paid for a temporary disability is determined by: A schedule of benefits that lists amounts based on specific types of injuries. Applying a nationally mandated percentage to the employee's average weekly wage. The severity of the injury that is determined by a schedule. Applying a state mandated percentage to the employee's average weekly wage.
Applying a state mandated percentage to the employee's average weekly wage.
All of the following are common-law duties of an employer under a workers' Compensation policy, EXCEPT: Warn workers of inherent dangers. Provide a safe working environment. Assumption of risk. Provide an adequate number of competent fellow workers.
Assumption of risk.
The crew of a ship is guilty of fraud with the intention of reaping gains at the expense of the owner. In ocean marine coverage, what is this called? Perils of the sea. Jettison. General average. Barratry.
Barratry.
Which of the following would be ineligible for coverage under an NFIP policy? Buildings with 60% of their actual cash value underground. Severe repetitive loss properties. Buildings with 40% of their actual cash value underground. Boathouses located partially over water.
Buildings with 60% of their actual cash value underground. EXPLANATION: If 50% of a building's actual cash value is located underground the building is ineligible for coverage under the NFIP. (So this would include a building with 60% of its ACV underground.)
Systems that permit multiple adjusters to work on the same claim simultaneously and in conjunction with other claims professionals are known as: Diary or suspense systems. Journal or chronicle systems. Knowledge or log systems. Reminder or journal systems.
Diary or suspense systems.
Which of the following is NOT one of the three Aircraft Hull coverage insuring agreements? Not in flight. Explosion. Disappearance. Not in motion.
Explosion. EXPLANATION: "Explosion" is NOT one of the three Aircraft Hull coverage insuring agreements.
An adjuster is engaged in the unauthorized practice of law if they perform any of the following duties, EXCEPT: Drafting a legally binding document in the course of adjusting a claim. Providing information gained through the claims investigation to the principal. Filling in the blanks of a form with factual data. Expressing an opinion as to the extent of the loss as part of a factual analysis.
Filling in the blanks of a form with factual data.
Liability policies require that the defendant's breach of their legal duty was the actual cause of the loss that was the basis for a third party lawsuit. Any of the following terms may be used to refer to the "actual cause of the loss", EXCEPT: Proximate cause. Factual cause. Intervening cause. Legal cause.
Intervening cause. EXPLANATION: The "actual cause of the loss" cannot be referred to as "intervening cause" which is actually an event that interrupts the events that are the actual cause of the loss.
Lisa submitted her adjuster license renewal application to the New York Department on December 31st. On January 2nd, the Superintendent informs Lisa of his/her intent not to renew her license. On which of the following dates will Lisa no longer be a licensed adjuster in New York? January 2nd. January 1st. December 31st. January 7th.
January 7th. EXPLANATION: If a licensee applies for a license renewal by December 31st of the year it expires, the license will remain in force until the Superintendent renews it, or until 5 days after notice has been given of the Superintendent's intent to nonrenew the license. 5 days after January 2nd, is January 7th.
Which of the following was the first type of paint used to paint automobiles? Acrylic. Lacquer. Enamel. Urethane.
Lacquer.
A legal term describing an intentional act that is illegal or morally wrong, and contributes to the injury of another person is: Negligence. A crime. A tort. Malfeasance.
Malfeasance. EXPLANATION: Malfeasance is a legal term describing an intentional act that is illegal or morally wrong, that contributes to the injury of another person.
The New York Unfair Claim Practice statutes classifies the actions of an adjuster who has been found guilty of advising a person on matters of law as having committed: Discrimination. Breach of warranty. Misrepresentation. Impersonation of an officer of the law.
Misrepresentation.
According to the Fair Credit Reporting Act, applicants for insurance must be provided with a notice informing them that an investigative consumer report will be conducted as part of the underwriting process. This notice must be provided to the applicant: Before the consumer report is requested. No later than five days following the date the consumer report was requested. Only if the report contain information that will prevent the insurer from writing a policy of insurance. No later than three days following the date the consumer report was requested.
No later than three days following the date the consumer report was requested.
When the automobile physical damage coverage of a New York auto insurance policy has been suspended because the named insured did not make the automobile available for mandatory inspection, the insurer must make a premium adjustment: Immediately on the date of the coverage suspension. On the 14th day following the coverage suspension. No later than the 20th calendar day after the effective date of the suspension. Only after the coverage has been suspended for more than 10 calendar days.
Only after the coverage has been suspended for more than 10 calendar days.
George, an expert witness, is called to testify when a claim is being litigated. What type of evidence is George's testimony to the court? Real evidence. Documentary evidence. Oral evidence. Demonstrative evidence.
Oral evidence
If an insured covers his home with a standard unendorsed HO-5 form and purchases a Coverage A limit that meets the coinsurance requirement, which of the following would NOT be covered on a replacement cost basis? The dwelling. Other structures. Personal property. An attached garage.
Personal property. EXPLANATION: Replacement cost coverage does not apply to Coverage C - Personal Property unless purchased by endorsement.
All of the following are common workplace accidents that cause injuries, EXCEPT: Cumulative Trauma Disorders. Rheumatoid Arthritis. Walking Into Injuries. Injuries from Falling Objects.
Rheumatoid Arthritis. EXPLANATION: Rheumatoid arthritis is an autoimmune disorder of the body, it is not a common workplace injury.
Insureds have a duty to make a loss notice "promptly" for all of the following reasons, EXCEPT: So that witnesses can be interviewed while memories are still fresh. So that further loss or damage will not occur before the claim is investigated. So that the insurer can reserve an amount to pay the claim sooner. So that relevant information regarding the claim is easier to obtain.
So that the insurer can reserve an amount to pay the claim sooner.
Which of the following statements is NOT TRUE about the coverage provided under the Employers Liability section of a workers' compensation policy? The bodily injury must have been caused or aggravated by the conditions of the employment. The bodily injury must arise out of and in the course of the employment. The bodily injury must also be covered for statutory benefits. The lawsuit for bodily injury may be brought in Canada.
The bodily injury must also be covered for statutory benefits. EXPLANATION: The answer choice that is NOT TRUE is: "The bodily injury must also be covered for statutory benefits." When the injury IS covered by statutory workers' compensation, Employers Liability will not apply.
Under a surety bond, the "principal" is the party that: Agrees to fulfill an obligation. Agrees to pay damages if default occurs. Provides the bond in exchange for a fee. Will be paid damages if default occurs.
Agrees to fulfill an obligation.
Which of the following is NOT a function of the air conditioner of an automobile? To cool the air in the passenger compartment of the vehicle. To dehumidify the air being pulled into the interior of the vehicle. To cool the engine of the vehicle. To use a fan that pulls hot, humid air out of the automobile's interior.
To cool the engine of the vehicle.
Coverage B of an unendorsed standardized Businessowners policy provides how much coverage for theft of money & securities? $5,000 on the premises only. $5,000 on the premises but only $2,500 off premises. $1,000 on and off the premises. $0.
$0. EXPLANATION: Even though the Businessowners policy provides "open peril" coverage which includes theft, the loss of bullion, money and securities is listed as "property not covered" under Coverage B.
What is the limit of coverage provided under a Mobile Homeowners policy for "other structures"? $2,000. 10% of the Coverage A limit or $2,000 whichever is greater. $5,000 per structure. Coverage for "other structures" must be added by endorsement.
10% of the Coverage A limit or $2,000 whichever is greater.
An insurer may cancel a New York Homeowners policy for non-payment of premium at any time, as long as the insurer provides the policyholder notice of: 15 days. 10 days. 30 days. 45 days.
15 days. EXPLANATION: The New York Special Provisions Homeowners form specifies that an insurer must provide the insurer 15 days notice of cancellation for non-payment of premium. Most states, only require a 10-day notice, but New York requires an additional 5 days.
When insurance is written on a Dwelling form, each of the following types of property would be insured under Coverage A, EXCEPT: A detached garage. An attached storage shed. An attached carport. Materials in the yard intended for construction of a new addition to the home.
A detached garage. EXPLANATION: Only the Dwelling and ATTACHED structures are covered under Coverage A of the Dwelling policy.
The standard Dwelling coverage forms may be used to cover all of the following, EXCEPT: A farm house. A permanently installed mobile homes. A dwelling with two units for rent. Dwellings under construction by endorsement.
A farm house. EXPLANATION: Farm houses are not eligible for coverage under the Dwelling forms. All of the other answer choices ARE eligible for coverage.
The loss settlement provision of an Aviation Hull policy can be amended at policy inception to settle on: A replacement cost basis. An actual cash value basis. An insured value basis. An agreed value basis.
An agreed value basis. EXPLANATION: Instead of the typical "insured value basis", the policy can be amended to an "agreed value basis" at the policy inception.
A formal request to an insurance company requesting a payment according to the terms of an insurance contract is known as: A notice of lawsuit. A declaratory judgement request. An insurance claim. A service of process.
An insurance claim.
Every New York insurer must distribute copies of the cybersecurity regulation to all of the following, EXCEPT: Anyone supervising claims handling. Anyone directly responsible for the handling of claims. Anyone directly responsible for the settlement of claims. Anyone who may offer for sale, an insurance policy.
Anyone who may offer for sale, an insurance policy. EXPLANATION: The New York statutes state that: "Every insurer must distribute copies of the cybersecurity regulation to every person directly responsible for the supervision, handling and settlement of claims subject to the regulation. It does not say that it must be distributed to anyone who may offer for sale, an insurance policy.
All parts of a vehicle can be categorized as part of the _______ or part of the ________. Frame / chassis Body / frame Front end / frame Body / chassis
Body / chassis
Natalie has been injured by a blender that turned out to be unsafe when she used it. She has decided to file a lawsuit against the manufacturer for damages. Which of the following is NOT grounds for which Natalie may bring the lawsuit? Breach of contract. Strict liability. Breach of warranty. Negligence.
Breach of contract. EXPLANATION: Breach of contract is not relevant because there was no contract executed between Matilda and the blender manufacturer.
Which of the following offers the broadest physical damage coverage under a Commercial Auto policy? Comprehensive. Specified cause of loss. Named perils. Broad named perils.
Comprehensive. EXPLANATION: Comprehensive coverage would be the broadest because it covers anything that is not defined as "collision". The specified cause of loss is a named peril form and thus, is more limited.
"A set of related instructions that direct the operation of a computer" is included in the Commercial Crime definition of: Computer system. Forgery. Computer program. Fraudulent instruction.
Computer program.
Each of the following is true about Builders' Risk Coverage, EXCEPT: Coverage terminates the day after construction is completed. The amount at risk increases over time. Land, lawns and trees are not covered. In effect, the coverage has a 100% coinsurance requirement.
Coverage terminates the day after construction is completed. EXPLANATION: Coverage normally terminates 90 days after the work has been completed or has been accepted. In addition, coverage will cease once the building has been put to its intended use.
All of the following are types of "agent authority" bestowed upon an adjuster with an appointment, EXCEPT: Express authority. Implied authority. Apparent authority. Evident authority.
Evident authority. EXPLANATION: Evident authority is NOT a type of "agent authority" granted to an appointed adjuster. Express, implied, and apparent authority ARE.
Which of the following is NOT covered by the supplementary payments section of a standardized Businessowners policy? The costs of bonds. Prejudgment interest. Interest that accrues after a judgment is made and before it is paid in court. Judgments awarded by a court of law.
Judgments awarded by a court of law.
Coverage A of a Commercial General Liability policy may provide all of the following coverages, EXCEPT: Bodily injury liability. Premises and Operations liability. Liability arising from slander. Products liability.
Liability arising from slander. EXPLANATION: Liability from slander is NOT paid under Coverage A of the CGL policy.
A loss reserving method that establishes aggregate reserves for all claims for a single line of insurance is known as: Average value method. Roundtable method. Formula method. Loss ratio method.
Loss ratio method.
The insuring agreement of a Personal Umbrella policy provides coverage for all of the following, EXCEPT: Personal injury damages for which the insured is legally liable for personal injury in excess of the retained limit. Damages for which the insured is legally liable for bodily injury and property damage in excess of the retained limit. Post judgment interest that accrues after the entry of a judgment. Defense costs in addition to the policy limits.
Postjudgment interest that accrues after the entry of a judgment.
The "Accounts Receivable" coverage extension of the standard Businessowners policy: Provides a maximum of $5,000 of coverage if the records were destroyed on the insured premises and $10,000 if they were destroyed off the insured premises. Provides a maximum of $10,000 of coverage for all destroyed records at the described locations combined. Provides a maximum of $10,000 of coverage if the records were destroyed on the insured premises and $5,000 if they were destroyed off the insured premises. Provides a maximum of $10,000 of coverage for all destroyed records at each location described in the policy.
Provides a maximum of $10,000 of coverage if the records were destroyed on the insured premises and $5,000 if they were destroyed off the insured premises. EXPLANATION: The "Accounts Receivable" coverage extension of the standard Businessowners policy provides a maximum of $10,000 of coverage if the records were destroyed on the insured premises and $5,000 if they were destroyed off the insured premises.
Which of the following Dwelling forms provides "open peril" coverage for dwellings and other structures? The DP-3 special form. The DP-1, DP-2, and DP-3 forms all provide this coverage. The DP-2 broad form and the DP-3 special form. The DP-1 basic form and the DP-2 broad forms.
The DP-3 special form. EXPLANATION: The DP-3 special form is the only Dwelling form that provides "open peril" coverage on the dwelling and other structures. The DP-1 and DP-2 are "named peril" forms.
The coverage for the products/completed operations hazard under the Home Business Insurance Endorsement is limited to: $12,000. $10,000. The amount shown in the Homeowners policy for Coverage E. The amount scheduled on the endorsement form.
The amount shown in the Homeowners policy for Coverage E. EXPLANATION: Coverage for the products/completed operations hazard under the Home Business Insurance Endorsement of the Homeowners policy, is limited to the amount shown in the Homeowners policy for Coverage E. All other business liability coverage is limited to twice the combined limits of Coverages E & F.
Coverage B of the Ordinance or Law Endorsement to a Commercial Property policy covers: The cost to demolish and remove the undamaged portion of the building, if that destruction must occur because of an ordinance or law requirement. The actual cost of the undamaged portion of the building that must be destroyed due to an ordinance or law. The cost of the direct physical loss to property by a covered cause of loss. The increased costs to repair or rebuild to comply with current building, zoning, or land use ordinances or laws.
The cost to demolish and remove the undamaged portion of the building, if that destruction must occur because of an ordinance or law requirement. EXPLANATION: Coverage B covers the cost to demolish and remove the undamaged portion of the building, if that destruction must occur because of an ordinance or law requirement. Do not confuse this with Coverage A of the endorsement, that reimburses the insured for the value of the undamaged portion of the building itself.
The predetermined amount of an insurance claim that is paid by the policyholder is known as: The premium. The deductible. The coinsurance amount. The insurance to value amount.
The deductible.
The New York Automobile Insurance Plan (Assigned Risk Plan) is administered by a committee. How are the committee members selected? The participating insurers select the majority of the committee members and the Superintendent selects two additional members to be appointed annually. The Superintendent selects all committee members including two licensed agents or brokers who are appointed to hold the seat for one year only. The participating insurer select all committee members including two licensed agents or brokers who are appointed to hold the seat for one year only. The participating insurers select the majority of the committee members and those members select two additional members to serve on the committee for one year only.
The participating insurers select the majority of the committee members and the Superintendent selects two additional members to be appointed annually.
Which of the following is NOT one of the first steps in a claims investigation? To obtain a release on the claim. To set a reserve. To verify coverage. To obtain information regarding the claim.
To obtain a release on the claim. EXPLANATION: Obtaining a release is one of the final steps in processing a claim.
Tom rents half of a duplex. During a severe storm, lightning strikes a tree in the front yard and it falls, causing damage on Tom's side of the duplex. Which of the following losses will be covered by Tom's HO-4 policy? The removal of the tree and debris costing hundreds of dollars. Tom's TV and entertainment system that were damaged when the tree fell through the roof. Tom's attached carport that was damaged when the tree ripped it from the side of the house. Tom's roof and front wall that were damaged when the tree fell on the house.
Tom's TV and entertainment system that were damaged when the tree fell through the roof. EXPLANATION: An HO-4 covers personal property if damaged by a covered peril. There is no coverage for real property under an HO-4 policy.
The Builders' Risk form covers all of the following, EXCEPT: Unattached signs. The building under construction. Materials and supplies that are intended to become part of structure and located within 100 feet of the building site. Scaffolding used while roofing the building under construction.
Unattached signs. EXPLANATION: Signs when outside the building and unattached are not covered by the Builder's Risk forms.
Under "pollution cleanup and removal" coverage under the standard ISO BOP form, when must a loss be reported? Within 180 days. Within 60 days. Immediately. Within 90 days.
Within 180 days. EXPLANATION: The expenses will be paid only if they are reported to the insurer within 180 days of the date of the direct loss or by the end of the policy period, whichever is earlier.
Under a standardized DP-2 or DP-3 policy, what is the maximum that would be paid for additional living expenses if Coverage A was $60,000? $12,000 $6,000 $7,000 $9,500
$12,000 EXPLANATION: The form provides 20% for additional living expenses and fair rental value. You can figure this out in your head by asking yourself, "What is 10% of $60,000" and then double it. 10% of $60,000 is $6,000 x 2 = $12,000. This is a coverage that is frequently amended to comply with state laws, so please notice that this question is asking about the STANDARDIZED policies.
Coverage G of a Farm Property policy would provide coverage for all of the following, EXCEPT: A garage located at the end of the driveway leading to the farmhouse. A silo located a couple of miles away from the barn but still located on the farm premises. A garage located on the farm premises used to park the vehicles used to transport livestock. A barn where the livestock are kept.
A garage located at the end of the driveway leading to the farmhouse. EXPLANATION: Coverage G is used to cover "farm other structures" that are used in the farm business. Coverage G does not cover any building that is related to the dwelling.
Calvin has a Business Automobile policy covering the automobiles he uses in his business. He acquires a new trailer with a load capacity of 1,000 pounds and he plans to attach it to a van he already owns. The van is scheduled on the policy with Symbol 7 listed beside it. Based on this information, how long does Calvin have to report his new trailer to the insurance company? Calvin will not be covered for the trailer because it exceeds the load capacity of a trailer that will be covered under a Business Auto policy. Calvin is required to report newly acquired vehicles to the insurance company within 7 days of making the purchase. Calvin is not required to report newly acquired vehicles under Symbol 7. Calvin is required to report newly acquired vehicles to the insurance company within 30 days.
Calvin is required to report newly acquired vehicles to the insurance company within 30 days. EXPLANATION: Calvin is required to report newly acquired vehicles to the insurance company within 30 days because he is insured under Symbol 7.
Which of the following statements is NOT TRUE regarding contractual liability coverage under a Commercial General Liability policy? Contractual liability is always covered. Insured contracts is the only type of contractual liability that is covered. "Hold harmless" agreements are a type of contractual liability that is excluded by Coverage A of a CGL policy. "Indemnity" agreements are a type of contractual liability that is excluded by Coverage A of a CGL policy.
Contractual liability is always covered.
Which of the following is NOT true concerning the Terrorism Risk Insurance Program Reauthorization Act of 2015? Coverage is mandatory. The insured can reject the coverage. It is an agreement between insurers and the United States government to provide coverage. Must be certified as an act of terrorism by the Secretary of Treasury in concurrence with the Secretary of Homeland Security and the US Attorney General.
Coverage is mandatory. EXPLANATION: The coverage is not mandatory and can be rejected. Under the 2015 extension, an act of terrorism must be certified by the Secretary of Treasury in concurrence with the Secretary of Homeland Secretary (previously it was the in concurrence with the Secretary of State) and the United State Attorney General.
The firewall and the cowl both separate the passenger compartment of a vehicle from the engine. The firewall is part of the ____________ and the cowl is part of the __________ of the vehicle's body. Front section / center section Front end / back end Midsection / rear section Center section / front end
Front section / center section
Fidelity bonds covering Employee Dishonesty pays for all of the following losses, EXCEPT: Mistakes made by employees that cause a loss to the insured business. A dishonest act of an employee causes a financial loss to the insured business. An employee steals from a customer's home while performing a service on behalf of the insured business. A plan official who embezzles money from the insured businesses ERISA retirement plan.
Mistakes made by employees that cause a loss to the insured business. EXPLANATION: Mistakes made by employees that cause a loss to the insured business are usually covered under an Errors & Omissions (E&O) policy.
A Homeowners policy is a personal package policy. All of the following are advantages of a personal package policy, EXCEPT: Package policies allow for lower deductibles. Fewer gaps in coverage exist with package policies. Insureds enjoy lower premiums with package policies. Package policies simplify the billing process for insurance companies.
Package policies allow for lower deductibles. EXPLANATION: Insureds select their deductible amounts, package policies do not allow for lower deductibles. All of the other answer choices are advantages to package policies.
Which of the following statements is TRUE of New York's Regulation 79? Regulation 79 defines "physical damage insurance" as a policy that covers both collision and comprehensive and no other perils. If the insured acquires an automobile as a replacement to an automobile already insured for physical damage, the newly acquired auto does not need to be inspected by the insurer. Regulation 79 states that all newly issued automobile policies may not provide coverage for automobile physical damage perils without a prior inspection of the vehicle is made by the insurer (unless the insurer waives it). If the insured requests physical damage coverage on an additional vehicle to be covered under their existing automobile policy, it does not need to be inspected.
Regulation 79 states that all newly issued automobile policies may not provide coverage for automobile physical damage perils without a prior inspection of the vehicle is made by the insurer (unless the insurer waives it).
The "Extortion -- Commercial or Government Entities Endorsement" to a Crime insurance policy contains an exclusion that the named insured make a reasonable effort to report the extortionists' demands to an associate or local law enforcement for coverage to apply. Which of the following best describes the purpose of this exclusion? To permit the insurer time to determine if the loss is covered by the policy before the named insured surrenders the property. To allow time for all associates of the company to be ruled out as the extortionist by law enforcement. To allow law enforcement time to capture the extortionist before the named insured surrenders the property. To eliminate the possibility of collusion between the named insured and an extortionist.
To eliminate the possibility of collusion between the named insured and an extortionist.
An automatic 60-day extended reporting period must be granted when a claims-made policy is terminated (except for non-payment of premium or fraud) in New York for all of the following liability policies, EXCEPT: Excess liability. Public entity liability. Fiduciary liability. Errors & Omissions.
Public entity liability. EXPLANATION: Public entity liability policies are granted an automatic 90-day extended reporting period. All of the other policies listed as answer choices are granted an automatic 60-day extended reporting period.
Kathryn is covered under a property insurance broad cause of loss form. Which of the following statements is true for Kathryn? Kathryn is covered for all risks of loss. The burden of proof lies with the insurance company to prove that a cause of loss, experienced by Kathryn, is excluded from coverage. Kathryn is covered for only the perils of fire, lightning, and removal. The burden of proof lies with Kathryn to prove that a named peril in her policy caused her loss
The burden of proof lies with Kathryn to prove that a named peril in her policy caused her loss.
Which of the following statements BEST describes how coverage will apply under a Commercial General Liability policy when a product is manufactured in the United States and a claim occurs in Italy? The policy will deny the claim because the loss occurred outside of the coverage territory. The policy will pay the claim but only if the "expanded coverage territory" endorsement is attached. The policy will deny the claim because the product was not on the insured's premises when the "occurrence" took place. The policy will pay the claim but only if the lawsuit is brought within the policy's coverage territory.
The policy will pay the claim but only if the lawsuit is brought within the policy's coverage territory.
The insured is wearing a diamond ring while on vacation in Europe. Her ring is valued at $1,500 is stolen. What coverage would apply under her Homeowners policy? The claim will be denied because they were out of the United States. The loss has exceeded the theft limit. Theft is not covered for jewelry valued in excess of $1,000. The policy will pay the loss less the deductible.
The policy will pay the loss less the deductible. EXPLANATION: Personal property is covered anywhere in the world. The theft limit for jewelry is $1,500. The amount of the loss, less the deductible is covered.
All of the following statements are TRUE regarding the "Legal Action Against Insurer" provision in most standard insurance policies, EXCEPT: This provision places a statute of limitations to file a lawsuit is set by state law for certain types of policies. This provision places limitations on the insured's right to sue their insurer for coverage. This provision permits the insurer to countersue the insured within a certain time period. This provision requires an insured to meet their required duties before they can bring a lawsuit.
This provision permits the insurer to countersue the insured within a certain time period.
Flora designs and makes custom dresses out of a small room at the back of the home she owns. She has the home covered by a Dwelling policy with the Permitted Incidental Occupancies endorsement attached. She has boxed up several dresses and stored them in the back room to be shipped out later when fire breaks out and burns them up. How much coverage will Flora's endorsed Dwelling policy provide? $0. Up to $1,000. Up to $10,000. Up to $5,000.
Up to $10,000. EXPLANATION: The Permitted Incidental Occupancies endorsement to a Dwelling policy can provide up to $10,000 for the loss of stored merchandise.
Under the Gramm-Leach-Bliley Act, there is a "pretexting provision". What is the definition of "pretexting"? Having clearance to access private information. Sending private information via text messaging. Accessing private information using false pretenses. Transcribing private information into text format.
Accessing private information using false pretenses.
Which of the following does NOT meet the definition of an "insured" under the New York UM/UIM coverage of an automobile policy: Any person with the right to collect damages awarded due to an insured's negligence. Any person with the right to collect damages awarded to an insured. The named insured and residents of the named insured's household. Any person while occupying an owned vehicle with the permission of the named insured or their spouse.
Any person with the right to collect damages awarded due to an insured's negligence. EXPLANATION: "Any person with the right to collect damages awarded due to an insured's negligence." does NOT meet the definition of an "insured" under the New York UM/UIM coverage. A person with the right to collect damages awarded due to an insured's negligence would be a third-party claimant.
The "Lessor, Additional Insured, and Loss Payee" endorsement to a Commercial Auto policy can be added to only those policies covering: Commercial vehicles over 10,000 pounds. Owned vehicles. Fleets of commercial vehicles. Leased vehicles.
Leased vehicles.
When the automobile physical damage coverage of a New York auto insurance policy has been suspended because the named insured did not make the automobile available for mandatory inspection, the insurer must make a premium adjustment: Immediately on the date of the coverage suspension. On the 14th day following the coverage suspension. No later than the 20th calendar day after the effective date of the suspension. Only after the coverage has been suspended for more than 10 calendar days.
Only after the coverage has been suspended for more than 10 calendar days. EXPLANATION: The premium adjustment must be made only after the coverage has been suspended for more than 10 calendar days. The return of premium or credit has to be delivered or transmitted no later than the 45th day after the coverage suspension.
Which of the following is NOT eligible for a coverage under a Homeowners insurance policy? Condominium unit owners. Owner-occupants of a 5 to 6-family dwelling. Renters that live in any type of building. Cooperative apartment occupants.
Owner-occupants of a 5 to 6-family dwelling.
Which of the following is one of the duties of the insured as specified in a Commercial Inland Marine policy? Submit to an examination under oath if the insurer requests it. Accept responsibility for the loss immediately. Leave damaged property and undamaged property together because moving the property could compromise the claims investigation. Notify law enforcement immediately at the time of the loss, regardless of whether or not the loss involved criminal activity.
Submit to an examination under oath if the insurer requests it.
Which of the following Business Auto symbols covers "owned autos only"? Symbol 2. Symbol 3. Symbol 7. Symbol 4.
Symbol 2. EXPLANATION: Symbol 2 covers owned autos only on the Business Auto coverage form.
A trailer in the possession of the insured under a written Trailer Interchange Agreement would have coverage under their Truckers form by using: Symbol 69. Symbol 48. Symbol 49. Symbol 70.
Symbol 48. EXPLANATION: A trailer in the possession of the insured under a written Trailer Interchange Agreement would have coverage under their Truckers form by using Symbol 48. Under the Motor Carrier form, it is Symbol 69.
The coverage territory for "products" coverage to apply under a Commercial General Liability policy is BEST DESCRIBED by which of the following statements? Worldwide coverage is provided as long as the product is manufactured or sold in the covered territory and any lawsuit regarding the claim is brought within the coverage territory of the policy. Products are covered while being manufactured anywhere in the world. The products must be made in the United States, its territories and possessions, Puerto Rico and Canada, if a lawsuit is brought in a foreign country. The product must be consumed or used within the United States and Canada for coverage to apply.
Worldwide coverage is provided as long as the product is manufactured or sold in the covered territory and any lawsuit regarding the claim is brought within the coverage territory of the policy. EXPLANATION: The products must be manufactured within the coverage territory. This includes the US, its possessions, Canada and Puerto Rico. The suit must also be brought within the coverage territory, unless otherwise agreed to by the insurer.
A customer is injured on the insured's premises and the insured is not found legally liable. The insured carries a Commercial General Liability policy. Which of the following CGL coverages would apply to cover the cost of treating the customer's injuries? Coverage A. Coverage B. Supplementary payments. Coverage C.
Coverage C. EXPLANATION: Coverage C - Medical Payments under the CGL policy pays regardless of legal liability on the part of the insured.
Sandy has the "Exclusion of Medical Expense from Personal Injury Protection" endorsement attached to her New York personal automobile policy. Sandy can enjoy a reduced premium for the Personal Injury Protection provided by her personal automobile policy because she has coverage for medical expenses under another policy she holds with Indemnify Insurance Company. Her policy with Indemnify provides $24,000 of medical expense coverage, therefore the aggregate limit of liability under her PIP coverage is now: $24,000 $26,000 $25,000 $50,000
$26,000 EXPLANATION: The $50,000 aggregate limit of liability under Sandy's PIP coverage will be reduced by $24,000, the amount she carries with Indemnify Insurance.
When workers' compensation benefits are payable after an automobile accident, how will Part B of the personal automobile policy be applied? Part B will pay as excess insurance over the workers' compensation benefits. Part B of the personal auto policy will pay pro-rata with the workers' compensation policy. Workers' compensation benefits will be paid as excess insurance over the Part B payments. Part B is excluded if workers' compensation benefits are payable.
Part B is excluded if workers' compensation benefits are payable. EXPLANATION: The Part B - Medical Payments insuring agreement of the personal automobile policy is excluded if workers' compensation benefits are payable.
Sam has his current business locations covered under a standard Businessowners policy. He purchases a new building to add another business location. Which of the following statements best describes how coverage will apply for Sam's newly acquired property? Sam will be covered for $300,000 for 14 days or until he reports his newly acquired property to the insurer, whichever comes first. Sam will have $250,000 of coverage for 30 days or until he reports his newly acquired property to the insurer, whichever comes first. Sam must report the newly acquired business location to his insurer before it can be covered. Sam will have $100,000 of coverage for 30 days or until he reports his newly acquired property to the insurer.
Sam will have $250,000 of coverage for 30 days or until he reports his newly acquired property to the insurer, whichever comes first. EXPLANATION: The Section I Coverage Extensions provide $250,000 of coverage for newly acquired or constructed property for 30 days or until it is reported to the insurer, whichever comes first.
All of the following statements are TRUE regarding eligibility to file a claim with the New York Motor Vehicle Accident Indemnification Corporation, EXCEPT: The injured person may collect no-fault benefits under their own policy and file a claim with the New York MVAIC if they have suffered a defined serious injury. The injured person may file a claim with the New York MVAIC if they are a legal resident of New York at the time of the accident. The injured person may file a claim with the New York MVAIC if neither they or their spouse is the owner of the vehicle involved in the accident that caused their injury. The injured person may file a claim with the New York MVAIC if the accident that caused their injuries occurred within the state of New York.
The injured person may collect no-fault benefits under their own policy and file a claim with the New York MVAIC if they have suffered a defined serious injury.
Contemporary Chairs, Inc. is having a sale in their showroom. A customer purchases a chair and takes it home. When the customer sits down in the chair it flips backward, causing bodily injury. Six months later, the customer submits a claim for damages of $100,000 and medical bills totaling $2,500. Contemporary Chairs, Inc. carries a Commercial General Liability policy with a $200,000 general aggregate limit, a $200,000 products-completed operations aggregate limit, a $100,000 each occurrence limit, and a $5,000 medical payments limit. The claim is paid by the insurance company, leaving a general aggregate limit of _________ to pay other claims for the remainder of the year. $197,500 $200,000 $97,500 $100,000
$197,500 EXPLANATION: In this situation, the claim for damages would fall under the products-completed operations limit. The only amount that would be subtracted from the general aggregate limit is $2,500 in medical payments. The question is asking how much of the GENERAL aggregate limit would remain after the entire claim for damages and medical payments is made. The correct answer would be $197,500.
Which of the following grants a legal finding in New York that an insurance licensee convicted of a felony involving breach of trust is "reformed after conviction"? Certificate of Relief from Disabilities (CRD). A pardon from the New York Governor A 1033 Waiver form. Certificate of Good Conduct (CGC).
Certificate of Good Conduct (CGC).
A medical specialty that treats disorders of the joints, muscles, and ligaments is known as: Rheumatology. Physical therapy. Neurology. Occupational therapy.
Rheumatology.
The section of the Businessowners policy that contains the requirements for the insurer to cancel the policy is: Section I - Coverage A. Section III. Section II - Coverage C. Section I - Coverage C.
Section III.
Rosa has automobile coverage with Binders Keepers, Inc., an insurer in New York. She has had three accidents in the past four years that resulted in bodily injury and property damage to others that totaled more than $500 per accident. Which of the following statements is true regarding what Binders Keepers, Inc. is permitted to do regarding Rosa's auto policy? Binders Keepers may cancel Rosa's policy immediately. Binders Keepers may nonrenew Rosa's policy at its next expiration date, but they cannot cancel the policy. Binders Keepers may deny the third claim only but must continue to provide coverage for any subsequent accidents. Binders Keepers must pay the third claim, but they can nonrenew the policy as of the date the claim is paid.
Binders Keepers may nonrenew Rosa's policy at its next expiration date, but they cannot cancel the policy. EXPLANATION: Binders Keepers may nonrenew Rosa's policy at its next expiration date, but they cannot cancel the policy. Any insured covered by an auto policy in New York having three or more accidents where bodily injury or property damage to others is in excess of $200 can have their policy non-renewed at its expiration date. This is NOT a permissible reason to cancel the policy.
Which of the following is the PRIMARY source of information used by insurance companies during the underwriting process? Credit reports. Insurance industry statistics and reports. The application for insurance. Consumer reports.
The application for insurance. EXPLANATION: All of the answer choices are sources used by insurance companies during the underwriting process, but the PRIMARY source of information is the application.
As defined in a Commercial Crime policy, all computer and hand-held or portable devices, software, and networks that allow data to be collected, transmitted, processed, stored or retrieved is known as: A computer system. A computer program. A computer drive. An extranet.
A computer system.
Nathan owns an ice cream shop in a strip mall next door to Eli's Hot Dogs & More restaurant. Eli's restaurant is damaged by fire, and Nathan is denied access to his ice cream shop by the fire department because it is adjacent to the damaged restaurant. If Nathan's Commercial Property policy includes a Business Income coverage form, then the insurance company will cover Nathan's loss of business income for: A maximum of six months. A maximum of thirty days. A maximum of sixty days. A maximum of four weeks.
A maximum of four weeks. EXPLANATION: When the loss of income is due to the actions of a civil authority (in this case, the fire department), coverage is limited to only four weeks, after a waiting period of 72 hours. More coverage can be purchased for an additional premium.
Which of the following would provide coverage for the physical damage of a ship while it is being transported by truck over land? Collision coverage. The running-down clause. Protection & Indemnity coverage. Land transit coverage.
Land transit coverage. EXPLANATION: "Land transit" coverage can be added to an Ocean Marine Hull policy to provide physical damage coverage for the ship while it is being transported over land.
An office building is limited in the number of stories it may contain and still be eligible for coverage under a standard Businessowners Policy. This number is: Five stories. Six stories. Four stories. Seven stories.
Six stories. EXPLANATION: Office buildings cannot exceed six stories in height and still be eligible for coverage under the standardized BOP policy.
Happy Hills Hospital is covered by a "Hospital Professional Liability" policy. Which of the following "medical incidents" occurring on the premises of Happy Hills would be excluded from coverage under their professional liability policy? Sue, a medical assistant at Happy Hills slips and falls on some water that a patient spilled. Sue's back is injured and she needs to have her medical expenses paid. Nancy, a nurse at Happy Hills dispenses the wrong medication to a patient and the hospital is sued. A patient sues after becoming ill with food poisoning after being served a meal in the hospital. A patient dies in the emergency room at Happy Hills. There was a mix up and the patient's body was sent to a nearby university for medical student use instead of to the funeral home as the family requested.
Sue, a medical assistant at Happy Hills slips and falls on some water that a patient spilled. Sue's back is injured and she needs to have her medical expenses paid. EXPLANATION: Sue's "slip-and-fall" back injury would be covered under Happy Hills' workers compensation policy, not their professional liability policy.
Harvey's Hardware carries a CGL policy with a $2,000,000 "per occurrence" limit and a $4,000,000 "aggregate limit". Harvey's also carries a Commercial Umbrella policy with a $2,000,000 "aggregate limit" and a $300,000 self-insured retention (SIR). The hardware store has 7 bodily injury claims during the policy period, with no single occurrence totaling more than $2,000,000, but the total of the 7 occurrences is $8,000,000. How will this claim be paid? The CGL policy will pay $4,000,000, the Umbrella policy will pay its $2,000,000 "aggregate limit" minus the $300,000 SIR, leaving 2,300,000 of the claim uninsured. The CGL policy will pay $4,000,000, the Umbrella policy will pay $2,000,000, leaving $2,000,000 of the claim uninsured. The CGL policy $2,000,000 on 2 of the 7 occurrences, up to its $4,000,000 aggregate limit, leaving the Umbrella policy to split the remaining 5 occurrences to a payment of $400,000 for e
The CGL policy will pay $4,000,000, the Umbrella policy will pay $2,000,000, leaving $2,000,000 of the claim uninsured. EXPLANATION: The CGL policy will pay its "aggregate limit" of $4,000,000, the Umbrella policy will pay its $2,000,000 "aggregate limit", leaving $2,000,000 of the claim uninsured. The SIR has no bearing on this claim because it does not apply if the underlying policy pays its portion of the loss.
Personal property that is covered under the Personal Property Replacement Cost Endorsement of a Homeowners policy is damaged and a claim has been filed. The replacement cost of the property at the time of the loss is $2,500. The full cost to repair the property is $2,000. The Coverage C limit of the Homeowners policy is $8,000. No special limits apply to this property and there is no limit applied to the type of property being claimed. Which of the following is the amount that will be paid under the endorsement? $2,500. $2,000. $8,000. $500.
$2,000. EXPLANATION: The endorsement will pay the smallest amount of the replacement cost at the time of the loss, the full repair cost, the Coverage C limit, any applicable special limits, or the limit that applies to the type of property being claimed.
The "Business Income" additional coverage of the standard Businessowners policy provides coverage for "ordinary payroll coverage" for: 30 days unless the insured selects and schedules a different amount. 60 days unless the insured selects and schedules a different amount. For 12 months in total. Until the employees can find other employment.
60 days unless the insured selects and schedules a different amount. EXPLANATION: The insurance company pays for only the loss of business income sustained during the restoration period that takes place within 12 consecutive months after the date of the covered loss or damage. However, it pays for ordinary payroll expenses for only 60 days after the date of loss unless a higher number of days is scheduled on the Declarations page.
Which of the following statements defines a "bailee"? A property owner who willingly entrusts the property to another person. Someone, other than the insured, to whom the insured temporarily entrusts their property. A property owner who is in the business of renting property to others. Someone to whom property is sold on an installment basis.
Someone, other than the insured, to whom the insured temporarily entrusts their property. EXPLANATION: A "bailee" is a person or business entity that has temporary possession of the insured property usually while performing a service. For example, a TV repair shop may have temporary custody of an insured television while it is being repaired.
An alternative dispute resolution (ADR) method by which disputing parties use a neutral outside party to examine the issues and develop a mutually agreeable settlement is known as: Appraisal. Arbitration. Mediation. Negotiation.
Mediation. EXPLANATION: An alternative dispute resolution (ADR) method by which disputing parties use a neutral outside party to examine the issues and develop a mutually agreeable settlement is known as mediation.
All of the following would be eligible for coverage under the New York "Joint Ownership Coverage Endorsement" to a Personal Auto policy in New York, EXCEPT: The insured's mother-in-law who resides in the same household. A non-resident employee who is driving an insured vehicle to deliver baskets that were hand-made for sale by the insured. The insured's son who lives across town and jointly owns a pickup truck with the insured. The insured's daughter who is residing in the insured's home while she is on break from college.
A non-resident employee who is driving an insured vehicle to deliver baskets that were hand-made for sale by the insured. EXPLANATION: The employee would not be covered because he / she does not reside in the insured's residence and the endorsement does not provide coverage if the vehicle is being used in the delivery of goods or materials.
Monique lives in Texas and is covered under a standard Personal Automobile policy. Her policy was issued by Binders Keepers Insurance, a company that is domiciled in North Carolina and also transacts insurance in Texas, New Mexico, California, and Arizona. Binders Keepers has broadened their coverage under the policy without additional premium, as of April 1st. They are rolling out the change in coverage as follows: North Carolina - April 1st Texas - April 15th New Mexico - April 20th California - April 30th When can Monique expect her coverage to be broadened? April 1st, because that is when the coverage was actually broadened, even though the change will not be made to her actual policy until April 15th. April 15th, because when a company broadens their coverage with no additional premium charge, it takes effect on the date it is implemented in an insured's state of residence. April 30th, because Monique canno
April 15th, because when a company broadens their coverage with no additional premium charge, it takes effect on the date it is implemented in an insured's state of residence. EXPLANATION: Monique's broadened coverage will become effective on April 15th, because when a company broadens their coverage with no additional premium charge, it takes effect on the date the coverage is implemented in an insured's state of residence.
Jim and Tina are a married couple that enjoy the outdoors. They have their motor home and pick-up truck covered by a standard Personal Automobile policy and both vehicles are listed on the declarations page of the policy. They attend a Camping & RV show on May 1st and purchase a small camper to use when camping near their home that summer. Jim calls the insurance agent on May 10th and adds the camper to the policy. On May 24th, Jim and Tina are pulling their new camper with their pick-up truck on their way to a nearby camp site. Jim is driving and turns a tight corner, clipping a street lamp with the side of the camper. How will Jim and Tina's Personal Auto policy cover the body damage to their camper? The body damage will not be covered by Part D of the policy because Jim did not report the new camper to the insurance agent within the required 7 days. The body damage will be covered by Part D of the policy becaus
The body damage will be covered by Part D of the policy because Jim reported the new camper to the insurance agent within the required 14 days. EXPLANATION: Body damage to a camper body IS covered by Part D if the Personal Automobile policy, even if the camper was not listed on the declarations page of the policy, if it was acquired during the policy period and added to the policy within 14 days of the acquisition.
