Download NY General (Insurance) Adjuster Test 2025 || Questions & Answers (Graded A+) and more Exams Insurance law in PDF only on Docsity!
NY General (Insurance) Adjuster Test
2025 || Questions & Answers (Graded
A+)
Require the insured to send copies of the cleaning and repairs to the underwriter Suspend coverage immediately by red tagging the items until they are repaired, cleaned and pass reinspection Reduce coverage in case of loss by 25% - ANSWER - Suspend coverage immediately by red tagging the items until they are repaired, cleaned and pass reinspection is correct. What is the maximum period of time that coverage applies under civil authority business income coverage under the BOP? - ANSWER - 4 weeks is correct. Which of the following statements is true with respect to symbol 1 used in the BAP declarations? Answer Choices: Select the Correct Answer It is used only for liability coverage. It identifies owned and hired autos only. When it is used to identify covered auto, 30 days' notice to the insurer is required to arrange coverage on newly acquired autos. When it is used, the covered autos must be specifically described. - ANSWER - It is used only for liability coverage. is correct. How are household personal property claims settled under the farm policy? Answer Choices: Select the Correct Answer Replacement cost Market value Replacement cost if insured 80% to value Actual cash value - ANSWER - Actual cash value is correct.
Claims under farm policies for household personal property will be settled on an actual cash value basis similar to the homeowner policy. An endorsement for replacement cost settlement is available for additional premium. A commercial umbrella liability policy would usually cover which of the following situations? Answer Choices: Select the Correct Answer All of the following are eligible for group long term care insurance, EXCEPT: Answer Choices: Select the Correct Answer A group formed as a cooperative to buy insurance at a discount. One or more employer or labor organizations for the benefit of the employees. Any professional, trade or occupational association for the benefit of their bona fide members or retirees. A trust established or maintained for the benefit of members of a qualifying association.
- ANSWER - A group formed as a cooperative to buy insurance at a discount is correct. In case of a loss, how many days notice does the insured have after notification of a claim to submit the claim to the underwriters of the ocean marine coverage? 60 Days 90 Days 120 Days 180 Days - ANSWER - 180 days is correct. What are the unique features of the Businessowners policy form? Answer Choices: It provides owned auto and ocean marine coverage The premium is adjustable and is based on number of employees The property coverage is open peril with no coinsurance requirement It has fewer exclusions - ANSWER - The property coverage is open peril with no coinsurance requirement is correct. A named peril aviation policy would cover all of the following, EXCEPT: Answer Choices: Flood Theft Stationary land damage Windstorm - ANSWER - Flood is correct.
mandatory coverage optional coverage never covered illegal coverage - ANSWER - optional coverage is correct. Vision care is an optional benefit offered under a group health insurance plan Because of the Nationwide Inland Marine definition, which of the following can be covered under a commercial inland marine policy? Answer Choices: Select the Correct Answer Bridges Dwellings Licensed trucks Aircraft - ANSWER - Nationwide Marine Definition. Specifies the types of property that may be insured on inland marine and ocean marine insurance forms. Qualifying property must generally be moveable, be in transit, or bear some other relationship to transportation or communication. The correct answer is: Bridges. Bridges are eligible because they are an instrumentality of transportation. The same is true of tunnels Any insurance adjuster whose license has been revoked for cause will not be entitled to apply for any other insurance license in New York until at least: Answer Choices: Select the Correct Answer One year after the revocation. Two years after the revocation. Three years after the revocation. Four years after the revocation. - ANSWER - One year after the revocation. is correct. The person must wait for one year to be eligible to reapply. There is no assurance that the Superintendent would consider a reissue of license due to the previous revocation. What would most likely be the effect of an insured's breach of warranty? Answer Choices: Select the Correct Answer The insurer might void the entire policy.
The insurer is entitled to a rate increase. The insured will convert the policy to an open-valued form. The insurer may raise the deductible if a loss occurs. - ANSWER - The insurer might void the entire policy. is correct. An insured's breach of a policy or application warranty is grounds for the insurer to void the entire policy. What is the limit of insurance that applies to property in transit in the BOP? Answer Choices: Select the Correct Answer $1, $2, $5, $10,000 - ANSWER - The correct answer is: $10, The BOP provides a $10,000 limit for property in transit. In New York the workers compensation program is administered by the Workers Compensation Board which establishes guidelines for the program. Notice of injury or death to a worker is required to be submitted to the employer within what period of time? Answer Choices: Select the Correct Answer The employer must be notified within 30 days. The employer must be notified within 10 days. The employer must be notified within 20 days. The employer must be notified within 45 days. - ANSWER - The employer must be notified within 30 days. is correct. Ed wants to buy a medical expense policy that includes benefits for surgery, and the insurer offers three options, including all of the following, EXCEPT: Answer Choices: Select the Correct Answer open table pricing. usual, customary and reasonable. surgical schedule. relative value schedule. - ANSWER - open table pricing. is correct.
- A representation is a promise by the applicant that certain conditions will continue to exist throughout the policy term.
- A representation explains the promise made by the insurance company.
- Another name for a representation is a warranty. - ANSWER - A representation is a statement made by the applicant that he believes to be true when made, but which might prove to be false. A representation the truth to the best of the applicant's knowledge and belief. It is an honest statement of a supposed fact. A misrepresentation is a knowingly false statement. A warranty is a statement guaranteed as factual. Which procedure allows one to view the inside of a joint? Answer Choices: Select the Correct Answer
- MRI
- Arthroscopy
- CAT Scan
- X-Ray - ANSWER - The correct answer is: MRI. An MRI is used to look inside a joint and other structures inside the body by using a magnetic field and pulses of radio wave energy. An incorporated insurance company with its capital divided into shares and owned by its shareholders is known as: Answer Choices: Select the Correct Answer
- A stock company.
- A mutual company.
- A fraternal benefit society.
- An association group. - ANSWER - The correct answer is: A stock company. The shareholders own a stock insurance company. Mutual insurance companies are owned by policyholders Prepaid dental plans offer services based on; Answer Choices: Select the Correct Answer 1.capitulation.
- captive member selection.
- concentration.
- capitation. - ANSWER - capitation. is correct. Mr. Vickers was in a hurry to catch a plane. He parks his car in the parking garage at the airport and leaves the keys in the ignition. When he returns he finds that his car has been stolen. Later the car was discovered with severe collision damage. The airport carries Garagekeeper's Legal Liability coverage and Mr. Vickers carries Liability and Comprehensive coverage on his auto. What coverage would apply? Answer Choices: Select the Correct Answer
- Mr. Vickers's comprehensive coverage.
- No coverage because there were no signs of forcible entry into the vehicle.
- The airport coverage.
- Mr. Vickers's collision coverage. - ANSWER - The correct answer is: Mr. Vickers's comprehensive coverage. This is an example of a "Other Than Collision" loss, sometimes referred to as Comprehensive. Even though the vehicle was involved in a collision the theft coverage would respond since the damage originated from the theft of the vehicle. The homeowners policy provides a special limit for damage to property of others in the additional coverages of Section II of: Answer Choices: Select the Correct Answer $1,000. $500. $250. $2,000. - ANSWER - $1,000. is correct The insurer will pay up to $1,000 for accidental damage to property of others caused by the insured. An insured can collect on his automobile medical payments coverage in all of the following situations, except: Answer Choices: Select the Correct Answer While injured in an owned vehicle While struck as a pedestrian by a vehicle licensed for on road use As a paying passenger in a taxi cab While in an owned vehicle used as a livery - ANSWER - While in an owned vehicle used as a livery is correct. The personal auto medical payments will not provide coverage for any insured while injured in their vehicle that is used as a public or livery conveyance. In terms of fidelity bonds, what does "position scheduled" refer to? Answer Choices: Select the Correct Answer
- The bond covers anyone who works in a "scheduled position."
- Employees listed as working in certain positions are not covered by the bond.
- The bond only provides coverage during "scheduled" work hours.
- The bond only provides coverage at "scheduled" locations. - ANSWER - The bond covers anyone who works in a "scheduled position." is correct. Rather than schedule the individuals by name to be covered under the bond, their positions are scheduled. Vandalism and malicious mischief (V&MM) covers: Answer Choices: Select the Correct Answer
- Intentional acts.
- Coercion.
- Illegal inducement. - ANSWER - Defamation. is correct. Discrimination is treating someone differently in rating or underwriting when he or she falls into the same category as another. Coercion can be trying to force the insured to do something he or she is not required to do. An illegal inducement is a promise to give something that is illegal, such as rebating a portion of the commission. 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: Answer Choices: Select the Correct Answer
- A large loss has occurred.
- Acts that increase the risk.
- Physical changes in the insured property that make it uninsurable.
- Non payment of premium. - ANSWER - A large loss has occurred. is correct. The homeowners policy was purchased to indemnify against the occurrence of a large loss, therefore, this would not represent a reason for policy cancellation. General liability polices have basically two limits. One is the aggregate limit and the other is the: Answer Choices: Select the Correct Answer
- Per occurrence limit
- Bodily injury limit
- Property damage limit
- Per accident limit - ANSWER - Per occurrence limit is correct. The per occurrence limit is the most the insurance company will pay on any one claim. The aggregate limit is the most the company will pay for all claims presented during the policy period that do not exceed the per occurrence limit per claim. In a homeowners policy, "persons insured" would include all of the following, EXCEPT: Answer Choices: Select the Correct Answer
- A non-related tenant living in the insured residence.
- All residents who are related to the named insured.
- A legal representative of a deceased named insured.
- A non-related minor being cared for by the named insured's family. - ANSWER - A non-related tenant living in the insured residence. is correct. A tenant would have to purchase their own personal property coverage as well as personal liability coverage. They may consider a "tenants homeowner policy." Who are the parties to an appraisal clause in a property insurance policy? Answer Choices: Select the Correct Answer
- Two appraisers and an umpire
- The insured, an appraiser, and one umpire
- The insurer and two appraisers
- One umpire and the adjuster - ANSWER - Two appraisers and an umpire is correct. The three parties to an appraisal dispute would be two appraisers and one umpire.
When may an adjuster obtain a non-waiver agreement? Answer Choices: Select the Correct Answer
- When requested by an insurer
- In dealing with a potential coverage dispute
- When subrogation may be involved
- When directed by the court - ANSWER - The correct answer is: In dealing with a potential coverage dispute. In coverage dispute situations, an adjuster may want to make clear that a known right is NOT being waived by any party. How many days does the liberalization clause provide for under the BOP prior to or during the policy? Answer Choices: Select the Correct Answer
- 55 days
- 30 days
- 45 days
- 35 days - ANSWER - 45 days is correct. If we adopt any revision that would broaden the coverage under this policy without additional premium within forty-five days prior to or during the policy period, the broadened coverage will immediately apply to this policy." 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? Answer Choices: Select the Correct Answer
- First policy effective basis
- Excess basis
- Equal share basis
- Pro rata basis - ANSWER - Pro rata basis is correct. Each company will pay it's 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. What is the purpose of the "sue and labor clause" in ocean marine insurance? Answer Choices: Select the Correct Answer
- Pertains to protecting the ship and other property from further damage.
- Affects the benefits payable to injured crew members.
- Provides defense costs from suits from passengers.
- A clause in a labor contract with the crewmembers. - ANSWER - ertains to protecting the ship and other property from further damage. is correct. The clause provides that in the event of a loss, the insured must immediately take all reasonable steps to minimize the loss and protect the property from further loss. Failure to do so may invalidate the coverage or reduce the amount of any claims. In most states, is workers compensation coverage made available from what sources?
What is a Reporting Form policy? Answer Choices: Select the Correct Answer
- The form that must be filled out to report a loss of personal property to the insurer
- A policy that requires the insured to report the value of the property insured at certain time intervals
- The same as a personal articles floater in that it specifically lists each jewelry item
- None of the responses are correct - ANSWER - A policy that requires the insured to report the value of the property insured at certain time intervals is correct. EXPLANATION: A "Reporting Form" policy is one in which the policyholder is required to report the values of insured property to the company at certain intervals. A provisional (deposit) premium is charged initially and the final premium is determined by applying the rate to the average of the values reported. The insured is required to insure the property 100% to value. The insured is also required to report 100% of the value of the insured property. Money and securities are best covered under which of the following? Answer Choices: Select the Correct Answer
- Inside the Premises Theft of Money and Securities
- Robbery and safe burglary.
- Premises burglary.
- Theft coverage only. - ANSWER - Inside the Premises Theft of Money and Securities is correct. EXPLANATION: This coverage provides theft, disappearance and destruction and is the best method to insure the theft of money and securities inside the premises. The other responses are more restrictive in coverage. An insured has taken a physical inventory of his merchandise and discovers a substantial shortage of valuable stock. He turns a claim in to the insurance carrier that provides his coverage under a Businessowners Policy. What coverage is provided by the BOP for merchandise that has mysteriously disappeared? Answer Choices: Select the Correct Answer
- Full replacement cost coverage
- Full actual cash value coverage
- The loss is paid on an agreed amount basis
- No coverage would apply - ANSWER - No coverage would apply is correct. EXPLANATION: There is no coverage for missing property when there is no physical evidence to show the cause of loss. Physical evidence is open to interpretation. For example, if the insured enters the premises in the morning to find all desks have been stolen, the "physical evidence" is that in the evening they were seen to be there, but not in the morning. An inventory in this case would be unnecessary. However, if the insured, upon taking year-end inventory, finds that he is missing a case of instruments, then there is no coverage.
Which of the following types crops would a "small grain" crop policy cover? Answer Choices: Select the Correct Answer Barley Corn Sorghum Potatoes - ANSWER - Barley is correct. EXPLANATION: Small grain consists of wheat, barley, as well as oats. All of the following would be covered under the Commercial Auto Policy, except: Answer Choices: Select the Correct Answer
- A partner using his own vehicle running a personal errand.
- An employee using an employer's vehicle.
- A partner using a company vehicle while on company business.
- An executive using a company vehicle on company business. - ANSWER - A partner using his own vehicle running a personal errand. is correct. EXPLANATION: A partner using his own vehicle on personal business would only be covered under his Personal Auto Policy. Under a provision known as "Time Payment of Claims" in a health insurance policy, after receiving proof of loss, all benefits other than those which are paid in periodic installments must be paid: Answer Choices: Select the Correct Answer
- Immediately.
- Within 30 days.
- At the end of the month.
- Within 45 days. - ANSWER - The correct answer is: Immediately.. EXPLANATION: This provision falls under the mandatory section of the Uniform Provisions Law. However, an insured cannot usually initiate any legal action until 60 days have expired from submission of proof of loss. The policy term of a flood insurance policy is: Answer Choices: Select the Correct Answer 1.One or three year term
- Three year term only
- Up to five years
- One year term only - ANSWER - One year term only is correct. EXPLANATION: Flood insurance is written on a one-year term basis. Homeowners Coverage C (personal property) excludes all of the following types of property, EXCEPT: Answer Choices: Select the Correct Answer
- Jerry's Jerseys subleases a small portion of the building it occupies to Jean's Sewing Service.
- All of the responses are correct - ANSWER - All of the responses are correct is correct. EXPLANATION: All of these are examples of "insured contracts" covered under the CGL policy. The insured has suffered a property loss and reported the claim promptly. Which of the following is NOT an immediate duty of the adjuster? Answer Choices: Select the Correct Answer
- Immediately seek subrogation rights against a third party
- Verify the effective date of the coverage
- Verify the proximate cause of loss
- Determine those that have insurable interests in the property - ANSWER - Immediately seek subrogation rights against a third party is correct. EXPLANATION: Subrogation of a claim occurs after the claim has been paid. Afterwards, the adjuster may seek subrogation against a third party who may have caused the loss. In 2011 Ace Agency writes a fidelity bond for Doe Carpeting. Two months later a claim for theft by one of Doe's employees that occurred back in 2008 is brought against Doe Carpeting. Doe should submit this claim to: Answer Choices: Select the Correct Answer
- The company with whom Doe had their fidelity bond in 2008
- The company with whom Doe currently have their fidelity bond
- Neither company because the bonding period has expired
- Both companies because both must share in indemnification - ANSWER - The company with whom Doe currently have their fidelity bond. EXPLANATION: Fidelity bonds contain a superseded suretyship clause. This clause states in essence that the new (current) bond will pay all losses that would have been recoverable under the prior bond if the discovery period under the prior bond had expired. An insured is covered under a DP-2 broad form dwelling policy. A water pipe has burst and the insured has suffered floor and ceiling damage in his two-story home. The cost to remove and replace the walls to get to the pipe is $300.00. The cost to repair the floor is $400.00. The replacement of the pipe that burst must now be replaced according to the new building codes. The cost to replace the pipe is $200.00. How much will the insurer pay? Answer Choices: Select the Correct Answer
- The policy will pay $300.
- The policy will pay $400.
- The policy will pay $700.
- The policy will pay $900.00 - ANSWER - The policy will pay $700.00 is correct. EXPLANATION:
The company is not responsible for the pipe that burst but is responsible for the other damages. Even though all of the dwelling forms, except the DP-1, provide 10% of the coverage A limit for ordinance and law as a result of changes in building codes, the policy will not respond to the part that failed, the pipe. Wages lost as a result of auto accident where a third party was at fault are considered: Answer Choices: Select the Correct Answer
- Special Damages
- Punitive Damages
- Other Damages
- General Damages - ANSWER - Special Damages is correct. EXPLANATION: Lost wages are considered to be special damages in that they can be readily determined. The insured has an umbrella liability policy with $1 million limit of insurance. Claims were filed against the insured's umbrella policy three times during one policy period: for $75,000 on February 5; for $800,000 on May 4; and for $500,000 on July 10. Which of these claims will be paid? Answer Choices: Select the Correct Answer
- The February 5 claim only
- The February 5 and May 4 claims only
- All three claims
- None of the claims - ANSWER - All three claims is correct. EXPLANATION: Assuming these claims came from three different occurrences, all three would be paid. Keep in mind that the umbrella policy has two limits. One is the occurrence limit and the other is the aggregate limit that limits the total claim payment amounts during the policy year. The aggregate limit does not apply under most umbrella policies to automobile claims. A tort is: I. A civil wrong. II. A legal obligation. Answer Choices: Select the Correct Answer I only II only Both I and II Neither I nor II - ANSWER - The correct answer is: I only. EXPLANATION: A tort is a wrongful act which must be adjudicated in a civil proceeding and which might result in monetary damages. As a result of a tort, a consequential judgment may create a legal obligation. But the tort itself is not an obligation, merely a claim. Torts do not include breaches of contract. Negligence is a tort.
Either excess or primary liability coverage on the trailer, at the option of the insurer. No liability coverage on the trailer. - ANSWER - rimary liability coverage on the trailer.. EXPLANATION: The BAP would provide primary liability coverage on the trailer in this instance. For physical damage to be covered on this loss the insured would need to have the endorsement, Trailer Interchange Coverage. Once the adjuster is appointed by the insurer to represent the insurer, the adjuster has the power to do all of the following, EXCEPT: Answer Choices: Select the Correct Answer
- Bind additional coverage.
- Make advance payments.
- Determine coverage.
- Make statements that the insured can assume the adjuster has the authority to make.
- ANSWER - Bind additional coverage. is correct. EXPLANATION: The adjuster does not have the power to bind additional coverage when adjusting a claim. Insurers can recoup payments under the Terrorism Risk Act of 2002 (which was extended in 2007 to expire 12/31/14) by: Answer Choices: Select the Correct Answer A surcharge in the rates for insureds. Filing for a rate increase with the Insurance Department. Attaching an endorsement charging an additional premium. Collect the premium on the policy anniversary date. - ANSWER - A surcharge in the rates for insureds. is correct. EXPLANATION: Commercial property and casualty insurers will collect (by policyholder surcharge) the mandatory and discretionary recoupments and remit them to the federal government. Surcharges cannot exceed three percent of any policy's annual premium. The Treasury Secretary, however, has discretion to make certain adjustments to the surcharge and its timing. Cars driven by Sue Trent and Jim Higgins were involved in an automobile accident. Ms. Trent's car was a total loss, and she obtained a settlement of $25,000 for her injuries. Scott Finley, Ms. Trent's passenger, was injured and incurred $6,000 in medical expenses. Mr. Higgins, the responsible party, carries Bodily Injury coverage with limits of $15,000 per person and $30,000 per accident, and Property Damage coverage of $5,000. His policy will pay a maximum of: Answer Choices: Select the Correct Answer
$39,000 - ANSWER - The correct answer is: $26,000. EXPLANATION: Mr. Higgins' policy will pay a maximum of $26,000. 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: Answer Choices: Select the Correct Answer Insurance Regulatory Official. Attorney General. Secretary of State. Secretary of Treasury. - ANSWER - Insurance Regulatory Official. is correct. EXPLANATION: Only an insurance regulatory official, such as the Insurance Commissioner, can grant permission to resume business All of the following are exclusions under Equipment Breakdown coverage, except: Answer Choices: Select the Correct Answer Sudden and accidental loss. Fire losses. Flood. Wear and tear. - ANSWER - Sudden and accidental loss. is correct. EXPLANATION: The Equipment Breakdown policy covers sudden and accidental loss. It can be modified to cover indirect loss (loss of income) as a result of a direct loss. The commercial property forms would cover a fire loss as a result of a boiler explosion since this would be an ensuing loss. Which of the following protects against legal liability for loss or damage to baggage? Answer Choices: Select the Correct Answer Hangarkeeper's Liability Coverage Cargo Liability
