Casualty Insurance Cumulative 2
An insured just purchased an auto policy for his new car. He wants to understand what perils are NOT insured against. Which section of his policy should the insured check?
Exclusions
If an insured has a loss history that is better than average, what will be applied to reduce the workers' compensation premium?
Experience modification factor
True or false: "authorized" is an example of the company's location of incorporation
False
True or false: "speculative" is a classification of a hazard
False
True or false: A corporation is insured under a commercial general liability (CGL) policy and is named in a lawsuit to recover expenses for bodily injury and property damages from a claim. The insurance company is obligated to provide coverage for spouses of officers and stockholders named in the suit
False
True or false: An insurer cancelled a contract with a producer on April 1st. The insurer must notify the Commissioner of this action by April 30th
False
True or false: Joe is injured in an auto accident and is expecting to settle the claim under his Personal Injury Protection coverage. Joe is the named insured on his own PIP policy and also an insured on his wife's policy. Joe's PIP and his wife's PIP will split this claim evenly.
False
True or false: Joe is injured in an auto accident and is expecting to settle the claim under his Personal Injury Protection coverage. Joe is the named insured on his own PIP policy and also an insured on his wife's policy. Joe's PIP will pay up to his limit for this claim, and his wife's will pay the remainder
False
True or false: Joe is injured in an auto accident and is expecting to settle the claim under his Personal Injury Protection coverage. Joe is the named insured on his own PIP policy and also an insured on his wife's policy. Only Joe's wife's PIP will pay this claim
False
True or false: Marcus has two policies that will cover his $20,000 loss. Company A will pay the first $15,000, and Company B pays the remainder. In this example, Company A's policy is considered pro rata insurance
False
True or false: New Jersey Automobile Full Insurance Underwriting Association offers a coverage of $1,000,000 for bodily injury
False
True or false: New Jersey Worker's Compensation Association pays for benefits under a Worker's Compensation program
False
True or false: Occupational hazard is the common law defense that allows the employer to deny liability on the basis that the employee knew what the situation was like before employment and assumed all of the risk of injury
False
True or false: The Employee Theft crime policy form includes a coverage extension that applies to employees temporarily outside the coverage territory for up to 60 days
False
True or false: Uninsured and Underinsured Motorist Coverages can be increased by stacking the limits of coverage under the same policy or multiple policies available to the insured
False
True or false: a business that wants coverage for its liability for employment-related acts can obtain it by purchasing employment practices liability insurance, workers' compensation and employers liability insurance, OR commercial general liability insurance
False
True or false: a completion bond is used to guarantee that supplies will be furnished at an agreed-upon price and time
False
True or false: a couple noticed yesterday that several items of personal property were missing from their home. There has NOT been any apparent robbery committed, the items are merely missing and have seemingly disappeared mysteriously. The couple will NOT be able to file a report with authorities WITHOUT proof of purchase and proof of loss of the goods in question
False
True or false: a couple noticed yesterday that several items of personal property were missing from their home. There has NOT been any apparent robbery committed, the items are merely missing and have seemingly disappeared mysteriously. The couple will need to call the local authorities and report the mysterious disappearance of goods
False
True or false: a couple noticed yesterday that several items of personal property were missing from their home. There has NOT been any apparent robbery committed, the items are merely missing and have seemingly disappeared mysteriously. The couple will need to report the loss to their insurance company so that a claim can be filed and paid
False
True or false: a family member of the insured is at fault for an auto accident with another motorist whose auto coverage limits are not adequate to pay for all damages. In this scenario, uninsured motorist coverage under a personal auto policy would apply
False
True or false: a fidelity bond is the general surety bond category that guarantees that the principal will fulfill certain obligations set forth by law
False
True or false: a newly licensed insurance producer wants to begin working immediately, but her license has not yet been issued. In this scenario, the producer may obtain a temporary work authority
True
True or false: a personal umbrella policy may act as excess over Homeowners Section II coverage
True
True or false: a personal umbrella policy may act as excess over auto liability coverage
True
True or false: a personal umbrella policy may act as excess over comprehensive personal liability
True
True or false: a producer returning part of her commission to her client, as an inducement to buy, best describes a rebate
True
True or false: a producer's license can be suspended or revoked for failure to pay child support
True
True or false: a producer's license can be suspended or revoked for failure to pay state income taxes
True
True or false: a producer's license can be suspended or revoked for offering rebates while transacting insurance
True
True or false: a supply bond is a common type of contract bond that guarantees the fulfillment of a contractual obligation
True
True or false: a vehicle purchased 90 days ago would NOT be eligible for coverage under a personal auto policy
True
True or false: according to the standard workers compensation and employer liability policy form, a state should be listed in Part Three - other states' insurance of the workers compensation and employers liability policy when the insured expects to extend operations to that state
True
True or false: additional coverage is part of a policy structure
True
True or false: advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered would be considered an unfair claims settlement practice
True
True or false: age of property is a factor in the determination of actual cash value
True
True or false: amounts and types of insurance are indicated on a certificate of insurance
True
True or false: an applicant for surplus lines authority must be allowed to write business in this state
True
True or false: an applicant for surplus lines authority must hold a property and casualty license
True
True or false: an applicant must complete 20 hours of education for each line of insurance in which the applicant intends to transact, including education regarding state-specific regulations, before being admitted to the state licensing examination
True
True or false: an automobile policy has limits of 100/300/50. The number 100 means the maximum limit for bodily injury claims that can be paid for one person
True
True or false: an example of an alien insurer doing business in this state is one formed under the laws of Mexico
True
True or false: an insured is involved in an auto accident with another motorist who is at fault and does NOT have any insurance. In this scenario, uninsured motorist coverage under a personal auto policy would apply
True
True or false: an insured may cancel a commercial insurance policy at any time by mailing or delivering written notice of cancellation to the insurer
True
True or false: an insured slams a hand in a car door while getting in, breaking the hand. This would be covered by the medical payments coverage in a personal auto policy
True
True or false: an insured was backing his car out of the driveway and hits a fire hydrant. The automobile sustained $1,300 of damage to the bumper. The insured's auto policy has a $500 deductible. In this situation, the insured is responsible for the first $500 of any claim that he makes on his policy.
True
True or false: an insured was having a new home built. While digging the footings for the foundation, the contractor struck a solid rock formation and found that was necessary to blast the formation in order to remove the rocks. The force of the blast broke several windows and some chinaware in a neighbor's home several blocks away. For the damage to paid for, the neighbor would NOT need to prove negligence, he would ONLY need to prove that the damage occurred.
True
True or false: when processing workers compensation claims, the critical components relate to the employer AND employee AND their locations
True
True or false: withdrawal of nonpremium monies are considered legal disbursements from premium trust accounts
True
True or false: workers compensation statutes require employers to meet capital reserves requirements sufficient to pay any claims that might arise. Employers can meet such obligations through assigned risk plans
True
True or false: workers compensation statutes require employers to meet capital reserves requirements sufficient to pay any claims that might arise. Employers can meet such obligations through competitive state funds
True
True or false: workers compensation statutes require employers to meet capital reserves requirements sufficient to pay any claims that might arise. Employers can meet such obligations through self-insurance plans
True
True or false: workers' compensation and commercial general liability insurance exclude losses arising from employment-related practices
True
When an insured's gardener was spraying weeds in his lawn, he failed to notice that the wind was drifting the spray into the neighbor's yard where he damaged their flower bed. The insured was found to be legally liable for this damage. This is an example of what?
Vicarious liability
What does the exclusions section of an insurance policy detail?
What perils are NOT insured against AND what persons are NOT insured
True or false: a newly licensed insurance producer wants to begin working immediately, but her license has not yet been issued. In this scenario, the producer may NOT transact insurance until her license has been issued
False
True or false: regarding personal injury benefits provided to pedestrians under PIP policies, pedestrians who suffer personal injuries are NEVER covered
False
True or false: relief employment by any county, city, board, or commission is NOT exempt from Workers Compensation requirements
False
True or false: representing an insurance policy as a share of stock does NOT constitute false advertising
False
True or false: requesting the insured swear under oath concerning the facts of the claim would be considered an unfair claims settlement practice
False
True or false: terms and conditions of insurance are indicated on a certificate of insurance
False
True or false: the claims-made trigger is based on the date when injury or damage occurs
False
True or false: the commercial general liability Coverage Part A - Bodily Injury and Property Damage provides coverage for employers
False
True or false: the commercial general liability Coverage Part A - Bodily Injury and Property Damage provides coverage for hired autos
False
True or false: the commercial general liability Coverage Part A - Bodily Injury and Property Damage provides coverage for machinery
False
True or false: the company owes premium money to the insured. The insurer gave the funds to the producer to return to the insured. The producer must pay the insured within 30 days
False
True or false: the course that an applicant must take before being admitted to the state licensing exam does NOT need to include education regarding the regulations of the insurance industry in New Jersey
False
True or false: the insured's chartered location or domicile is a consideration in determining which state's law applies when a worker is required to travel into another state and is injured while working in the other state
False
True or false: the insured's family member is struck by a hit-and-run driver. This would NOT be covered by uninsured motorist coverage
False
True or false: the insured's neighbor borrowed the insured's car and was hit by an uninsured motorist. This would NOT be covered by uninsured motorist coverage
False
True or false: the insurer is required to provide proof that the insured received the cancellation notice prior to cancelling a commercial insurance policy
False
True or false: the normal location where the employee works is NOT a consideration in determining which state's law applies when a worker is required to travel into another state and is injured while working in the other state
False
True or false: the other states' insurance section of a workers compensation policy provides coverage for ANY other state the insured may have operations in
False
True or false: to be eligible for coverage under the Commercial Auto Insurance Plan (CAIP), an insured must have been turned down for insurance coverage by at least 3 insurers
False
True or false: two engineers were working on a manufacturing line at the same time. One worker was neglecting his duties, which caused the second engineer to incur an injury. Workers Compensation will NOT pay for injuries incurred due to negligence; however, the company is still responsible for any medical costs.
False
True or false: types and cost of insurance are indicated on a certificate of insurance
False
True or false: under a personal auto policy, a covered auto does NOT include temporary vehicles due to repair, servicing, breakdown, or loss
False
True or false: underinsured motorists are included in an unendorsed garage coverage form
False
True or false: uninsured motorist coverage applies when the insured vehicle is at-fault
False
True or false: uninsured motorists are included in an unendorsed garage coverage form
False
True or false: using names that disguise the true nature of a policy does NOT constitute false advertising
False
True or false: workers compensation statutes require employers to meet capital reserves requirements sufficient to pay any claims that might arise. Employers can meet such obligations through second injury funds programs
False
Circulating deceptive sales material to the public is what type of Unfair Trade Practice?
False advertising
What types of bonds are classified as judicial bonds?
Fiduciary and court
Which liability policy protects those who manage private pension and employee benefit plans?
Fiduciary liability
What does fire damage legal liability coverage pay for?
Fire damage to property the insured leases or temporarily occupies caused by the insured's negligence
An insurer incorporated under the laws of another state but doing business in this state is considered what?
Foreign
An agent is considered a nonresident agent in what circumstance?
If he/she is licensed in another state, but is allowed to transact insurance in this state
Restoring an insured financially after a claim is known as what?
Indemnity
True or false: officers of corporations are exempt from Workers' Compensation requirements
False
True or false: other-than-collision would cover financial losses due to damage to an insured's car in an accident for which the insured was found at fault
False
True or false: other-than-collision would cover financial losses due to damage to an insured's neighbor's mailbox that was caused by the insured's pickup
False
True or false: other-than-collision would cover financial losses due to legal action brought against an insured for an accident
False
True or false: personal and advertising is a liability coverage in a general liability policy NOT subject to the aggregate limit
False
True or false: personal injury protection coverage includes medical expense, income continuation, essential services, death, and funeral expense benefits. The maximum amount of funeral or burial expenses for one person is $1,500
False
True or false: policy limits are the maximum amount an insured may collect, or for which an insured is protected under the terms of the insuring agreement
False
True or false: premises operations is a liability coverage in a general liability policy NOT subject to the aggregate limit
False
True or false: producer licenses will NOT be issued to business entities if one partner holds 10% share in another licensed business entity
False
True or false: producer licenses will NOT be issued to business entities if the business has only one licensed producer
False
True or false: producer licenses will NOT be issued to business entities if the business it NOT authorized by the Secretary of State
False
True or false: product/completed operations is a liability coverage in a general liability policy NOT subject to the aggregate limit
False
True or false: regarding personal injury benefits provided to pedestrians under PIP policies, pedestrians are NOT covered if struck by objects propelled by a motor vehicle
False
True or false: regarding personal injury benefits provided to pedestrians under PIP policies, pedestrians are covered ONLY if injured by a motor vehicle
False
Personal injury protection coverage includes medical expense, income continuation, essential services, death, and funeral expense benefits. The maximum amount of funeral or burial expenses for one person is what?
$1,000
An insured and his spouse were traveling down an icy road and hit a sign, accumulating $1,350 damage to their car. They have a $250 deductible. They already collected on a $1,500 claim earlier this year. How much will they collect on this claim?
$1,100
If a UM/UIM Coverage has limits of 250/500/100, how much will it cover for bodily injury to 1 person per accident
$250,000
A licensee is charged (at a hearing) with knowingly violating an insurance regulation. Along with a cease and desist order, what will the licensee most likely be fined per charge?
$5,000
The Commissioner conducts an investigation regarding a possible misconduct. At a hearing, the licensee is found guilty for knowingly violating a cease and desist order? What is a likely penalty
$5,000 per violation
An insured owns 2 automobiles that are insured under a single policy. Each auto has Uninsured/Underinsured Motorist Coverage limits of 250/500/100 in the event of an accident. What is the total amount of bodily injury coverage available to the insured?
$500,000
If a UM/UIM Coverage has limits of 250/500/100, how much will it cover for bodily injury to multiple individuals per accident?
$500,000
In order to become a producer in New Jersey, after submitting a licensing application, candidates must pass a licensing examination within how long?
1 year
If an insurer cancels an agency contract, within how long must they notify the Commissioner in writing?
15 days
In New Jersey, in the event of cancellation for nonpayment of the premium on an Auto policy, the insured must be given how long of notice?
15 days
Within how long of completing an approved prelicensing education course must a candidate submit a license application?
2 years
Prior to being admitted to the state licensing examination, an applicant must complete how much prelicensing education for each line of business that he/she intends to transact?
20 hours
In New Jersey, if the insurer chooses not to renew a casualty policy on the anniversary date, the insured must receive notice at least how long before the expiration date of the coverage?
30 days
Under a personal auto policy, a covered auto includes a newly acquired auto as long as the newly acquired auto was purchased within how long ago?
30 days
Sue's license was revoked 1 year ago. She would like to reinstate it. how much longer will she have to wait before she can apply for reinstatement?
4 years
How long does a producer have to remit the collected premiums to the insurer?
5 business days
The company owes premium money to the insured. The insurer gave the funds to the producer to return to the insured. Within how long must the producer pay the insured?
5 days
Under the New Jersey Automobile Full Insurance Underwriting Association, every noninsurer servicing carrier must have been in the insurance business for at least how long?
5 years
The Employee Theft crime policy form includes a coverage extension that applies to employees temporarily outside the coverage territory for up to how long?
90 days
What are secondary injury funds?
A method by which employers manage the risks associated with the hiring of "previously injured" potential employees
A business that wants coverage for its liability for employment-related acts can obtain it by purchasing what?
Employment practices liability insurance
Who is a surplus lines agent?
A person or organization that is allowed to write business in New Jersey for insurance companies that do NOT possess a certificate of authority in New Jersey if NO authorized insurers in New Jersey offer the specific type of insurance in question
Marcus has two policies that will cover his $20,000 loss. Company A will pay the first $15,000, and Company B pays the remainder. In this example, Company B's policy is considered what?
Excess insurance
Who would be added for coverage under a property policy by an endorsement?
Additional insureds
A general liability policy will respond to claims against an insured when bodily injury or property damage is caused by what?
An insured's negligence
Refusing to pay claims without conducting a reasonable investigation based upon all available information is an example of what?
An unfair claims practice
If an insurer declares that the value of a loss is $5,000, but the insured is confident that the amount of the loss is substantially different, what would most likely be used to settle the dispute?
Arbitration
When an insured and her insurer could not agree on the amount of liability loss after her accident, the settlement was submitted to someone whose decision was then binding on both parties. What policy condition was applied?
Arbitration
Which common law defense allows the employer to deny liability on the basis that the employee knew what the situation was like before employment and assumed all of the risk of injury?
Assumption of risk
Before workers' compensation laws, which three common law defenses helped employers avoid liability?
Assumption of risk; contributory negligence; the fellow servant rule
Which commercial auto coverage provides protection for most commercial auto exposures EXCEPT truckers, garages, and motor carriers
Business auto coverage
How are medical payments, uninsured motorists, and underinsured motorists coverages added to an unendorsed garage coverage form?
By endorsement
An agency wants to obtain license statistics on one of its new producers. It requests a document that the Insurance Department can produce, which lists the producer's license status, lines of license that the producer can transact, and other information. What is this report called?
Certification of license status
A lender who conditions approval of a loan on the condition that the borrower purchase insurance from that lender may be guilty of what?
Coercion
A sworn statement must usually be furnished by the insured to an insurer, and must include what information about the occurrence and the amount of indemnity claimed?
Date and description
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?
Department of Insurance
True or false: a newly licensed insurance producer wants to begin working immediately, but her license has not yet been issued. In this scenario, the producer may transact insurance provided that she has official documentation that she passed her licensing exam
False
True or false: a newly licensed insurance producer wants to begin working immediately, but her license has not yet been issued. In this scenario, the producer may transact insurance through another producer for a maximum period of 180 days
False
True or false: a nonowned temporary substitute vehicle would NOT be eligible for coverage under a personal auto policy
False
True or false: a personal umbrella policy may act as excess over auto collision coverage
False
True or false: a producer has 10 calendar days to remit the collected premiums to the insurer
False
True or false: a producer misrepresenting policy provisions or coverages at issue best describes a rebate
False
True or false: a producer requiring an insured to buy insurance from her as a condition to a loan best describes a rebate
False
True or false: a producer selling insurance primarily to himself, his family, and his friends best describes a rebate
False
True or false: a producer's license can be suspended or revoked for failure to generate commissions
False
True or false: a runaway shopping cart in a mall parking lot knocks an insured down, breaking his leg. This would be covered by the medical payments coverage in a personal auto policy
False
True or false: a trailer owned by the insured would NOT be eligible for coverage under a personal auto policy
False
True or false: a vehicle listed on the declarations page would NOT be eligible for coverage under a personal auto policy
False
True or false: according to the standard workers compensation and employer liability policy form, a state should be listed in Part Three - other states' insurance of the workers compensation and employers liability policy when the insured has operations in the state where the policy is written
False
True or false: an applicant for surplus lines authority does NOT need to be considered a resident of this state
False
True or false: an applicant for surplus lines authority must possess a certificate of authority in this state
False
True or false: an applicant must complete 50 hours of education in all lines of insurance, including education regarding state-specific regulations, before being admitted to the state licensing examination
False
True or false: an automobile policy has limits of 100/300/50. The number 100 means the maximum limit for bodily injury claims that can be paid for one accident
False
True or false: an example of an alien insurer doing business in this state is one formed under the laws of Arizona
False
True or false: an example of an alien insurer doing business in this state is one formed under the laws of Puerto Rico
False
True or false: an example of an alien insurer doing business in this state is one formed under the laws of the District of Columbia
False
True or false: an insured falls down while water skiing and is run over by a boat. This would be covered by the medical payments coverage in a personal auto policy
False
True or false: an insured is at fault for an auto accident with another motorist, but the insured's limits are not adequate to pay for damages. In this scenario, uninsured motorist coverage under a personal auto policy would apply
False
True or false: an insured is injured in an auto accident with another motorist who is at fault but has limits of insurance that are not adequate to cover all medical expenses. In this scenario, uninsured motorist coverage under a personal auto policy would apply
False
True or false: an insured just purchased an auto policy for his new car. He wants to understand what perils are NOT insured against. To find this, he should check the definitions section of his policy
False
True or false: an insured trips over the curb while crossing the street on the way to her car and sprains a wrist. This would be covered by the medical payments coverage in a personal auto policy
False
True or false: an insured was backing his car out of the driveway and hits a fire hydrant. The automobile sustained $1,300 of damage to the bumper. The insured's auto policy has a $500 deductible. In this situation, the insured is responsible for the total of $500 on claims made for the calendar year on the policy
False
True or false: an insured was backing his car out of the driveway and hits a fire hydrant. The automobile sustained $1,300 of damage to the bumper. The insured's auto policy has a $500 deductible. In this situation, the insured will pay all but $500 of any claims he makes on his policy.
False
True or false: an insured was backing his car out of the driveway and hits a fire hydrant. The automobile sustained $1,300 of damage to the bumper. The insured's auto policy has a $500 deductible. In this situation, the insured will receive a $500 discount on all repair work that is contracted by his insurer.
False
True or false: an insured was having a new home built. While digging the footings for the foundation, the contractor struck a solid rock formation and found that was necessary to blast the formation in order to remove the rocks. The force of the blast broke several windows and some chinaware in a neighbor's home several blocks away. The insured's insurer, REGARDLESS of negligence, pays for this damage.
False
True or false: most states will NOT impose absolute liability for damage caused by harboring poisonous snakes
False
True or false: an insurer decides to terminate the appointment of one of its producers and notifies the Commissioner 29 days after the fact. On the 9th day after the decision, the producer violates a regulation of the Insurance Code, and a policyowner wants to hold the insurer legally responsible. In this situation, the insurer is NOT legally responsible, since a producer's statements are NOT tied to the insurer.
False
True or false: an insurer decides to terminate the appointment of one of its producers and notifies the Commissioner 29 days after the fact. On the 9th day after the decision, the producer violates a regulation of the Insurance Code, and a policyowner wants to hold the insurer legally responsible. In this situation, the insurer is NOT legally responsible, since the appointment was terminated
False
True or false: an organization licensed as a producer business entity based in New York would like to transact insurance in New Jersey. The organization will need to obtain a nonresident business entity license, which will secure nonresident status for the business itself AND all of its producers
False
True or false: any time nonresident producers satisfy CE requirements in their home state, they are NOT required to complete CE hours in New Jersey
False
True or false: auto collision is a liability coverage
False
True or false: aviation physical damage coverage covers personal effects
False
True or false: benefits are part of a policy structure
False
True or false: casualty insurance policies that have been in effect for a period of 60 days or more may be cancelled due to excessive claims
False
True or false: circulating deceptive sales material to the public is an example of misrepresentation
False
True or false: consideration describes an insurer's responsibility for payment under a policy as stated in the common policy provisions?
False
True or false: cost and amount of insurance are indicated on a certificate of insurance
False
True or false: damage to property owned by the insured would generally be included in the supplementary payments portion of a liability policy
False
True or false: directors and officers liability protects those who manage private pension and employee benefit plans
False
True or false: domestic coverage is NOT included in a Homeowners policy
False
True or false: employers liability coverage under a workers compensation policy includes injury caused intentionally by the insured
False
True or false: employers liability coverage under a workers compensation policy includes injury occurring outside the United States
False
True or false: employers liability coverage under a workers compensation policy includes punitive damages awarded because a worker was employed in violation of law
False
True or false: every Homeowners policy purchased before 1984, when renewed in New Jersey, is NOT required to provide liability coverage from any injured domestic servant or household employee
False
True or false: factors that determine premium rates set by insurance companies include loss costs, operating expenses, claims handling costs, AND location of insured
False
True or false: household employees in New Jersey are required to have liability on their person and dependents under the Domestic Coverage Act of 1984
False
True or false: if a car is stolen and left in a snow bank, causing the radiator to freeze and sustain heavy damage, the damage would NOT be covered by the auto policy because freezing is NEVER covered
False
True or false: if a car is stolen and left in a snow bank, causing the radiator to freeze and sustain heavy damage, the damage would NOT be covered by the auto policy because theft is NEVER covered
False
True or false: if a car is stolen and left in a snow bank, causing the radiator to freeze and sustain heavy damage, the damage would be covered by the auto policy because there is NO exclusion for freezing
False
True or false: if a licensee wants to transact insurance under a different name than that listed on his or her producer's license, he will NOT be able to do this under ANY circumstance because it is illegal to transact insurance under any name other than the one listed on the license
False
True or false: if an insured has a loss history that is better than average, an experience rating will be applied to reduce the workers' compensation premium
False
True or false: if the issuance of a license is denied and a hearing is requested, the state courts will be making determination whether or not the license should be issued
False
True or false: in New Jersey, in the event of cancellation for nonpayment of the premium on an Auto policy, the insured must be given 30 days notice
False
True or false: insurance premium paid is a factor in the determination of actual cash value
False
True or false: insurers may exclude a person from PIP benefits if the person was driving a family member's car with permission
False
True or false: insurers may exclude a person from workers' compensation benefits under New Jersey law where the person's conduct contributed to his personal injuries while accidentally injuring himself
False
True or false: involuntary deposits are considered legal disbursements from premium trust accounts
False
True or false: medical payments are included in an unendorsed garage coverage form
False
True or false: misrepresenting the terms of a policy does NOT constitute false advertising
False
Which term refers to solicitation, negotiation, effectuation, or advising related to an insurance contract?
Insurance transaction
The general business of transacting insurance, including soliciting, negotiating, or communicating with the insureds is known as what?
Insurance-related conduct
What general surety bond category guarantees that the principal will fulfill certain obligations set forth by law?
Judicial bond
What describes an insurer's responsibility for payment under a policy, as stated in the common policy provisions?
Limits of liability
Which term is defined as the failure to use care that an otherwise prudent person would have under similar circumstances?
Negligence
Which term means termination of an insurance policy at its expiration date by not offering a policy continuation or replacement?
Nonrenewal
What term includes losses caused by continuous or repeated exposure to conditions resulting in injury to persons or damage to property that is neither intended nor expected?
Occurrence
Which provision defines how the policy will respond if there is other valid insurance written on the same risk?
Other insurance
States other than the state where the policy is written may be included for coverage in a workers compensation policy if they are named in which part of the policy?
Part 3
To determine whether an experience modification factor is able to be applied, what needs to be evaluated?
Premiums paid and losses incurred over the 3 years immediately preceding the policy period
Marcus has two policies that will cover his $20,000 loss. Company A will pay the first $15,000, and Company B pays the remainder. In this example, Company A's policy is considered what?
Primary insurance
True or false: a couple noticed yesterday that several items of personal property were missing from their home. There has NOT been any apparent robbery committed, the items are merely missing and have seemingly disappeared mysteriously. The couple will NOT be able to make a claim for the property since it is considered to have mysteriously disappeared
True
What statement must an insurer receive before it will pay benefits for a loss?
Proof of loss
Which type of insurance would be needed to cover damage to property owned by the insured?
Property insurance
When one insurer buys insurance from another company to minimize the effects of catastrophic losses, they are doing what?
Reinsuring
An applicant for a disability insurance policy has a heart condition of which they are unaware and therefore they answer no to the question pertaining to heart problems on their application. Their answer is considered to be an example of what?
Representation
What are the two rating plans available for use to adjust the premium for Workers Compensation?
Retrospective and experience
An applicant for a license desperately wants to become an insurance agent, but cannot pass the state licensing exam. His twin brother offers to take the test under the applicant's name and passes. One year later this gets discovered. What will the Commissioner do?
Revoke the license
While driving, an insured lost control of her automobile and drove it through the side of a hardware store damaging the store and 3 aisles of hardware goods. It was determined that the insured was driving the posted speed limit and that her car was in good repair. The hardware store owner will likely do what?
Seek a claim for property damages from the driver's insurer
Upon payment for a loss, the insured is obligated to surrender to the insurer the right to sue a negligent third party. What is this called?
Subrogation
Which type of bond is used to guarantee that supplies will be furnished at an agreed-upon price and time?
Supply bond
Rates for the New Jersey Personal Auto Insurance Plan are set by adjusting what by a specified percentage for insureds having one or more violations, 4 or more points, OR an at-fault accident within the preceding 3 years?
Territorial base rates
If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, what must occur?
The change must be filed with the Department
Two engineers were working on a manufacturing line at the same time. One worker was neglecting his duties, which caused the second engineer to incur an injury. How will the company handle the situation?
The company is responsible for the Workers Compensation claim that will ensue
An insured was having a new home built. While digging the footings for the foundation, the contractor struck a solid rock formation and found that was necessary to blast the formation in order to remove the rocks. The force of the blast broke several windows and some chinaware in a neighbor's home several blocks away. Who pays for this damage?
The contractor
For fire damage legal liability coverage, where is the limit of insurance shown?
The declarations page
What information is found in the conditions part of an insurance policy?
The description of the duties and obligations of the insured
Who assumes absolute liability for any injury suffered by an employee while at work?
The employer
Who pays for benefits under a Workers Compensation program?
The employer of the employee who is injured
Who does uninsured motorist coverage apply to?
The insured; relatives of the insured; those occupying the covered vehicle
An insured was involved in an accident that was caused by a tire blowing out. The insured was severely injured and incurred medical expenses of $100,000. The insured brought a recovery action against the manufacturers of the auto and the tires. The court held that the tire was the cause of the accident. Who is required to pay for this loss?
The manufacturer of the tire
What are policy limits?
The maximum amount an insured may collect, or for which an insured is protected under the terms of the policy
An automobile policy has limits of 100/300/50. What does the number 100 mean?
The maximum limit for bodily injury claims that can be paid for one person.
What does the first number in the coverage limits represent?
The maximum limit for bodily injury claims that can be paid for one person.
For fire damage legal liability coverage, what is the limit of insurance?
The maximum limit the insurer will pay per occurrence
How is Workers Compensation defined?
The obligation imposed on employers to pay benefits as prescribed by the New Jersey Workers Compensation laws OR the US Longshorement and Haborworkers Compensation Act
Policy limits are the maximum amount an insured may collect, or for which an insured is protected under the terms of what?
The policy
If an insurance policy has the additional coverage provision, how does it affect the policy premium?
There is no additional premium
What is the purpose of excess insurance?
To prevent the insured from profiting from the loss
What is the purpose of the New Jersey Personal Auto Insurance Plan?
To provide Personal Auto insurance for those unable to obtain coverage through ordinary methods
What is the purpose of purchasing an umbrella liability policy?
To provide excess insurance over the primary liability policy
True of false: a certificate of insurance does NOT obligate the insurer to the person to which the certificate was issued
True
True or false: "alien" is an example of the company's location of incorporation
True
True or false: "domestic" is an example of the company's location of incorporation
True
True or false: "foreign" is an example of the company's location of incorporation
True
True or false: "moral" is a classification of a hazard
True
True or false: "morale" is a classification of a hazard
True
True or false: "physical" is a classification of a hazard
True
True or false: A corporation is insured under a commercial general liability (CGL) policy and is named in a lawsuit to recover expenses for bodily injury and property damages from a claim. The insurance company is obligated to provide coverage for employees of the corporation named in the suit.
True
True or false: A corporation is insured under a commercial general liability (CGL) policy and is named in a lawsuit to recover expenses for bodily injury and property damages from a claim. The insurance company is obligated to provide coverage for officers of the corporation named in the suit
True
True or false: A corporation is insured under a commercial general liability (CGL) policy and is named in a lawsuit to recover expenses for bodily injury and property damages from a claim. The insurance company is obligated to provide coverage for stockholders named in the suit
True
True or false: An insurer cancelled a contract with a producer on April 1st. The insurer must notify the Commissioner of this action by April 15th
True
True or false: Joe is injured in an auto accident and is expecting to settle the claim under his Personal Injury Protection coverage. Joe is the named insured on his own PIP policy and also an insured on his wife's policy. Only Joe's PIP will pay this claim.
True
True or false: New Jersey Automobile Full Insurance Underwriting Association offers Comprehensive and Collision coverage
True
True or false: New Jersey Automobile Full Insurance Underwriting Association offers Uninsured and Underinsured Motorist coverage
True
True or false: New Jersey Automobile Full Insurance Underwriting Association offers a medical payment coverage of $500,000 with a limit of $250,000 per person
True
True or false: an insurer decides to terminate the appointment of one of its producers and notifies the Commissioner 29 days after the fact. On the 9th day after the decision, the producer violates a regulation of the Insurance Code, and a policyowner wants to hold the insurer legally responsible. In this situation, the insurer will be held legally responsible.
True
True or false: an organization licensed as a producer business entity based in New York would like to transact insurance in New Jersey. The organization will need to obtain a nonresident business entity license, and its producers will need to obtain nonresident licenses
True
True or false: applicants for the Commercial Auto Insurance Plan (CAIP) MUST live in New Jersey AND own a registered vehicle
True
True or false: aviation physical damage coverage covers aircraft communications equipment
True
True or false: aviation physical damage coverage covers aircraft controls
True
True or false: aviation physical damage coverage covers aircraft electronic navigation
True
True or false: aviation physical damage coverage covers aircraft engines
True
True or false: aviation physical damage coverage covers the airframe of the aircraft
True
True or false: by naming a state in Part Three of a workers compensation and employers liability (WC&EL) policy, an employer provides that company operations MAY be conducted in that state
True
True or false: casual employees are exempt from Workers' Compensation requirements
True
True or false: casualty insurance policies that have been in effect for a period of 60 days or more may be cancelled due to fraud or misrepresentation in obtaining the policy
True
True or false: casualty insurance policies that have been in effect for a period of 60 days or more may be cancelled due to increased hazard or material change in the risk
True
True or false: casualty insurance policies that have been in effect for a period of 60 days or more may be cancelled due to nonpayment of the premium
True
True or false: certain agricultural workers are exempt from Workers' Compensation requirements
True
True or false: claim payments are considered legal disbursements from premium trust accounts
True
True or false: cost of first aid to others at the time of an accident would generally be included in the supplementary payments portion of a liability policy
True
True or false: damage caused by explosives is an example of when a person's actions are determined to be against public policy
True
True or false: declarations are part of a policy structure
True
True or false: definitions are part of a policy structure
True
True or false: domestic servants and household employees are exempt from Workers' Compensation requirements
True
True or false: employers liability coverage under a workers compensation policy includes damages claimed by third parties
True
True or false: every Homeowners insurance policy issued, delivered, OR renewed in New Jersey, MUST provide coverage against liability from any injured domestic servant OR household employee AND dependents
True
True or false: expenses the insured incurs, as part of defense, at the company's request would generally be included in the supplementary payments portion of a liability policy
True
True or false: factors that determine premium rates set by insurance companies include loss costs, operating expenses, claims handling costs, AND profits
True
True or false: fiduciary liability protects those who manage private pension and employee benefit plans against liability for violation of ERISA which governs employer-sponsored retirement plans
True
True or false: fire legal liability is a liability coverage in a general liability policy NOT subject to the aggregate limit
True
True or false: garagekeepers are included in an unendorsed garage coverage form
True
True or false: gross premiums due insurers are considered legal disbursements from premium trust accounts
True
True or false: if a car is stolen and left in a snow bank, causing the radiator to freeze and sustain heavy damage, the damage would be covered by the auto policy because freezing exclusion is removed if the car is stolen
True
True or false: if a licensee is doing business under a fictitious name other than the name appearing on the producer license, the licensee is required to file with the Department prior to use of the fictitious name
True
True or false: if a nonresident producer's home state has the same CE requirements AND the nonresident producer satisfies them, they are NOT required to complete CE hours in New Jersey
True
True or false: insurance companies employ actuaries to calculate premium rates based on loss costs, claims handling costs, operating expenses, and profit
True
True or false: insurers may exclude a person from PIP benefits if the person was acting with the intention of injuring himself or herself
True
True or false: insurers may exclude a person from PIP benefits if the person was avoiding lawful apprehension or arrest by a police officer
True
True or false: insurers may exclude a person from PIP benefits if the person was breaking the law
True
True or false: insurers may exclude a person from workers' compensation benefits under New Jersey law where the person's conduct contributed to his personal injuries while causing intentional injury to others
True
True or false: insurers may exclude a person from workers' compensation benefits under New Jersey law where the person's conduct contributed to his personal injuries while committing a felony
True
True or false: insurers may exclude a person from workers' compensation benefits under New Jersey law where the person's conduct contributed to his personal injuries while seeking to avoid lawful arrest by a police officer
True
True or false: liability is included in an unendorsed garage coverage form
True
True or false: loss of earnings due to the accident would generally be included in the supplementary payments portion of a liability policy
True
True or false: most states impose absolute liability when a person's actions are determined to be against public policy
True
True or false: most states will impose absolute liability for damage caused by wild animals
True
True or false: other-than-collision would cover financial losses due to damage to an insured's car caused by wind or hail
True
True or false: physical damage is included in an unendorsed garage coverage form
True
True or false: producer licenses will NOT be issued to business entities if one partner's license was revoked in the previous 5 years
True
True or false: property type is a factor in the determination of actual cash value
True
True or false: regarding personal injury benefits provided to pedestrians under PIP policies, pedestrians are covered if injured by a motor vehicle OR struck by objects propelled by the motor vehicle
True
True or false: regardless of whether an injury was caused by the negligence of another employee or if the injured employee assumed the risks arising from the job, the employer CANNOT use these reasons as a defense against payment of Workers Compensation
True
True or false: relief employment by the state is exempt from Workers' Compensation requirements
True
True or false: replacement cost is a factor in the determination of actual cash value
True
True or false: stating that dividends are not guaranteed does NOT constitute false advertising
True
True or false: the Commercial Auto Insurance Plan (CAIP) provides liability coverage
True
True or false: the Commercial Auto Insurance Plan (CAIP) provides physical damage coverage
True
True or false: the claims-made trigger is based on the date the claim is first made in writing against an insured for injury or damage that occurred on or after the policy's retroactive date
True
True or false: the commercial general liability Coverage Part A - Bodily Injury and Property Damage provides coverage for completed operations
True
True or false: the commercial general liability Coverage Part A - Bodily Injury and Property Damage provides coverage for operations
True
True or false: the commercial general liability Coverage Part A - Bodily Injury and Property Damage provides coverage for premises
True
True or false: the commercial general liability Coverage Part A - Bodily Injury and Property Damage provides coverage for products
True
True or false: the dependents of domestic servants and household employees are exempt from Workers' Compensation requirements
True
True or false: the insured causes a head-on collision with the car of an uninsured motorist. This would NOT be covered by uninsured motorist coverage
True
True or false: the insured's car is hit by someone whose auto insurer is insolvent. This would be covered by uninsured motorist coverage
True
True or false: the insurer is required to give advance notice of its intended cancellation of a commercial insurance policy to the insured
True
True or false: the insurer may cancel a commercial insurance policy by mailing or delivering written notice of cancellation to the first named insured
True
True or false: the insurer's location is irrelevant to the processing of workers compensation claims
True
True or false: the other states' insurance section of a workers compensation policy provides coverage ONLY for those other states listed in the policy
True
True or false: the personal umbrella policy ONLY acts as excess on types of liability coverage
True
True or false: the place where the accident occurred is a consideration in determining which state's law applies when a worker is required to travel into another state and is injured while working in the other state
True
True or false: the state where the employee was hired is a consideration in determining which state's law applies when a worker is required to travel into another state and is injured while working in the other state
True
True or false: under a personal auto policy, a covered auto includes automobiles listed in the declarations
True
True or false: under a personal auto policy, a covered auto includes nonowned temporary substitute vehicles
True
True or false: under a personal auto policy, a covered auto includes owned trailers
True
True or false: uninsured motorist coverage applies when the uninsured vehicle is at -fault.
True
Limits of liability
the insurer's liability for payment as stated in an insurance policy
