NJ PSI PROPERTY AND CASUALTY EXAM NEWEST 2024 ACTUAL EXAM 180 Q&A, Exams of Business Administration

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NJ PSI PROPERTY AND CASUALTY EXAM NEWEST 2024

ACTUAL EXAM 18 0 QUESTIONS AND CORRECT DETAILED

ANSWERS |ALREADY GRADED A

Employees are barred from suing employers in court to obtain compensation for injuries covered by workers' compensation because of which of the following doctrines?

• Employer liability
• Exclusive remedy
• Workman liability
• No fault insurance - answer-Exclusive Remedy Which of the following would trigger coverage under business income form with extra expense coverage?
• Carpet cleaning after a water main break
• Employee pay after a building structure is damaged
• Building inspectors fees after a loss
• Unit rent when tenant is liable - answer-Carpet Cleaning after a water main break All of the following would be considered an insured person under Part A of a personal automobile policy EXCEPT:
• Other persons or organizations that use the car to the extent that they share liability with the insured person.
• Anyone using the insured's car with the insured's permission or the reasonable belief that they are entitled to do so.
• The named insured and members of the insured's family for the ownership, maintenance and use of any auto or trailer.
• Other persons or organizations for their liability from an accident involving an auto or trailer used by the insured but owned by that person or organization. - answer-Other persons or organizations for their liability from an accident involving an auto or trailer used by the insured but owned by that person or organization. A DP-2 policy covers all of the following EXCEPT:
• damage to awnings from weight of snow.

• damage to property caused by burglars.
• freezing of automatic fire sprinkler systems.
• accidental discharge of steam from a plumbing system. - answer-damage to awnings from weight and snow An extended reporting period attached to a general liability policy provides coverage in which of the following ways?
• It provides coverage for claims made outside the policy term.
• It gives an additional 30 days coverage beyond the policy term.
• It gives an additional 10 years coverage beyond the policy term.
• It covers any gap between the claims-made and occurrence forms. - answer-It provides coverage for claims made outside the policy term. Which of the following is an example of risk reduction?
• Installing a fire hose system on every floor of a building
• Carrying an adequate amount of insurance to cover any loss.
• Refusal to work in a building that is not made of brick or concrete
• Not purchasing insurance because of a past history of zero claims - answer-Installing a fire hose system on every floor of a building Which of the following persons is covered for accidental injury on the insured's premises under the commercial general liability medical payments?
• a tenant of the premises
• an employee of the insured
• person injured in warfare
• a volunteer worker - answer-a volunteer worker Which Homeowner Form covers fixtures, installations, and improvements made or acquired at the insured's expense? HO- 6 HO- 5

HO- 4

HO- 2 - answer-HO- 4 Which policy condition is invoked when parties to an insured loss cannot agree?

• Arbitration
• Assignment
• Liberalization
• Subrogation - answer-Arbitration Mobile homes can be insured in all of the following ways EXCEPT:
• With a HO-8 Modified Coverage form.
• On a separate mobile homeowners package policy.
• With a DP-1 if the mobile home is on a foundation.
• On a mobile homeowners endorsement to a HO-3 form. - answer-With a HO-8 Modified Coverage form. Workers' compensation coverage is rated on the basis of which of the following?
• Employer's payroll
• Employee's earnings
• Employer's gross claims
• Employer's years in business - answer-Employer's payroll Workers' compensation benefits for loss of wages include which of the following?
• Reimbursement for medical bills
• Complete replacement for lost wages
• Replacement of a portion of lost wages
• Income stream for survivors - answer-Replacement of a portion of lost wages Which of the following terms refers to the transfer of the insured's right of recovery against others to his insurance company?

• Abandoment
• Legal Release
• Loss Transfer
• Subrogation - answer-Subrogation A bank customer's identity was compromised and the thieves made numerous purchases from a retailer by signing the customer's checks. When the bank refused to make payment for the goods, the retailer brought suit against the bank. Which coverage indemnified the bank for liability in the suit?
• Shopkeeper's coverage
• Forgery and alteration
• Lender's liability
• Anti fraud coverage - answer-Forgery and alteration A woman slips on icy steps and breaks her leg. Which of the following is the peril in this situation?
• The fall
• The icy steps
• The broken leg
• The season of the year - answer-The fall A cable company uses employees to install equipment in customers' homes. The company purchases a bond from an insurance company to protect itself from potential dishonest acts of the employees. Which of the following types of bond does the cable company purchase?
• Blanket bod
• Fidelity bond
• Schedule bond
• Surety bond - answer-Fidelity bond Which of the following hazards is an example of a physical hazard?
• Burning debris near the building on a calm sunny day
• Leaving the shed unlocked at night because contents are insured

• Backing into the garage door because you want insurance to pay for a new one
• Leaving the keys in the car and doors unlocked - answer-Burning debris near the building on a calm sunny day Which document would a lender ask an insured for as evidence that a policy has been written?
• Certificate
• Declarations
• Endorsement
• Policy - answer-Certificate Which coverage forms are used when the insured sustains loss of revenue due to direct physical loss from a peril insured against that forces the insured to suspend operations during the period of restoration?
• Causes of Loss forms
• Business Income Coverage forms
• Suspension forms
• Commercial Casualty forms - answer-Business Income Coverage forms When does the coverage begin for a builders risk form?
• The date the policy premium is paid
• On the date any construction begins
• On the date construction starts above the highest basement floor if there is a basement
• On the date construction starts above the lowest basement floor if there is a basement - answer-On the date construction starts above the lowest basement floor if there is a basement If the insured has a loss with a private passenger nonowned temporary substitute vehicle how will the loss be treated by the insured's own policy for physical damage?
• Insured has excess coverage only.
• No coverage extends from insured's policy.

• Liability coverage extends to the owner of the vehicle.
• The broadest coverage available extends from the insured's policy. - answer-The broadest coverage available extends from the insured's policy All of the following are used to establish negligence EXCEPT:
• proximate cause.
• legal duty owed.
• breach of legal duty owed.
• cost of damages. - answer-Cost of damages Which of the following limits of insurance on the dwelling are available and apply to Coverage D-Fair Rental Value?
• 10 %
• 15 %
• 20 %
• 25 % - answer-20 % Which part of an insurance contract describes a loss for which the insured will not be indemnified for?
• Conditions
• Declarations
• Exclusions
• Insuring Agreement - answer-Exclusions The Causes of Loss form for farm property lists which of the following?
• the type of property insured

• the amount of insurance provided
• perils property is insured against
• exclusions to named insureds - answer-perils property is insured against All of the following are examples of insurable interest EXCEPT:
• insuring your home
• insuring expensive jewelry
• insuring your friend's automobile
• insuring business property you own - answer-insuring your friends automobile A single earthquake constitutes all shocks that occur within which time period?
• 16
• 24
• 48
• 168 - answer-168 hours Which of the following situations under dwelling policy conditions describe how the insurance company will settle a loss?
• Pay the full value of a pair of earrings when only one is lost
• Company has the option to repair to pre-loss condition
• If loss is covered by other insurance the other insurance pays full loss
• Property is replaced by company at full replacement value at loss - answer-Company has the option to repair to pre-loss condition Which part of the commercial general liability designates who is an insured?

• conditions
• declarations
• definitions
• insuring agreement - answer-Declarations When the policy term ends and either the insured or the insurance company wants to discontinue coverage which provision is applied?
• Expiration
• Flat Cancel
• Cancellation
• Nonrenewal - answer-Nonrenewal All of the following are listed in the duties of the insured following loss EXCEPT:
• Notice of claim
• Proof of loss
• Submitting to examination
• Contracting for restoration - answer-Contracting for restoration The insured is mowing his lawn when a stranger is noticed in the backyard. The stranger claims to be a substitute delivery person. Several days later a gold watch can not be found. Which of the following describes the loss?
• Robbery
• Burglary
• Theft of property
• Mysterious disappearance - answer-Mysterious Disappearance Federal Crop Insurance is a type of insurance sometimes called which one of the following?

• Voluntary private insurance
• Special broadened forms insurance
• National association coverage insurance
• Residual market insurance - answer-Residual market insurance All of the following are the most commonly used personal inland marine forms EXCEPT:
• Personal property form
• Personal articles form
• Builder's floater form
• Personal effects form - answer-Builders floater form How does the BOP differ from the CPP?
• The BOP covers property damage only
• The BOP is specifically designed for larger companies
• The BOP covers small businesses that have multiple locations.
• The BOP prepackages a group of coverages desirable to small businesses. - answer-The BOP prepackages a group of coverages desirable to small businesses. All of the following are examples of direct loss EXCEPT:
• after a car crash you have to rent a replacement vehicle
• a fire destroys your personal property in your rental apartment.
• a thief takes your computer from your locker.
• a truck throws a stone and cracks your windshield. - answer-after a car crash you have to rent a replacement vehicle

Which of the following would be covered by a commercial package policy?

• Small to medium sized businesses
• Ocean marine
• Loss due to crime
• Injury to worker on the job - answer-Loss due to crime Which applies when an insured is found legally liable for the loss of another and is ordered to pay general damages?
• Compensation is ordered to set an example
• Compensation is ordered to punish insured
• Damages compensate for pain and suffering
• Insured must pay medical and lost wages expense - answer-Damages compensate for pain and suffering The claims-made liability form provides coverage from a date that precedes the policy effective date. Which of the following defines that date?
• anniversary date
• retroactive date
• occurrence date
• claims date - answer-retroactive date Which of the following is the standard amount of Coverage A-dwelling provided by the HO-6 Unit- Owners Policy?
• $
• $1,
• $5,
• $10,000 - answer-$1,

When an individual with a pre-existing condition is in an automobile accident and the insurance covers rehabilitation only to the level of the condition prior to the accident, this is because of which of the following principles?

• reasonable expectations
• indemnity
• good faith
• adhesion - answer-indemnity Which of the following business liability exposures does a slip and fall loss fall under?
• Indirect and contingent
• Medical expense
• Premises and operations
• Retail hazards - answer-Premises and operations What is the purpose of the causes of loss form that lists specific exclusions?
• To inform the insurer what the loss is in a claim
• To state which properties are covered in a loss
• To state which perils are insured against
• To inform the insured whether the loss in a claim is covered - answer-To state which perils are insured against All of the following describe a nonowned auto under the commercial auto policy Symbol 9 EXCEPT:
• Auto not titled to an insured but available for regular use of named insured or family member
• Nonowned auto is designated for liability coverage only
• Includes autos owned by employees but used in the insured's business

• Autos used in the insured's business that are not leased, hired, rented, or borrowed. - answer-Auto not titled to an insured but available for regular use of named insured or family member Which of the following would be covered perils under the DP-1 Basic policy form?
• Falling objects
• Freezing or pluming
• Weight of ice or snow
• Riot of civil commotion - answer-Riot or civil commotion All of the following are correct for towing and labor costs coverage on the personal auto policy EXCEPT:
• settlement is by reimbursement
• coverage is available by endorsement
• towing and labor are combined per occurrence
• labor costs are performed at the shop are limited to $25. - answer-labor costs are performed at the shop are limited to $ Absolute liability can be imposed by law and exist in the absense of which of the following?
• hird party liability
• hazardous operations
• products liability
• negligence - answer-negligence When an insured disagrees with the valuation of a loss and his appraiser and the insurance company's appraiser disagree, how will the loss be settled?
• by the insurance company's appraiser
• a third appraiser called an umpire will make the decision

• the insured's appraiser will determine the valuation of the loss
• the amount agreed to by any two of the three - answer-the amount agreed to by any two of the three When an insured selects Symbol 2 on the automobile declarations, indicating coverage for any auto titled to the insured, which of the following automobile types will be covered?
• any auto
• mobile equipment
• owned autos only
• temporary substituted - answer-owned autos only When the insured's child spills red juice on the carpet of insured's covered automobile, which of the following coverages will apply?
• broad
• basic
• comprehensive
• limited liability - answer-comprehensive Which of the following is correct for amounts paid as supplementary payments covered in the personal auto policy Part A liability?
• They are subject to the deductible
• They do not reduce the policy limit.
• They are included in the policy limit.
• They cannot be paid to the insured. - answer-They do not reduce the policy limit. All of the following would be found on a declarations page EXCEPT:
• limits of insurance

• address of insured
• policy exclusions
• costs for coverage - answer-policy exclusions Which of the following created The National Flood Insurance Program?
• an association of mortgage banks
• the United States Congress
• governors of flood prone states
• a consortium of insurance companies - answer-The United States Coverage Homeowner Form HO-2 provides coverage for loss of appliances, carpeting, and other household furnishings for a maximum of how much?
• $
• $2,
• $3,
• $4,500 - answer-$2, Which of the following Homeowners form provides the most comprehensive coverage? HO- 4 HO- 5 HO- 6 HO- 8 - answer-HO- 5 Which of the following types of crime best describe the unlawful act of taking property from the care and custody of another person while threatening to cause bodily harm?

burglary robbery shoplifting breaking and entering - answer-robbery In which of the following DP forms is the dwelling covered under open perils and the personal property on a named peril basis? DP- 1 DP- 2 DP- 3 DP- 4 - answer-DP- 3 For the purpose of workers' compensation insurance all of the following are subject to the workers' compensation laws, either as an employer or employee EXCEPT:

• An insurance agent
• A building contractor
• The employee of a party store
• A crew member of an ocean going vessel - answer-A crew member of an ocean going vessel Which policy provision provides that an insurance company can take possession of damaged property?
• assignment
• subrogation
• salvage
• benefit to bailee - answer-salvage A contract that is against public policy is not enforceable according to which contract characteristic?

• competent parties
• consideration
• legal purpose
• statute of limitation - answer-legal purpose The insured carries uninsured motorist coverage limits of 100/300/100 and is struck by an uninsured motorist, who will pay insured's bodily injury damages claimed for $100,000?
• the state's uninsured motorist fund
• the uninsured driver
• the insured's insurance company
• the insured has no avenue to recover - answer-the insured's insurance company Which of the following professionals would purchase Errors And Omissions insurance to manage the liability risk associated with their business endeavors?
• attorney
• caregiver
• doctor
• fireman - answer-attorney An insured operates a auto repair shop and has a garage coverage form with garagekeepers insurance when an employee on a test drive with a customer's car is involved in a crash. How will the customer's car be covered by the insured's policy? All coverage is excluded under the garagekeepers insurance for the nonowned car.
• The insured's policy is excess to the employee's policy and covers any physical damage
• The customer's car is covered for any physical damage while in the custody of the insured.

• Physical damage coverage is specifically excluded for off premise occurrences. - answer-The customer's car is covered for any physical damage while in the custody of the insured. Underwriters are permitted to use all of the following when underwriting an application for insurance EXCEPT:
• disability
• inspection services
• credit reports.
• claim history. - answer-disability Which of the following forms trigger coverage for a loss under the commercial general liability policy if a loss happens during the policy period?
• claims made form
• occurrence form
• period certain form
• static form - answer-occurrence form The insured has a commercial auto policy with a drive other car broadened coverage liability for named individuals (DOC) endorsement. In which of the following would the named individual be covered?
• racing company car
• driving neighbor's auto
• any vehicle owned by insured
• family member driving company vehicle - answer-driving neighbors auto As a general rule, commercial inland marine insurance covers all of following EXCEPT:
• domestic shipments of goods

• merchandise while it is being manufactured.
• musical instruments for professional use
• contractor tools used on a job site. - answer-merchandise while it is being maufacured The Terrorism Risk Insurance Act and the National Flood Insurance Program are similar by providing which of the following?
• relief for victims of flood loss
• coverage for loss caused by terrorism acts
• subsidies, loss sharing or excess coverage
• government oversight of specialized insurance - answer-subsidies, loss sharing or excess coverage When an employer sends employees out of state on work related business, which of the following must he do to ensure the appropriate workers' compensation coverage?
• purchase a separate policy for the state in question
• list the names of the employees sent out of state
• list the state on the information page for other states' coverage
• report the work to the insurance company as soon as it is completed - answer-list the state on the information page for other states' coverage Under the commercial general liability which one of the following is covered under supplementary payments?
• cost of bail bonds
• defense costs for the plaintiff
• court costs taxed against a third party
• loss of earnings expense of over $250 a day - answer-cost of bail bonds

Which of the following are defined as a part of the policy and can void the policy if they are breached, whether the breach was intentional or unintentional?

• material facts
• representations
• waivers
• warranties - answer-warranties Exclusions common to liability coverage for both the personal auto policy and the business auto policy include all of the following EXCEPT:
• work related injuries to insured's employees
• vehicles used in prearranged racing or speed contests
• for bodily injury or property damage caused intentionally by the insured.
• for liability arising while the insured auto is being used in an auto business. - answer-for liability arising while the insured auto is being used in an auto business. An insured with split liability limits of 100/300/100 is at fault in an automobile accident and the other vehicle sustains $6,500 in property damages as well as two occupants have bodily injury and are claiming $150,000 each. What is the most insurance will pay to each occupant?
• $100,
• $150,
• $200.
• $300,000 - answer-$100, All of the following specify limits of insurance for the commercial general liability EXCEPT:
• legal defense
• medical expense

• general aggregate
• personal and advertising injury - answer-legal defense An injured employee covered under workers' compensation is entitled to reasonably justifiable expenses for retraining. This benefit falls under which of the following?
• medical rehabilitation
• physical rehabilitation
• vocational rehabilitation
• educational rehabilitation - answer-vocational rehabilitation