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NJ Title Exam Questions and Answers

An insurance agent is defined as an individual who transacts business on behalf of a

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a client Knowingly making false statements which are derogatory against and meant solely to injure another defamation Type of authority that is either stated orally or in writing and allows an agent to act on behalf of the insurance company express authority Type of authority holds an agent has when any reasonable person assumes the agent has apparent authority The chance or uncertainty of loss risk Conditions and ground rules for a policy specify obligations and responsibilities for the insurer and the insured The insuring agreement of a property insurance policy includes promise made by the insurance company to the insured to provide coverage Insurable Interest means type of investment that protects anything subject to a financial loss A loss for which there is no protection under insurance policy terms exclusion Modified Whole Life Policies The premium is lower than normal during the early years and increases to a fixed premium after a 3-5 year period

In which of the DP Forms is the dwelling covered under open perils and the personal property on a named peril basis DP - 3 In a level term life policy, _______ always remains constant death benefit This is excluded on DP - 3 coverage Ice damage to homes Dwelling Property Policy's cover mountain vacation homes used on weekends and summers DP - 1 basic policy covers Lightning Strikes and Not Earthquakes Grace periods protect policy holders from unintentional lapses of the policy Dwelling Policy conditions describe how an insurance company has the option to repair to pre-loss conditions The policy and application constitute the complete agreement between the policyowner and the insurance company Entire Contract Provision Is switching the policy from one insured top another an ownership right? NO. Under the misstatement of age provision, what happens if it is determined at death that the insured's age or gender was misstated on a life insurance policy application Benefits are adjusted to an amount that the premium would have purchased at the correct age or gender ______ is NOT a nonforfeiture option available in a Whole Life Policy Accumulation at interest During the first 60 days an automobile policy is in force, when may an insurer cancel the policy? by a statement of the specific reason These are not covered by title insurance Exclusions

These outline the relationships between insurance companies and the insured Conditions Temporary transfer of title to insurance companies for litigation purposes subrogation This schedule contains policy number, amount, dates, company info, legal descriptions of property Schedule A This schedule identifies exemptions that carry over and how they may have been satisfied. IE gaps in time, lack of signatures on old documents Schedule B Temporary Work Certificates last for 6 months This tenancy has right of survivorship Join Tenancy ABC - > AB-> A - > D/E Joint Tenancy These affect Joint Tenancies Time, Title, Interest, Possession Tenancy in severalty real estate ownership by only one devises Also, preresiduary gift. A gift of real property by will. Under the Uniform Probate Code, a gift of personal or real property by will. Tenancy in Common Co-ownership of property in which each party owns an undivided interest that passes to his or her heirs at death. Tenancy by the Entirety The joint ownership, recognized in some states, of property acquired by husband and wife during marriage. Upon the death of one spouse, the survivor becomes the owner of the property. Deed Restrictions

Clauses in a deed limiting the future uses of the property. assignment The act of transferring to another all or part of one's rights arising under a contract. Easement in Gross the right to use land for a specific, limited purpose unrelated to any adjacent parcel - Think Powerlines Easement by Prescription An easement acquired by continuous, open, and hostile use of the property for the period of time prescribed by state law. NJ 20 Years - Trespassing Easement Appurtenant An easement created to benefit adjacent land. Runs with the land. Dominant and Servient Easement in Gross Always Dominant Easement by necessity An easement allowed by law as necessary for the full enjoyment of a parcel of real estate; for example, a right of ingress and egress over a grantor's land. Easment by Necessity Created when no other access to land exists...right of ingress & egress, Driveway Constructive Notice Notice given to the world by recorded documents. All people are charged with knowledge of such documents and their contents, whether or not they have actually examined them. Possession of property is also considered constructive notice that the person in possession has an interest in the property. Constructive Notice The knowledge that the law presumes a person has about a particular fact irrespective of whether the person knows about the fact or not. (Recording). Constructive Notice notice of agency termination that is usually given by publishing an announcement in a newspaper

This notice is given via the mail to residents when a new cell tower is being erected near one's home Constructive Notice Actual Notice Express information or fact; that which is known; direct knowledge. Actual Notice The actual knowledge that a person has about the existence of a particular fact. Abstract of Title The condensed history of a title to a particular parcel of real estate, consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete and accurate. History of Ownership Affidavit of Title A statement, in writing, made under oath by seller or grantor, acknowledged before a Notary Public in which the affiant identifies himself or herself and affiant's marital status certifying that since the examination of title on the contract date there are no judgments, bankruptcies or divorces, no unrecorded deeds, contracts, unpaid repairs or improvements or defects of title known to affiant and that affiant is in possession of the property. title Ownership of Land and Property The first Insurance Company was founded in this state? PA The name of the first insurance company The Philadelphia Contributionship This act gave States power of Feds on insurance matters McCarran-Ferguson Act of 1945 Voluntary Alienation The transfer of title by a deed. Involuntary Alienation A transfer of title to real property without the owner's consent.

Grantor the individual who conveys the ownership rights of real property Grantee A person who receives a conveyance of real property from a grantor. Mortgagee lender Mortgagor borrower guardian a person who cares for persons or property Leashold Estate An interest in real property that gives a tenant a qualified right to possess and/or use the property for a limited time under a lease. Leasehold estates are for how long? Definite period of time. Has a termination date. Life Estate An interest in real or personal property that is limited in duration to the lifetime of its owner or some other designated person or persons. Life estate in reversion When the life tenant dies the property reverts back to the grantor Life estate in reversion upon grantee's death, title passes back to grantor, who retains a future interest. If grantor is already dead, title passes to grantor's estate/heirs. Life Estate Pur Autre Vie A life estate "for the life of another," where the measuring life is someone other than the life tenant. Estoppel A legal note to denying a fact or restoring a right that has been previously waived. codicil an addition to a will deed

the official document transferring ownership from seller to buyer Quitclaim Deed A deed to relinquish any interest in property which the grantor may have, without any warranty of title or interest. Warranty Deed A deed in which the grantor makes formal assurance as to quality of title. Bargain and Sale Deed A deed that carries with it no warranties against liens or other encumbrances but that does imply that the grantor has the right to convey title. The grantor may add warranties to the deed at his or her discretion acknowledgement Declaration made in front of notary (or judge) by signer. Not required to make a deed valid dedication gift of land by an owner to a government body for public use Testate to die with a valid will Intestate with no will A last will and testament takes effect upon death of a testator Devisee one who inherits real estate under a will Escheat forfeiture of a decedent's property to the state in the absence of heirs Ownership changes hands when a deed is delivered and accepted. This is not necessary for the validity of a deed recording of deed In a deed, the buyer is referred to as the grantee

Special Warranty Deed identical to a general warranty deed except that the covenant against encumbrances applies only to the time that the grantor owned the property Severalty Ownership of real property by one person only, also called sole ownership. acknowledgements are given by signers Actual Notice Express information or fact; that which is known; direct knowledge. recording a deed offers greatest benefit to grantee Recording a deed: guarantees ownership protects the interests of the purchaser Joint Tenants and Tenants by the Entirety Survivors become owners Tenancy in common must have unity of possession T or F - Joint Tenants may NOT devise his interest True. Where two brothers hold title to property, one with 1/3 and the other with 2/3 interest, title would most likely be held as Tenancy in Common Corporations cannot hold title to real property in NJ with another as a joint tenant because of their perpetual existence. Tenancy by the Entirety exists automatically when names of husband and wife appear on the deed In NJ, condos are regulated by the Horizontal Property Act

In a purchase money mortgage, seller takes back a mortgage as part of the purchase price Mortgages are discharged by all but death Notes create personal obligations junior mortgages are always subordinate to mortgages recorded ahead of it Property tax liens have priority over all other liens length of time when an individual holds a tax lien certificate 2 years Encumberances are Recorded documents which created a lien on property, rights or interests in a property of other than the apparent owner, an interference in the use and transfer of property Judgements institute liens on a property An insurance company chartered in NJ is considered domestic A maliciously critical statement about another agent or insurer defamation and unfair trade practic length of time after a producer's license is revoked the producer may apply for a new license 5 years

of credits needed for renewing a producer's license

24 credits of continuing ed The commissioner must give _________ notice of a proposed rule change. 30 days The NJ Insurance Commissioner may repeal insurance rules and regs T or F - The commissioner may create insurance laws.

False An insurance company chartered and domiciled in NJ is domestic, admitted, and authorized. Another name for the McCarren-Ferguson Act is Public Law 15 Reinsurance A contract where one insurer transfers all or part of a risk to another Number of days an insurance company has to file with the Dept. a notice of appointment 15 days Licenses must submit renewal applications to the dept. in ____ days before license expires 10 If someone's license expires, they can No longer work, no longer accept commission, but can be paid commissions for work done while license was in affect. Temporary work authority is effective the date a producer's license is dated Business names can be fictitious as long as agency or brokerage is added An applicant for an insurance producer's license must make application for a license within ________ after passing the state exam one year licenses are property of NJ Commissioner is appointed by Governor In an insurance contract, the insured is represented by broker number of days a person suspected of violation is given prior to a hearing 10 days

Fine for unwittingly committing an unfair trade practice $ Maximum fine for committing an unfair trade practice $ inducement a thing that persuades or influences someone to do something - In NJ - Maximum $

of days required to let Dept. know of office relocation

30 days _________ can impose criminal penalties against violators Court SEUA Interstate Commerce rebate a cash refund given to someone in order to obtain business - all or part of a policy Represents the Insurer in an insurer transaction agent A producer's license may be revoked if the commissioner finds that commission earned on "controlled business" exceeds what percentage of total commissions 50% Agency Agreement defines authority of an insurance producer Insurance Producer Any of several kinds of insurance personnel who place insurance business with insurers and who represent either insurers or insureds, or both. Regarding title insurance, when a producer receives a policy for delivery to an insured, the policy must be mailed or delivered within 30 days School certificate is valid for 2 years after successful completion of course loan title policy protects mortgagee (lender)

title insurance premiums are paid once upon issuance of the policy ______ gives acknowledgment county clerk mortgage policy of title insurance is purchased by mortgagor (borrower) Title insurance coverage extends to hidden and unknown matters whether or not they are of record Abstract of title The condensed history of a title to a particular parcel of real estate, consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete and accurate. T or F - Title defects that arise after closing are protected False Chain of Title A history of the ownership affecting title to a parcel of land. Best evidence of title is provided by title insurance An owners title policy protects the owner and his heirs for as long as they own the property T or F - An objective of Title Search is to Establish Relative Value False T or F - An objective of Title Search is to Verify Ownsership True T or F - An objective of Title Search is to Find money encumbrances True T or F - An objective of Title Search is to Find non money encumbrances True Title policies insure against forgery, unmarketability, and loss from lack of access to the insured property

documents are recorded at county level power of attorney a legal document authorizing someone to act on your behalf T or F - Recording of documents provides constructive notice True Concealment A means of hiding material facts Insurable risks are pure risks insurance can best be defined as sharing loss Indemnification The insured is restored to his or her approximate financial position prior to the occurrence of the loss Chance of loss, gain, or breaking even speculative risk pure risk presents _____ chance of loss T or F An essential element of an insurable risk is that the loss must be geographic. False Smoking is an example of a _____ hazard physical Expressed Authority Authority that arises from specific statements made by the principal (employer) to the agent (employee) Implied Authority Authority that is not expressed or written into the contract, but which the agent is assumed to have in order to transact the business of insurance for the principal. Flows from expressed authority In NJ, this is not used for legal descriptions

Gov't survey system A square mile consists of 640 acres. Therefore, a square 1/2 mile is 160 acres Notice of appointment are ____ days 15 days Certificate of authority given to insurance company licensed in NJ __________________ defines the authority of an insurance producer agency agreement _______________discloses to borrowers the true cost of obtaining credit truth in lending act smoke detectors are governed by the Uniform Safety Act Requires lenders to keep records for 2 years RESPA _____ creates a deed restriction grantor An easement created by adverse use is said to have been created by: prescription An easement in gross is considered an easement of prescription Encrouchment Intrusion onto property by improvement to an adjoining property _____ determines whether or not an encroachment exists survey Rights of possession, control, disposition, and enjoyment which accompany ownership Bundle of Rights T or F - The owner of a life estate can sell her interests True T or F - The owner of a life estate can mortgage her interests True

T or F - The owner of a life estate can devise her interests False T or F - The owner of a life estate can lease her interests True Full and complete ownership Fee Simple To establish a claim of title of a parcel of realty by adverse possession, a claimant must hold the parcel for the required time and the possession must be exclusive, continuous, uninterrupted, visible, notorious The government ability to take private property for the public purpose condemnation Compensation usually follows a court action relating to which of the following? eminent domain Owner's Policy Title insurance issued for the total purchase price of the property to protect the new owner against unexpected risks. ALTA American Land Title Association Loan Policy Protects the lender Form of ownership where each tenant has the same right to possess the property. Each tenant has the full right to transfer, will, mortgage, or take action regarding his interest. Tenancy in Common T or F - Tenancy in common has the right of survivorship False Joint Tenancy formed Time, Title, Interest, Possession Title Insurance authority includes all policies of insurance _____ or __________ owners of real property guaranteeing or indemnifying

A producer taking over a business with a deceased person has ____ days without requiring examine. (temp. license) 180 days T or F - No person whose license has been suspended or revoked may be a partner, officer, or owner of a licensed business entity, or otherwise be employed in any capacity by an insurance producer True Penalty for failure to maintain on file with a state accurate home or business address $ Penalty for failure to notify state of opening or closing of a branch office $ Penalty for failure to notify state of business name change $ Penalty for bounced check $ Penalty for failure to maintain on file agency contracts and employment contracts $100 per contract Penalty for failure to notify the State of addition or deletion of more than 10% of officers, directors, and partners $ Penalty for failure by an employing producer, insurer, or other custodian to return a license $ Maximum penalties for Fraud $15, person who is authorized to perform certain legally binding act's on a principal's behalf agent another name for a broker principal authority the principal intentionally and expressly grants in either in writing, orally, or both

express authority authority the principal intends the agent to have but does not specifically grant implied authority the authority any reasonable person would assume the agent has based on the agent's actions apparent authority In a reinsurance transaction, the originating insurer may also be referred to as the ceding insurer An owner whose license is revoked will be entitled to reapply after a waiting period of ____ years ten