Exam Stimulation

Transportation expenses are covered under a personal auto policy for ___________.

$20 per day, for a maximum of $600

What is the maximum allowed value of a gift that an agent can give to an insured without violating the regulation on rebating?

$25

The commissioner believes that an insurance rule or regulation has been violated, and decides to call a disciplinary hearing. How many days before a hearing must the Commissioner issue a notice to the person charged with a violation?

10 Days

The Commissioner believes that a license has violated an insurance regulation and decides to conduct a hearing. How long of a notice must the Commissioner provide the license?

10 days

The declarations page of the homeowners policy provides all of the following information EXCEPT ______.

A statement that earthquake damage is not covered.

Which of the following definitions best defines the term "accident"?

A sudden, unplanned and unexpected event, not under the control of the insured, resulting in injury or damage neither expected nor intended

An uninsured motor vehicle includes all of the following EXCEPT

A vehicle being used for public livery

What is a foreign insurer?

An insurer with a home office in another state

A man is working on the roof of his house, and his neighbor is watching from the ground. When roof shingles are thrown off the roof, they hit the neighbor in the face, injuring his eye. Which best classifies the homeowner's legal liability?

Bodily injury

The crime of forced entry into the premises of another by a person or persons with felonious intent is defined as....

Burglary

Termination of an in-force insurance policy prior to the expiration date shown in the policy is known as _____?

Cancellation

In order for an insurer to legally transact insurance, it must obtain which of the following?

Certificate of Authority

An insured is driving her car through a residential area when she loses control and crashes into a neighbor's front porch. The neighbor, who was sitting on the porch, is injured. The insured's liability policy has a limit of $500,000. This amount applies to the total of damages for any bodily injury and property damage resulting from one accident. Which type of limit of liability does the insured have?

Combined single

If a violation of the New Jersey insurance code were to occur, a cease and desist order and/or penalty may be issued. Who may issue a cease and desist order?

Commissioner

What term best describes the act of withholding material information that would be crucial to an underwriting decision?

Concealment

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT

Conditions

An insured's business is damaged because of a fire, and he is forced to close the business temporarily for repairs. As a result, the insured lost income. What type of loss is this?

Consequential

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

Consideration

Additional coverages in the liability section of a homeowners policy cover all of the following EXCEPT

Damage to a third-party property for which the insured is legally liable

The part of a policy that clarifies terms in the policy is the ________

Definitions

An insured has four separate but identical policies written by different insurers to cover her $100,000 building. Each policy is written for $100,000 and each has the pro rata liability other insurance clause. In the event of a total loss to the building, what would each insurer pay?

Each policy will pay $25,000 of the loss.

The list of those lines or classes of insurance for which there exists no reasonable or adequate market in New Jersey, as determined by the Commissioner, is known as...?

Exportable list

The requirement that agents must account for all insurance funds, and are not permitted to co-mingle those funds with their own is known as...

Fiduciary responsibility

All of the following are conditions commonly found in the insurance policy EXCEPT...?

Insuring agreement

The insurer may suspect that a moral hazard exists if the policyholder...

Is not honest about his health on an application for insurance

An insurance producer fails to obtain automobile insurance for a client after agreeing to do so. The client is involved in an auto accident after running a red light and is found to be at fault. The damage to the other vehicle totals $5,000. Which statement regarding the producers errors and omissions liability policy is true?

It will provide coverage because the damage to the client resulted from the producer's negligence

For a contract to be enforceable by law, the purpose of the contract must be

Legal and not against public policy

Which of the following in NOT considered a misrepresentation as it pertains to unfair trade practices?

Making comparisons between different policies

What insurance policy provision defines how the policy will respond if there is more than one insurance policy written on the same risk?

Other insurance

What is the major difference between a stock company and a mutual company?

Ownership

An insured has a liability policy that sets the amount for all claims that arise from a single incident at $50,000. Which type of limit of liability does this insured's policy have?

Per occurance

The risk of loss may be classified as __________.

Pure risk and speculative risk.

Giving a client an inducement to a sale not stated in the policy is an unlawful practice known as

Rebating

Which of the following is used in the formula for calculating the actual cash value of a property?

Replacement Cost

Which of the following would be covered under personal injury liability?

Slander

Burglary is defined as

Taking of property from within the premises leaving visible signs of forced entry.

Under a dwelling policy, which of the following is NOT a factor in determining a loss?

The amount negotiated by the insured

Which of the following is true regarding license cancellation and re installment?

The license needs to be returned to the Insurance Dept. It can be reinstated by filling out an application and paying a fee.

An organization licensed as a producer business entity based in New York would like to transact insurance in New Jersey. Which of the following is true?

The organization will need to obtain a nonresident business entity license, and its producers will need to obtain nonresident licenses.

When a direct chain of events resulting from a negligent act causes injury or damage, that act is considered to be _______________

The proximate cause

Which of the following best expresses the purpose of a stated value contract?

To pre-establish the amount of coverage available for property items that are difficult to value

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage

Which method of loss valuation is contrary to the basic concept of indemnity?

replacement cost

In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for

uninsured motor vehicle

Bill's license was revoked 2 years ago. How much longer will he have to wait in order to request his license to be reinstated?

3 years

If an insurer and insured have a dispute about whether a particular loss is covered under a policy, which authority will settle the dispute?

Court system

Which of the following dwelling coverages would provide coverage to a garage not attached to the primary insured dwelling?

Coverage B

The FAIR Plan provides _________.

Essentially property insurance

All of the following are found in the declarations section of a policy EXCEPT...

Exclusions

The section of an insurance policy that details that perils are not insured against and what persons are not insured is known as ___?

Exclusions

Replacement cost is defined as...

Full replacement of property at its current cost, new and without reduction for depreciation.

Which of the following is the basis for a claim against an insurance policy?

Loss

A person who does not lock the doors or does not repair leaks shows an indifferent attitude. This person presents what type of hazard?

Morale

A Certification of License Status must include all of the following information EXCEPT

Number of years a licensee has been in the business

All of the following are parts of a personal auto policy EXCEPT

Physical damage coverage

The other insurance provision that limits the liability of the insurer to a portion of the loss no greater than the amount the insurer bears to all the insurance covering the property is called...?

Pro rata liability

Which of the following is NOT required information a producer must provide before solicitation insurance?

Producer contact information

Which of the following is defined as the legal liability arising from physical damage to the belongings of others caused by the negligence of an insured?

Property damage liability

When the insured is the owner and only designated driver for two or more automobiles and is the only licensed driver residing in the household, he/she is charged...?

Reduced PIP premiums on each vehicle

Replacement cost coverage is provided in both the broad and special form dwelling policies when

The amount of insurance on the dwelling is at least 80% of its replacement cost at the time of loss

Which of the following would qualify as a competent party in an insurance contract?

The applicant has a prior felony conviction

Negligence is defined as.....

The failure to use reasonable and prudent care

Which of the following statements would be correct if an insured failed to maintain the underlying limits as required by a personal umbrella policy/

The insured would be responsible for the amount required as underlying limits in the event of a claim.

An insured covered under a Mobile Homeowners Policy wants to move the location of the covered mobile home. Which of the following must the insured obtain from the insurer?

Transportation/ Permission to Move Endorsement

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

mutual

A meteorite hits the insured's car, causing damage. Under which of the following coverage's in a personal auto policy would this loss be paid?

other than collision

Which of the following coverage's is automatically included in a basic auto policy?

personal injury protection coverage

A $100,000 house insured on a policy with an 80% coinsurance requirement has a fire that caused $40,000 of damage; the owner has a policy with $60,000 coverage. How much can the owner collect for his loss?

$30,000

In choosing an insurance business name, which of the following would be allowed?

A proper name which does not belong to any offices, stockholders, or executives

Presenting any written or oral statement in support of or in opposition to a claim payment, while knowing that the statement contains false or misleading information material to the claim, would be best considered...?

A violation of the New Jersey Insurance Fraud Prevention Act

What is a Certificate of Insurance?

A written document showing the types and amounts of insurance that have been issued to the insured

Rebating is an unfair trade practice and is regulated by law. All of the following would be considered to be rebating EXCEPT

An agent misrepresents policy benefits to convince a policy owner to replace policies.

Which of the following risks would NOT be eligible for coverage under a homeowners policy?

An applicant who lives on a commercial farm.

A policy condition that stipulates how the amount of damaged or lost property will be determined if the insured and the principal do not agree on the value of a property loss is known as...

Appraisal

Which of the following clauses establishes the procedure for determining the amount of a loss when the insurer and the insured cannot agree on the value of property or amount of loss?

Appraisal clause

Bob insists that the insurer owes him $10,000 for liability damages, while his insurer asserts that they owe him no more than $7,000. Which of the following would most likely describe the type of claim settlement that they might pursue?

Arbitration

If an insured has an umbrella liability policy in addition to his personal auto policy, which would be considered the underlying policy?

Auto policy

Events or conditions that increase the chances of an insured loss occurring are referred to as

Hazards

The policy conditions define...

How parties to the contract must act following a loss.

The pro rata liability clause is designated to protect the principle of _____________.

Indemnity

If the issuance of a license is denied and a hearing is requested, which entity will be making determination whether or not the license should be issued?

The Department of Insurance

If an insured covered under a mobile home policy moves the mobile home to protect it from a covered peril, the policy will pay up to _____.

$500

All of the following are special personal property limits under homeowners policy EXCEPT...

$500 for business personal property on the insured premises

What coverages are offered by the New Jersey Automobile Full Insurance Underwriting Association?

$500,000 bodily injury, comprehensive and collision, and medical payment of $500,000 with a limit of $250,000 per person.

Licensees must file with the Department a branch office registration form within how many days before business is first conducted there?

30

An insurance producer is acting as a broker when he or she negotiates for an insurance contract on behalf of...

A client

All of the following statements concerning the New Jersey Insurance Underwriting Association are true EXCEPT...

All insurers licensed in the State are members

The insured with a homeowners policy has had damage to his property caused by a volcano. Which of the following is true?

All volcanic eruptions within 72 hour period will be considered one occurance

When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?

Foreign

When would a misrepresentation on an insurance application be considered fraud?

If it is intentional and material

What type of property does a Personal Floaters policy cover?

Movable personal property, wherever it may be located

The New Jersey Insurance Underwriting Association is supported by funds from the _____________.

New Jersey Insurance Development Fund

In order for company Y to be authorized to write property insurance in New Jersey, in which of the following associations must they have membership?

New Jersey Underwriting Association

Which of the following is covered under the physical damage coverage of a personal auto policy?

Sound reproduction equipment permanentlyinstalled in the covered auto

The policy provision found in property insurance policies that prevents the insured from collecting twice for the same loss is called?

Subrogation

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?

The Fair Credit Reporting Act

An insured's 9-year-old son threw a ball, accidentally breaking a neighbor's plate glass window. The insured was found legally liable for the cost of replacing the window. This is an example of ________

Vicarious liability

What type of liability would a person who owns a swimming pool have?

Absolute

Which of the following statements accurately describes the difference between the two tort options the named insured must choose from PIP coverage?

One of the options exempts the owner of an auto from liability for non-economic loss.

In a personal auto policy, the medical payments coverage is similar to...

Accident insurance, because