NY Insurance Adjuster

The insured has suffered roof damage as a result of a tornado. He makes temporary repairs until permanent repairs can be made. He spends $1,500 for this work. How much, if any, will the DP-2 dwelling policy pay?

$1,500

The insured is covered under a BOP for $200,000 on his building. The risk is completely destroyed by fire. It will cost $225,000 to replace the building. The cost to remove the debris is $25,000. How much, if any, will the company pay for this loss?

$225,000 The company will pay the $200,000 plus another $25,000 for the debris removal. The policy provides an extra limit of $25,000 where the cost to rebuild or replace the building exhausts the limits of coverage.

For the split limit example, $25,000/$50,000/$50,000 /$100,000/$10,000, explain what each of these figures mean?

$25K Bodily injury per person/$50K Per accident/$50K Death per person/$100K Death per accident/$10K Property

Actual Cash Value definition?

-the cost of replacement less depreciation

What are the elements of a valid contract (CLOC)?

1. Capacity to Contract 2. Legal Purpose 3. Offer and Acceptance 4. Consideration

Parties to an Insurance Contract?

1. First party (insured) 2. Second party (the insurance company) 3. Third party (in liability insurance, this is the party that has been damaged by the first party)

Characteristics of Insurable Interest?

1. Not all pure risks are insurable. 2. The following characteristics create an insurable risk: -Loss must be definite and definable -Loss must be accidental

After receiving an inquiry from the Insurance Department regarding a claim, an insurer must respond within:

10 business days

Basic personal injury protection pays for necessary medical, dental, hospital, and rehabilitation expenses up to

100% (subject to a maximum limit).

For a minor to contract to life insurance, they must be at what age?

15

In New York no suit or action against the insurer for the recovery of any claim will be sustainable in any court of law unless all of the requirements of the policy have been complied with, unless commenced within ______ months next after inception of the loss.

24

What is the limit that will be paid for the fire department service charge in the BOP form?

: $2,500

Sam's home located in a rural area is insured under a DP-2 dwelling form with a $500 deductible. He experiences a fire at his home and has to call the local volunteer fire department to extinguish the fire. He receives a bill from the fire department in the amount of $800. How much of the bill from the fire department will his policy pay?

: $500 The policy will provide $500 to pay for fire department charges incurred when the fire department is called to save or protect covered property from a peril insured against. This coverage is additional insurance and no deductible applies.

The insured has sustained a loss of income loss from a covered peril under his Businessowners Policy. What deductible applies to loss of income coverage?

A 72 hour waiting period before the policy pays.

an application for marine insurance, a yacht owner states that the yacht will only be sailed on inland waters. If the insured subsequently sails the yacht on the seas, coverage may be denied because the insured has breached:

A warranty.

In New York, continuing education requirements for agents must be satisfied:

Biannually

The personal liability section of a Homeowners Policy covers which of the following?

Bodily injury or property damage caused by the personal activities of an insured..

Absolute liability is most frequently applied to activities involving:

Dangerous material Hazardous operations Dangerous animals

On what date must an adjuster license be renewed?

December 31 - even numbered years.

4 Parts of Insurance Contract?

Declarations Page, Insuring Agreement, Conditions, and Exclusions/Limitations

When no beneficiary exists and the principal sum would otherwise go to the insured's estate, the insurance company can pay up to $1,000 to any relative, by blood or marriage, who appears equitably entitled to the money under the:

Facility of payment clause. .

Typically, how are defense costs handled under an aviation policy?

Handled as a supplementary payment.

All of the following are excluded from garage policy liability coverage, EXCEPT:

Injury or damage arising out of a motorboat the named insured keeps stored in the back of his repair garage..

Garagekeeper's coverage excludes all of the following losses, EXCEPT:

Loss to a high-value stereo system permanently installed in a covered auto. . Garagekeeper's coverage is added to the garage liability policy. Its only purpose is to provide physical damage coverage to customers' vehicles left at the garage site. It basically covers collision and comprehensive type claims. The garage is acting as a bailee and by law, is required to exercise more than reasonable care. Theft by employees can only be covered by a fidelity bond.

Which of the following statements is false concerning "no-fault" auto insurance?

Negligence must be proved. .

For the insured dwelling and other detached structures, the DP-3 provides:

Open peril coverage.

Which of the following is not paid under personal auto medical payments?

Pain and suffering.

In cases of comparative negligence, the proportional share of each party in the entire liability will be based on:

Relative degree of fault

Replacement cost coverage is best defined as:

Replacement without deduction for depreciation..

John Smith has just made his last car payment which concludes his contract. The finance company, for reasons not immediately apparent, has the car repossessed. If Mr. Smith brings a suit, the court will allow Mr. Smith to retake possession of the car pending the court's final ruling as to ownership if Mr. Smith provides the court a:

Replevin bond.. A replevin bond guarantees that if property is in the possession of party A is determined to belong to party B and the court orders its return to party B, party A will do so. Party A would first have to obtain an attachment bond, also required by the court, in case the property was wrongfully repossessed.

All of the following can be gathered from an air sampling test, EXCEPT:

Skin exposure to toxic chemicals..

What are the two categories of compensatory damages?

Special and General

Under the farm forms, the maximum amount payable for a loss to a satellite dish is:

The correct answer is: $1,000..

Which of the following watercraft losses are excluded under a homeowner policy? I. Theft off the residence premises II. Windstorm damage while the insured's boat is docked at the marina III. Fading of the canvas tarp which covers a boat IV. Earthquake damage

The correct answer is: I, II, III, and IV.

Vision care insurance policies most often cover:

The cost of lenses and frames. .

The State Insurance Fund provides workers compensation coverage for which of the following?

The fund is for both those employers unable to obtain coverage and those purchasing coverage in the competitive market.

Part I of the Workers Compensation Employer Liability Insurance Policy describes

The insurer's duty to pay promptly, when due, the benefits required of the employer by the workers compensation statute

What does the term "comparative negligence" refer to?

The percentage of fault is shared by each driver in an accident in which both contribute to causing the accident..

Who are the three parties to the "appraisal clause"?

The two appraisers and the umpire.

What is the purpose of the "other insurance clause"?

To avoid over payment of a claim.

significant purpose of a reporting form under the dealer's physical damage coverage under the garage policy?

To deal with changing values of autos held for sale. .

In the newest edition of the Commercial Property form, which of the following is now considered part of the building?

Vegetated Roofs.

The Personal Auto Policy, under Supplementary Payments:

Will pay the insured up to $200 per day for loss of earnings due to testifying at a trial concerning an accident caused by the insured.

Liberalization definition?

a clause in property/casualty insurance contracts which states that if the policy or endorsement forms are broadened and no additional premium is required, then all existing similar policies or endorsements will be construed to include the broadened coverage.

What is moral hazard?

a condition of morals or habits that increases the probability of a loss from a peril.

Tort definition?

a person becomes legally liable by committing a tort. Generally (but not always) a court of law must determine negligence.

What is speculative risk?

a situation where either profit or loss is possible. (Example: gambling). Speculative risks are not insurable.

What is pure risk?

a situation where there is only the possibility of loss. (Example: damage to property by fire). Pure risks are insurable.

Accident definition?

a sudden and unforeseen event resulting in a financial loss.

Occurrence definition?

a sudden and unforeseen event resulting in financial loss. It may also be a continuous or repeated exposure to an event that results in a financial loss. More inclined to liability.

Two types of loss evaluation methods?

actual cash value and replacement

What is peril?

actual cause of a loss (fire, windstorm, or hail)

Ambiguity definition?

ambiguous language (language that is vague and creates doubt) in the policy provisions will usually be resolved by the courts in favor of the insured.

What is Offer and Acceptance?

an applicant completes an application for coverage (makes an offer) and the insurance company accepts it and returns a policy or binder. If the insurance company issues an altered policy, the altered policy becomes a counter offer.

What is Aleatory Contract?

an insurance contract is aleatory, which means it is contingent on an uncertain event (loss). Insureds who pay premium but have no losses will not receive claim payments under the policy. However, they will have peace of mind knowing they are covered if a loss occurs. On the other hand, insureds who suffer a loss often receive a great deal more from the insurer than they have paid in premiums. Therefore, there is unequal value. The insured pays a lower premium than the ultimate obligation of the insurer in case of a covered claim.

What is Legal Purpose?

an insurance contract must not be written to cover an illegal activity or immoral purposes.

No Benefits to Bailee definition?

an insured's property insurance policy protects the insured and not a bailee of the insured's property.

Proximate Clause definition?

an unbroken chain of events that causes a loss. An event that, in a natural and continuous sequence, produces a claim.

What is a hazard?

any condition that increases the possibility of a loss

What is physical hazard?

any hazard arising from the material, structural, or operational features of the risk itself apart from the person owning or managing it

Assumption of Risk definition?

applies when a person knowingly exposes himself or herself to danger or injury.

Split Limit definition?

are expressed by 3 figures (3rd limit is for property damage). There may be a limit representing the maximum payable for each person injured per occurrence for bodily injury and another limit applicable to the claims of all persons injured in the accident or occurrence.

Punitive Damages (Exemplary Damages) definition?

are often awarded by the court and intended to punish the defendant.

Reinsurance definition?

contract of indemnity against liability by liability by reason of the original insurance

Open Peril definition?

does not list the perils but provides broader coverage. All perils are includes except for those excluded on exclusions section of the policy.

Negligence definition?

for a liability policy to respond the insured must be guilty of "negligence" and coverage must be granted by the policy. Intentional acts are never covered by liability policies. Negligence is defined as the lack of unreasonable chance of harm.

What is morale hazard?

hazards arising out of an insured's indifference to loss because of the existence of insurance

Salvage definition?

if the insurer pays a loss on behalf of the insured, the insurer is entitled to the salvage to reduce the claim.

What is Capacity to Contract?

in order for the contract to be binding, all parties must have the necessary capacity to enter into the contract. Cases where capacity has been deemed insufficient include: minors, mental incompetents, and those who have not signed the contract while under the influence of drugs/alcohol.

Binder definition?

insurance binders serve as temporary evidence that coverage is in effect until the policy is issued. They can be either oral or written.

Coinsurance Clause definition?

is a method of requiring the insured to insure at least 80% of the value of the property in exchange for a premium discount. This clause is used whether the insured insures the property on an actual cash value basis or on a replacement cost basis. If the insured's policy contains this clause and the insured carries less than this amount, a penalty will occur in case of partial loss.

Law of Large Numbers definition?

is a statistical concept that relates to probability and the insurer is able to make predictions of possible loss

Absolute Liability definition?

is imposed by law on those participating in certain activities that are considered especially hazardous.

Direct Loss definition?

is one that is a direct consequence of a particular peril. Fire damage to an apartment building is an example of a direct loss.

Underwriting definition?

is the process of selecting certain types of risks that have historically produced a profit and rejecting those risks that do not fit the underwriting criteria of the insurer

Comparative Negligence definition?

law that allows an injured party to collect from another party for a loss, even when the injured party contributed to his/her own loss. Damages are reduced to the extent of the injured party's negligence.

Named Peril definition?

lists the specific perils to be covered in the policy.

Indirect Loss definition?

loss result from a direct loss. The loss of rental income as a result of the fire is an indirect loss. You cannot have an indirect loss without first having a direct loss.

Exclusions of Insurance Contract?

may describe property, perils, hazards or losses arising from specific causes that are not covered by the policy

Limitations of Insurance Contract?

may eliminate or reduce coverage, but only under certain circumstances or when specified conditions apply

Declarations Page of Insurance Contract?

named insured policy term/period amount of insurance limits of liability premiums and deductibles property description list of endorsements Tells the who, what, where, and premium info.

Liability Losses definition?

occurs when a person or entity is determined to have been responsible, or legally liable, for injury or loss to another person or liable for damage to another's property and the law requires them to make financial restitution. These are called third party losses. Liability losses are paid by casualty insurance type policies.

Single Limit definition?

pays up to one amount as the maximum limit of liability of the insurer with respect to any one accident/occurrence involving either or both bodily injury and property damage

Conditions of Insurance Contract?

policy conditions set provisions, rules of conduct, duties, and obligations for the parties

Standardized Policies definition?

refer to form that have filed by Insurance Services Office, Inc. (ISO) to the individual state insurance departments for approval. Many insurance companies use the approved ISO forms rather than developing and filing their own forms in each individual state.

There are three ways in which the limits of a liability policy insuring agreement may be expressed?

single limit, split limits, and/or aggregate limits (usually for commercial).

Other Insurance Clause definition?

some claims are paid based on a pro-rata approach. This means that each insurer will pay its percentage of the claim as limit bears to the total amount of coverage in force.

What is Consideration?

something that has value in the eyes of the law in which a promise receives something in return for promise. The insured (the promisee) gives the application and premium to the agent and/or company in return for their promise to pay in the future.

Replacement definition?

the current cost to purchase new, the item that was lost, with no deduction for depreciation. The full value will be paid up to the limit of the policy less any depreciation.

Insuring Agreement of Insurance Contract?

the insuring agreement describes the covered perils, or risks assumed, or nature of coverage, or make some reference to the contractual agreement between insurer and insured.

What is risk?

the possibility (uncertainty) that a loss might occur and is the reason that people buy insurance

Indemnity definition?

the principle of indemnity assumes that a claimant should only be restored to the approximate financial condition that existed prior to the loss, no better, no worse.

What does the Law of Large Numbers determine with respect to insurance?

the rates

Vicarious Liability definition?

there are times when a person may be held responsible for the negligent acts of another person. This is known as vicarious liability or imputed liability. A common form of vicarious liability involves the relationship between an employer and an employee

Subrogation Clause definition?

this clause is used when the insurer has paid a covered claim on behalf of the insured that is caused by another party. The insurance company is entitled to the insured's right of recovery from the negligent party. Includes insured deductible

Pair or Set Clause definition?

this is a loss settlement condition that appears in many property insurance contracts including inland marine. It states that if part of a pair or set is lost or damaged, the loss will be valued as a fair proportion of the total value of the set.

Deductible definition?

this is the self-insured part of the insured loss.

Under compensatory damages, what are general damages?

type of compensatory damages that reimburse the injured party for such things as pain/suffering, disfigurement, and life-altering issues such as loss of mobility and loss of consortium no readily defined by actual incurred expenses. These damages pay for so-called 'non-economic' losses. Non-economic losses are not measurable.

Under compensatory damages, what are special damages?

type of compensatory damages the injured party receives for direct and specific expenses involved in the loss, such as medical expenses and loss of wages. These damages pay for so-called 'economic losses'. Economic losses are measurable.

Appraisal Clause definition?

when the dispute involved a property claim, both parties select an appraiser to determine the value of the loss. The appraisers choose an umpire. The appraisers will state separately the value of the property and amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding.