New York Adjuster Exam Questions with 100% correct Answers 2024, Exams of Community Corrections

Download New York Adjuster Exam Questions with 100% correct Answers 2024 and more Exams Community Corrections in PDF only on Docsity! New York Adjuster Exam Questions with 100% correct Answers 2024 Which of the following would NOT be found in the conditions section of a homeowners insurance policy? Subrogation rights Duties of the insured Insurance premium Mortgagee clause - ANS -The insurance premium is not shown in the conditions section of the homeowner policy. Which of the following is true regarding dealers physical damage coverage under a garage policy? It is a blanket limit for covered autos. It extends coverage to customers' autos. It is an annual maximum limit for comprehensive and collision losses. It is a maximum limit per auto. - ANS -It is a blanket limit for covered autos. EXPLANATION: 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. Which of the following would not be considered an occupational disease? Black lung. Mesothelioma. Pulmonary fibrosis. Bending over to pick up a box and hurting your back. - ANS -Bending over to pick up a box and hurting your back. is correct. EXPLANATION: Bending over to pick up a box and causing an injury is a work related injury and not a disease. Which of the following is correct in order for the additional coverage of "collapse" to be available under special BOP? The collapse must be such that the building can not be used as intended The remaining part of the structure standing must be demolished The remaining part of the structure must be judged unsound to rebuild on The building must be leaning, settling or in danger of collapsing - ANS -The correct answer is: The collapse must be such that the building can not be used as intended. EXPLANATION: The definition of collapse in the policy is the "abrupt falling down or caving in of the structure or part of the structure" and it must render the building as unusable as intended. Which of the following would not be eligible for coverage under a livestock floater? Poultry Cattle Sheep Swine - ANS -EXPLANATION: Poultry is not eligible property under the livestock floater. The insured owns a motorhome that is not covered by the insured's Personal Auto policy. This vehicle can be added to the policy by using which of the following endorsements? Miscellaneous Type Vehicle endorsement Special Type Vehicle endorsement Recreational Vehicle endorsement Motorhome endorsement - ANS -The correct answer is: Miscellaneous Type Vehicle endorsement. EXPLANATION: The Miscellaneous Type Vehicle endorsement can be used to cover motorhomes, motorcycles, etc. Insurers must maintain a complaint record for _________ after all elements of the complaint are resolved and the file is closed. five years three calendar years one year six calendar years - ANS -The correct answer is: six calendar years. EXPLANATION: Insurers are required to maintain complaint records for six calendar years. A BOP policy has a $500,000 occurrence limit for liability and a $1,000,000 aggregate limit. If claims for $600,000 and $400,000 have been filed in two separate incidents, how much coverage remains, if any, for any future claims submitted during the policy term? Answer Choices: $500,000 -0- Who are the three parties to the "appraisal clause"? Answer Choices: Select the Correct Answer The insured, the insurer, and the appraiser The two appraisers and the Insurer The two appraisers and the umpire The two appraisers and the insured - ANS -EXPLANATION: The three parties are the two appraisers and the umpire. Which of the following would be covered under a Business Auto Symbol number 7? Answer Choices: Select the Correct Answer Hired auto only Non owned auto Specifically described auto only Any auto - ANS -The correct answer is: Specifically described auto only . EXPLANATION: The purpose of Symbol 7 in commercial auto is to cover only specifically described vehicles as opposed to covering all the insured's. This occurs when an insurer may agree to cover all of the owner's vehicles except certain types. A vehicle used to transport pollutants or explosives is an example. The burden of proof is normally a duty of: Answer Choices: Select the Correct Answer The insurance company The adjuster The insured The contractor - ANS -Your answer: The insured is correct. The burden of proof is the responsibility of the insured. When an insurer intends to non-renew a homeowners policy in New York, at least _____ advance notice of non-renewal must be sent to the insured. Answer Choices: Select the Correct Answer 45 days 60 days 90 days 30 days - ANS -45 days is correct. EXPLANATION: In addition to this specific time of advance notice, specific reasons for the company's decision to not renew must accompany the notice. Though multiple parties may be involved in a lawsuit, the opposing sides are referred to as: Answer Choices: Select the Correct Answer Insured and claimant Complaintant and defendant Plaintiff and defendant Counsel and co-counsel - ANS -EXPLANATION: The opposing sides are called the plaintiff and defendant. What is required in order for seasonal increase coverage to apply under the BOP? The insured must purchase the coverage by endorsement The limit of insurance must be at least equal 100% of the average personal property values for the previous 12 months Submit average inventory values for the previous three years The BOP does not provide automatic seasonal increase in coverage - ANS -The limit of insurance must be at least equal 100% of the average personal property values for the previous 12 months. EXPLANATION: The limit of insurance for business personal property must at least equal 100% of the average business personal property values for the previous 12 months. Which of the following professional liability policies would cover a dishonest, fraudulent or criminal act of the manager of a LLC? Fiduciary Liability Malpractice Liability Errors and Omissions None of the policies cover these acts - ANS -None of the policies cover these acts. Which of the following is not required to obtain an adjuster license in New York? A licensed New York attorney An average adjuster of maritime losses An officer, director or regular salaried employee of an authorized insured None of these individuals is required to be licensed - ANS -None of these individuals is required to be licensed. Which of the following best describes "no release or walk-away" release? A form of advanced payment to the claimant. A structured settlement. The bills are paid and no attempt to obtain a separate release is made. The insurer agrees to waive its right to subrogation against a third party who caused the damage. - ANS -he bills are paid and no attempt to obtain a separate release is made. is correct. EXPLANATION: The bills presented are paid with no attempt to obtain a separate release, although the wording on the draft or check may also serve as a form of release. After a certain amount of time has passed with no further contact with the claimant, the file is considered closed. Who is responsible for the legal fees in a lawsuit covered by Employer's Liability in a standard workers compensation policy? The insurer The insured The employer if found negligent The party bringing the lawsuit - ANS -The correct answer is: The insurer. EXPLANATION: Under Employer's Liability Insurance of a standard workers compensation policy, the insurer promises to pay, at its own expense and without limit, the costs of investigating claims against an insured and the costs of defending the insured for such claims. Which of the following represents an indirect loss? A tree fell on a house, causing a hole in the roof, which later allowed rain to enter Rain entered a house after a tree fell onto it, later causing mold to develop Mold developed in a house, later causing the occupants to become very ill A kitchen fire made a house untenable, causing the occupants to incur hotel charges - ANS -The correct answer is: A kitchen fire made a house untenable, causing the occupants to incur hotel charges. EXPLANATION: An indirect loss is the temporary loss of use caused by a direct property loss. A kitchen fire is a direct loss. If that loss is severe enough to make the house unfit to be used, the insured will need to temporarily find an alternative place to live in until repairs to the house are completed. The cost of that temporary replacement - the hotel charge - is the indirect loss. If an insured carries Coverage C under a dwelling form, how much coverage applies on a worldwide basis? 10% of the Coverage C limit 20% of the Coverage C limit 40% of the Coverage C limit 50% of the Coverage C limit - ANS -10% of the Coverage C limit is correct. EXPLANATION: Whereas homeowners forms provide the FULL limit of personal property coverage anywhere in the world, dwelling forms cover only 10% of the personal property limit on a worldwide basis. The remainder of the personal property is covered only while on the designated premises. Insurers can refuse to renew a health insurance policy for all of the following reasons, EXCEPT: Answer Choices: Select the Correct Answer nonpayment of premium. deterioration of the insured's health status. In the ocean marine insurance, which of the following is considered to be the most important implied warranty? I. Seaworthiness. II. Condition of the cargo. III. Legality. I only. I and II only. II and III only. I and III only. - ANS -I only. is correct. EXPLANATION: All of the responses are implied warranties in ocean marine insurance. The most important is considered to be the seaworthiness of the vessel. Which of the following statements is true regarding the purpose of Umbrella policies? Answer Choices: Select the Correct Answer All of these statements are correct To provide higher limits of liability To expand coverage beyond primary policies To provide coverage when primary limits are exhausted - ANS -All of these statements are correct is correct. EXPLANATION: 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 is NOT provided by the farm employers liability and farm employees medical payments insurance endorsement? Answer Choices: Select the Correct Answer Payment of statutory workers compensation benefits Pays medical payments to an injured farm employee Provides employers legal liability coverage where a bodily injury has occurred to an employee Provides defense coverage to the farm owner as a result of an injured employee who brings a legal action - ANS -Payment of statutory workers compensation benefits is correct. EXPLANATION: This endorsement offers farm employers liability coverage and farm employee medical payments insurance. This endorsement does not provide statutory workers compensation benefits. Which section of the spine is comprised of five fused vertebra? Answer Choices: Select the Correct Answer Lumbar vertebrae Cervical vertebrae Thoracic Sacral - ANS -Your answer: Sacral is correct. EXPLANATION: Below the lumbar area are five sacral vertebrae. These comprise the sacrum. These five vertebrae fuse into one bone. Under the property coverage offered by the HO-3 form, which would not be covered? Answer Choices: Select the Correct Answer The property of a teenage friend of the insured's son who is temporarily residing with the insured and whose property is stolen. A business associate who suffers damage to his clothing from the insured's fireplace when a log rolled out. Property that belongs to a friend of the insured and which the insured borrowed and is temporarily using. The dog owned by a guest that is stolen while he is visiting the insured. - ANS -The dog owned by a guest that is stolen while he is visiting the insured. is correct. EXPLANATION: The policy excludes animals as covered property. What does the term "comparative negligence" refer to? The percentage of fault is shared by each driver in an accident in which both contribute to causing the accident. The one who is most negligent receives no payment when the claim is settled. The one who is the least negligent receives no payment when the claim is settled. If both parties have contributed to causing the accident, neither party receives any payment when the claim is settled. - ANS -The percentage of fault is shared by each driver in an accident in which both contribute to causing the accident. is correct. EXPLANATION: Comparative negligence establishes the percentage of fault shared by each driver in an accident in which both contribute to causing the accident. Comparative negligence laws vary by state. An insured can, by written request to the insurance company, have benefits under his policy paid to: A hospital, a physician, or a surgeon. Himself, but no one else. A hospital, but not to a physician or surgeon. Only the beneficiary, whether the insured is living or deceased. - ANS -The correct answer is: A hospital, a physician, or a surgeon. . EXPLANATION: Other than service type hospitalization contracts, health policies are reimbursement contracts that reimburse the covered insured for his/her claim. Assignments for payment to health care providers may be made, but may not always be honored by insurers. The insured carries $100,000 underinsured motorist coverage under his personal auto policy. He is injured by another driver who carries $25,000 bodily injury limits. If the insured is injured to the extent of $100,000, how much can he collect under his underinsured motorist coverage? Answer Choices: Select the Correct Answer $25,000 $50,000 $100,000 $75,000 - ANS -The insured could collect up to $75,000. The other driver's policy would pay $25,000 and the insured's UIM coverage would pay the rest of the claim up to $75,000. The adjuster has uncovered some discrepancies in matters pertaining to a claim. He is unable to contact the insured to discuss these matters. What should the adjuster do? Deny the claim Send a reservation of rights letter to the insured's last known address Do nothing until the insured can be contacted Pay the claim and give the insured the benefit of the doubt - ANS -EXPLANATION: In this case the adjuster should send a reservation of rights letter to the insured's last known address to preserve the rights of the insurer. Coverage D - Loss of Use on a farm policy will include coverage for: I. Additional living expenses incurred by the resident family. II. Loss of rental income of the owner for tenants who cannot live there due to a covered loss. I only II only Both I and II Neither I nor II - ANS -Both I and II. EXPLANATION: Similar to the loss of use coverage on the homeowner policy, Coverage D on the farm policy will pay both the additional living expenses of the owner occupant and any loss of rental income if a tenant is also unable to live there after a covered loss. An insured has a BOP and desires to add the endorsement that provides Utility Servises-Direct Damage coverage. What types of property must be listed for coverage to apply? Answer Choices: Select the Correct Answer Overhead transmission lines Water Supply Services What feature is common to most property insured under a commercial inland marine policy? Usually in transit Rarity Changing values Named peril coverage - ANS -Usually in transit is correct. EXPLANATION: Historically speaking, inland marine policies involved movement of goods over land. While some inland marine policies cover property at a fixed location (like fine art or maps and drawings), the common thread to most IM policies is transit risk, or property being off of an insured's main premises - like cargo on trucks or contractor's equipment. Aircraft liability coverage is very similar to auto insurance coverage with the following exception: Usually written with a deductible Does not apply to property damage of others Liability to passengers is treated as a separate exposure Cannot exclude passenger liability - ANS -Liability to passengers is treated as a separate exposure. EXPLANATION: Bodily injury and property damage under the aircraft liability policy is very similar to the automobile liability insurance policy with one exception. In aircraft liability coverage, liability to passengers is treated as a separate exposure. Which of the following would be considered a "collision" peril under auto physical damage coverage? Riot Striking an animal Missiles or falling objects Hitting a pot hole - ANS -EXPLANATION: Hitting a pot hole and causing damage to the vehicle (other than the tires) would be a collision peril. The other perils are covered under "other than collision" coverage. A building with an actual cash value of $240,000 is insured for $200,000. The policy has an 80% coinsurance requirement. If there are no deductibles, how much would be paid for a $60,000 loss? $60,000 $48,000 $57,600 $62,500 - ANS -The correct answer is: $60,000. EXPLANATION: The insured needs to be covered for at least 80% x $240,000 or $192,000 to avoid a penalty in case of a partial loss. In this case, the insured carries more than is required, and therefore, all the loss is covered. Mary intentionally trips her neighbor while the neighbor is trespassing on the insured's property. Although the neighbor is not injured, Mary gives the neighbor $500 in cash to settle any potential liability claim. How will Mary's insurance company most likely respond in this situation? The insurer will reimburse Mary for the entire $500. The insurer will reimburse Mary for $500, less any applicable deductible. The insurer will sue the neighbor for the return of the $500 because the neighbor was not injured. The insurer will deny liability coverage because Mary's action was intentional. - ANS - EXPLANATION: Intentional acts are excluded and the company will deny the claim. The only exception to this exclusion is when the insured is attempting to use reasonable force to protect themselves or their property. Six months after a new employee is hired, the insured learns that the employee was fired from a previous job for stealing company property. How will this discovery affect the insured's crime coverage? Answer Choices: Select the Correct Answer Coverage for this employee will be cancelled at the end of the policy period It will have no effect on coverage because the dishonest act occurred before the employee was hired Coverage for this employee will be cancelled after 30 days Coverage for this employee will be cancelled immediately - ANS -EXPLANATION: Coverage for this employee will be cancelled immediately. This happens immediately due to the discovery of the past dishonest acts by that employee. Another example, an employee was caught in May 2011 falsifying documents. The policy in question becomes effective August 2011. In November, the same employee is caught stealing. Since the insured knew of the employee's dishonest act prior to the policy period, any loss is excluded from coverage. Vision care insurance policies most often cover: The cost of lenses and frames. Replacement lenses and/or frames due to breakage. Sunglasses and safety glasses. Eye surgery. - ANS -The cost of lenses and frames. is correct. EXPLANATION: Most vision policies cover corrective lenses and frames as well as contact lenses but do not cover replacement lenses, specialty lenses such as sunglasses or surgery. 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. Acts that increase the risk. Physical changes in the insured property that make it uninsurable. Non payment of premium. - ANS -A large loss has occurred. is correct. EXPLANATION: The homeowners policy was purchased to indemnify against the occurrence of a large loss, therefore, this would not represent a reason for policy cancellation. Under the BOP, which of the following is not automatic coverage? Hired and Non-owned Automobile Coverage Loss of earnings after a covered fire Limited Sign Coverage Replacement cost settlement on building losses - ANS -Hired and Non-owned Automobile Coverage is correct. EXPLANATION: Hired and non-owned automobile coverage is an elective coverage. The insurance industry in the United States is regulated primarily by: The U.S. Congress The President The states The Supreme Court - ANS -EXPLANATION: For the most part the regulation of insurance rests with the states. Under New York no fault automobile coverage, when may an insured sue? Serious injury Personal injury When bodily injury damages exceeds $50,000 When medical coverage does not provide coverage - ANS -The correct answer is: Serious injury. EXPLANATION: In New York an insured reserves the right to sue in case of death or serious injuries. Protection and indemnity coverage contained in an ocean marine policy covers: I. Liability against injuries to seamen. II. Injury to stevedores, longshoreman and harbor workers. III. Cargo, if lost or damaged through negligence. I, II and III. The consumer under "Let the Buyer Beware" doctrine. The ABC Insurance Company as Jones' liability carrier. The XYZ Insurance Company as Jones' liability carrier. A pro-rata agreement will have to be reached between the ABC and XYZ insurance companies. - ANS -The correct answer is: The XYZ Insurance Company as Jones' liability carrier.. EXPLANATION: Though the faulty product was actually manufactured during the time that ABC was the insurer, the damages did not occur until XYZ had taken over the liability coverage. The entity responsibility for a liability or injury claim is the carrier providing coverage at the time of the injury. An insured is covered under an HO-3 form. If the insured hits his own house and also damages the garage and the attached fence with his vehicle, what coverage would apply? The house and garage only The fence only Nothing because the insured's vehicle caused the damage The house, garage and the fence - ANS -The correct answer is: The house, garage and the fence. EXPLANATION: All of the items are covered under the HO-3 if the insured damages his own property with his vehicle. This is also true of the HO-5 form. These two forms provide open peril coverage and do not exclude this kind of loss. The maximum seating capacity and total floor space for a fine dining restaurant covered under a BOP is? Answer Choices: Select the Correct Answer 75 150 75 seats with 7,500 total square feet 150 seats with 7,500 total square feet - ANS -150 seats with 7,500 total square feet. EXPLANATION: A fine dining restaurant can have up to 150 seats but still must have only 7,500 of total floor space. Which of the following perils is not covered under the Commercial Property Basic Cause of Loss form: Collapse (other than sinkhole collapse). Sprinkler leakage Explosion Sinkhole collapse - ANS -:Collapse (other than sinkhole collapse).. EXPLANATION: The Basic Form does not cover collapse except sinkhole collapse. How many years must a business be operational in New York before it can qualify as a self-insurer for workers compensation? Three years. Four years. Five years. Two years. - ANS -The correct answer is: Three years. . EXPLANATION: A company must be in business for at least three years before it can make application with the state to become a qualified self-insurer. Which of the following is not a dwelling policy form? Answer Choices: Select the Correct Answer Extended Basic Broad Special - ANS -the correct answer is: Extended. EXPLANATION: The three dwelling policy forms are basic (DP-1); broad (DP-2); and special (DP-3). Which of the following dwelling forms may provide replacement cost coverage for buildings? The broad and special forms only The basic, broad, and special forms The basic and broad forms only The special form only - ANS -The correct answer is: The broad and special forms only. EXPLANATION: The broad and special forms provide replacement cost coverage on the structures if the insured carries at least 80% of replacement cost value on the structures. The basic form provides actual cash value coverage only. The insured has a barn on his premises. The dwelling is insured for $200,000 under a DP-2 dwelling policy. How much coverage applies to the barn? $20,000 $10,000 Nothing $5,000 - ANS -Nothing is correct. EXPLANATION: Farm property, including farm dwellings are not eligible under the dwelling policy. The barn is farm property and cannot be covered. Farm property forms must be used. Which of the following statements is correct regarding pollution caused by smoke released from an industrial operation covered under the Commercial Property Policy? Always covered A gradual release of pollution from industrial operations is not covered Covered on an "excess basis" Covered if caused by a covered cause of loss peril - ANS -The correct answer is: Covered if caused by a covered cause of loss peril . EXPLANATION: The Commercial Property Policy will not pay for loss or damage caused by or resulting from the discharge, dispersal, seepage, migration, release or escape of pollutants unless the discharge, dispersal, seepage, migration, release or escape was caused by a covered cause of loss.Therefore if a fire or explosion causes the release of pollution, the loss would be covered. The gradual release of smoke from normal agricultural and industrial operations is not a covered cause of loss. 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? $1,000 if the flood is imminent and the property is in danger of flooding. No coverage at all. $2,500 but only if the insured provides receipts prior to the flooding. None of the the responses listed are correct. - ANS -EXPLANATION: The policy will provide additional coverage up to $1,000 for preventative measures taken to prevent the property from an imminent flood loss. This $1,000 however will be subtracted from the policy limit covering any property that may be damaged by the imminent flood. A drug store has an ice cream counter and someone spills ice cream on the floor. Both the employee and the store manager are aware of the situation. The store can be held legally liable when: Someone falls while the store employee is mopping the floor. The floor has been moped but is still wet. No provisions for cleaning up have been made. All responses listed are correct. - ANS -EXPLANATION: All of the responses are correct. The store has a legal duty to protect invitees from sustaining injuries if possible. With long term care insurance, the ability to transfer from a bed to a chair is known as: A normal activity of daily living. An activity of assisted living. An abnormal activity. An activity done without thought. - ANS -A normal activity of daily living. is correct. EXPLANATION: