Download NJ PROPERTY PRODUCER EXAM NEWEST, ACTUAL EXAM 250 QUESTIONS AND CORRECT DETAILED ANSWERS and more Exams Insurance law in PDF only on Docsity!
Page | 1
NJ PROPERTY PRODUCER EXAM NEWEST,
ACTUAL EXAM 250 QUESTIONS AND CORRECT DETAILED ANSWERS
|ALREADY GRADED A+
Insurance-Related Conduct ......answer.....Soliciting, selling, negotiating, or binding policies of insurance Dwelling Policy ......answer.....Only insures property DP-1 ......answer.....Basic Form DP-2 ......answer.....Broad Form DP-3 ......answer.....Special Form Dwelling Coverage A ......answer.....Dwelling- Covers dwelling, structures attached to dwelling, and materials/supplies for the dwelling. Dwelling Coverage B ......answer.....Other Structures- Insures buildings on premise but separate from the dwelling. Dwelling Coverage C ......answer.....Personal Property- Covers the insured's personal property and must be requested. If rental property, a tenant's property is not covered.
Page | 2 Dwelling Coverage D ......answer.....Fair Rental Value- Covers insured in the event a covered loss makes the rental portion of a property unfit for normal use. Dwelling Coverage E ......answer.....Additional Living Expense- Included in DP-2 & DP-3 and pays for additional living expenses the insured incurs after a loss. DP- 1 by endorsement. HO- 2 ......answer.....Broad Form. Owner Occupied HO-3 ......answer.....Special Form. Owner Occupied HO- 4 ......answer.....Tenants or Renters. HO- 5 ......answer.....Comprehensive Form (Open). Covers everything minus named exclusions. HO- 6 ......answer.....Condominium Owners HO- 8 ......answer.....Modified form. For special Risks. Think Antique homes. Mobile Homes ......answer.....By endorsement to a DP or HO policy. Can be a separate policy. Insures home, other structures (10%) and contents. Personal property - 40% of coverage. Permanent Foundation. Time Element Coverage Forms ......answer.....Business Income. Covers loss of income and expenses due to suspension of business following a covered loss. Commercial Package Policy (CPP) ......answer.....Must have at least 2 kinds of coverage.
Page | 4 How many hours for an Earthquake occurrence? ......answer.....168 Hours Insurance ......answer.....Transfer of risk from a person or a business to an insurer Insurable Interest ......answer.....Risk of financial loss Risk ......answer.....The uncertainty of financial loss Speculative Risk ......answer.....Chance of loss or gain; Not insurable Pure Risk ......answer.....Chance of loss only; insurable Hazard ......answer.....Physical or moral conditions which may create or increase the probability of a loss Physical Hazard ......answer.....The hazard can be seen Moral Hazard ......answer.....Dishonesty that intentionally causing a loss is acceptable Morale Hazard ......answer.....Carelessness Peril ......answer.....The cause of a loss
Page | 5 Direct Loss ......answer.....Physical Loss Indirect Loss ......answer.....Consequence of physical loss Proximate Cause ......answer.....What caused the accident? Deductible ......answer.....A provision in an insurance policy requiring the insured to pay a flat amount before the insurer will make any benefit payments. Limits of Liability ......answer.....The maximum amount that the insurer will pay in the event of a loss. Coinsurance ......answer.....Total value of insurance should equal 80% of total value. Accident ......answer.....An unforeseen. unintended event. Cancellation ......answer.....Occurs before the policy's expiration date Pro Rata ......answer.....Full refund of unearned premium. Insurer cancellation requires advanced notice. Short Rate ......answer.....Insured Cancellations - no advanced notice. Partial refund or unearned premium. Vacant ......answer.....Empty building not containing no people nor contents. Insured penalized after 60 days of vacancy.
Page | 7 Duties of the Insured: Complete ......answer.....Detailed proof of loss Duties of the Insured: Make ......answer.....The property available for inspection by the company Duties of the Insured: Submit ......answer.....To examination under oath if required Duties of the Insured: Cooperate ......answer.....With the insurer as required during the claim investigation procedure Liberalization ......answer.....Extended coverage to insured. No additional premium charged. No action required by insured. Mortgagee Rights ......answer.....Filing proof of loss if the insured fails to do so. Paying the premium if the insured fails to do so. Proof of Loss ......answer.....Official inventory of the damages Appraisal ......answer.....Disagreement on the amount of the loss Appraisal conditions ......answer.....Company and insured pay their own appraiser. Appraisers get an umpire if they can't agree (cost shared). Agreement of any two of the three determines the amount. Arbitration ......answer.....Disagreement about other areas of the loss.
Page | 8 Nonconcurrency ......answer.....Two or more policies covering the same property but providing different or non-identical coverage. Primary Insurance ......answer.....Attaches immediately upon the occurrence or loss Excess coverage ......answer.....Pays whatever is not paid by the primary policy up to the amount of the loss or excess coverage limit Pro Rate Provision ......answer.....Each insurer's liable for a portion of the loss Assignment ......answer.....Transfer of rights to assignee. Policy cannot be transferred without written consent from the insurer. Subrogation ......answer.....Insurer has the right to sue an at-fault party for damages the insurer had to pay to the insured. Warranties ......answer.....Promise Representations ......answer.....Believed to be true Concealment ......answer.....Failure to disclose known facts Binders ......answer.....Temporary insurance agreement pending execution of the policy contract. Underwriting ......answer.....Process of evaluating a risk
Page | 10 Domestic Company ......answer.....In-state company Foreign Company ......answer.....Out-of-state company Alien Company ......answer.....Out-of-country company Stock Company ......answer.....Insurer incorporated in accordance with the laws of the state of NJ with its capital divided into shares and owned by its stockholders. Mutual Company ......answer.....Insurer incorporated in accordance with the laws of NJ without permanent capital stock. Owned by its policyholders. Reinsurance ......answer.....Transfer of insurance business from one insurer to another. Certificate of authority ......answer.....Issued by the Commissioner of Banking and Insurance demonstrating the authority of an insurer to transact insurance business in this state. Agent ......answer.....Insurance producer who is authorized, in writing, by any insurance company to act as its agent to solicit, negotiate, or sell insurance contracts on its behalf or to collect insurance premiums. Broker ......answer.....Producer who, for a commission, brokerage fee, or other consideration, acts or aids in any manner concerning negotiation, solicitation, or sale of insurance contracts as the representative of an insured or prospective insured.
Page | 11 Consultant ......answer.....Person who, for a fee, commission, or other consideration, acts or holds himself out to the public or any licensee as offering any advice, counsel, opinion, or service with respect to the benefits, advantages, or disadvantages under any policy issued in this state. Producer ......answer.....Must have a license from the Commissioner Requirements for first time Producer: ......answer.....Properly completed application. Resident must complete educational courses and pass licensing exams. Non-resident must certify that they hold a currently valid license in their home state. Might need to prove well being. Required fees must be paid. Must provide criminal history requests and fingerprinting. Resident Completed Applications contain: ......answer.....Entity's legal name Business mailing and location address Any other business names Names, any license reference numbers, and license authorities of each licensed officer or partner. Any names, addresses, and license reference numbers of all persons owning 10% or more of the business entity. Responses to questions concerning the applicant's character, fitness, and financial responsibility. Non-resident Completed Applications Contain: ......answer.....Currently licensed in another state with good standing. Submitted the proper request for licensure and paid required fees. Whose home state awards nonresidents insurance producer licenses to residents of NJ on the same basis.
Page | 13 Bailee's customer policy ......answer.....Nonfiled commercial inland marine form obtained by a bailee to cover loss or damage to customers' property in the bailee's custody without regard to liability Bailee ......answer.....A person or organization that has temporary possession of someone else's personal property. falling objects; weight of snow, ice or sleet; and water damage (limited). ......answer.....Broad named perils listed: burglary ......answer.....unlawfully entering or leaving the premises as evidenced by visible signs of forced entry or exit. Contributory negligence ......answer.....Common law defense against negligence that states that if an individual contributes to her own loss in any way, then someone else cannot be held liable for the loss. Comparative negligence - ......answer.....Law that allows an injured party to collect from another party for a loss, even when the injured party contributed to her own loss. Damages are reduced to the extent of the injured party's negligence. Earthquake insurance ......answer.....Insurance that covers damage to a structure, its contents, or both as the result of an earthquake; available as a separate policy and as an endorsement to the dwelling, homeowners, and commercial property policies. Estoppel ......answer.....Principle that states that if one intentionally or unintentionally creates the impression that a certain fact exists, and an innocent party relies on that impression and is injured as a result, the guilty party may be legally prohibited from asserting that the fact does not exist.
Page | 14 Last clear chance ......answer.....allows a plaintiff that is contributory negligent to recover if he is able to prove that the defendant (most at-fault party) had the last opportunity to avoid the accident. underwriting ......answer.....Insurance company function that involves researching and evaluating insurance applicants to decide which ones are acceptable to the company as insureds Uninsured motorists coverage ......answer.....those who do not carry insurance, motorists whose insurance does not meet the state's minimum financial responsibility laws, drivers whose insurance companies are insolvent , and hit-and-run drivers who cannot be identified. made up of insurers in NJ ......answer.....NJIUA is made up of who BOP ......answer.....security systems are covered under what absolute/strict liability ......answer.....zoo animal attack 30 days ......answer.....notice time for HO cancellation special perils ......answer.....volcanic eruption is covered under what A- $4, B-$8,000 ......answer.....pro rata provision-- company a 100,000 company b 200,000. Loss of $12,000, how much does each company cover?
Page | 16 ......answer.....after denial of license in NJ producer has the right to do what? contempt for court ......answer.....if producer does not show up to subpoena what happens insuring agreement ......answer.....perils covered is included where? negligence ......answer.....If you are in an accident and you are trying to prove the other party failed to perform a duty owed to you, you are trying to prove what securities ......answer.....a watch person is protected when guarding what? named/broad perils ......answer.....dp-2 perils are what kind of perils? Riot or civil commotion ......answer.....covered peril under dp-1 basic policy form additional ......answer.....collapse is what kind of coverage? 30 ......answer.....commercial property removed for protection is covered for how many days? fire, lightning, explosion, windstorm, hail, theft, vandalism ......answer.....basic perils listed: 3 ......answer.....Commercial Package policy give the company the right to examine the books and records of a policy owner
Page | 17 throughout the coverage period and for up to how many years thereafter? broad ......answer.....name
