Exam 1

H's liability policy has the following limits: $25,000 per person, $100,000 per occurrence, and $2,000,000 aggregate. This year, five separate claimants file in the amount $25,000 for injuries suffered in a single accident. How much will the policy pay?

$100,000

Company A's per person Limit of Liability is $100,000 and Company B's is $200,000 for the same insured. How much will Company B have to pay for a covered $6,000 loss caused by the insured?

$4,000

Insurers must acknowledge the receipt of a notice of a claim within:

15 business days of the date of receipt

What is the minimum amount of notice an insurer must provide to a policyholder in advance of cancelling a personal policy?

45-60 days

If a renewal application is filed before July 1st of the year of expiration, the expiring license will continue in full force until the renewal license is issued, or:

5 days after the Superintendent refuses to issue the renewal license and has given notice of the refusal to the applicant

Select the person who is not considered an insured under an HO-3 policy?

A friend who is renting a bedroom in the insured's house since it is only three blocks away from work

All of the following statements regarding the property policy structure are correct, except:

Additional coverages are added to the policy for an additional premium

Which of the following is incorrect with regard to commissions and compensation?

An insurer may not pay a commission to anyone other than a currently licensed and appointed agent, but may pay a commission to an agency that is not licensed

Which of the following is correct with regard to producer appointments?

An insurer that appoints an agent must file a Certification of Appointment Department within 15 days after the agency contract is executed

The Employees As Insureds CA 99 33 Endorsement amends the Who Is An Insured Provision as follows:

Any employee is an insured while using a covered auto the named insured does not own, hire or borrow in the named insured's business or personal affairs

In order for a commercial crime loss to be covered under a Discovery Form, the loss must:

Be discovered during the policy period

Under the HO-4 and HO-6, personal property is covered on which basis?

Broad perils coverage

Coverage is open peril on the Jewelers Block Floater but there is no coverage for ___________ unless added as an optional coverage.

Broken or smashed show windows

Which of the following reduces an award in proportion to the amount of negligence?

Comparative negligence

All of the following are true, except:

Coverage D of a Homeowners Policy includes loss of income from an incidental business

Which statement is false?

Coverage F limits are subject to a deductible

Which of the following is correct regarding products liability under the CGL?

Coverage applies to the bodily injury (BI) and property damage (PD) the product causes, but not to the product itself

Of the Dwelling Policy forms, which one would cover an owned mobile home permanently affixed to a foundation?

DP-1

BAP liability coverage would not apply to which of the following?

Damage to property in the insured's care

Which of the following statements is false concerning the Personal Umbrella Liability DL 98 01 Endorsement?

Damages do not include prejudgment interest awarded against an insured

The Commercial basic Cause of Loss Form does not cover which of the following perils?

Earth Movement

Which of the equipment is covered under the Equipment Breakdown Protection Coverage Form?

Electrical and mechanical equipment used in the utilization of energy

Which of the following statements is false regarding assumed names?

Every licensee's legal name must be previously approved by the Superintendent

Which statement is false regarding the Businessowners Policy?

First aid expenses are included in Supplementary Payments

Which coverage form may not be added to the Commercial Property Coverage Part?

Homeowners Special Form

With regard to the Amendment of Policy Provisions - New York (PP 01 79) Endorsement:

If the policy is issued to a federal employee for government business, the U.S. or any of its agencies are not insureds under Part A

All of the following are excluded under the BOP, except:

Increased cost of construction

The Personal Liability endorsement does not provide coverage for which of the following?

Injury caused to a regular resident of the dwelling

The Mobile Agricultural Machinery and Equipment Coverage Form does not include coverage for:

Irrigation equipment

Which description of the Personal Articles Floater is incorrect?

It covers claims on a replacement cost basis

Which of the following is a loss condition under the Business Auto Coverage form?

Legal action against the insurer

How is lost or damaged property valued under the BAP?

Lesser of the ACV or the cost to repair or replace

Which of the following claims would be covered under the Personal Injury Endorsement attached to an HO-3 Policy?

Liability arising from publication of material that violates another person's right of privacy

Which of the following statements is NOT true of the Commercial Liability Umbrella Coverage Form?

No coverage is provided for pre-judgment or post-judgment interest

As part of the solvency requirements, insurers authorized to transact insurance business must file an annual financial statement with the Superintendent:

On or before March 1 of each year

The Joint Ownership Coverage - New York PP 03 78 Endorsement does NOT amend the term 'your covered auto' to mean:

Only the vehicle shown in the Schedule or in the Declarations

Which of the following would not be excluded under Coverage A of the CGL?

Operation of mobile equipment

Which of the following is not an Optional Coverage under the Businessowners Policy?

Personal property of others that is in the insured's care, custody and control

Which is the best description of punitive damages?

Punitive damages are assessed as a punishment for extremely objectionable conduct by a negligent party

Damage to a building insured under the Businessowners Policy is valued on which basis?

Replacement Cost

Which of the following is covered by Coverage E of the Farm Property Coverage Part?

Scheduled farm personal property

Which of the following would not be covered under a Valuable Papers and Records Floater?

Securities

Which of the following would be an insured under the CGL policy?

Spouse of a partner

Which of the following is true about the right of salvage?

The insurer has the right to take possession of damaged property after payment of a loss

Which of the following statements BEST describes the manner in which a licensee must provide a clear and conspicuous notice to its customers that accurately reflects its privacy policies and practices?

The notice must be provided a the time the insurance application is taken, and annually thereafter

All of the following statements regarding property insurance are correct, except:

The owner of clothing left in the care of a dry cleaner is called a bailee

All of the following are true of the extended reporting period, except:

The supplemental extended reporting period must be purchased at the beginning of the policy period

Which of the following forms is designed to insure a single shipment of goods?

Trip Transit Policy

All of the following are covered under a Homeowners Policy, except:

All living expenses incurred when a dwelling becomes uninhabitable after a covered loss

The Miscellaneous Type Vehicle Endorsement attached to a Personal Auto Policy allows eligibility of a motorcycle by:

Amending the definition of 'your covered auto' and 'newly acquired auto' to include any miscellaneous type vehicle

Which of the following statements is correct?

Any sale of Medicare supplement coverage that will provide an individual more than one Medicare supplement policy or certificate is prohibited

The Law of Large Numbers provides that:

As the number of insured units increases, predictability of losses improves

Which of the following is not an element of negligence?

Assumption of risk

Which of these statements is not true about Uninsured Motorist coverage?

Coverage is automatically provided for the damage to the insured vehicle

Which of the following statements is false with regard to the Water Back Up and Sump Discharge or Overflow - New York HO 23 85 Endorsement?

Coverage is excluded due to a loss caused by the insured's negligence, including that of an insured minor

Which of the following is true regarding the Musical Instrument Floater?

Covered instruments may not be played for remuneration during the policy term

Which of the following statements is NOT correct regarding Supplementary Uninsured/Underinsured Motorist Coverage?

Every motor vehicle policy must include supplementary uninsured/underinsured motorist coverage

The act of 'selling' does NOT include:

Exchanging an insurance policy by any means, for money, on behalf of a licensed preferred provider organization

The _________ endorsement covers the loss of money, securities, or property that results from a threat made to the insured, so long as the threat is reported to law enforcement.

Extortion

What type of liability policy requires the injured party to collect benefits from his/her own insurance as if it were first-party coverage, eliminating the process of determining negligence?

No fault

All of the following are excluded from the Workers' Compensation Law, except:

Part time employees

The Workers' Compensation Insurance Schedule of Benefits applies to:

Permanent Partial disabilities

Which type of standard policy includes coverage options that would not exclude damage by flood?

Personal Auto

Which of the following statements is true with respect to Uninsured Motorist Coverage?

Physical damage is excluded under uninsured motorist coverage

Which statement is false regarding the Building Personal Property Coverage Form?

Preservation of Property Coverage provides named-perils coverage for 10 days

Which of the following is true about the National Flood Insurance Program?

Property removed to protect it from flood is covered for 45 days at other locations

Which of the following risks may be protected against by insurance?

Pure Risk

K owns several buildings at different locations with each one insured on a separate policy. Which of the following methods of writing insurance does this describe?

Specific Limit

The New York State Disability Benefits Law is administered by:

The Workers' Compensation Board

All of the following are true of the Dwelling Policy Broad Form, except:

The broad form covers dwellings located on farms

Which of the following is true regarding Completed Operations coverage?

The coverage will pay for bodily injury and/or property damage caused by negligent or faulty work by the insured, but not for the cost of replacing the work that caused the loss

Which of the following would not be found in the Common Policy Declarations page of a Commercial Package Policy?

The first named insured

Which of the following best defines short rate cancellation?

The insured will receive less than the full amount of the unearned premium

A sandwich shop discovers that someone has vandalized their customer bathrooms, causing $2,500 in damage. Under the shop's commercial crime policy, which insuring agreement or endorsement would pay for this loss?

The insured would need to file a claim for this loss under their commercial property or businessowners policy

Under the property removed coverage extension of a Dwelling Policy, which of the following is incorrect?

The policy will not provide any coverage while insured property is being removed from endangered property

Which of the following is NOT correct with respect to definition of a producer?

The term, producer includes an agent of a title insurance company

Which of the following is false concerning provisions in health insurance policies?

The time limit on certain defenses is 3 years