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NY PRACTIC EXAM

NEW YORK EXAM NEW

Question	Answer
Insurable interest allows Rick to take out an insurance policy on all of the following EXCEPT:	his ten-year-old car. his new fishing boat. his vacation home. his favorite restaurant. (x)
Robby enjoys racing the other cars on the road . And besides, they have good insurance, so it wouldn't be that big of a deal even if Robby did damage his car. In insurance terms, Robby’s behavior is:	a morale hazard. (x) a moral hazard. a peril. a risk.
Stephan’s insurance company denied his recent claim. he disputed the insurer’s decision When his case went to trial, the jury also decided the policy language was open to interpretation, so they decided in favor of Stephan.	insurance policies are personal contracts. insurance policies are contracts of adhesio. (x) insurance policies are contracts of utmost good faith. insurance policies are aleatory contracts. *
Bill has bought $175,000 in insurance coverage on his $300,000 home. Which of the following statements applies to Bill?	Bill is underinsured on his home. (x) Bill has adequate co-insurance. -insurer will pay for 100% of Bill's partial losses. Bill's home is fully insured.
A TREE IS HIT BY LIGHTNING AND THE TREE FALLS AND HITS' THE HOUSE. wHAT IS THE TREE?	a direct loss. (X) a hazard. the proximate cause of loss. an indirect loss.
Jason is currently more than 30 days late, and has been so five times in the last year, and his insurer has done nothing about it. When Jason gets into an accident and files a claim, which of the following would be true?	- The principal of estoppel prevents the insurer from denying coverage in this case. (If a insurer takes no action, it cannot take action later if the policyholder continues the practice. )
Which of the following is the easiest and least costly option?	Litigation Mediation Adjuster/claimant negotiation (X) Arbitration
An independent adjuster:	is self-employed and may be contracted by one or more companies at a time.
An insurer may keep an independent adjuster from having the authority to bind the insurer by:	requiring that the insured sign a non-waiver agreement. (X) stating as much in the Conditions section of the policy. requiring that the adjuster sign a ""reservation of rights"" letter. issuing a declaratory judgement action.
Annie hits a patch of black ice and careens off the road and crashes into Frank's home. An adjuster is sent out to Frank’s property and determines the damages to be $12,436. Frank’s personal estimate totals $12,500-Frank holds firm.	The adjuster should not negotiate with Frank about this because the difference between the two estimates is too small to be worth it.
The adjuster is examining deductible, the total damages, the policy limits, other policies, whether the property is adequately insured, and whether or not a coinsurance penalty applies. What function adjuster is Peter performing?	Evaluating a claim (X) Investigating a claim Reporting a claim Managing a claim
Which of the following is NOT a way to determine an insurer’s liability in a claim?	-Check if the policy covers the type of damage being claimed. -Check if the current month's premium had been paid at time of loss. (X) -Check if the claimant has insurable interest. -Check if the policy was active at time of loss.
Which of the following statements about litigation is FALSE?	An adjuster’s claim file will be used as evidence in court. In liability claims, the defendant is usually a third party. (X)
After Jerry pulled the fire alarm,d flooded the offices at Elliot Designs, Elliot Designs filed a claim with KLM Insurance, who dispatched Chrystal to investigate and process the claim. Who is the principal in this scenario?	Elliot Designs KLM Insurance (X) Jerry Chrystal KLM Insurance hired Chrystal to settle Elliot Designs' claim on its behalf, so KLM Insurance is the principa
What does it mean for a claim to go to litigation?	The adjuster will have to defend the insurance company. The claimant will need to get a lawyer. The insurance company must be forced to pay. A court of law will decide the case. (x)
What kind of adjuster is not contracted by any particular company, can work for multiple insurers at once, and is paid by fee schedule, daily rate, time and expense, or commission?	Emergency adjuster Staff adjuster Public adjuster Independent adjuster X
_______ authority is granted when the insurer does not correct its agent, even if the agent is acting in error.	Express Apparent (X) Implied (An insurer grants apparent authority when it chooses not to correct its agent, even if the agent is acting in error)
While reviewing a homeowner policy, you may find all of the following listed as an insured's duty after a loss, EXCEPT:	-provide the insurer with a loss estimate from an appraiser. (X) -protect the property from further losses. -promptly notify the insurer of the loss. -cooperate with the adjuster’s investigation.
The Standard Fire Policy had four main parts. They were:	-Declarations, Coverages, Conditions, and Exclusions. -Declarations, Insuring Agreement, Conditions, Exclusions. (X) -Declarations, Coverages, Conditions, and Endorsements. -Declarations, Insuring Agreement, Conditions, and Endorsements.
A tornado completely destroys Cheyenne’s property. Her losses include her $95,000 home, $4,700 privacy fence, $5,000 detached garage, and $1,600 in patio furniture. . How much of Cheyenne’s losses will be covered under Coverage B - Other Structures?	Cheyenne's Coverage B losses include the $4,700 fence and $5,000 garage, for a total of $9,700. Her policy's Coverage B will provide up to 10% of the Coverage A limit for these items, in this case, $9,000.
Cheyenne's Coverage B losses include the $4,700 fence and $5,000 garage, for a total of $9,700. Her policy's Coverage B will provide up to 10% of the Coverage A limit for these items, in this case, $9,000.	HO -6 Condo Form
An HO-3 policy is intended for a/an:	Individual
The limit of liability for Coverage B - Other Structures is typically:	10% of Coverage A.
In which section of the Standard Fire Policy would you find an explanation of the losses covered under the policy and what the insurer has agreed to provide in exchange for premiums?	Insuring Agreement (X) Endorsements Exclusions Conditions
Clark lost power & lost several hundred dollars worth of meat that he was keeping in a freezer in his basement. Which homeowners coverage might indemnify Clark for the loss of his meat?	Personal Property coverage (X) Property Removal coverage Consequential Loss coverage * Reasonable Repairs coverage
Which of the following is NOT an exclusion commonly found in the Standard Fire Policy?	Lightning (X) Flood and water damage Ordinance or law Earthquake
Fire Policy Exclusions	-Flood and water damage -Ordinance or law -Earthquake
Homeowners policies don’t provide coverage for:	damage to outbuildings. liability in the case of third party injury. flood damage. (X) residential home damage.
Abraham docked Shawn's pay for the amount of food he stole. Shawn turns it on and leaves the restaurant. The resulting fire in the kitchen causes $30,000 in damages. Is Abraham's loss may be covered?	Vandalism * Subrogation Control of Property (X) Other Insurance .---The Control of Property provision allows Abraham to be covered for the loss Shawn caused, as long as Shawn was not acting directly under Abraham's control.
After thirty years of operating his business, Phil is finally ready to retire. At the end of next month he will shut his doors and cancel his claims-made Commercial General Liability policy. Assuming Phil does nothing else with his policy, it will:	-receive the supplemental extended tail coverage. -transform into an occurrence policy. -offer no further coverage for any claims made against Phil’s products. -receive the basic extended tail coverage. (X)
Beth has three deductibles on her policy: 1) a % deductible of 2% per loss, 2) a mini deduct of $500, and 3) a max deductible of $1,500. After experiencing a covered loss of $85,000, how much will Beth have to pay out of her own pocket for the loss?	$1500 2% of 85K =1650 so max is deductible $1500
Veronica' is in the process of building an extra structure on her bus premises. After 40 days before completed, Veronica sells her business and retires to Florida. Her Builder’s Risk Coverage Form in her commercial property policy is terminated because:	-the property is abandoned. -more than 30 days have passed since the beginning of construction. -Veronica moved out of state to Florida. -Veronica no longer has an insurable risk in the property. (X)
Which of the following is TRUE of the Stamp and Coin Collection Personal Articles Floater of Inland Marine Insurance?	Under blanket coverage, the policy will only pay up to $1,000 for any unscheduled coin collection.
Sam is in the process of building his warehouse when inherits another bus property & decides to move his business there. Why would that cause the policy period to end on the Builder’s Risk Coverage Form in his commercial property policy?	Coverage B - Business Personal Property supersedes Builder’s Risk coverage. (X)(X The property is abandoned. More than 30 days have passed since the start of construction. Extra Expense coverage supersedes Builder’s Risk coverage.
At Newman Medical, During a severe rainstorm, lightning strikes the balcony, breaking it into pieces. new building codes require construction materials that are more expensive than originally. What coverage in their CPP pays for this extra expense?	-Increased Construction Costs (X) -Preservation of Property * -Newly Acquired Properties -Extra Expense
When Shay purposefully caused fire damage to Jim’s restaurant, Jim was covered under his commercial property policy. Which policy condition allows Jim’s insurer to now attempt to recover those damages from Shay?	Subrogation
Sandy is decorating the window in Aprils store, she loses her balance and falls backward off a step stool, breaking some very expensive lamps. . What policy condition in Lillian's commercial property policy provides evidence that this loss may be covered?	Control of Property (X) Subrogation No Benefit to Bailee Liberalization
Which of the following statements about the Standard Flood Insurance Policy is true?	It is only sold through the NFIP Direct Program. * It is governed by state and local courts. It is not subject to state departments of insurance. X It is private insurance.
When an Umbrella Policy covers a loss that the base policy does not, there is a "deductible" called a(n):	stand-alone retention. excess-liability retention. self-insured retention. (X) follow-form retention.
Jill was forced to close her convenience store and evacuate because of a strong hurricane that hit her town. Jill so she lost two full weeks of income. Which additional coverage would indemnify Jill for this loss?
Which of the following statements about excess liability insurance policies is FALSE?	They can be written as Follow Form or Stand Alone policies.
the following statements about excess liability insurance policies is TRUE.	They always have the same provisions, exclusions, and limits as the base policy. They only pay out after the base policy limit is exhausted. They only cover the same risks as those covered by the base policy.
In a Watercraft Policy, Part D-Coverage for Damage to Your Watercraft provides an insured with several Additional Coverages. Which of the following is NOT one of these Additional Coverages?	Salvage Expense Towing and Assistance Expense * Uninsured Boaters X Personal Effects
for a Hurricane, The Grayson Fishing Port is covered under a commercial insurance policy with Time Element coverage. What must they prove in order to be indemnified for the rental fees?	The rental fees are an extra expense that resulted from the direct damage to the port.
if Paul rents his garage out to Jim who uses it as a residence, can it be covered?	Unfortunately for Paul, since he rents the garage out to Jim, who uses it as a residence, it cannot be covered under Coverage A of his NFIP policy.
Which of the following is NOT one of the four types of Ocean Marine Insurance?	Cargo Coverage Prevention & Insurance X Freight Insurance Hull Coverage
In a Dwelling policy, Coverage A provides protection for:	structures attached to the principal dwelling.
Shanice has a DP-1 policy insuring her house. After a storm causes damage to the roof, s. Which additional coverage can help Shanice with the increased costs due to the new building codes?	None X Ordinance or Law coverage would be able to help Shanice with the additional costs related to bringing her property up to code. is only available under the DP-2 & DP-3 policies. Shanice will pay out of pocket for the increased costs.
Helen has an HO-3 open-peril policy, but she doesn’t feel she needs liability coverage & wants to change to a dwelling policy. the policies are fundamentally different, which dwelling policy would most closely resemble Helen's current homeowners policy?	DP-2 DP-3 X DP-1 DP-4 Like the HO-3, the DP-3 provides open-peril coverage for the dwelling and other structures, and named-peril coverage for personal property.
While reviewing his DP-3 policy, Jim notices that some additional coverages are included in his Coverage A limit, while others are paid in addition to that limit. Which TWO additional coverages are included within Jim's Coverage A limit?	Debris Removal and Reasonable Repairs X Debris Removal and Fire Dept. Service Charge Trees, Shrubs, Other Plants and Fire Dept. Service Charge Additions & Alterations and Reasonable Repairs
Bob has a DP-2 A limit of $120,000. Bob's entire property, including his house and two appurtenant structures. Assuming his Coverage B limit is 10% per occurrence, and all his property is deemed a total loss, how much of an indemnity can Bob expect?	132k
A basic DP-1 dwelling policy offers ___________ coverage and ___________ valuations.	-named-peril; replacement cost -named-peril; actual cash value X -open-peril; actual cash value -open-peril; replacement cost
On a vehicle, the B-pillar:	-supports the windshield -supports the rear window -supports a sliding door -is the support between the front and rear doors X
All private passenger insurance policies written under the New York Automobile Insurance Plan are required by law to include which of the following?	-Liability limits of at least 50/100/50 -A $500 deductible -Replacement cost coverage for the insured auto -Up to $1,000 in Medical payments coverage X
Will has a Personal Auto Policy. Which of the following cars would qualify for coverage as a “temporary substitute” under Will’s policy?	Will rents a car while his car is in the shop. X Will buys a new pickup to replace his old car. Will rents a car for a road trip up to Maine. Will borrows his neighbor’s car for a week.
Someone who owns a vehicle in New York must carry UM/UIM coverage of at least _____ for bodily injury for one person or ______ per accident, and ______ for wrongful death for one person or _____ per accident.	-$25,000; $50,000; $50,000; $100,000 (X) -$20,000; $40,000; $40,000; $80,000 -$50,000; $100,000; $50,000; $100,000 -$25,000; $50,000; $75,000; $100,000
Which of the following would most likely be covered under Other Than Collision coverage in a personal auto policy?	Civil unrest is most likely to be covered, since freezing, civil confiscation, and mechanical breakdown are all specifically excluded perils under Other than Collision coverage.
In a Commercial Auto Policy, Symbol #8 represents:	-specifically described autos. -hired autos. X -non-owned autos. -owned private passenger autos.
In New York, the Optional Basic Economic Loss Coverage endorsement adds an additional _____ to the coverage limit available for Basic Economic Loss.	$25,000 X $20,000 $50,000 $10,000
In order to obtain auto liability coverage through the New York Automobile Insurance Plan, an applicant must:	-have no moving violations on his driving record. -have been unable to get coverage in the voluntary market during the past 120 days. -be over the age of 25. -have a valid drivers license.X

Created by: Rosalynww

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