NY Adjuster Quizzes/Practice Exams Combined

Which of the following diagnostic procedures is used to evaluate the electrical activity of a person's brain? A. Electroencephalography B. Arthroscopy C. Electromyography D. Electrocardiogram

A. Electroencephalography

Eliza's car is insured with a personal auto policy that includes liability, collision, and other-than-collision coverages. She buys a pickup truck. What coverage, if any, will the PAP provide for the truck? A. automatic liability coverage if she reports the newly acquired vehicle to the insurer within 14 days. B. automatic collision coverage if she reports the newly acquired vehicle to the insurer within 30 days C. none because the newly acquired vehicle is a truck D. automatic liability coverage for the remainder of the policy period

A. automatic liability coverage if she reports the newly acquired vehicle to the insurer within 14 days. Because the truck is an additional vehicle, it has automatic liability coverage immediately. Eliza must notify the insurer within 14 days to add the truck to her policy.

Under the Coverage A insuring agreement of the CGL policy, what does the insurer promise to do? A. to pay damages on behalf of the insured for bodily injury or property damage that the policy cover B. to cover the insured's obligat1on under a court InjunctIon C. to sue those who file claims against the insured for bodily injury or property damage D. to determine the most suitable coverage for the insured's loss exposures

A. to pay damages on behalf of the insured for bodily injury or property damage that the policy cover

Whenever it rained, the roof of Jada's home leaked. Although she intended to repair the roof, she never got around to it. A heavy rainstorm exacerbated the leakage problem and damaged furniture in her home. She filed a claim with her insurer and it was denied. The insurer based its denial on which exclusion in the DP 3 policy? A. Water damage exclusion B. Neglect exclusion C. Intentional loss exclusion D. Earth movement exclusion

B. Neglect exclusion

As a risk management technique, which of the following best illustrates risk transfer? A. John refuses to buy life insurance because he figures he has enough money in his savings to pay for his burial when he dies. B. Robert purchases life insurance because he figures doing so is far less expensive than trying to save all the money his survivors would need upon his death. C. Sheila refuses to drink alcoholic beverages if she expects to drive a car afterward. D. Carol eats a healthy diet and exercises regularly, hoping that doing so will keep her healthy.

B. Robert purchases life insurance because he figures doing so is far less expensive than trying to save all the money his survivors would need upon his death.

Jonah's Farm Livestock Coverage Form (FP 00 40) covers his livestock. As defined, this means Jonah has coverage for all of the following creatures on his farm EXCEPT: A. goats B. chickens C. lambs D. pigs

B. chickens The livestock definition does not include fowl.

Which of the following incidents would be covered by the equipment insurance breakdown policy? A. a boiler's tubes are pitted with scale and must be replaced. B. basement flooding causes a company's heating system to malfunction C. a surge in electricity damages a company's mainframe computer D. worn-out bearings cause a machine to stop functioning

C. a surge in electricity damages a company's mainframe computer ** A covered breakdown includes a failure in pressure or vacuum equipment or a mechanical or electrical failure (including surges). Coverage is excluded for portions of equipment normally subject to periodic replacement, routine maintenance, or general wear-and-tear.

Freddy's dwelling policy has a governmental action exclusion. The insurer will use this exclusion if the loss arises because: A. firefighters set a backfire to prevent the spread of a wildfire, and the backfire destroys the house B. firefighters destroy his house to keep a brush fire from spreading C. the sheriff takes control of the house after Freddy fails to pay taxes D. his wife gets a restraining order to keep him from entering their house

C. the sheriff takes control of the house after Freddy fails to pay taxes

Dental plans commonly group covered treatment and benefits into how many classes? A. one B. four C. three D. two

C. three

Erin wants to protect her warehouse inventory against damage from extremely hot and cold temperatures resulting from a loss of electrical power. What endorsement should her businessowners policy include? A. artificially generated currents B. utility services-time element C. utility services-direct damage D. protective safeguards

C. utility services-direct damage. The utility services-direct damage endorsement covers losses resulting from damage to the electric utility company's equipment by a covered peril.

Which of the following is used as a decorative and protective coating on the exterior of a car? A. Cowl B. Lamp C. Pillar D. Paint

D. Paint Paint is a liquid mixture that is used as a decorative and protective coating on the exterior of a vehicle.

For an insurer to pay a property insurance claim, when must the policyholder have an insurable interest in the insured property? A. only at the start of the policy year B. only when the insurance was purchased C. any time during the past year D. at the time of the loss

D. at the time of the loss With property and casualty insurance, an insurable interest must exist at the time of the loss.

With respect to requirements for a valid contract, a policyowner's payment of the policy premium is called a(n): A. offer. B. acceptance. C. counteroffer. D. consideration.

D. consideration. ** Consideration means something of value that both parties to a contract exchange. With an insurance contract, the applicant's premium payment is the applicant's consideration.

How many days does the insurer have to provide claim forms to the insured after receiving a notice of claim? A. 15 B. 10 C. 60 D. 30

A. 15

Except for certain medical expenses, workers' compensation benefits are not immediately paid for how many days after a disability begins? A. 7 B. 14 C. 21 D. 30

A. 7 Workers' compensation benefits are not paid for the first seven days of disability except for certain expenses. If the disability lasts longer than 14 days, benefits will be paid from the first day of disability.

What should business partners who want to be covered under a workers compensation policy covering their employees do if they want to also be protected for job-related injuries? A. Add the sole proprietors, partners, officers, and others coverage endorsement to their workers compensation policy. B. Nothing; in most states there is no way to provide workers compensation benefits to the partners of a business partnership. C. Add the voluntary compensation and employers liability coverage endorsement to their workers compensation policy. D. Add an appropriate workers compensation endorsement to their commercial general liability (CGL) insurance policy.

A. Add the sole proprietors, partners, officers, and others coverage endorsement to their workers compensation policy. The sole proprietors, partners, officers, and others coverage endorsement is used when, in accord with state law, a partner has selected to become subject to the state's workers compensation law.

Mrs. Delaney hired a contractor to build a deck on the back of her house. She purchased the necessary lumber and it's piled in her back yard. Under what coverage part of her homeowners policy is the lumber insured? A. Coverage A ' Dwelling B. Coverage B ' Other Structures C. Coverage D ' Loss of Use D. The lumber isn't insured by her policy

A. Coverage A ' Dwelling ** Materials and supplies located on the residence premises that are to be used in the construction, alteration, or repair of the insured dwelling are insured under Coverage A ' Dwelling.

Alex wants the broadest homeowners insurance policy available to insure his home. Which homeowners policy form will he most likely choose? A. Homeowners Policy Comprehensive Form 5 (HO 5) B. Homeowners Policy Special Form 3 (HO 3) C. Homeowners Modified Form 8 (HO 8) D. Homeowners Policy Broad Form 2 (HO 2)

A. Homeowners Policy Comprehensive Form 5 (HO 5). ** The HO 5 form's open perils coverage on the dwelling, other structures, and personal property provides the broadest coverage available in a standard ISO homeowners form.

Kristie opens the remote-controlled gate to the mansion where she lives to allow her friend Marta to enter the grounds. An uninvited vacuum cleaner salesman follows Marta through the open gate. Kristie's watchdogs are trained to attack intruders, and they injure both Marta and the salesman. Which of the following statements is true? A. Kristie has less of an obligation to the uninvited salesman than she has to her invited friend Marta. B. Kristie has more of an obligation to the unexpected salesman than she has to her expected friend Marta. C. Kristie has equal obligations to any party who enters her premises for any reason. D. Kristie has no obligation to exercise care toward anyone entering her property.

A. Kristie has less of an obligation to the uninvited salesman than she has to her invited friend Marta. While property owners have an obligation to prevent harm to people who enter their property, there is less obligation towards a licensee (salesman) than an invitee (Marta), and even less obligation toward a trespasser.

Maurice's personal auto policy (PAP) on the family car lists him as the named insured. His wife, Sondra, is involved in an accident while using the car as a Charity Organization volunteer. The injured parties sue Maurice, Sondra, and Charity Organization. Which is insured under the policy's liability coverage? A. Maurice, Sondra, and Charity Organization B. Maurice and Sondra C. Maurice and Charity Organization D. Maurice

A. Maurice, Sondra, and Charity Organization ** Sondra is a named insured by virtue of her marriage to Maurice, who is named in the policy. Charity Organization is an insured because it may be held liable for an insured's use of the named insured's covered auto.

Armand is a security guard at a local department store. He is injured while detaining a suspected shoplifter. Although Armand is treated for the injury and returns to work, he is unable to perform all of his prior duties. However, his doctor assures him that he has attained maximum recovery. Armand has a: A. Permanent partial disability B. Permanent total disability C. Temporary partial disability D. Temporary total disability

A. Permanent partial disability A permanent partial disability occurs when an employee suffers an injury from which he or she will never recover, but the injury is such that the ability to work is partially affected. The worker can still do some work, but his or her earning capacity is less than it would be had no injury occurred

Rayburn Foods wants its commercial general liability policy to provide pollution coverage that includes cleanup costs. What pollution endorsement do you recommend to Rayburn Foods? A. Pollution Liability Coverage Form B. Pollution Liability Limited Coverage Form C. Limited Fungi or Bacteria Coverage D. Mold Extension Coverage

A. Pollution Liability Coverage Form The Pollution Liability Coverage Form provides insurance for bodily injury and property damage liability arising from covered pollution incidents and includes costs for cleanup costs for which the insured is legally obligated to pay.

Who is responsible for collecting and remitting premium taxes to each state involved in an excess and surplus lines transaction? A. Producer B. Beneficiary C. Insurer D. Policyholder

A. Producer The producer is responsible for collecting premium taxes and remitting them to each state involved in an excess and surplus lines transaction.

Suzanne runs a business in her large house and employs several people on the premises. Who is a residence employee as defined in Suzanne's homeowners policy? A. Rachel, Suzanne's maid B. Thanh, Suzanne's personal trainer C. Gwendolyn, Suzanne's insurance agent D. Bill, the secretary who handles Suzanne's business correspondence

A. Rachel, Suzanne's maid

Which of the following describes the actions of muscles and joints? A. Terms of movement B. Terms of location C. Organizational terms D. Associative terms

A. Terms of movement.

Heat and electricity were out for four days at Tanner's home due to a city power outage. The lack of heat, combined with freezing weather conditions, caused the pipes in Tanner's home to burst. Will his DP 3 policy cover this loss? A. The freezing loss is covered by the DP 3. B. The freezing loss is not covered by the DP 3. C. 50% of the freezing loss will be covered by the DP 3. D. 75% of the freezing loss will be covered by the DP 3.

A. The freezing loss is covered by the DP 3. The power failure exclusion refers to the failure of power or any other utility service if this failure occurs off the residence premises. However, if a covered loss ensues as a result of this failure, the ensuing loss itself is covered.

Which of the following is true of AD&D policies? A. The principal sum is the amount payable as a death benefit. B. The capital sum is the amount payable as a death benefit. C. The capital sum is the maximum amount the policy will pay. D. The principal sum paid is the amount payable for the accidental loss of sight or accidental dismemberment.

A. The principal sum is the amount payable as a death benefit. **

Esther has just bought an expensive painting as an addition to her art collection. Considering the high price she paid for it, she wants to be sure there will be no dispute with the insurer in the event it is damaged or stolen. What type of policy would you recommend Esther purchase? A. Valued policy B. Actual cash value policy C. Indemnity contract D. Split limit policy

A. Valued policy ** Valued policies use the agreed value approach to insure valuable works of art. With a valued policy, the insurer agrees to pay the specified value as agreed to by the insured and insurer before any loss occurred. This minimizes the potential for a dispute in the event of a loss.

Nearly all state workers compensation laws specify certain activities for which injuries are not compensable. Which of the following injuries would most likely be covered by a workers compensation policy? A. Vinnie is walking across a newly shingled roof when a loose shingle gives way and he slides down the roof, breaking his ankle. B. During an employee softball game, Butch hits the umpire with a bat because he doesn't like the call he made. C. Bubba is trying to deliberately run over Jonathan with a backhoe when he crashes the backhoe into a wall, injuring himself. D. Frank is install ing steel beams for a skyscraper when he slips and falls to the floor below because he refused to wear a safety harness.

A. Vinnie is walking across a newly shingled roof when a loose shingle gives way and he slides down the roof, breaking his ankle.

During an examination of Agent Todd's marketing practices, the Superintendent requested additional information about the number of policies he sold to family members throughout the year. Agent Todd never responded to the request. Which penalty may the Superintendent impose? A. a fine of up to $500 per day that he fails to respond B. license revocation C. cease and desist order D. up to six months' imprisonment

A. a fine of up to $500 per day that he fails to respond

The valuation provision in the commercial inland marine common conditions form establishes the fact that covered property will be valued at the smallest of three amounts. Which is NOT one of those three amounts? A. acquisition cost plus reasonable physical depreciation B. cost of restoring the property to its pre-loss condition C. cost of replacing the property with substantially identical property D. actual cash value of the property at the time of the lost

A. acquisition cost plus reasonable physical depreciation. Acquisition cost plus depreciation is not one of the alternative valuation amounts in the valuation provision of the commercial inland marine common conditions form. Moreover, it also would not make any sense to add depreciation to an item's acquisition cost.

An insurance agent's E&O policy covers insurance producers against errors and omissions claims brought by: A. both clients and insurers B. clients only C. neither clients nor insurers D. insurers only

A. both clients and insurers. ** The two major classes of claimants under insurance agents errors and omissions policies are clients and insurers.

All the following statements regarding Coverage J (medical payments) of the Farm Liability form are correct EXCEPT: A. there are no exclusions associated with this coverage B. it may help avoid a lawsuit C. it covers medical expenses incurred within three years of an accident causing bodily injury D. its underlying purpose is to foster a good relationship between the potential claimant and the insured

A. there are no exclusions associated with this coverage Under Coverage J, the insurer pays reasonable medical expenses incurred within three years of an accident that causes bodily injury. An underlying reason for this coverage is to develop a good relationship between the potential claimant and the insured or insurer and thus avoid a lawsuit. It is subject to many of the same exclusions applicable to the bodily injury and property damage liability coverage.

Toby rents a trailer to use on the family vacation. Toby checks the limit of liability provision in his personal auto policy and discovers that the most an insurer will pay for any loss to the rented trailer is? A. $1,000 B. $1,500 C. $2,000 D. $2,500

B. $1,500 Under the PAP, the most an insurer will pay for a loss to a non-owned trailer is $1,500.

When a claims-made liability policy ends, when must the insurer notify its insured of the automatic extended reporting period coverage? A. 60 days. B. 30 days. C. 21 days. C. 14 days.

B. 30 days. In New York, when claims-made liability coverage ends, an insurer must within 30 days NOTIFY its insured that automatic extended reporting period coverage is provided for up to 60 days.

In which of the following situations may protection and indemnity insurance NOT provide coverage to the ship's owner for the loss? A. Tainted food causes passengers on a cruise ship to fall ill. B. A ship loses its cargo. C. The owner must retain legal counsel to defend a lawsuit involving an insured vessel D. A crew member is seriously injured and must be returned to the home port immediately.

B. A ship loses its cargo. Protection and indemnity insurance provides broad liability protection including coverage for injured or ill employees and passengers and costs of legal defense-for the owners of ships and other oceangoing vessels. However, it generally excludes coverage for loss or damage to cargo or other property, including passengers' baggage and personal effects.

Joseph has a DP 3 policy to cover the unfurnished single-family home he rents to tenants. He has no intent to insure tenants' property. However, he sees that the policy form includes Coverage C-Personal Property. What effect does this have on the coverage? A. As a landlord, his coverage must extend to his tenant's property. B. Although personal property coverage is printed in the form, coverage is only provided when the declarations show a limit and a premium for that coverage. C. An endorsement should be attached to exclude the personal property coverage. D. All dwelling policies must provide personal property coverage.

B. Although personal property coverage is printed in the form, coverage is only provided when the declarations show a limit and a premium for that coverage. ** A given dwelling policy does not automatically provide all the property coverages that are printed in the policy form; a given coverage is provided only when the declarations show a limit and a premium for that coverage.

Why do most insurance policies covering buildings and their contents exclude earthquake coverage? A. It is difficult to predict when an earthquake will occur. B. An earthquake may result in catastrophic losses. C. Earthquake coverage can only be obtained through the National Earthquake Insurance Program. D. Earthquake damage is a form of expected wear and tear.

B. An earthquake may result in catastrophic losses.

When insured property is damaged, what must the insured do with it? A. Sell it as salvage. B. Arrange for its repair or disposal. C. Surrender it to the insurer. D. Abandon it.

B. Arrange for its repair or disposal.

Eloise installed an in-ground swimming pool in the back yard of her home. Under what section of her homeowners policy is the pool insured, if at all? A. Coverage A--Dwelling B. Coverage B--Other Structures C. Coverage D--Loss of Use D. The pool isn't insured by her policy

B. Coverage B--Other Structures The swimming pool is insured under Coverage B ' Other Structures on the homeowner policy because it is not attached to the dwelling.

Cindy is a copywriter for Country Gentleman, a men's fashion magazine. She believes she is a victim of sexual discrimination and has experienced sexual harassment by her supervisor. She files suit against the magazine. What type of liability insurance would Country Gentleman need to cover Cindy's claims? A. Directors and officers liability (D&O) B. Employment practices liability (EPL) C. Errors and omissions liability (E&O) D. Employee benefits liability (EBL)

B. Employment practices liability (EPL) ** For-profit corporations, government entities, and nonprofit organizations are subject to claims from employees who allege discrimination, wrongful termination, sexual harassment, retaliation, and various other workplace torts. EPL coverage responds to such claims.

What federal law permits seamen to receive compensation for workplace injuries if they were partially negligent? A. Outer Continental Shelf Lands Act (OCSLA) B. Jones Act C. Federal Employers Liability Act (FELA) D. Longshore and Harbor Workers Compensation Act (LHWCA)

B. Jones Act The Jones Act provides seamen with a negligence remedy for on-the-job injuries without having to overcome employer defenses against negligence.

Dustin asks his insurance agent if liability coverage is automatically included in dwelling policy. Dustin's agent tells him that it is not and advises him to add which endorsement to his policy? A. Extended coverage B. Personal liability supplement C. Ordinance or law endorsement D. Automatic increase in insurance endorsement

B. Personal liability supplement The personal liability supplement, which includes medical payments coverage, may be added to the dwelling property policy via endorsement or written as a separate stand-alone policy. This coverage is comparable to the liability coverage provided by the homeowners policy.

Excess and surplus (E&S) lines insurance is any type of coverage that: A. is not essential but is desirable B. cannot be placed with an admitted insurer in a certain jurisdiction C. provides coverage once a primary policy's limits have been exhausted D. has unused limits that are left over after paying a large loss

B. cannot be placed with an admitted insurer in a certain jurisdiction **

When obtaining information about a claim, an adjuster is interested in? A. collecting any and all information about the claim B. collecting information about the claim that is needed to resolve it C. finding information most helpful to the insurer D. finding information most helpful to the claimant

B. collecting information about the claim that is needed to resolve it

A commercial umbrella liability policy issued to a small business provides excess limits of coverage over and above the liability limits provided by all the following policies EXCEPT: A. auto liability B. inland marine C. employers liability D. businessowners

B. inland marine ** A commercial umbrella policy provides excess limits of liability coverage over a firm's general liability, auto liability, and employers liability insurance. Inland marine policies provide property coverage.

Unlike an insurance policy, a surety bond: A. can usually be canceled at any time B. is a three-party contract C. covers only fortuitous losses D. is independent of other contracts

B. is a three-party contract Three parties-the principal, the obligee, and the surety-are involved in a bonding relationship.

Which business would be eligible for coverage under a businessowners policy? A. construction contractor that works on buildings up to ten stories tall B. motel four stories tall C. apartment building seven stories tall D. office building 20 stories tall

B. motel four stories tall. ** Apartment buildings are eligible for BOP coverage. Also eligible are construction contractors doing work at heights up to three stories, mercantile risks, motels up to three stories tall, and office buildings up to six stories tall.

Shelly knew her untreated high blood pressure put her at risk, but her heart attack occurred suddenly during the middle of her shift as a bartender. Shelly's subsequent claim for workers compensation benefits was denied on the basis that her heart attack was a(n): A. uninsurable risk B. personal risk C. neutral risk D. employment risk

B. personal risk

BOP eligibility is based on a business's: A. geographical location B. size and type C. past loss experience D. financial reports

B. size and type. A business's eligibility for BOP coverage depends on its size and type.

What is the primary purpose of the many tax-favored health insurance plans sponsored by the federal government? A. to satisfy public demand for nationalized health insurance B. to encourage people and employers to save for health-care expenses C. to serve as a provider of last resort D. to generate income for federal spending projects

B. to encourage people and employers to save for health-care expenses

In general, the Superintendent may discipline a licensee by imposing a fine of up to how much for each violation? A. $10,000 B. $5,000 C. $500 D. $2,500

C. $500

Zahra has an umbrella liability policy with a limit of $1,000,000. Her underlying insurance includes a personal auto policy with a $500,000 limit. Zahra's PAP lapses before she has an auto accident that seriously injures the passengers in both vehicles. The claims for personal injury total $1,000,000. Zahra files a liability claim for $1,000,000 under her umbrella policy. How much, if anything, will the umbrella policy pay? A. $1,500,000 B. $1,000,000 C. $500,000, the difference between the PAP limit and the total claim D. $0, because Zahra allowed her PAP to lapse

C. $500,000, the difference between the PAP limit and the total claim A maintenance of underlying insurance condition requires the insured to maintain the underlying insurance with the same limits and scope of coverage that existed when the umbrella policy began. If the insured fails to do so, the umbrella insurer is obligated to pay covered claims, but only to the extent that the claims are within the coverage and exceed the limits of the underlying insurance. The insured is responsible for any difference in coverage or limits.

An insurer that delays payment of a valid claim more than 30 days after receiving proof of loss must pay monthly interest on the payment at the rate of: A. 0.5 percent. B. 2 percent. C. 3 percent. D. 1 percent.

C. 3 percent. An insurer must pay a valid claim within 30 days after proof of loss has been submitted. Overdue payments incur interest at the rate of two percent each month.

As long as their termination is not due to a dishonest act, an individual is considered an "employee" under the employee theft insuring agreement for: A. 90 days following termination B. 10 days following termination C. 30 days following termination D. 60 days following termination

C. 30 days following termination. Individuals are considered employees for 30 days after their service terminates. The 30-day extension does not apply if the termination was due to dishonest acts.

How does an independent adjuster differ from a public adjuster? A. An independent adjuster works for an insured while a public adjuster works for an insurer. B. An independent adjuster is self-employed while a public adjuster is employed by an insurer. C. An independent adjuster works for an insurer while a public adjuster works for an insured. D. An independent adjuster works for an insurer while a public adjuster works for a governmental agency.

C. An independent adjuster works for an insurer while a public adjuster works for an insured. An independent adjuster investigates and settles claims on behalf of an insurer. A public adjuster does so on behalf of an insured.

Solomon owns a small health food store for which he has a commercial general liability policy. He knows that the policy is designed for businesses and only covers general liability exposures. Therefore, what types of liability would not be covered by his CGL policy? A. Premises and operations liability B. Products and completed operations liability C. Auto liability and professional liability D. Contractual liability

C. Auto liability and professional liability ** Commercial general liability insurance does not cover auto liability or professional liability.

Bernard's homeowners insurance policy refers to an "insured location." Which one of the following locations would NOT qualify as an insured location? A. dorm room that Bernard occupies while enrolled in a summer course B. Bernard's cemetery plot C. Bernard's office in a downtown building owned by his employer D. basement of Bernard's home

C. Bernard's office in a downtown building owned by his employer

Brandi rents her home to a tenant who furnishes it. Brandi's dwelling policy is most likely to have Coverage A-Dwelling and? A. Coverage E-Additional Living Expense B. Coverage B-Other Structures C. Coverage D-Fair Rental Value D. Coverage C-Personal Property

C. Coverage D-Fair Rental Value Coverage D covers the fair rental value-less noncontinuing expenses when property that is normally rented or held for rental is uninhabitable because of damage by a covered peril.

Dawn is the only person named in the declarations of her homeowners insurance policy. References to an "insured" in her policy do NOT include: A. a neighbor hired to walk Dawn's dog B. Dawn's minor children living in her home C. Dawn's next-door neighbor D. Dawn

C. Dawn's next-door neighbor

Which of the following statements is correct about OBEL coverage? A. All benefits must be applied to medical expenses. B. It replaces mandatory basic auto insurance. C. It is supplemental coverage. D. New York residents are required to buy it.

C. It is supplemental coverage. Optional Basic Economic Loss coverage, or OBEL, applied when the insured's $50,000 limit of no-fault coverage is exhausted. The insured can determine how to apply the benefits.

Margaret opened the windows to air out the Grand Hotel guestrooms where she worked as a housekeeper. Before she could close them, a thunderstorm soaked beds, drapes, and carpeting in the rooms she serviced. Will the causes of loss-broad form of Grand Hotel's building and personal property coverage form cover this damage and, if so, under which peril? A. It will cover loss from a windstorm. B. It will cover water damage. C. It will not cover this loss. D. It will cover loss from neglect.

C. It will not cover this loss. ** The Grand Hotel has no coverage for this claim. The windstorm peril excludes damage to the interior of a building or its contents caused by rain through an undamaged open window, and the water damage peril applies to system or appliance leakage. Neglect is an exclusion, not a covered peril.

Which incident that resulted in a liability claim against Jacquelyn did NOT involve "property damage" as defined in her homeowners insurance policy? A. Trash collectors were injured by hazardous material in Jacquelyn's garbage. B. Neighbors lost utility service when Jacquelyn dug a hole in her yard and accidentally cut a cable. C. Jacquelyn plagiarized an article from the Internet in a news story she wrote. D. Jacquelyn's son accidentally mowed the neighbor's prize rosebushes.

C. Jacquelyn plagiarized an article from the Internet in a news story she wrote.

Which of the following is not an optional coverage available for purchase on the BOP? A. Outdoor signs B. Mechanical breakdown C. Personal property off-premises D/ Money and Securities

C. Personal property off-premises ** The four most popular optional coverages that can be added to the BOP are outdoor signs, mechanical breakdown, employee dishonesty, and money and securities.

Which of the following systems is comprised of the body's bones, tendons, ligaments, and cartilage? A. Cardiovascular system B. Respiratory system C. Skeletal system D. Nervous system

C. Skeletal system

Ida's boutique at a shopping mall escapes damage when a portion of the atrium roof caves in. However, her business came to a sudden halt when the debris blocks access to her store. Does Ida's businessowners policy cover the resulting loss of income? A. No, the BOP's business income and extra expense coverage does not apply because Ida's property was not damaged. B. No, because the BOP provides neither business income nor extra expense coverage. C. Yes, because the BOP's business income and extra expense coverage applies when a business interruption is caused by damage to any area used to gain access to the insured's premises. D. No, because the BOP includes extra expense coverage but not business income coverage.

C. Yes, because the BOP's business income and extra expense coverage applies when a business interruption is caused by damage to any area used to gain access to the insured's premises.

Kendrick's car is insured with a personal auto policy (PAP). How can he have the policy also cover his new motorcycle? A. the PAP provides automatic coverage on a newly acquired vehicle B. list the motorcycle in the PA P's declarations C. add the miscellaneous type vehicle endorsement to the PAP D. replace the PAP with a fleet policy to cover more than one vehicle

C. add the miscellaneous type vehicle endorsement to the PAP The miscellaneous type vehicle endorsement broadens the definition of covered autos to include miscellaneous type vehicles, such as motorcycles.

Which of the following is a peril? A. ice B. rain C. flood D. snow

C. flood A peril is a cause of loss. Flood is normally an excluded peril. Weather conditions by themselves do not cause a property loss, but they increase the likelihood of a loss resulting from some covered peril such as "weight of ice, sleet, or snow." Ice, sleet, or snow are considered to be hazards because they increase the likelihood of a loss.

To avoid the appearance of practicing law, a claims adjuster's communications with an insured should always be? A. limited to interpretations of the policy B. reviewed by an attorney C. limited to the wording of the policy D. supported by references to the law

C. limited to the wording of the policy

The Dwelling Property 3-Special Form provides more coverage than the Dwelling Property 2-Broad Form because the DP 3 automatically provides: A. replacement cost coverage rather than actual cash value coverage on personal property B. additional living expense rather than fair rental value coverage C. open perils coverage rather than named perils coverage on the building D. other structures coverage with higher limits and no deductible

C. open perils coverage rather than named perils coverage on the building In contrast to the DP 2's named perils coverage, the DP 3 provides open perils coverage on the dwelling building.

Javier is a licensed adjuster in New York. If he wishes to renew his license, he must do all of the following EXCEPT: A. apply to have the license renewed B. fulfill the continuing education requirements C. post an additional bond D. pay an application fee

C. post an additional bond

Adrienne was a painter until a malicious coworker splashed solvent in her eyes, seriously reducing the quality of her eyesight. According to the workers compensation law in Adrienne's state, she might be entitled to damages based either on the percentage her disability bears to total permanent disability or to benefits described in a: A. table B. program C. schedule D. catalog

C. schedule Most states have developed a list or schedule of specific injuries and corresponding benefits for common permanent partial disabilities that are compensable under their workers compensation laws.

A noncancellable health insurance policy guarantees that: A. the insurer will not reduce coverage or increase the premium B. the insured will not cancel the policy C. the insurer will not cancel coverage or increase the premium D. the insured will renew the policy

C. the insurer will not cancel coverage or increase the premium **

Under the Personal Injury Protection endorsement for New York, benefits paid for basic economic loss will reimburse the injured person for personal injuries suffered in a motor vehicle accident up to a limit of? A. $10,000 B. $20,000 C. $25,000 D. $50,000

D. $50,000 Under the Personal Injury Protection Endorsement, the insurer will pay benefits to reimburse for basic economic loss of up to $50,000 sustained by an injured person resulting from personal injuries caused by an accident arising from the use or operation of the insured motor vehicle.

An adjuster typically completes his or her initial investigation of a claim with in how many days of being assigned the claim? A. 5. B. 30. C. 10. D. 15.

D. 15. Typically, within 15 days from the assignment date, the handling adjuster should have completed most of the initial investigation.

Ace Real Estate is considering a businessowners policy for an office building that has eight stories and is less than 100,000 square feet. Its agent will advise Ace that: A. Ace is eligible if the building has an approved fire protection system B. Ace is eligible if every floor is occupied C. Ace is ineligible because the building must exceed 100,000 square feet of space D. Ace is ineligible because the building is taller than six stories

D. Ace is ineligible because the building is taller than six stories Office buildings are eligible for the businessowners policy if they do not exceed six stories in height or 100,000 total square feet.

In addition to a property owner, what other parties might have an insurable interest in the property? A. Next door neighbor B. Local municipality C. Local political representative D. Bank or mortgage holder.

D. Bank or mortgage holder.

Shawn's ice cream parlor gets most of its customers from the health club next door. What coverage, if any, in Shawn's policy would apply if a fire closes the health club? A. Extra expense coverage would apply to any property damaged by a covered peril. B. Coverage would not apply because Shawn's property did not suffer a direct loss. C. Business income coverage would apply to any property damaged by a covered peril. D. Business income from dependent properties additional coverage would apply.

D. Business income from dependent properties additional coverage would apply. ** Business income from dependent properties coverage applies to loss of business income resulting from damage from a covered cause to property of another business on which the insured depends.

In the dwelling policy's Peri ls Insured Against, Coverage A- Dwelling and Coverage B- Other Structures, which of the following is generally covered? A. Seepage of all contaminants B. Dispersal of airborne pollutants C. Discharge of specific contaminants D. Contamination from a named peril

D. Contamination from a named peril Under Perils Insured Against, Coverage A-Dwelling and Coverage B - Other Structures in the DP 00 03 exclude discharge, dispersal, and seepage of pollutants unless the release or escape of the pollutants is caused by an insured peril.

Which of the following statements about most common government health insurance plans is correct? A. Government health insurance is a right of citizenship. B. Government health benefits are tax free. C. Government health insurance is available only to state or federal employees. D. Government health insurance is available to individuals and groups.

D. Government health insurance is available to individuals and groups.

Mrs. Zarella owns vacant land and calls you to add its location to her homeowners insurance policy. You tell her the vacant land doesn't need to be added to the policy because it's already covered based on which of the following terms that are defined in the policy? A. Residence premises B. Business C. Dwelling D. Insured location

D. Insured location An 'insured location' includes vacant land, premises not owned by the insured and where the insured is residing temporarily, and cemetery plots.

Monument Farms Grocery submits a claim under its commercial crime policy because several items of stock are missing. How does the policy respond? A. It pays the claim under Employee Theft coverage B. It pays the claim under Other Property coverage C. It denies the claim under the Warehouse Receipts exclusion D. It denies the claim under the Inventory Shortages exclusion

D. It denies the claim under the Inventory Shortages exclusion

XYZ's workers compensation policy lists the insured as "Les Smith and Hiram Jones, a partnership doing business as XYZ." This firm is a new venture for Les and Hiram, both of whom also operate other businesses. For whom does XYZ's workers compensation policy provide coverage? A. Les and Hiram only, but not XYZ's employees B. Les and Hiram, for injuries to employees of any of their ventures C. Les only, because he is the first named insured D. Les and Hiram, but only for injuries to XYZ's employees

D. Les and Hiram, but only for injuries to XYZ's employees Because the listed employer is a partnership, each individual partner is insured but only in his capacity as an employer of the partnership's employees.

Mitch tripped on the sidewalk and let go of his briefcase, which landed in a flower stall and knocked several potted plants off a shelf. A shard from one of the flower pots landed in the soup being served to a patron at the sidewalk caf' next door. The patron took the soup home. Several days later, his wife added spices to the soup before serving it to their children. One child grew ill from ingesting the shard. The patron sued the owner of the flower stall, who in turn sued Mitch. Under these circumstances, is there a proximate causation between Mitch's actions and the injury caused to the child? A. No, the accident simply happened. B. Yes, Mitch's briefcase was the entity causing the damage. C. Yes, Mitch should have foreseen that if he tripped he might lose control of his briefcase and injured someone. D. No, Mitch could not reasonably anticipate that his tripping would set in motion a chain of events that would lead to the child's injury.

D. No, Mitch could not reasonably anticipate that his tripping would set in motion a chain of events that would lead to the child's injury. Proximate causation is a doctrine by which a plaintiff must prove that the defendant's actions set in motion a chain of events that could have reasonably been anticipated to lead to the damage or injury the plaintiff suffered. Liability will only be imposed for setting in motion a relatively short chain of events leading to natural, probable, or foreseeable consequences.

Sevigny Enterprises lost its building to a fire. You are the adjuster determining if the building was insured to value. Which of the following statements BEST describes the loss valuation provision in the BOP with respect to the required limit of insurance? A. Property must be insured to its actual cash value B. Property must be insured to its replacement value C. Property must be insured to at least 80 percent of its actual cash value D. Property must be insured to at least 80 percent of its replacement value

D. Property must be insured to at least 80 percent of its replacement value

Which of the following statements BEST describes the personal liability coverage afforded on the ISO homeowners forms? A. Each ISO homeowners form provides a different level of liability coverage B. Only ISO's HO-3 Special Form includes liability coverage C. The HO-4 Contents Broad form is the only ISO homeowners form that doesn't include liability coverage D. The ISO homeowners forms provide the same liability coverage

D. The ISO homeowners forms provide the same liability coverage ** The personal liability coverage is the same on all the ISO homeowners forms.

In most liability insurance policies, the insurer agrees to pay claims on behalf of the insured. However, P&I policies are considered indemnity policies. How does this differ from liability policies? A. There is no material difference, as both indemnify the insured. B. The insurer pays the loss and then seeks reimbursement from the insured or the party at fault. C. Indemnity policies guarantee payment of the claim. D. The insured must pay the loss before the insurer will repay the insured.

D. The insured must pay the loss before the insurer will repay the insured. ** In an indemnity policy, the insurer reimburses the insured who has suffered and paid for a loss. Under an indemnity policy, the insured (or assured) must pay for the loss before the insurer indemnifies the assured.

Heather's distraught next-door neighbor was holding his wife hostage at gunpoint. After several hours, the neighbor's husband still refused to free his wife. The sheriff's department ordered that tear gas canisters be fired into the house. The gas sparked a fire in the house and the sheriff ordered the fire department to contain the fire from spreading to other homes. Will Heather's dwelling policy cover the damage to her home from this fire containment action? A. No, because the damage was caused by order of a governmental authority. B. No, because governmental action is an excluded property peril. C. Yes, because a dwelling policy provides coverage for fire damage. D. Yes, because a fire containment action ordered by a governmental authority is an exception to the governmental action exclusion.

D. Yes, because a fire containment action ordered by a governmental authority is an exception to the governmental action exclusion. The destruction or confiscation of property described in the dwelling, other structures, or personal property coverages through the orders of a governmental authority is excluded. However, the governmental action exclusion does not apply to acts ordered by the government that are taken at the time of a fire to restrict or prevent its spread, if the fire loss is covered under the policy.

According to the "motor vehicle" definition in Donnell's homeowners insurance policy, which would NOT be considered a motor vehicle? A. a trailer attached to a lawn tractor B. a self-propelled snowblower C. a lawn tractor D. a bicycle

D. a bicycle

Evangelina wants to insure the contents of her apartment under Coverage C of a DP 2 broad form rather than the cheaper DP 1 basic form. Which loss will this broad form cover? A. medical expenses incurred by a guest injured in the apartment B. the jewelry burglars stole from her apartment C. medical expenses Evangelina incurred for treatment of cuts sustained while clearing debris after a burglary D. damage burglars caused when they broke into her apartment

D. damage burglars caused when they broke into her apartment ** Burglary damage is a named peril in the DP 2 broad form, but theft, liability, and medical payments are not automatically covered.

Merrill's insurance agency has an ISO businessowners policy. A customer claims that Merrill failed to recommend the necessary insurance policies for his firm. What will Merrill's insurer do? A. pay only for advertising injury B. pay only for property damage C. pay only for personal injury D. deny coverage

D. deny coverage

A combination of toxic fumes and debris from an explosion at a paint supply store forces the evacuation of nearby homes and damages several automobiles. It also damages a neighboring computer repair shop where Quincy delivered his personal computer for repairs. Smoke and water destroy the hard drive containing files in which Quincy stored manuscripts for his doctoral thesis. Under the store's CGL policy, which does NOT qualify as property damage? A. damage to the computer repair shop B. damage to the automobiles C. destruction of the computer's hard drive D. destruction of the manuscripts

D. destruction of the manuscripts

Upon learning that Bryant, a key executive, has been kidnapped, Bryant's employer contacted the security firm listed in the declarations of its kidnap/ransom and extortion policy. The security firm was able to negotiate Bryant's release and billed his employer $250,000 for its services. Which coverage of the employer's kidnap/ransom and extortion policy will reimburse the employer for its $250,000 loss? A. kidnap/ransom and extortion-direct loss. B. detention or hijack. C. in-transit delivery of property. D. kidnap/ransom and extortion-expenses incurred.

D. kidnap/ransom and extortion-expenses incurred.

Which of the following building properties may be eligible for flood coverage under the National Flood Insurance Program? A. boat repair dock B. greenhouse with glass walls on all sides C. chemical storage tank of steel construction D. mobile home

D. mobile home

Although it addresses common terms that apply to all commercial policy forms, the commercial policy conditions form does NOT include: A. premium payment terms B. transfer of rights and duties under the policy C. cancellation provisions D. no benefit to bailee conditions

D. no benefit to bailee conditions ** Because the no benefit to bailee condition relates to situations in which someone else has custody of the insured's property, that condition applies only to property insurance.

When collecting personal financial or health information, an insurance company is required to do all of the following EXCEPT: A. notify individuals about the company's privacy practices. B. describe conditions under which the company may disclose the information to other parties. C. provide methods for individuals to prevent disclosure of the information. D. provide individuals with copies of documents disclosed to other parties.

D. provide individuals with copies of documents disclosed to other parties.

In an auto policy that has split limits of 50/100/75, what does the "100" represent? A. the maximum amount that will be paid to any one injured person B. the maximum sum the insurer will pay for injuries to other people and property damage to other cars or property C. the maximum amount the insurer will pay for damage to other cars or property D. the maximum sum the insurer will pay to all injured persons

D. the maximum sum the insurer will pay to all injured persons

Which of the following provisions allows the insurer to require the insured to take a physical exam during the claims investigation process? A. the payment of claims provision B. the reinstatement provision C. the grace period D. the physical examination and autopsy provision

D. the physical examination and autopsy provision

A claims adjuster is required to maintain a complete and accurate claim file for all of the following reasons EXCEPT: A. to record the activities that occurred during the adjustment of the claim B. to permit others to service the claim if the adjuster is unavailable C. to facilitate examination by insurance regulators D. to support denial of the claim

D. to support denial of the claim An adjuster is required to keep a complete and accurate claim file to 'let the file speak for itself' if the adjuster is unavailable, and to a permit examination by insurance regulators. The decision to deny a claim is based on the results of the adjuster's investigation of the claim.

A license for an independent adjuster in New York is valid for? A. five years B. four years C. three years D. two years

D. two years