New York Property & Causality Exam

Under the workers compensation system, who is responsible for the expenses resulting from work-related injuries and occupational diseases?

The employer, regardless of whether it was at fault for the injury or disease

Which of the following is an approved written document that identifies procedures in place to keep the insurer's Information System safe? a) Privacy Disclosure b) Cybersecurity Policy c) TRIA d) Insurance Frauds Prevention Act d) Insurance Frauds Prevention Act

b) Cybersecurity Policy

Under which of the following organizations are the practicing providers compensated on a fee-for-service basis? a) HMO b) PPO c) Open panel d) Blue Cross/Blue Shield

b) PPO

In a participation plan, the insured may be eligible for which of the following? a) A partial premium refund b) An increase in insurance over time c) An increase in insurance over time d) Guaranteed dividends

a) A partial premium refund

Which rider in a disability policy pays income during the waiting period before Social Security benefits can begin? a) Additional monthly benefits b) Waiver of premium c) Cost of living d) Coordination of benefits

a) Additional monthly benefits

Workers Compensation laws provide all of the following types of benefits EXCEPT a) Compensatory benefits. b) Medical benefits. c) Rehabilitation benefits. d) Death benefits.

a) Compensatory benefits.

Which of the following entities are responsible for making premium payments in medical plans? a) Subscribers b) Producers c) Insureds d) Payors

a) Subscribers

Which of the following would be considered an insured under a business auto coverage form?

Anyone while using a covered auto owned by the named insured, with permission

First aid costs for others injured on the insured's premises

Are paid in addition to the liability limit.

Farm fences (except field and pasture fences) are covered by which farm coverage form?

Coverage G

Which of the following best describes the aleatory nature of an insurance contract?

Exchange of unequal values

The causes of loss insured against in an insurance policy are known as

Perils

Under the business auto coverage form, mobile equipment is covered for liability insurance

When being carried or towed by a covered auto

What is the limit for the forgery or alteration coverage in the businessowners policy?

$2,500

What is the basic limit for costs incurred at the place a vehicle is disabled provided by the towing and labor costs endorsement?

$25

Which of the following is the basis for a claim against an insurance policy? a) A loss b) A hazard c) An event that increases the chances of possibility of loss d) A misrepresentation to an applicant made by an insurance agent

A loss

Under a businessowners policy, an insured can cancel the policy

At any time by mailing a written notice of cancellation.

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

Definitions.

All of the following are optional coverages that may be attached to an HO-3 policy EXCEPT a) Earthquake coverage. b) Personal property replacement cost. c) Dwelling replacement cost. d) Home day care coverage.

Dwelling replacement cost.

In addition to the common policy conditions, all the following apply to liability coverage EXCEPT a) Separation of insured. b) Employers liability. c) Bankruptcy. d) Legal action against insurer.

Employers liability.

What policy would a business owner whose business fills scuba tanks most likely need to insure unfired pressure vessels and compressors?

Equipment breakdown

Insurers issuing motor vehicle liability policies should notify insureds of the availability of supplemental spousal liability insurance

Every year.

What kind of coverage does Form DP-3 provide?

Open peril

Which of the following exclusions applies to both personal injury and advertising injury in the businessowners policy? a) Breach of contract under an implied contract b) Willful violation of a penal statute or ordinance committed by the insured c) An offense committed by an insured whose business is advertising d) A wrong description of the price of the goods, products, or services

Willful violation of a penal statute or ordinance committed by the insured

All of the following are true regarding physical damage coverage

a) The policy will pay up to $20 per day up to a maximum of $600 for rental transportation. b) The insurer will pay for direct and accidental loss to a covered auto minus any applicable deductible. c) Losses to nonowned autos will be covered the same as the broadest coverage available for any covered auto, except non-owned trailers are limited to $1,500.

Which form insures both buildings and personal property on an open peril basis?

HO-5

. In insurance transactions, fiduciary responsibility means

Handling insurer's funds in a trust capacity

A BOP (businessowners policy) is most similar to

Homeowners.

The term "functional replacement cost" refers to

) Loss valuation

If a driver cancels his auto insurance and does not replace it, how long does the insurer have to report this to the Department of Insurance?

30 days

The removal coverage included in the broad form dwelling policy will cover property temporarily removed from the premises to protect it from damage for how long?

30 days

Under dwelling policy, if an insurer chooses to repair or replace damaged or lost property, it must inform the insured within how many days of receiving proof of loss?

30 days

A dwelling policy has been in effect for 60 days when fraud was discovered by the insurer. Prior to the cancellation date, the insurer must provide a notice of

30 days.

If an insurer refuses to renew a dwelling policy for one of the acceptable reasons, the insurer must notify the insured within

45 days.

Records pertaining to a Transportation Network Company's trips must be maintained for a period of at least

6 years.

Vandalism and malicious mischief would be covered if the insured's premises have been vacant for no more than how many days?

60

According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss?

60 days

Under the conditions of the dwelling policy, within how many days does an insurer have to pay for a loss once a proof of loss form has been received and an agreement with the insured as to the amount payable has been reached?

60 days

In an earthquake coverage provided by endorsement in a homeowners form, one or more earthquake shocks would be considered a single earthquake if they occur within what maximum time period?

72 hours

According to homeowners Coverage A, how much of a house's value must be insured in order to qualify for replacement coverage?

80%

Who would NOT be considered an insured under a homeowners policy?

A divorced spouse living in another state

A businessowners policy is

A self-contained prepackaged policy.

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

Accident insurance, because it pays medical expenses regardless of fault.

An insurer formed under the laws of another country is known as a/an

Alien insurer

Crime insurance is usually written on what basis?

All risk

With respect to the business of insurance, a hazard is

Any condition or exposure that increases the possibility of loss.

Which of the following is NOT an example of the company's location of incorporation? a) Foreign b) Alien c) Authorized d) Domestic

Authorized

Under farm liability, Coverage H includes

Bodily injury.

Which of the following other coverages is NOT included in the basic form dwelling policy?

Breakage of glass

A liability policy that provides coverage for a claim for injury or damage if the claim is first filed against the insured during the policy period is called

Claims-made form.

Which of the following is an additional coverage that is covered by the broad causes of loss form?

Collapse

What two policy components are part of every commercial package policy?

Common policy declarations and common policy conditions

Which section of an insurance policy indicates the general rules or procedures that the insurer and insured agree to follow under the terms of the policy? a) Conditions b) Insuring agreement c) Declarations d) Endorsements

Conditions

Because an insurance policy is a legal contract, it must conform to the laws governing contracts which require all of the following elements EXCEPT a) Offer and acceptance. b) Conditions. c) Legal purpose. d) Consideration.

Conditions.

Which of the following risks is eligible for coverage under a businessowners policy? a) Banks b) Bars or taverns c) Automobile dealers d) Condominiums

Condominiums

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

Consideration

In a dwelling policy, which of the following provides coverage for additional living expenses incurred by an owner-occupant in the event a covered peril makes the premises uninhabitable due to a covered loss a) Coverage A b) Coverage B c) Coverage C d) Coverage E

Coverage E

The authority granted to an agent through the agent's contract is referred to as

Express authority.

Negligence is defined as

Failure to do what a reasonable prudent person would do under given circumstances.

. Which of the following would be named on the Declarations page of a property or liability policy? a) All insureds b) Additional insureds c) First named insured d) Beneficiaries

First named insured

Dwelling coverage excludes?

Land on which the dwelling is located.

Under the dwelling policy, Coverage C - Personal Property is

Limited to covering a guest's property while at the insured location

Which of the following lists specific perils covered under an insurance policy?

Named perils

An insured has a personal property replacement cost endorsement under her homeowners policy. If an expensive painting and an antique chair are stolen from the insured's home, what will the insured receive on the claim under that endorsement?

Nothing

The commercial general liability Coverage Part A - Bodily Injury and Property Damage provides coverage for which of the following? a) Employers b) Machinery c) Premises d) Hired autos

Premises

Under Section I, homeowners insurance must include

Property coverage.

The risk of loss may be classified as

Pure risk and speculative risk.

Which services are associated with Standard & Poor's and AM Best?

Rating the financial strength of insurance companies

Which policy condition in HO policies states that insurance applies separately to each insured?

Severability of insurance

. 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.

A company has a businessowners policy on a building with an estimated replacement cost of $300,000. The company carries $150,000 of insurance. If a loss occurs, how much will the insured company be paid?

The coinsurance formula would apply

A neighbor's tree has fallen into the insured's yard. The insured's homeowners policy will only pay to remove the tree if

The tree is blocking the driveway

All of the following are true statements regarding the supplementary payments of a commercial general liability policy EXCEPT a) They pay all expenses incurred by the insurer. b) They pay pre-judgment and post-judgment interest. c) They pay all reasonable costs incurred by the insured in helping to investigate or defend a claim. d) They pay defense costs even after the aggregate limit has been reached.

They pay defense costs even after the aggregate limit has been reached.

Purpose of a Stated Value Contract?

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

The part of the insurance contract that describes the covered perils, and the nature of coverage of the contractual agreement between the insurer and the insured is called the

Insuring agreement.

When is liability coverage included in a homeowners policy?

It is included automatically.

According to the Nationwide Marine Definitions, risks that may be the subject of inland marine insurance include all of the following EXCEPT a) Shipments made by freight train. b) Cargo transported by truck. c) Large pleasure boats. d) Property while stored at a warehouse.

Large pleasure boats

In a group health policy, between whom is the contract?

The employer and the insurance company

A premium discount is the term that describes when an insured owes a total standard premium greater than

$5,000.

Workers compensation rating is developed by applying a rating bureau job classification rate to which of the following?

) Payroll

If a hearing is scheduled for a producer who has violated regulations regarding unfair trade practices, the Superintendent must send a prior notice within how many days of the hearing?

10 days

The minimum age requirement for a resident insurance producer in New York is

18

When a health insurance policy is purchased in the state of New York, the insured may cancel the policy and receive a premium refund within

20 days.

A client's policy lapsed in 2012 without being renewed. In what year could the insurance company destroy the file on this policy?

2018

The Patient Protection and Affordable Care Act mandates that insurers provide coverage for adult children of the insured up to the age of

26

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?

3 days

Which of the following would NOT be considered an insurance producer?

An insurer's officer

. How long is a waiting period upon purchase of flood insurance through NGIP?

30 days

How long does a licensee have to notify the Superintendent of a change of address?

30 days

Unless an event is unforeseeable, how many days of advance notice must an employee provide an employer before taking paid family leave?

30 days

If licensees have administrative action taken against them, they must report this to the Superintendent within

30 days.

Which of the following is most likely INELIGIBLE for coverage under the businessowners policy? a) A retailer with gross annual sales of $100,000 b) An office with total floor area of 5,000 square feet c) A bank d) A fast-food restaurant

A bank

Who may share in the commission from the sale of a property insurance policy?

A licensed property insurance agent of the same insurer involved in the transaction

How is the Paid Family Leave coverage provided to a private employer?

Added as a rider to an existing disability policy

An employer that qualifies for a "self-insured" workers compensation plan may wish to further limit his liability against catastrophic losses by purchasing excess insurance coverage called

Aggregate excess coverage

The inspections and surveys condition in a businessowners policy

Allows the insurer the right to inspect the insured's premises.

For every excess lines policy or policy renewal procured from an unauthorized insurer, producers must file which of the following?

An affidavit

According to the conditions of a Workers Compensation policy, the insurer has the right to inspect the insured workplace

At any time.

According to the New York State Disability Benefits Law definitions, what is the term for the money allowances during disability payable to an eligible employee?

Benefits

An employee is injured while visiting the employer's out-of-state site. How will the workers compensation benefits be determined?

Benefits will be provided if the state was listed on the policy information page.

What type of bond guarantees that a construction contractor will enter into a contract at a set price?

Bid bond

How is a professional liability policy written?

Claims-made

Most insurers issue health insurance policies for delivery in many states. Because each state regulates and mandates the requirement for policies delivered to their residents, instead of having a policy form for each state, the insurer attaches

Conformity with state statutes optional provision.

When an individual obtains an insurance license for the primary purpose of writing insurance on him or herself, or for members of his or her immediate family, or business, this is called

Controlled business.

Which of the following dwelling policy forms primarily insures a structure on an actual cash value basis? a) DP-1 b) DP-2 c) DP-3 d) All DP forms

DP-1

Which of the following losses will be covered by an unendorsed homeowners policy? a) Theft in a structure under construction b) Collapse caused by an earthquake c) Damage caused by fire or lightning d) Faulty or defective zoning

Damage caused by fire or lightning

Which section of an insurance policy contains basic underwriting information, such as the insured's name, address, amount of coverage and premiums, and a description of insured locations? a) Endorsements b) Declarations c) Conditions d) Insuring agreement

Declarations

Regarding a medical plan, as the stop-loss rises, the premium

Decreases.

The period of time immediately following a disability during which benefits are not payable is the

Elimination period.

An executive is accused of sexual harassment. What type of coverage would respond?

Employment practices liability

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?

Fair Credit Reporting Act

In addition to the coverages built into the Property Coverage Form, insurers may offer other endorsements that can further expand the coverage provided in the policy

For an additional premium.

According to agency law, the agent always represents the

Insurer.

Any accident where there is loss of time from regular duties exceeding one day beyond the workday and where medical treatment beyond ordinary first aid is required must be reported as a worker's compensation claim injury within 10 days after the employer learns of the injury. Failure to do so

Is considered a misdemeanor punishable by a fine

What is the benefit of experience rating?

It allows employers with low claims experience to get lower premiums.

A municipality can protect itself against the construction or repair of properties that do not conform to the building codes established by ordinance by requiring the contractors to obtain

License and permit bonds.

Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices? a) Stating that the insurance policy is a share of stock b) Exaggerating the benefits provided in the policy c) Making comparisons between different policies d) Making misleading oral statements about a policy

Making comparisons between different policies

What are the two sources for workers compensation insurance?

Monopolistic state fund and competitive market

In a watercraft policy, which coverage part will respond to a claim for damages for bodily injury or property damage for which the insured becomes legally liable because of a watercraft accident?

Part A

Which of the following limits, shown in the declarations of a policy, applies to medical expenses? a) Per person b) Per occurrence c) Per injury d) Per incident

Per person

The defendant being released on a surety bail bond is the

Principal.

Which of the following would be the insured's duty in the event of a loss according to the Duties in Event of Occurrence, Claim or Suit condition? a) Delivering a claim to the insurer in person b) Promptly notifying the insurer of a claim by phone c) Providing specific details regarding an occurrence d) Initiating the investigation of a claim

Providing specific details regarding an occurrence

What is it called when an agent offers compensation to an applicant in exchange for business?

Rebating

In a personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called

Self-insured retention.

When an employee benefit plan pays the premium for a fiduciary liability policy, what provision must be included in that policy?

Subrogation

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

The auto policy

Under the provisions of the Business Income Coverage Form, all of the following are true EXCEPT a) The peril causing the interruption must be an insured peril, and the damage from that peril must have occurred within the policy period. b) The insured agrees to resume all or part of operations as quickly as possible. c) The insured is reimbursed for payroll that continues after the loss begins. d) The insured is reimbursed for the loss from the date of loss to date of restoration or policy expiration date, whichever comes first.

The insured is reimbursed for the loss from the date of loss to date of restoration or policy expiration date, whichever comes first.

The voluntary compensation endorsement in a workers compensation policy provides that the insurer will pay statutory benefits to the insured person in exchange for what?

The insured person must release the employer and the insurer from further liability

The members of a limited liability company are insureds under a Businessowners Policy if

The limited liability company is designated as the named insured.

A policy with a 31-day grace period implies

The policy remains in force without penalty for 31 days even though the premium due has not been paid.

What is the purpose of Medigap policies?

To cover expenses for Medicare deductibles and coinsurance

Workers compensation statutes require employers to meet capital reserves requirements sufficient to pay any claims that might arise. Employers can meet such obligations through all of the following EXCEPT a) Self-insurance plans. b) Second injury funds programs. c) Assigned risk plans. d) Competitive state funds

b) Second injury funds programs.

A structure may be eligible for coverage under the National Flood Insurance Program if it meets all of the following requirements EXCEPT a) Has 2 solid walls and a roof. b) Is principally above ground. c) Is entirely over water. d) Is not located within the Coastal Barrier Resource System.

c) Is entirely over water.

Which of the following statements is NOT true of a commercial umbrella liability policy? a) It would provide excess insurance over an existing general liability policy. b) It provides protection as primary coverage where there is no other existing coverage. c) It would automatically cover all losses as they occur. d) It can be issued with a professional liability policy.

c) It would automatically cover all losses as they occur

Which of the following would qualify for C-MAP? a) Any property that is within 3 miles of the shore b) A new property purchased in New York state c) Any property located in a designated geographic area d) A 4-family owner-occupied dwelling located in a designated area

d) A 4-family owner-occupied dwelling located in a designated area

Which of the following individuals will be eligible for coverage on the Health Insurance Marketplace? a) Someone who has Medicare coverage b) A U.S. citizen living abroad c) A U.S. citizen who is incarcerated d) A permanent resident lawfully present in the U.S.

d) A permanent resident lawfully present in the U.S.

Which of the following may be EXCLUDED from coverage in a Major Medical Expense policy? a) Custodial care b) Cosmetic surgery c) Coverage provided under workers compensation d) All of the above

d) All of the above

Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage? a) Group dental insurance plan b) Medical-surgical expense plan c) Basic medical expense plan d) Health Maintenance Organization plan

d) Health Maintenance Organization plan

An insurance agency could purchase an Errors and Omission insurance policy which would provide protection in the event of any of the following events, EXCEPT a) The agency negligently fails to offer an increased limit of coverage or benefit under a policy. b) The agency is sued by an insured for giving incorrect advice. c) The agency negligently fails to renew a policy causing a client to suffer a financial loss. d) The agency loses commission income from policies that were not issued by the insurer.

d) The agency loses commission income from policies that were not issued by the insurer.

The purpose of the coinsurance clause found in property insurance policies is to

Encourage the insured to insure the property closer to its full value.

Which of the following would modify the original insurance contract by either adding or removing coverage?

Endorsement

The cancellation provision in a businessowners policy specifies all of the following EXCEPT a) The insurance company's cancellation requirements. b) The method of transferring the owner's rights. c) The method of refund of unearned premiums. d) The insured's cancellation requirements.

The method of transferring the owner's rights.

. All of the following are perils covered under the broad form dwelling policy EXCEPT a) Fire. b) Lightning. c) Collapse. d) Theft.

Theft.

A specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean?

There is no coverage.

Which of the following symbols is available to an insured with vehicles subject to no-fault coverage?

) Symbol 5

What is the purpose of the Motor Carrier Act of 1980?

) To establish financial responsibility requirements for interstate motor carriers

What amount of coverage is provided on HO policies for watercraft?

) Up to $1,500

Compulsory automobile financial responsibility laws may be satisfied in all of the following ways EXCEPT a) The purchase of insurance from an authorized insurer. b) A certificate of self-insurance. c) Posting a bond with the motor vehicle department. d) A certificate of passing a safe driver's education course.

A certificate of passing a safe driver's education course.

Which of the following would NOT be classified as personal property for insurance purposes? a) A car b) Furniture c) A mobile home d) A house

A house

Under what conditions can broad theft coverage be added to a dwelling policy?

If the insured is owner-occupant of the dwelling

correct formula for computing a loss ratio?

Incurred losses + loss adjusting expense/earned premium

Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?

Indemnity

Which of the following injuries may be covered under Coverage C - Medical Payments of a commercial general liability policy? a) Injuries to an employee due to participation in an athletic event b) Injuries to a member of the general public that occurs on premises c) Injuries to an employee during performance of his or her job d) Injuries to an independent contractor on the premises

Injuries to a member of the general public that occurs on premises

All of the following are true of Coverage B - Other Structures EXCEPT a) It must be added by endorsement to a homeowners policy. b) This coverage is not applicable on the HO-4 policy form. c) The amount of coverage provided by Coverage B is an amount equal to 10% of Coverage A. d) An example of an "other structure" would be a detached garage.

It must be added by endorsement to a homeowners policy.

Which of the following individuals would probably NOT have insurable interest in insured property? a) Home owner b) Home owner's spouse c) Mortgage company d) Neighbor

Neighbor

All of the following are examples of risk retention EXCEPT a) Deductibles. b) Copayments. c) Premiums. d) Self-insurance.

Premiums.

When the amount of insurance written in a property policy is not subject to any coinsurance provision and that amount is paid in the event of a covered loss, the coverage is said to be written as

Stated amount.

All of the following statements concerning the New York Automobile Insurance Plan are correct EXCEPT a) Each insurer participating in the Plan must maintain an office in the State of New York. b) The Plan cannot reject state residents for any reason. c) All insurance companies writing motor vehicle insurance must participate in the Plan. d) In addition to the minimum limits required to meet the financial responsibility laws, the Plan offers specified excess limits.

The Plan cannot reject state residents for any reason

Which situation would NOT be covered by the basic Causes of Loss form under a commercial property policy? a) Piccolo Pete's Café has its door broken by vandals trying to get inside. b) The automatic fire protective sprinkler system inside New Realities Book Shop leaks, causing damage to the store. c) Gordon's Motorcycle Heaven is damaged by the sudden sinking of land created by the action of water on limestone. d) The Surf Side Club Waterfront Restaurant is damaged when flood waters rise and seep into the restaurant.

The Surf Side Club Waterfront Restaurant is damaged when flood waters rise and seep into the restaurant.

When a vehicle travels from one state to another, what happens to the limits of policy liability in a personal auto policy?

They do not change.

What is the purpose of the ordinance or law coverage endorsement?

To remove the exclusion of losses resulting from ordinances or laws

When an individual purchases insurance, what risk management technique is he or she practicing?

Transfer

What is the business auto coverage territory for?

United States and its territories, Canada, or worldwide for private passenger hired autos

Under the Automobile Assigned Risk Plan, how much coverage must be provided to the insured for liability arising out of the death of two person caused by a single auto accident?

Up to $100,000