NJ Property & Casualty Exam Practice Questions with Verified Answers

What is a Business Owners Policy (BOP)? - ANSWER-They usually are targeted at small and medium-sized businesses. This assembles the basic coverages required by a business owner in one bundle. What are the features of a BOP Policy? - ANSWER-Property Liability, Business Income, and General Liability What is the method of valuation on building and business personal property? - ANSWER-Replacement Cost / 80% or more of the full replacement cost of the property How long is the "Period of Restoration" following a covered direct loss? - ANSWER-12 Consecutive Months, Restoration begins 72 hours after the time of direct physical loss & ends when the task is completed or business starts at a new permanent location What makes a business BOP eligible? - ANSWER-Business has to generate sales over $6million or that occupy more than 35,000 square feet of space What types of Businesses are BOP Eligible? - ANSWER-Apartment buildings, office buildings (6 stories or lower/ 100.000 sq ft.), Service, Processing, Wholesaler, Contractor, Restaurant (Fast Food), Motel (3 Stories or lower), Convenience Store/Gasoline Store, Self Storage What type of Businesses are not BOP Eligible? - ANSWER-Auto Repair/Service Station, Restaurant (Not Fast Food), Place of Amusement, Manufacturers What is covered in Section 1 of the BOP? - ANSWER-Buildings & Structures at the premises described in the dec, business personal property located in or on the building at the described premises or in the open (or vehicle) within 100 ft of the premises, leased personal property What is the ISO? - ANSWER-Insurance Service Office - Provides rating services by filling out an ISO Form What are some coverage extensions in the BOP? - ANSWER-Newly acquired/Constructed Property, Personal Property off Premises, Outdoor Property, Personal Effects, Valuable Paper & Records, Accounts Receivable, Exclusions What is Business Income Extra Expense? - ANSWER-Loss of income and continuing expenses What are Additional Expenses? - ANSWER-Any expense needed to not allow business income loss (Example - Extra Space) What is Liability? - ANSWER-Bodily Injury & Property Damage through a 3rd party What is Advertising Liability? - ANSWER-Publisher, getting sued for writing something (Slander, Defamation of Character, Ruin Someone) What is Products Liability? - ANSWER-Bodily injury and property damage from your product What is Product Completed Operations? - ANSWER-Completed Job and someone gets injured What is Medical Expense? - ANSWER-Good will coverage, bodily injury (Whether or not legally liable), To avoid small claims and lawsuits What makes you Dwelling Program Eligible? - ANSWER-Has to have Residential dwelling purposes & can't have more than 4 dwelling units or more than 5 roomers or boarders What are the dwelling coverage forms? - ANSWER-DP1 (Basic) , DP2 (Broad), and DP3 (Special) What are the covered perils under a DP1? - ANSWER-Fire, lightning, explosion, wind & hail, smoke, aircraft, riot & looting, vandalism, sprinkler leakage, sinkhole collapse, volcano/lava What is the valuation on a DP1? - ANSWER-Covers losses at Actual Cash Value (ACV) What are the covered perils under a DP2? - ANSWER-Fire, Lightning, Internal & External Explosion, Windstorm & Hail, Civil Commotion, Smoke, Aircraft & Vehicles, Volcanic Eruption, Riot, Vandalism & Malicious Mischief, Burglary Damage, Weight of Ice & Snow, Glass Breakage, Accidental Discharge or Overflow of Water or Steam, Falling Objects, Freezing of Pipes, Electrical Damage, Collapse, Tearing Apart, Cracking, Burning, Bulging What is the valuation on a DP2? - ANSWER-Covers losses at Replacement Cost (RPC) What is the personal property valuation on a DP2? - ANSWER-Covers losses at Actual Cash Value (ACV) What are the covered perils under a DP3? - ANSWER-Open Perils Coverage (Only doesn't cover excluded) What are the excluded perils of a DP3? - ANSWER-Ordinance or Law, Earth Movement, Water Damage, Power Failure, Neglect, War, Nuclear Hazard, Intentional Loss, Governmental Action, Mold What is the valuation on a DP3? - ANSWER-Covers losses at Replacement Cost (RPC) What is the Dwelling (A) Coverage? - ANSWER-Dwelling What is the Dwelling (B) Coverage? - ANSWER-Other Structures What is the Dwelling (C) Coverage? - ANSWER-Personal Property What is the Dwelling (D) Coverage? - ANSWER-Fair Rental Value What is the Dwelling (E) Coverage? - ANSWER-Additional Living Expense What Does Dwelling Coverage (A) Cover? - ANSWER-Dwelling described in the dec page, used for residential purposes, including structures attached to the dwelling (Example: Garage) TRUE OR FALSE? Dwelling Coverage (A) Also Covers Material & Supplies on or next to the described location used to construct, alter, or repair the dwelling or other structures @ the described location? - ANSWER-True TRUE OR FALSE? Dwelling Coverage (A) Covers Land and Land Dwelling Sits On? - ANSWER-False What is the Valuation of Dwelling Coverage (A) - ANSWER-Replacement Cost What Does Dwelling Coverage (B) Cover? - ANSWER-Other structures described on the location if they are separated or detached from the dwelling by clear space, a fence, or a utility line (Example: Detached Garage) TRUE OR FALSE? Dwelling Coverage (B) Covers Structures Rented to Others Who Were Not A Tenant of the Dwelling Before Residing in the Other Structure - ANSWER-False What is the Dwelling Coverage (B) Percentage Limit of Insurance of the Coverage (A) limit? - ANSWER-10% What Does Dwelling Coverage (C) Cover? - ANSWER-Household & personal property usual to the occupancy TRUE OR FALSE? Dwelling Coverage (C) Covers Loss Due to Vandalism & Mischief, Guest, as Well as Servant While Located on the Described Location? - ANSWER-True TRUE OR FALSE? Accounts, bank notes, coins, currency, birds, animals, fish, aircraft, watercraft (other than rowboats or canoes), motor vehicles (other than used to service location/handicapped), hovercraft, data, paper records, computers, credit cards, funds transfer cards, water/steam, and grave makers are property covered in the Dwelling Coverage (C) form? - ANSWER-False In the Dwelling Coverage (C) form, the insured may use what percentage of the Coverage C limit of insurance for loss caused by insured peril to covered property anywhere in the world? - ANSWER-10% What Does Dwelling Coverage (D) Cover? - ANSWER-Provides insurance for indirect losses that occur as a result of direct loss to property insured under coverages A,B, or C that are covered by the policy TRUE OR FALSE? Dwelling Coverage (D) is a policy that pays for the "Fair Rental Value" of that part of the described location that is rented to others, or held for rental for others at the time of a loss - ANSWER-True What is the Dwelling Coverage (D) limit of Coverage (A) limit? - ANSWER-20% What Does Dwelling Coverage (E) Cover? - ANSWER-Policy pays for any necessary increases in living expenses incurred by the named insured lives uninhabitable. (Maintain normal standard of life). What is the limit percentage for the Dwelling Coverage (E) - ANSWER-20% What is the meaning of WC SAVER? - ANSWER-Windstorm, Civil Commotion, Sales, Aircraft, Volcanic Eruption, Riots What is Homeowners Insurance? - ANSWER-A form of property insurance that covers losses and damages to an individual's house and to assets in the home. Also provides liability coverage against accidents in the home or on the property What are other coverages of the Dwelling Policy? - ANSWER-Debris Removal, Improvements Alterations and Additions, Worldwide Coverage, Reasonable Repair, Property Removed, Trees Shrubs and Plants, Fire Department Service Charge, Collapse, Glass or Safety Glazing Material, Ordinance or Law What are some General Exclusions of the Dwelling Policy? - ANSWER-Ordinance or Law, Earth Movement, Water Damage, Power Failure, Neglect, War, Nuclear Hazard, Intentional Loss, Non Concurrent Exclusions What are Selected Endorsements for the Dwelling Policy? - ANSWER-Automatic Increase in Insurance, Broad theft Coverage, Limited Theft Coverage, Dwelling Under Construction, Personal Liability Supplement What makes you Homeowner Policy Eligible? - ANSWER-Name insured must be the owner-occupant of the insured dwelling, The dwelling muse be the principal residence of the named insured, and incidental business occupancies, offices, studios, schools are all permitted. TRUE OR FALSE? Eligible dwellings under the Homeowners Policy contain 1-4 residential units and no ore than 2 roomers or boarders per family. - ANSWER-True What Form is the HO-2 Homeowners Coverage Form? - ANSWER-Broad Form What Form is the HO-3 Homeowners Coverage Form? - ANSWER-Special Form What Form is the HO-4 Homeowners Coverage Form? - ANSWER-Contents Broad Form What Form is the HO-5 Homeowners Coverage Form? - ANSWER-Comprehensive Form What Form is the HO-6 Homeowners Coverage Form? - ANSWER-Unit Owners Form What Form is the HO-8 Homeowners Coverage Form? - ANSWER-Modified Form What does the HO-2 Form Cover? - ANSWER-Provides coverage for the dwelling, other structures and personal property TRUE OR FALSE?