New York State Property and Casualty Insurance Exam questions and answers

Physical damage coverage under a garage policy is a blanket limit for covered auto, an accurate statement? Yes; The dealer's physical damage limit would be done on a blanket limit basis. This would apply to comprehensive and collision losses to the auto inventory of the dealer. This is done because it is simply not practical to schedule each dealer owned vehicle for physical damage. This is generally accomplished by the use of a monthly reporting form. An insured owns a motorcycle, a moped and a motor home. What endorsement is added to the personal auto policy to provide coverage? Misc. Type Vehicle Endorsement; The "miscellaneous type vehicle" endorsement is added for these types of recreational vehicles. Note that ISO has a separate endorsement for snowmobiles. Investment consultants should purchase which of the following policies to protect themselves from errors and omissions? Professional Liability; Errors and omissions coverage does not involve bodily injury or property damage, which is provided by other types of policies. This is why professional liability coverage is needed. Medical malpractice insurance does cover bodily injury. The negligent act of the agent is imputed to the principal if the act occurred within the course and scope of the agent's employment. This means that the principal becomes: Directly liable for damages to a third party caused by the agent (employee)..This is sometimes referred to as "vicarious" liability. Which of the Homeowner's polices does not include coverage for flood? An HO-3 Policy; A homeowner policy specifically excludes flood coverage. The purpose of a Medicare Supplement policy, (aka Medi Gap), is to: pay for services not covered by Medicare; Medicare coverage contains deductibles and coinsurance payments. Having a Medicare Supplement/Medi Gap policy, offered by commercial insurers, is designed to cover those coverage gaps. Under the Federal Insurance Fraud and False Statements Act, if someone is prohibited from doing business in a state, approval to resume transacting business must be granted by: Insurance Regulatory Official; Only an insurance regulatory official, such as the Insurance Commissioner, can grant permission to resume business. What is not reflected in a privacy report? Categories of medical information; Medical information is not a topic in a privacy report. It deals with financial issues only. If the surviving spouse of a covered worker does not remarry, how long are death benefits paid to the surviving spouse if the worker is killed in a work related incident in New York? For life; Generally, the surviving spouse receives benefits for the remainder of his or her life, except in situations where they remarry. In situations where the surviving spouse remarries, the spouse receives a lump-sum of two years of benefits. An insured has purchased a Medicare supplement policy from a new insurer, replacing a policy from a previous insurer. A "Notice of Replacement" must be provided to this individual by: The replacing insurer; Since this transaction is a replacement, the insurance regulations of the state require that the replacing insurer must provide the applicant with a Notice of Replacement What mandate is given in the Affordable Care Act requiring all health plans to offer child dependency coverage to age 26? There is no mandate in any federal or state law requiring employer group plans or individual health plans to provide dependent health coverage; None. Health plans are not required by any law to offer dependent care coverage. However, if a group health plan or insurer provides coverage for children, the plan must make such coverage available for a child until age 26. What injury is covered under the medical payments section of an insured's CGL policy? A shopper is injured while visiting a showroom owned by the insured; The coverage excludes injuries to employees, persons participating in an athletic event on the insured's premises and injuries to tenants. The shopper is the only third party that would be covered. Which type of HMO employs its own physicians on a salary basis? Closed Panel; Closed panel plans aka Staff model plans, employ physicians, nurses and other health care professionals. What is an example of a privately run insurers? The excess and surplus lines markets are privately run insurers that usually writes risks that the standard market does not want to write. Which of the dwelling forms provides broad form coverage for personal property? DP-2 and DP-3 only; The DP-1 provides very limited coverage for personal property. Both the broad form (DP-2) and the special form (DP-3) provide broad form coverage for personal property. An insured purchases two homeowner policies from two different insurance companies. If a covered loss occurs, on what basis will the loss be settled by each of the insurers? : Pro rata basis; Each company will pay its pro-rata share of the loss. This means the percentage of coverage (the total amount of insurance carried) that each company provides on the risk. The liberalization clause of a businessowners policy automatically applies favorable expansions of coverage, for which a premium is not charged if the changes are made during the policy period or within: 45 days prior to the effective date; A liberalization condition states that the insurer will automatically and immediately apply to the policy any revisions made during the policy period or within 45 days prior to the effective date if those revisions broaden the coverage without additional premium. What is insured under the HO-5 form? Though typically "insured" refers to the policyholder and his or her spouse, relatives by blood, marriage or adoption who reside in the named insured's household are also covered. Also included are wards or foster children under the age of 21 as well as resident relatives who are attending college away from home and are under 24 years of age. Insurers must participate in the "write your own" program under flood insurance. Is this statement accurate? No; Insurers voluntarily participate in the program; they are not required to do so. Would the owner of the uninsured vehicle be covered under the uninsured motorist coverage of the personal auto policy? No; The uninsured motorist coverage provides coverage for the insured and anyone riding in the insured's auto. It does NOT cover the owner of the uninsured vehicle. A commercial inland marine condition defining the insurer's subrogation rights: Guarantees the insurer's ability to recover from a third party who is responsible for a covered loss; When the insurer pays a covered claim caused by a third party, the insurer can seek reimbursement for the loss if they can prove negligence or responsibility on the part of the third party. What coverage of the garage policy will pay for physical damage to a garage customer's auto regardless of legal liability? Garagekeepers direct coverage endorsement; The garagekeepers direct coverage endorsement pays for damages to a customer's vehicle regardless of legal liability. Water damage to an insured building covered under the Commercial Property - Special form would be covered under all of the following circumstances, EXCEPT: Water damage to the building caused by a pipe that has leaked over a period of 14 days; Water damage caused by a pipe that has been leaking beyond 14 days is excluded by this Commercial Property form. The insured owns a 50 HP fishing boat covered under a watercraft policy for hull insurance. He also carries a homeowner policy. He ties his boat to a tree and goes ashore to camp. The next morning he discovers that his boat is stolen. Which policy would pay the claim? The watercraft policy; The watercraft policy would pay the claim. The homeowner policy excludes property more specifically insured and also excludes any boat off the insured's premises for the peril of theft. The medical payments coverage on the farm policy can be claimed for up to: 3 years; Similar to a homeowner policy, medical payment claims can be made up to three years from the date of the injury. The deductible under a homeowner policy does not apply to? Liability coverage; Liability coverage as well as medical payments coverage are not subject to a deductible. Commercial Insurance coverage under the broad and special forms covers which of the following types of water damage? A water pipe that bursts; The broad and special cause of loss forms provide coverage for all types of water related damage except that caused by flood, from surface water or water below ground which surfaces. When a homeowners policy has been in effect for 60 days in New York, an insurer can cancel at anytime for any of the following reasons, EXCEPT: A large loss has occurred; The homeowners policy was purchased to indemnify against the occurrence of a large loss, therefore, this would not represent a reason for policy cancellation What are the lifetime dollar limits on the essential benefits provided under ACA? There are no lifetime dollar limits on essential benefits; There is a ban on lifetime dollar limits for most covered benefits for every health plan whether individual plans or group plans. The doctrine of res ispsa loquitur relates to legal liability? Yes or no? In the common law of negligence, the doctrine of res ipsa loquitur (Latin for "the thing speaks for itself") states that the elements of duty of care and breach can be sometimes inferred from the very nature of an accident or other outcome, even without direct evidence of how any defendant behaved. Which of the following is NOT covered under most commercial crime policies? Legal expenses; The commercial crime policy does not provide legal defense coverage with one exception. Under the forgery or alteration coverage, legal expense coverage is provided. Under Coverage F - Medical Payments of the homeowners program, what is the time limit for expenses to be covered following an accident? 3 years; Coverage F refers to medical payments coverage. It pays without regard to the negligence of the insured. All covered expenses up to the specified limit are paid for up to three years. What is the purpose of Umbrella policies? Umbrella policies provide higher limits over primary coverages, provide broader coverage than underlying policies, and they also provide primary insurance in some cases where the underlying policies leave gaps. When the Umbrella policy provides coverage not provided by the underlying coverage there is a SIR (self-insured retention) otherwise considered to be a deductible. Which of the following bonds are used by financial institutions? Standard Form 24 Bond; Standard form #24 is a commonly used financial institution bond used by banks and various financial oriented agencies. The other bonds are fidelity and surety bonds and are used to either guarantee performance of a task or that dishonest acts will not happen. The financial institution bonds are similar to the crime insurance policies used by businesses. The HO-3 policy covers loss to personal property caused by: 17 listed perils; With the HO-3 policy, personal property is covered against loss caused by any of the 17 named perils listed in the HO-2 policy. They are (1) fire or lightning; (2) windstorm or hail; (3) explosion; (4) riot or civil commotion; (5) aircraft; (6) vehicles; (7) smoke; (8) vandalism and malicious mischief; (9) theft; (10) breakage of glass; (11) volcanic eruption; (12) freezing of plumbing; (13) accidental discharge or overflow of water from an appliance or plumbing system; (14) weight of ice, snow or sleet; (15) damage from falling objects; (16) sudden and accidental tearing apart of systems or appliances and (17) damage from sudden surges from artificially generated electric current. A common carrier is not held liable for the loss of a shipper's goods when the loss results from: An act of God; They are not responsible for acts of God such as floods, hurricanes or for the negligence of the shipper (poor packing). Premise liability exposure is faced by: 1) Banks 2) Landlords 3) Retail Stores 4) Car Dealers All is correct; All parties/businesses that occupy the covered premises, or have a financial stake in the premises, face liability exposure. The customer is the potential claimant.