NJ Property Producer Exam with complete solutions

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. 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. CPP's can't contain: - ANSWER-Workers' Compensation, Life Insurance, Health and Disability Insurance, Certain types of Professional Liability Equipment Breakdown Coverage - ANSWER-NOT a maintenance policy, Designed to cover breakdown, Failure of pressure or vacuum equipment, Mechanical failure (including rupture or bursting caused by centrifugal force), Electrical failure. Business-owners Policy - ANSWER-Similar to CPP, but more for small business owners. Inland Marine - ANSWER-Insurance for property in transit Personal Floaters - ANSWER-For individuals who want to insure their belongings while traveling. Commercial Property Floaters - ANSWER-Protect property that a company does not store at a permanent location. National Flood Insurance Program (NFIP) - ANSWER-Created in 1968 to offer flood insurance to eligible communities. What are the two types of Flood Insurance? - ANSWER-Emergency & Regular Building Limits for Flood Insurance - ANSWER-Emergency: $35,000 Regular: $250,000 Contents Limits for Flood Insurance - ANSWER-Emergency: $10,000 Regular: $100,000 Commercial Building Limits for Flood Insurance - ANSWER-Emergency: $100,000 Regular: $500,000 Business Personal Property for Flood Insurance - ANSWER-Emergency: $100,000 Regular: $500,000 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 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. Indemnity - ANSWER-Pay for the loss with no gain Actual Cash Value - ANSWER-The cost of repairing or replacing damaged property with other of like kind and quality, less depreciation of the damaged property. Equation for ACV - ANSWER-Replacement Cost - Depreciation = Actual Cash Value Replacement Cost - ANSWER-How much it would cost to replace in today's market 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. Occurence - ANSWER-Accident, including continuous or repeated exposure to the same general harmful conditions. 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. Nonrenewal - ANSWER-Occurs at the expiration date. Insurer must give advanced notice. No advanced notice required by the insured. Vacant - ANSWER-Empty building not containing no people nor contents. Insured penalized after 60 days of vacancy. Unoccupancy - ANSWER-Contents remain but no people. No loss coverage. Liability - ANSWER-Covers the insured for losses that cause injury or property damage to another person and which the insured is found to be legally responsible. Negligence - ANSWER-Failure to act or not act reasonably Declarations - ANSWER-Who, what, when, where, and how much Insuring Agreement - ANSWER-Promise to pay and perils covered Conditions - ANSWER-Rules for the policy Endorsements - ANSWER-Changes to the original policy Exclusions - ANSWER-Items not covered Named Insured - ANSWER-Listed on the declarations