State: New York | Category: Property and Casualty Insurance | All tests in this Category:
Practice Test 1 Practice Test 21. What does a Combined Single Limit (CSL) mean in auto liability?
CSL sets one single limit per accident for both bodily injury and property damage, rather than separate BI and PD limits.
2. In cases of insurer insolvency or imminent insolvency, what power does the NY DFS have?
New York law authorizes the Superintendent to appoint receivers, rehabilitators, or liquidators to protect policyholders when an insurer is insolvent or in danger of insolvency.
3. Which of the following is NOT typically covered as part of covered injuries & benefits?
Injuries off premises that are unrelated to work are generally not covered, whereas occupational diseases, work-related injuries, and related medical treatment are covered.
4. Replacement Cost vs Actual Cash Value in a Commercial Property policy is generally:
Most CP policies default to Actual Cash Value unless Replacement Cost coverage is added by endorsement; RC coverage is common for buildings and can be extended to personal property with the right endorsements.
5. Supplementary Payments under CGL typically include which of the following?
Supplementary Payments cover defense costs and certain bonds; they are paid in addition to the policy limits.
6. A supersedeas bond is used to:
A supersedeas bond allows the enforcement of a judgment to be postponed during an appeal, protecting the appellant from immediate execution of the judgment.
7. The Contractual Liability Exclusion in CGL generally excludes liability assumed under contract, except for which of the following?
The exclusion typically excludes liability assumed under contract, but insured contracts listed in the policy are often covered.
8. General Average refers to which of the following concepts in marine risk?
General Average is a deliberate sacrifice to save the voyage, and the resulting costs are shared by all parties with an insurable interest.
9. Under HO-2 broad form, personal property is insured on which type of peril basis?
HO-2 applies personal property coverage on a named-perils basis, listing specific perils that are covered.
10. A fidelity bond primarily covers losses caused by:
Fidelity bonds protect employers from losses due to employee dishonesty, such as theft or fraud.
11. A material fact is a fact that:
A material fact is information a reasonable insurer would consider important in making underwriting or coverage decisions.
12. Property Damage (PD) liability coverage pays for damage to:
PD liability covers damage to third-party property caused by an at-fault insured, not damage to the insured's own property or personal belongings.
13. Misrepresentation occurs when the applicant provides information that is:
Misrepresentation involves false statements that are material and relied upon by the insurer when issuing the policy. It can lead to denial of coverage or rescission.
14. What is tail coverage in relation to claims-made professional liability policies?
Tail coverage, or an extended reporting period, allows claims that arise during the policy period to be reported after the policy ends, preserving coverage for events that occurred earlier.
15. Money and securities are typically:
Money and securities are generally excluded from standard property coverage and require a separate endorsement or form to be covered.
16. The peril described as 'weight of ice, snow, or sleet' is typically included as a covered peril for which property under most homeowners forms?
Weight of ice, snow, or sleet on roofs is a peril commonly listed for the dwelling as part of many homeowners forms.
17. Fire Department Service Charge coverage within a Commercial Property policy:
Fire Department Service Charge provides coverage for the cost of fire department services, up to a specified limit, when responding to a covered loss at the insured location.
18. Which of the following is a named peril commonly covered for personal property under HO-2?
Theft is a named peril that is typically covered for personal property under HO-2; floods and earthquakes are usually excluded unless endorsed.
19. The exclusive remedy rule in workers' compensation means:
In most systems, workers' compensation is the exclusive remedy for work-related injuries, barring most civil lawsuits against the employer for the same injury.
20. Which statement correctly contrasts replacement cost (RC) and actual cash value (ACV) valuation?
Replacement cost is the current cost to replace the property with new, without subtracting depreciation. Actual cash value equals replacement cost minus depreciation.
21. Which statement about the exclusive remedy in workers' compensation is true?
The exclusive remedy doctrine generally prevents the employee from pursuing a civil action for damages for the same work-related injury.
22. Which form provides open peril coverage for the dwelling and other structures, while personal property is insured on a named-peril basis?
The Special Form (HO-3) provides open peril coverage for the dwelling and other structures, while personal property (Coverage C) is insured on a named-peril basis.
23. What does a 'prior acts' endorsement address in a claims-made policy?
A 'prior acts' endorsement aligns with the retroactive date. It ensures coverage for acts occurring after that date that are first claimed during the policy period, preventing gaps when switching carriers.
24. Direct Physical Loss in a Commercial Property policy means:
Direct physical loss refers to physical damage or destruction to covered property, as opposed to intangible or purely financial losses.
25. Which entity is responsible for licensing and supervising producers who sell insurance in NY?
Licensing and supervision of insurance producers in NY fall under the NYDFS, overseen by the Superintendent.