Insurance & Risk Management: Terrorism, Crop, & Property Coverage, Exams of Business Finance

Download Insurance & Risk Management: Terrorism, Crop, & Property Coverage and more Exams Business Finance in PDF only on Docsity! New York Adjuster Exam 181 Questions with Verified Solutions. 1. The insured has moved into a dwelling that was being build and was covered by the "Dwelling under Construction" endorsement. How long does the insured have to report his / her occupancy to the insurance company? - ANS 30 days 2. When a New York Homeowners policy is still in the 60-day underwriting period, the insurer may cancel it for any reason by providing a ______ notice. - ANS 30 day 3. Personal property that is covered under the Personal Property Replacement Cost Endorsement is damaged and a claim has been filed. The replacement cost of the property at the time of the loss is $2,500. The full cost to repair the property is $2,000. The Coverage C limit of the Homeowners policy is $8,000. No special limits apply to this property and there is no limit applied to the type of property being claimed. Which of the following is the amount that will be paid under the endorsement? - ANS 2,000. The endorsement will pay the smallest amount of the replacement cost at the time of the loss, the full repair cost, the Coverage C limit, any applicable special limits, or the limit that applies to the type of property being claimed. 4. The mandatory recoupment of the federal share through policyholder surcharges under Terrorism Risk Insurance Program Reauthorization Act of 2015 was increased from 133% to - ANS 140% 5. A Building and Personal Property Coverage form provides coverage for all of the following types of property, EXCEPT: - ANS Growing crops and lawns. 6. The insured sets a fire to his home and is found to be guilty of arson. There is a lien on the burned property by a mortgage company in the amount of $150,000. The property is insured for $300,000 and is a total loss. The personal property of the insured, covered separately by a Homeowners policy for $150,000, is also a total loss. How will this claim most likely be paid? - ANS The mortgagee is paid $150,000. 7. The Terrorism Risk Insurance Act and all of its extensions and reauthorizations is actually an agreement between: - ANS between the Federal Government and the insurance companies. 8. The first effort to provide insurance for land transportation risks involved an extension of ocean marine coverage known as the: - ANS "Warehouse to warehouse" clause. 9. Which of the following is not a duty of an insurer in case of a loss? - ANS Separate the damaged property from the undamaged property and protect the property from further loss 10. An insured owns a set of six drawing pens designed and used by Benjamin Franklin. Each pen is worth $1,000 alone, but the set is worth $12,000. One pen is destroyed by a covered peril. Under the pair or set clause the insurance company will pay a maximum of which of the following amounts? - ANS $7,000 11. Traditionally, the most common type of crop insurance sold prior to the creation of the Multi-Peril Crop Insurance Program was: - ANS Coverage for hail damage. P a g e 1 | 14 12. An adjuster's report that contains all the facts, evidence and disposition of the claim and is considered to be the final report is known as the: - ANS Full report. 13. The New York Superintendent of Insurance may refuse to renew, suspend or revoke a license as a result of which of the following? I. A violation of any provision of the New York Insurance Code. II. A licensee making a material misstatement in application for license. III. A licensee being found guilty of fraud or dishonest practices. - ANS I, II and III 14. No insurer may issue checks or drafts or partial settlement of a loss or claim that is still being negotiated that: - ANS Releases the insurer from additional liability. 15. The insured owns a two family dwelling and is covered under a Homeowner policy. One of the units is rented. The insured also maintains a small incidental business in the structure. In case of a covered loss, which of the following would NOT be paid under Coverage D - Loss of Use? - ANS Loss of income from the incidental business. 16. The adjuster bond required in New York is payable to: - ANS The state of New York. 17. An earthquake and landslide has occurred and soon after a house insured on an unendorsed HO-3 is damaged by fire and then an explosion. What would be covered in this scenario? - ANS Only the resulting fire and explosion damage would be covered 18. If any person engages in activities in violation of the Federal Insurance Fraud and False Statements regulation, he or she may be subject to which of the following? - ANS A civil penalty of not more than $50,000. 19. Kelly would like to obtain an Independent Adjuster license in New York, however, she has been convicted of a felony involving dishonesty or breach of trust. Kelly plans to submit a 1033 Waiver from the Department of Financial Services so that she can begin looking for a job. Which of the following is NOT a requirement for the Superintendent to grant this waiver? - ANS Kelly is not required to submit evidence of restitution to the people of the state of New York. 20. The Earthquake Endorsement will provide coverage to the dwelling and/or personal property with the deductible stated as: - ANS 5% of the limit that applies to all Section I coverage’s 21. In order to avoid problems with underinsurance and over insurance, a business which has fluctuating inventory values during the year should consider coverage written on: - ANS the value reporting form. 22. The term "undamaged stock", as defined in an Equipment Breakdown policy, applies to which of the following situations? - ANS Refers to the reduction in the value of the stock as a result of damage to other stock... 23. In order to receive full replacement cost recovery on a covered loss under a BOP, the named insured must maintain insurance limits equal to at least what percentage of the covered property's full replacement value? - ANS 80% of the property value P a g e 2 | 14 54. What does "Transfer of Your Rights and Duties under This Policy" refer to in the BOP? - ANS the Subrogation Clause 55. When a claimant is represented by an attorney, which of the following is prohibited by the adjuster? - ANS Contact the claimant without the consent of the attorney 56. A building is insured by three insurance companies to spread coverage on a particular type of hazardous risk. In case of a loss under a Commercial Property policy, the payment of the claim would invoke the pro-rata liability clause which means: - ANS Each insurer pays in accordance to the percentage its coverage bears to the total amount of insurance in force. 57. A farmer purchases a crop hail policy with a limit of $10,000 on 5000 acres that sustains a 30% loss. Coverage is written with a 5% minimum loss before the policy will pay. How much will the farmer receive? - ANS $3,000 58. Which of the following is not covered by an unendorsed HO policy? - ANS flood 59. Loss settlement for unscheduled personal property that is covered under a standard ISO Homeowners policy is on a: - ANS ACV basis 60. In situations where the insured and the insurer may disagree on the value of an item, it would be best to insure that item as: - ANS Agreed value 61. Which of the following events would require a change on a homeowner policy? - ANS A change in mailing address 62. An insured's loss payment is reduced by depreciation. Which of the following best describes this situation? - ANS ACV 63. Which of the following statements defines a "Bailee"? - ANS Someone, other than the insured, to whom the insured property is entrusted temporarily. 64. What part of the policy contains the promises made by the insurance company to the insured? - ANS the insuring agreement 65. What is the amount of bond that must be posted with the state of New York to obtain an adjuster's license? - ANS $1,000 66. Which type of Crop Insurance Policy covers the entire farm instead of an individual crop? - ANS Adjusted Gross Revenue 67. Under which of the following claims settlements are the claim invoices presented and paid with no attempt to obtain a separate release? - ANS A walk-away release. 68. Which of the following would be considered vacant on an unendorsed Commercial Property policy? - ANS A leased building in which less than 31% of the building is occupied. 69. All of the following are EXCLUDED under the Earthquake Endorsement to a Homeowners policy, EXCEPT: - ANS Land shock waves 70. An insured carries a Personal Property Replacement Cost endorsement attached to his Homeowners policy. He has suffered a loss to his personal property. He submits a claim for actual cash value (ACV) at the time of the loss, but notifies the insurer that P a g e 5 | 14 he intends to make a claim for replacement cost later. The insurer will honor the insured's request, but only if the cost to repair or replace the property is: - ANS more than $500 71. Property and casualty insurance can be utilized to handle: I. Pure risks. II. Speculative risks. - ANS I only 72. With a "full release settlement" of an insurance claim: - ANS All damages are paid immediately in one lump sum. 73. In order for a "full release settlement" to become closed, what MUST occur? - ANS The claim check must be cashed by the claimant 74. Richard has been advised by the New York Superintendent of Insurance to cease and desist in the performance of certain infractions of the Insurance Code. He has had a hearing and been issued a cease and desist order. He continues to violate the cease and desist order. He can be fined a penalty of up to: - ANS $5,000 per violation 75. The New York Workers Compensation Residence Employees Endorsement to the Homeowners policy, covers residence employees of the insured who are engaged in regular employment: - ANS less than 40 hours 76. The insurance company does not pay for certain damaged property under an Equipment Breakdown policy. Identify the property. - ANS Obsolete property. 77. If an insured would like to purchase additional amounts of coverage, above the "Special Limits" provided under his Homeowners policy for jewelry or firearms, it can be obtained through the use of: - ANS A Scheduled Personal Property endorsement. 78. The term "time element coverage" is used when the amount of loss depends on: - ANS The time it takes to repair, rebuild or restore damaged property. 79. Under the standard ISO Farm insurance Special Cause of Loss form, coverage for vandalism or breakage of glass is excluded if the premises has been vacant for _____ days or more. - ANS 60 80. Which of the following causes more property damage in the United States than any other natural disaster? - ANS Floods 81. The Terrorism Risk Insurance Program Reauthorization Act of 2015 excludes all acts of terrorism if the act is committed as part of the course of a war declared by Congress with the exception of one line of insurance. Which of the following is the only line of insurance that would still be covered in case of a war? - ANS Workers compensation 82. An insured has a HO-5 Homeowner Policy; they have insured the wife's diamond ring and the husband's guns on a personal articles floater. All of the items are stolen. What policy and deductibles would apply? - ANS The homeowner policy would not pay and the personal articles floater would pay without a deductible... 83. Which of the following time periods is ordinary payroll coverage limited to in case of a business income loss under the BOP? - ANS 60 days P a g e 6 | 14 84. All of the following would be covered under a Builders Risk Policy, EXCEPT: - ANS Prospective buyer. 85. Under the New York Cyber security Regulation, an exempt covered entity that ceases to qualify for an exemption will have _____ to comply with the requirements of the regulation. - ANS 180 days 86. No act will be certified by the Secretary of the Treasury, in consultation with the Secretary of Homeland Security, as an act of terrorism under the Terrorism Risk Reauthorization Act of 2015 unless: - ANS The losses that occur relate to commercial property and specified casualty risks 87. Isaac owns a home with an older furnace in need of repair. He leaves his home for a month to avoid the cold weather. He returns to find that the furnace had stopped working. Water pipes have frozen and burst and his property has been damaged. Since the water ran for almost a month, his water bill is extremely high. What will the adjuster pay? - ANS The water damage. 88. The Superintendent of Insurance may issue a _____ temporary permit to an individual to adjust claims while an adjuster's application is pending. - ANS 120 day 89. Which of the following statements describes an action that the adjuster cannot take after a claimant has hired an attorney to represent him/her in handing a claim? - ANS Contact the claimant without the consent of the attorney. 90. An intentional act designed to deceive and induce another party to part with something of value is known as: - ANS Fraud 91. Under the New York Cyber security Regulation (23 NYCRR 500) each covered entity, including insurance companies, must submit a written statement by _____ of each year certifying that it is in compliance. - ANS February 15 92. Kelly would like to obtain an Independent Adjuster license in New York, however, she has been convicted of a felony involving dishonesty or breach of trust. Kelly plans to submit a 1033 Waiver from the Department of Financial Services so that she can begin looking for a job. Which of the following is NOT a requirement for the Superintendent to grant this waiver? - ANS Evidence must be submitted to show that restitution was made to the people of the state of New York for the felony in which Kelly was convicted. 93. Faulty wiring causes a fire that destroys an insured's home. In insurance terms, the faulty wiring is called a: - ANS hazard 94. The crew of a ship is guilty of fraud with the intention of reaping gains at the expense of the owner. In ocean marine coverage, what is this called? - ANS barratry 95. The first step that any adjuster must take when commencing a claims investigation is: - ANS to verify the coverage under the policy. 96. The insured carries an HO-3 homeowner policy. He has complied with the 80% to value provision for replacement cost dwelling coverage. He suffers a fire loss. Which of the following property is NOT covered on a replacement cost basis? - ANS Wall to wall carpeting. 97. The carpeting is not covered on a replacement cost basis. This coverage can be obtained by attaching the "personal property replacement cost" endorsement. P a g e 7 | 14 127. Which of the following is covered under the Commercial Property broad cause of loss form, but is not covered by the basic cause of loss form? - ANS The basic form does not include loss coverage for the weight of ice and snow. Vandalism, riot, and sinkhole collapse are all covered by both the Commercial Property broad form and basic form. 128. Under the BOP, up to how many years can the insurer request to examine the books and records of an insured after the policy has expired? - ANS 3 years 129. An adjuster commits an act of insurance fraud covered by the Federal Insurance Fraud & False Statements Act. The fraud does not affect the financial stability of the company. What is the maximum time the adjuster may be confined to prison? - ANS 10 years 130. In New York, insurers must maintain records pertaining to claims, rating, underwriting, marketing and other pertinent information for a period of: - ANS 6 years 131. Miranda's home is covered under a Homeowners policy with an Earthquake Endorsement attached. She has selected the base deductible of 5% and her limit of liability under Coverage C is greater than Coverage A. Her Coverage C limit of liability is $1,000. What is the deductible that Miranda will have to pay? - ANS $500 132. Although 5% multiplied by $1,000 is $50, the endorsement states that the deductible will never be less than $500. 133. Which section of the Commercial Package Policy varies based on the lines of coverage included? - ANS coverage part 134. What is the standard deductible under an Equipment Breakdown policy? - ANS $500 135. Pollutant cleanup under the commercial building and personal property form: - ANS is an additional coverage. 136. A "full release settlement" when properly prepared, should include: - ANS The names of the release and releaser 137. An independent adjuster acts on behalf of his or her principal. Which of the following is the principal for an independent adjuster? - ANS Insurer 138. In the property insurance field, a "friendly fire" is one which: - ANS Remains within its intended limits. . 139. All of the following are perils insured against by the Dwelling Broad Theft Coverage Endorsement - DP 04 83, EXCEPT: - ANS robbery 140. Axel Jamison contacts an insurance agent to purchase a Homeowners policy. The agent advises Axel that he will stop by later that day to inspect the home and take the policy application. Before the agent arrives, Axel hides his collection of venomous snakes and does not disclose them on his policy application. The Homeowners policy, with personal liability coverage is issued later that week, and the next day a snake escapes and bites a neighbor. How will the adjuster handle this claim? - ANS The claim will be denied because Axel is guilty of concealment. . 141. Convenience stores selling gasoline must have a minimum of ______ square feet in total floor area in order to qualify for the BOP? - ANS 3000 P a g e 10 | 14 142. The New York Water Back-up and Sump Discharge or Overflow Endorsement to the Homeowners policies, applies a special deductible of: - ANS $250 143. A non-waiver agreement allows the insurer to: - ANS investigate a loss without implying that it is covered 144. Which type of Crop Insurance Policy covers the entire farm instead of an individual crop? - ANS Adjusted Gross Revenue. 145. A typical Homeowners policy without a Home Business endorsement has how much coverage available for business personal property? - ANS $2500 146. All of the following are reasons that an adjuster should keep very detailed log notes, EXCEPT: - ANS to produce notes that will support a fraudulent denial of claims. 147. An agent, insured or claimant has intentionally misled an insurer for financial gain. Such an act is known as: - ANS fraud 148. Under the New York Cyber security Regulation, a covered entity must notify the Superintendent within _____ when a Cyber security event has occurred. - ANS 72 hours 149. A tenant leases space in a building. The tenant's space is damaged by fire. When will the Commercial Property policy pay for the damage? - ANS When the owner of the building submits proof of loss for the damage 150. The amount it would cost to repair or replace property minus depreciation is the definition of: - ANS ACV 151. On what date must an adjuster license be renewed in New York? - ANS December 31 of expiration year. 152. An adjuster has uncovered some discrepancies in matters pertaining to a claim, and is unable to contact the insured to discuss these matters. What should the adjuster do in this situation? - ANS Send ROR 153. The time period of coverage which is stated on the declarations is known as: - ANS policy period 154. Watercraft liability, medical expenses and uninsured boaters are coverage’s provided under which of the following policies? I. Watercraft. II. Homeowners. III. Mariners. - ANS I only 155. A claims dispute where a disinterested third party who has decision making authority has been asked to intervene is known as: - ANS arbitration 156. Under the "regular program" a flood insurance policy will insure a single family residence for up to: - ANS $250,000 157. The limit under the regular flood program is $250,000. Under the emergency food program the dwelling is covered for only $35,000. P a g e 11 | 14 158. A commercial property policy specifies which of the following responsibilities as a duty of the insured? - ANS to provide a proof of loss statement following a loss if requested by the company. 159. If a ship's captain must jettison a disproportionate amount of his policyholder's cargo in order to save the ship, there is a provision in Ocean Marine policies that will spread that lost among all of the insured’s involved with the ship. What is this provision called? - ANS General Average clause 160. The coverage extension "Business Personal Property Temporarily in Portable Storage Units" will provide $10,000 of coverage for up to: - ANS 90 days 161. What is the main difference between the DP-1 and DP-2 forms? - ANS the perils insured against. 162. DP-1 and DP-2 are similar forms, both designed to provide property insurance for personally-owned residential buildings containing up to four living units without requiring the insured to reside there. These two forms are different in the "perils insured against" section. The DP-2 broad form covers all the perils included in the DP-1 plus several "broad" perils including burglary damage, ice or snow damage, falling objects, freezing of plumbing, heating, or air conditioning systems or household appliances, accidental discharge of water from plumbing, heating, or air conditioning systems, and breakage of glass. 163. In which of the following situations should an adjuster consider obtaining a non-waiver agreement? - ANS In dealing with a potential coverage dispute. 164. What are the unique features of the ISO standardized Business owner’s policy form? - ANS The BOP provides "open peril" coverage for property... 165. Which of the following best describes "no release or walk-away" release? - ANS The bills are paid and no attempt to obtain a separate release is made. . 166. The focus of Equipment Breakdown coverage is: - ANS prevention of loss 167. If an insured takes precautionary measures to protect property from flood damage such as creating a retaining wall of sand bags, how much coverage if any, will be provided by a flood policy? - ANS $1,000 if the flood is imminent and the property is in danger of flooding... 168. Under the commercial property condominium association form, coverage is based on: - ANS The association agreement and bylaws 169. A Commercial Property Policy includes a protective safeguard endorsement indicating there are protective safeguards installed in the risk such as a sprinkler system. Should the system become inoperative, how long does the insured have to report this fact to the insurer? - ANS 48 hrs. 170. The Main Street Gazette is interested in protecting against the additional costs of continuing to print the newspaper, at a temporary location in the event its building was destroyed. Which of the following coverage’s should the Main Street Gazette purchase for this purpose? - ANS extra expense P a g e 12 | 14