THE NEW YORK STATE PROPERTY AND
CASUALTY EXAM 165 QUESTIONS AND
ANSWERS 2023
Ceding Insurer
The insurer transferring the risk is called?
Assuming insurer
The insurer providing reinsurance to another insurance company is called?
agent's contract with the principal because the principal grants authority to an agent through
the agent's contract
what documentation grants express authority to an agent?
adhesion
Insurance policies are not drawn up through negotiations, and an insured has little to say about
its provisions. What contract characteristic does this describe?
Contract of Adhesion
Any contract in which one party must either accept the agreement as written by the other party
or reject it.
Unilateral Contract
promise in exchange for an act
Authorized Insurer
insurer who has received a Certificate of Authority from the department of insurance to
transact insurance in this state
Admitted Insurer
What is an authorized insurer also known as?
B.
Adverse selection is a concept best described as
A. Only offering coverage to good risks.
B. Risks with higher probability of loss seeking insurance more often than other risks.
,C. Underwriters slanting the odds in favor of the company.
D. Poor choices of applicants to be covered.
Adverse Selection
that there are more risks with higher probability of loss seeking to purchase and maintain
insurance than the risks who present lower probability. Underwriters must guard against this.
B.
The insured's house is located one mile from the county's new landfill and across the road from
the entrance of a rock quarry. It would cost $150,000 to rebuild the house if something
happened to it, but when the insured tried to sell it, the best offer he received was $80,000. The
insurance company will insure the house for only $80,000. What method of valuation is used to
insure this property?
AFunctional replacement cost
B.Market value
CActual cost value
DReplacement cost
market value
When insured for __________ ________, it is insured for what a willing buyer would pay prior
to a loss. This is different from actual cash value or replacement cost.
Actual Cost Value
payment you receive is based on the cost of an item minus depreciation
personal property
property that is moveable
real property
property that is nonmoveable
Loss of Use Coverage
insurance coverage for homeowners that pays for the costs of living away from home while the
home is being repaired
Contents Coverage
Insures all of your personal belongings
Dwelling Coverage
, insures the structure and anything attached to it
loss of use coverage
What kind of coverage applies only after a direct loss caused by a covered peril has occurred?
D.
What will happen if a house covered by a standard mortgage clause is a total loss?
A. The mortgagee retains no rights to any contracts involving the policy.
B. The insured receives the full benefit and passes the mortgagee's share to the mortgagee.
C. The mortgagee receives the full benefit and passes the insured's share to the insured.
D. The insurer pays the mortgagee according to the mortgagee's interest in the property.
that benefits will go to the insured and the mortgagee as their interest appears in the event of a
loss to real property.
What does the standard mortgage clause ensure?
Blanket
What kind of coverage provides one limit of insurance for multiple locations or classes of
property with the entire limit of insurance available to respond to any loss? No single item is
assigned a specific amount of insurance. However, different amounts of insurance may be
shown for buildings in general and contents in general.
A
A policy that insures all property at multiple locations for a single amount is referred to as
A. Blanket.
B. Reporting.
C. Special.
D. Specific.
Coinsurance
the sharing of expenses by the policyholder and the insurance company
B
A $100,000 house insured on a policy with an 80% coinsurance requirement has a fire that
caused $40,000 of damage; the owner has a policy with $60,000 coverage. How much can the
owner collect for his loss?
A. $20,000
B. $30,000
C. $40,000
D. $60,000
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