NY P&C EXAM QUESTIONS AND
ANSWERS
Which of the following is true regarding the HO-4 and HO-6 forms? - ANSWER -They
are used to insure the personal property and personal liability of the insured, but do not
include the structure itself
Since the insured under the HO-4 and HO-6 forms does not have an insurable interest
in the dwelling, the coverage on the structure is limited.
Losses that cannot be calculated objectively, such as pain and suffering or mental
anguish, are considered: - ANSWER -General damages
General damages are awarded to an injured party for pain, suffering, mental anguish,
disfigurement, and similar losses. These losses cannot be calculated objectively and
are assigned a specific dollar value.
What is the difference between the policy forms covering 'computer fraud' and 'fund
transfer fraud'? - ANSWER -Computer fraud applies when a computer is used to
illegally transfer money, and fund transfer fraud applies when a computer generates a
fraudulent funds transfer order
Computer fraud coverage applies when a computer is the direct instrument used for a
crime. Fund transfer fraud coverage applies when instructions cause a fraudulent
transfer to occur, regardless of the means by which the instructions are received.
Neither covers losses due to dishonest employees.
The Businessowners Liability Coverage Form includes coverage for bodily injury,
property damage, personal injury and advertising injury to which coverage applies, plus:
- ANSWER -Liability assumed under an insured contract
Liability coverage is provided for sums for which the insured becomes legally liable to
pay as damages for bodily injury, property damage, or personal injury and advertising
injury, including liability assumed under an insured contract.
Which of the following coverages is mandatory on all Claims-Made Commercial General
Liability Policies issued in New York? - ANSWER -The 60-day tail must be provided.
The 3 year tail must be offered, but not necessarily accepted.
A loss caused by which of the following would be covered under a BOP? - ANSWER -
Increased cost of construction
,The Increased Cost of Construction Additional Coverage provides $10,000 coverage for
costs incurred to comply with an ordinance or law regulating repairing or replacing
damaged building parts.
Workers' Compensation does not cover which of the following? - ANSWER -Pain and
suffering are not covered under Workers' Compensation.
Which statement is true about the BOP Hired Auto and Non-Owned Auto Liability
Endorsement? - ANSWER -It adds business auto coverage for a vehicle the insured
rents
This endorsement adds business auto coverage to the BOP, but only for vehicles the
insured hires, leases, and doesn't own.
Which of the following is true regarding the Boatowners Policy? - ANSWER -It is similar
in design to a Homeowners Policy and similar in coverage to the Personal Auto Policy
The Boatowners policy is a package policy that provides both property and liability
coverage and is similar in design to the homeowners policy. The coverage it provides is
similar to that provided by the personal auto policy. The policy is generally used to
insure boats that can be towed by a car.
Which of the following statements regarding Commercial Property insurance is false? -
ANSWER -Time element losses and direct losses are the same
Time element losses are indirect losses, not direct losses.
All of the following are coverage extensions under the Building and Personal Property
Coverage Form, except: - ANSWER -Inflation Guard is an optional coverage, not a
coverage extension.
A group self-insurer's termination of a member is not effective until: - ANSWER -At least
10 days after the termination notice has either been filed with the Board or sent by
certified or registered letter and served in a similar manner upon the employer
Hull Coverage and Cargo Coverage under Ocean Marine Insurance are generally
written on which basis? - ANSWER -Cargo and Hull Insurance are written on a full value
basis. The valuation of the cargo includes the stated value of the invoice, import duties,
and freight charges.
Which of the following statements is NOT correct regarding Supplementary
Uninsured/Underinsured Motorist Coverage? - ANSWER -Every motor vehicle policy
must include supplementary uninsured/underinsured motorist coverage
IT's optional.
, Which of the following damages would be covered under the Liability Coverage of the
Personal Auto policy? - ANSWER -Damage caused to a rented garage by the insured
auto
Liability coverage for property rented to, or in the care, custody, or control of the insured
is very limited. Damage to a rental car would be covered by either collision or
comprehensive coverage as applicable.
The limit of liability of Coverage D, Damage to Your Auto, under the Personal Auto
Policy states that: - ANSWER -The limit of liability is the lesser of the actual cash value
(ACV) of the vehicle or the amount necessary to repair or replace the vehicle with
another of like kind and quality
Generally, the maximum limit of liability is equal to the actual cash value of the vehicle
or vehicles insured. If the damage can be repaired, then the limit of liability is equal to
the amount necessary to repair the vehicle or vehicles.
Which of the following most accurately describes the abandonment condition? -
ANSWER -The insured cannot abandon damaged property to the insurer
The abandonment clause provides that the company will not accept property
abandoned by an insured when there is a claim dispute.
Which form responds to losses that occur while the policy is in force, regardless of when
the claim is made? - ANSWER -Occurence.
An occurrence form provides coverage for losses that take place during the policy
period. It doesn't matter when the loss is reported; what matters is when the loss
occurred. The key in this form is the date the loss actually happened and if it happened
when the policy was in effect.
All of the following are true regarding the structure of a property policy, except: -
ANSWER -The insured's duties in case of loss are found in the Insuring Agreement
The Conditions list the general rules and duties in the event of a loss under the policy.
ABC Industries contracts with municipal governments to build bridges, viaducts, and
similar engineering projects. If workers from ABC Industries cause damage to a taxicab
while pouring the foundation for a new overpass, which kind of liability exposure would
this be an example of? - ANSWER -Premises and operations
An insured business conducts its operations both at its own premises and elsewhere. If
a business, or anyone acting on its behalf, causes bodily injury or property damage, the
business may be considered legally liable for such injury or damage. CGL coverage is
ANSWERS
Which of the following is true regarding the HO-4 and HO-6 forms? - ANSWER -They
are used to insure the personal property and personal liability of the insured, but do not
include the structure itself
Since the insured under the HO-4 and HO-6 forms does not have an insurable interest
in the dwelling, the coverage on the structure is limited.
Losses that cannot be calculated objectively, such as pain and suffering or mental
anguish, are considered: - ANSWER -General damages
General damages are awarded to an injured party for pain, suffering, mental anguish,
disfigurement, and similar losses. These losses cannot be calculated objectively and
are assigned a specific dollar value.
What is the difference between the policy forms covering 'computer fraud' and 'fund
transfer fraud'? - ANSWER -Computer fraud applies when a computer is used to
illegally transfer money, and fund transfer fraud applies when a computer generates a
fraudulent funds transfer order
Computer fraud coverage applies when a computer is the direct instrument used for a
crime. Fund transfer fraud coverage applies when instructions cause a fraudulent
transfer to occur, regardless of the means by which the instructions are received.
Neither covers losses due to dishonest employees.
The Businessowners Liability Coverage Form includes coverage for bodily injury,
property damage, personal injury and advertising injury to which coverage applies, plus:
- ANSWER -Liability assumed under an insured contract
Liability coverage is provided for sums for which the insured becomes legally liable to
pay as damages for bodily injury, property damage, or personal injury and advertising
injury, including liability assumed under an insured contract.
Which of the following coverages is mandatory on all Claims-Made Commercial General
Liability Policies issued in New York? - ANSWER -The 60-day tail must be provided.
The 3 year tail must be offered, but not necessarily accepted.
A loss caused by which of the following would be covered under a BOP? - ANSWER -
Increased cost of construction
,The Increased Cost of Construction Additional Coverage provides $10,000 coverage for
costs incurred to comply with an ordinance or law regulating repairing or replacing
damaged building parts.
Workers' Compensation does not cover which of the following? - ANSWER -Pain and
suffering are not covered under Workers' Compensation.
Which statement is true about the BOP Hired Auto and Non-Owned Auto Liability
Endorsement? - ANSWER -It adds business auto coverage for a vehicle the insured
rents
This endorsement adds business auto coverage to the BOP, but only for vehicles the
insured hires, leases, and doesn't own.
Which of the following is true regarding the Boatowners Policy? - ANSWER -It is similar
in design to a Homeowners Policy and similar in coverage to the Personal Auto Policy
The Boatowners policy is a package policy that provides both property and liability
coverage and is similar in design to the homeowners policy. The coverage it provides is
similar to that provided by the personal auto policy. The policy is generally used to
insure boats that can be towed by a car.
Which of the following statements regarding Commercial Property insurance is false? -
ANSWER -Time element losses and direct losses are the same
Time element losses are indirect losses, not direct losses.
All of the following are coverage extensions under the Building and Personal Property
Coverage Form, except: - ANSWER -Inflation Guard is an optional coverage, not a
coverage extension.
A group self-insurer's termination of a member is not effective until: - ANSWER -At least
10 days after the termination notice has either been filed with the Board or sent by
certified or registered letter and served in a similar manner upon the employer
Hull Coverage and Cargo Coverage under Ocean Marine Insurance are generally
written on which basis? - ANSWER -Cargo and Hull Insurance are written on a full value
basis. The valuation of the cargo includes the stated value of the invoice, import duties,
and freight charges.
Which of the following statements is NOT correct regarding Supplementary
Uninsured/Underinsured Motorist Coverage? - ANSWER -Every motor vehicle policy
must include supplementary uninsured/underinsured motorist coverage
IT's optional.
, Which of the following damages would be covered under the Liability Coverage of the
Personal Auto policy? - ANSWER -Damage caused to a rented garage by the insured
auto
Liability coverage for property rented to, or in the care, custody, or control of the insured
is very limited. Damage to a rental car would be covered by either collision or
comprehensive coverage as applicable.
The limit of liability of Coverage D, Damage to Your Auto, under the Personal Auto
Policy states that: - ANSWER -The limit of liability is the lesser of the actual cash value
(ACV) of the vehicle or the amount necessary to repair or replace the vehicle with
another of like kind and quality
Generally, the maximum limit of liability is equal to the actual cash value of the vehicle
or vehicles insured. If the damage can be repaired, then the limit of liability is equal to
the amount necessary to repair the vehicle or vehicles.
Which of the following most accurately describes the abandonment condition? -
ANSWER -The insured cannot abandon damaged property to the insurer
The abandonment clause provides that the company will not accept property
abandoned by an insured when there is a claim dispute.
Which form responds to losses that occur while the policy is in force, regardless of when
the claim is made? - ANSWER -Occurence.
An occurrence form provides coverage for losses that take place during the policy
period. It doesn't matter when the loss is reported; what matters is when the loss
occurred. The key in this form is the date the loss actually happened and if it happened
when the policy was in effect.
All of the following are true regarding the structure of a property policy, except: -
ANSWER -The insured's duties in case of loss are found in the Insuring Agreement
The Conditions list the general rules and duties in the event of a loss under the policy.
ABC Industries contracts with municipal governments to build bridges, viaducts, and
similar engineering projects. If workers from ABC Industries cause damage to a taxicab
while pouring the foundation for a new overpass, which kind of liability exposure would
this be an example of? - ANSWER -Premises and operations
An insured business conducts its operations both at its own premises and elsewhere. If
a business, or anyone acting on its behalf, causes bodily injury or property damage, the
business may be considered legally liable for such injury or damage. CGL coverage is
