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NJ PSI PROPERTY AND CASUALTY
EXAM TEST BANK 2024 | 350+ EXAM
QUESTIONS AND CORRECT
ANSWERS | ALREADY GRADED A+ |
LATEST UPDATE
The Mobile Home Endorsement of a Homeowners policy affords coverage to mobile homes under the? A. HO-1 (Basic Form) B. HO-2 (Broad Form) C. HO-3 (Special Form) D. HO-2 or HO-3 (Broad and Special) ------CORRECT ANSWER--------------D. HO-2 or HO-3 (Broad and Special) All of the following are eligible for coverage under Homeowners policy except? A. A condominium unit owner. B. A farm owner. C. A mobile home owner. D. A tenant in an apartment building. ------CORRECT ANSWER--------------B. A farm owner. The term Insured Location under Section II of Homeowners policies refers to all of the following except? A. The insured premises. B. Farm land. C. A non-owned premises where an insured temporarily resides. D. A newly-acquired premises. ------CORRECT ANSWER--------------B. Farm land. All of the following would be considered insured's under a Homeowner's policy expect? A. Resident relatives of the insured. B. A non-relative resident under age 21 in the care of the insured. C. The insured's spouse if the spouse lives in the household. D. A non-relative resident over age 21. ------CORRECT ANSWER--------------D. A non- relative resident over age 21.
All of the following homeowners policies provide dwelling coverage except? A. HO- 2 B. HO- 3 C. HO- 4 D. HO- 1 ------CORRECT ANSWER--------------C. HO- 4 Dwelling coverage A includes all of the following except? A. The dwelling. B. The deck on the back of the dwelling. C. A Gazebo. D. Construction materials on the residence premises for use in the repair of the dwelling. ------CORRECT ANSWER--------------C. A Gazebo. Under Homeowners policies, the base deductible applicable to property losses, Section I, is? A. $ B. $ C. $ D. $1000 ------CORRECT ANSWER--------------B. $ The National Flood Insurance Program (NFIP) is a ________ program? A. State. B. Municipal. C. Federal. D. Worldwide. ------CORRECT ANSWER--------------C. Federal. All of the following are optional coverage's under Homeowners policies except? A. Personal Property Replacement Cost coverage. B. Increased coverage limits from items suck as jewelry, furs, and silverware. C. Loss of Use coverage. D. Earthquake coverage. ------CORRECT ANSWER--------------C. Loss of Use Coverage.
D. The babysitter's Medical Insurance policy. ------CORRECT ANSWER--------------A. Your Homeowners policy. On Homeowners policies, the full limit on personal property (Coverage C) applies to personal property while it is? A. In the state of residence only. B. In the United States only. C. Anywhere in the world. D. In the United States and Canada only. ------CORRECT ANSWER--------------C. Anywhere in the world. Under an NFIP Flood policy, there is coverage for? A. Both direct damage and loss of use. B. Direct damage only. C. Loss of use only. D. Consequential loss only. ------CORRECT ANSWER--------------B. Direct damage only. Loses to which of the following are not covered under Homeowners policies? A. Property of roomers or boarders. B. Articles separately described and specifically covered by other insurance. C. Animals, birds, and fish. D. All of the above. ------CORRECT ANSWER--------------D. All of the above. A scheduled Personal Property Endorsement is usually written on a ______ basis? A. Special Perils. B. Named Perils. C. Premises. D. Blanket. ------CORRECT ANSWER--------------A. Special Perils. Under Homeowners policies, Section II, the basic limit for Personal Liability Coverage is? A. $50,000. B. $75,000. C. $100,000. D. $150,000. ------CORRECT ANSWER--------------C. $100,000.
Under Section II Additional Coverage's of Homeowners policies, the insurer agrees to pay? A. The costs of defending a claim. B. Premiums on bonds required in a suit. C. Court costs. D. All of the above. ------CORRECT ANSWER--------------D. All of the above. Under Homeowners and other policies, ACV is the abbreviation for which property insurance valuation? A. Approved Coverage Valuation. B. Approximate Cash Value. C. Actual Coverage Valuation. D. Actual Cash Value. ------CORRECT ANSWER--------------D. Actual Cash Value. Under Homeowners and other policies, the definition of the property insurance valuation known as Actual Cash Value (ACV) is? A. Replacement Cost plus a cash payment. B. Replacement Cost minus the cost of new material. C. Replacement Cost minus depreciation. D. Replacement Cost plus market value. ------CORRECT ANSWER--------------C. Replacement Cost minus depreciation. When dealing with jewelry, furs, or silverware, which carry special limits, a producer should advise a client that if the value exceeds the limits specified in the policy, the client should purchase? A. A Scheduled Personal Property Endorsement. B. Less Jewelry. C. A Fine arts Endorsement. D. Another policy. ------CORRECT ANSWER--------------A. A Scheduled Personal Property Endorsement. Under an NFIP Flood policy, the maximum amount of building coverage that can be written on a single family property is? A. $100,000. B. $150,000. C. $200,000.
under an NFIP Flood policy, the maximum amount of personal property coverage that can be written on a single family property is? A. $50,000. B. $75,000. C. $100,000. D. $150,000. ------CORRECT ANSWER--------------C. $100,000. Under an NFIP Flood policy, producers may issue blinders to effect flood coverage for? A. $50,000. B. $100,000. C. $250,000. D. producers may not issue binders to effect flood coverage. ------CORRECT ANSWER- -------------D. Producers may not issue binders to effect flood coverage. In property insurance, insurable interest must exist at the/ A. Inception of the policy. B. Time of the premium payment. C. Time of the application. D. Time of the loss. ------CORRECT ANSWER--------------D. Time of the loss. Property Insurance Basics All of the following may be listed as an insured on a property policy, except: A. mortgagee listed as an additional insured B. The policyowner C. A business with temporary custody of the insured property D. A named insured's legal representative ------CORRECT ANSWER----------------C under no benefit to bailee remember 3 C's, care,custody, control of an insured's property does NOT benefit from claim, payment and cannot be named on policy Property Insurance Basics- listed on a property policy ------CORRECT ANSWER-----------------mortgagees
- loss payees
- legal insured Property Insurance Basics-
when property is valued on a replacement cost basis losses are paid: A At the cost to replace with functionally equivalent property B At today's costs, without any deduction for depreciation C At market value of the damaged property D At an amount previously agreed upon by the insured and insurer ------CORRECT ANSWER----------------B remember functional replacement cost is for materials or techniques that are outdated or too expensive Property Insurance Basics- Which construction classification uses materials that can withstand fire for at least 2 hours? A Frame B Noncombustible C Fire-Resistive D Masonry ------CORRECT ANSWER----------------Fire-Resistive The pair and set clause found in property policies states that in the event of a loss to only part of pair or set, losses will be settled either by A. repairing or replacing the damaged part or by paying the difference between the actual cash value before and after the loss B. deny coverage C. Replace entire set with equal value D. Pay the appraised value ------CORRECT ANSWER----------------Repairing or replacing the damaged part OR paying the difference of ACV before and after loss Property Insurance Basics-
when you think of liability think of money going to the ------CORRECT ANSWER----------- -----third party Casualty (liability) insurance basics Property damage covered by a liability policy includes which of the following? A Damage to property owned by, or leased to, the insured B Damage to tangible property belonging to a third party, including loss of use of that property, caused by the insured's negligence C Damage to the insured's products arising out of the products D Damage to property of others in the insured's care, custody, or control that results from a criminal wrong ------CORRECT ANSWER----------------B Casualty Basics what does a liability policy cover ------CORRECT ANSWER----------------medical and legal fees if you're held legally responsible for someone else's injury, or damage to someone else's property.--including loss of use of that property caused by acts of the insured casualty basics what are supplementary payments ------CORRECT ANSWER----------------payments that the insurer makes to the insured for costs to resolve claims or investigate casualty basics: explain the order of limits #/#/# ------CORRECT ANSWER----------------per person, per occurence, aggregate limit casualty basics:
what does it mean when something is so inherently dangerous that negligence cannot be defend the insured who is liable- example d's child plays with H's venomous snake at neighbors. ------CORRECT ANSWER----------------Absolute Liability (strict liability-party is liable even when no negligent act is committed) even though H is not being negligent they are still legally liable Causality Basics- what are the 4 elements of negligence ------CORRECT ANSWER-----------------duty owed to a third party
- breach of that duty (breach when a persons conduct fails to meet a standard of care, example failing to look at traffic signals breaches the duty to drive safely )
- wrongful act was the direct cause
- forseeable consequence casualty basics: gross negligence and intentional torts are excluded from the liability policy, ------ CORRECT ANSWER----------------gross negligence- the act of not caring at all intentional torts- premeditated or planned and harm another person negligence vs gross negligence ------CORRECT ANSWER----------------gross negligence- running a red light while also driving under the influence negligence- running a red light tort vs unintentional tort ------CORRECT ANSWER----------------wrongful civil act not including criminal act or breach of contract that violates a duty or right of another unintentional tort (negligence)- not caused by a delibertate act but is the result of the failure to act as a reasonable or prudent person would gross negligence vs negligence ------CORRECT ANSWER----------------negligence is an unintentional tort Casuality Basics:
Punitive damages are an AWARD to an injured party, in addition to compensatory damages intended to discourage a wrongdoer from repeating acts of negligence Casualty basics: Which of the following might be considered a negligent act? A Breach of an employment contract B Robbery of a sporting goods store C Assaulting a neighbor over a boundary dispute D Unintentionally renting a leaky boat to vacationers ------CORRECT ANSWER---------------
- D causality basics: negligent act ------CORRECT ANSWER----------------type of tort which that is an unintentional, civil act (ruling out robbery and assault) unintentional failure to exercise a reasonable degree of care, making it an example of negligence. state law- Temporary licenses are granted by the Commissioner in the following situations, except: A Prospective licensees sells insurance while preparing to take the state licensing exam B The spouse of a disabled producer operates their agency until they can return to work C A designee acts on behalf of an individual entering active duty in the armed forces D A partner maintains the license of a business entity following the death of the entity's designated license ------CORRECT ANSWER----------------A temporary license allows individuals to assume management of an insurance business on behalf of deceased or disabled, active militant, Prospective licensees must complete the prelicensing education and examination requirements and be licensed before they can sell, solicit, or negotiate insurance.
state law- All of the following statements regarding prerequisites for producer licensing are correct, except: A Individual applicants must be fingerprinted B Business entities must complete prelicensing education requirements C An applicant holding a CLU is exempt from prelicensing education requirements D Applicants for credit insurance need not take a licensing exam ------CORRECT ANSWER----------------B business entities must designate one individual to be responsible for all insurance related activities state law: funeral expense benefit
- 2,
- 5,
- 2500
- 1500 ------CORRECT ANSWER---------------- 2500 a standard fire policy in pennsylvania may be cancelled by the insurer ------CORRECT ANSWER----------------at any time with 5 days written notice conditioins that increase the probability of an insured loss ------CORRECT ANSWER----- -----------hazard courts may rely on this legal doctrine to see if coverage applies ------CORRECT ANSWER----------------reasonable expectations a person decides not to get phyiscal damage coverage on their snowmobile what form of risk management is this ------CORRECT ANSWER----------------retention
on a dwelling policy, what percentage of the coverage C - Personal property .. A 5% b) 10%. c) 20%. d) 50% ------CORRECT ANSWER----------------b A customer at a local deli trips over a folded rug while entering the establishment. This would be considered what type of business liability? a)products exposure b)completed operations exposure c)operations exposure d)premises exposure ------CORRECT ANSWER----------------D Which endorsement can an insured add to their business automobile policy to cover the owner of the leased vehicle?a) miscellaneous vehicle endorsementb) drive other car coverage endorsementc) additional insured-lessor endorsementd) individual named insured endorsement ------CORRECT ANSWER----------------additional insured lessor replacement cost coverage under the homeowners forms applies if a dwelling ...a) 50%b) 60%c) 80%d) 90% ------CORRECT ANSWER----------------80% the application that is made with facts that are believed to be true without doubt are called ------CORRECT ANSWER----------------warranties which of the following water damage losses are not covered by a dwelling policy special form
- flood water
- leaky sprinkler heads
- broken water pipes
- appliance overflow ------CORRECT ANSWER----------------flood water
leaky sprinkler head is covered and overflowing of appliances, broken pipes covered
which endorsement is used to eliminate depreciation on the settlement of your personal property ------CORRECT ANSWER----------------personal property replacement cost- will pay to replace without any deduction while driving on a country road an insured individual hits a deer that ran infront of the car a. specified cause of loss b. collision coverage c. comprehensive coverage d. liability insurance ------CORRECT ANSWER----------------comprehensive which coverage would a condominium owner purchase ------CORRECT ANSWER-------- --------HO- 6 FORK LIFT is a mobile endorsement ------CORRECT ANSWER---------------- the standard deductible under the businessowners policy (BOP) is $500 and applies to which of the following a. fire department service charge b. business personal property c. civil authority d. extra expense ------CORRECT ANSWER----------------b personal property Optional Coverages in a BOP insured can cover ------CORRECT ANSWER----------------outdoor signs; money & securities; employee dishonesty and equipment breakdown. In order for coverage to apply MUST be shown in the Declarations. BOP SECTION I ------CORRECT ANSWER----------------employee dishonesty; equipment breakdown; money & securities; outdoor signs; vacancy. Businessowners Section II - Liability
passengers for a fee, or any other business use would make the vehicle ineligible for Personal Auto coverage, and commercial auto insurance would be needed the RMA is responsible for ------CORRECT ANSWER----------------approving premium rates, adminsitering subsidies and funding educationo n agricultural risk managementt reinsured by FCIC coverage available for over 120 crops homeowner policy endorsement (without the endorsement these arent covered) water backup and sump discharge or overflow ENDORSEMENT ------CORRECT ANSWER----------------covers water or waterborne material that backs p through sewers or drains, or that overflows or is discharged from a sump pump or related equipment homeowner policy exclusion ------CORRECT ANSWER----------------gov earthquake war intentional loss A power failure caused by a car hitting a utility pole a mile away from the residence is not covered. A power failure caused by a tree falling on a power line leading from the utility pole to the residence premises would be covered. water (damage by flood, surface water, tidal waves sewer sump pump homeowner special form ------CORRECT ANSWER----------------Water damage resulting from putting out a fire in the living room, an overflowing dishwasher, or a leaking fire protective sprinkler system would all covers everything including theft and vandalism accidental discharge of water from a plumbing system. covered by Special Form Homeowners policy.
- The ONLY exclusion to the right of recovery of benefits as the employee's exclusive remedy for a personal injury is a. Mini tort claim b. Punitive damage claim
c. Intentional tort d. Unintentional tort ------CORRECT ANSWER----------------c
- Under a Commercial Package policy (CPP) the first named insured possess all of the following responsibilities EXCEPT a. canceling the policy in writing b. Requesting changes of the limits of the policy c. Submitting surveys of the insured business to the insurer d. Receiving any return premiums ------CORRECT ANSWER----------------c
- An individual purchases a vehicle and financed it though his credit union. Which party does NOT have an insurance interest? a. The owner b. The insurer c. The title holder d. The credit union ------CORRECT ANSWER----------------The insurer coverage D of the farm property provides additional coverage for which of the following a. Poultry and livestock incidental to farm use b. Growing crops beyond 250 feet of the covered residence c Living expenses for the loss of use of living quarters in residence premises d. Barns or farm outbuildings or structures other than private garages that are used primarily for farming purposes ------CORRECT ANSWER----------------c
- Under a dwelling policy, which coverage part insures buildings on the premises that are connected to the dwelling only by a fence?a. Coverage Ab. Coverage Bc. Coverage Cd. Coverage D ------CORRECT ANSWER----------------coverage B
- What type of liability is based on a product being unreasonable dangerous?a. Generalb. Strictc. Contractuald. Negligence ------CORRECT ANSWER----------------strict also known as absolute liability where its so dangerous youre at fault anyway (playing w venomous snake)
