NJ P&C Insurance Exam 2023 Questions with Verified Answers (Graded A)

A flood damages a single-family dwelling that is in a community in the early stages of participation in the NFIP, but they are not yet considered participating. What is the maximum a resident may receive for damages to their personal property? - ANSWER-$10,000 Under the Dwelling Broad Form, losses to an unattached garage are paid on which basis? - ANSWER-Replacement Cost Which of the following is false regarding the Building and Personal Property Coverage Form? - ANSWER-The policy covers vehicles licensed for road use In which type of system does an employer have the choice to provide Workers' Compensation benefits at its own option? - ANSWER-Elective When coverage applies to losses from all perils except those specifically excluded, the policy is said to be written on which of the following basis? - ANSWER-Open Perils A manufacturer is held liable if a product caused an injury whether the product was or was not defective. This describes what type of liability? - ANSWER-Strict Which of the following perils is not covered by Crop/Hail insurance? - ANSWER-Failure to harvest Which of the following is not true concerning Section II of the Homeowners Policy? - ANSWER-The Damage to Property of Others duplicates coverage that is included in Section I Who among the following may place business with the Association? - ANSWER-All producers licensed to do business in the state Which of the following losses would be covered under all dwelling forms? - ANSWER-Fire damage to building materials and supplies that are located on the insured premises All of the following are false about Damage to Your Auto, except: - ANSWER-In the event of total loss, adjustment will be made for the physical condition of the vehicle Which of the following statements is not true about a claim payment for a collision loss under the PAP? - ANSWER-If the insurer recovers and returns stolen property to the insured, no further payment is due Choose the physical damage claim that would be covered under the Personal Auto Policy. - ANSWER-Malicious mischief to the tires A building valued at $200,000 is insured for $150,000 with an 80% coinsurance requirement and a $1,000 deductible. After the building is totally destroyed, incurring debris removal expenses of $10,000, how much will the Building and Personal Property Coverage Form pay? - ANSWER-$159,000 Which of the following would not be covered under Coverage C of the Special Dwelling Form? - ANSWER-The insured's golden retriever Fine arts and antiques are classes of property insured on a: - ANSWER-Valued basis Flood is a specified cause of loss under which section of the Garage Coverage Form? - ANSWER-Section IV A hazard is best defined as: - ANSWER-Something that increases the chance of loss Which statement is true concerning Dwelling policies? - ANSWER-The Special Form insures the dwelling on an open perils basis, and insures the contents against the broad form perils Which of the following is true under the Dwelling policy? - ANSWER-The Basic Form covers the perils of fire, lightning and internal explosion Rates are referred to as which of the following when the insurance company files for approval and then implements the rates? - ANSWER-File and Use Which of the following is not true about an insurance policy? - ANSWER-The insuring agreement includes the name of the insured Which of the following is not an implied warranty in relation to Ocean Marine Insurance? - ANSWER-Full value All of the following are true of a Yacht Policy, except: - ANSWER-A yacht is covered regardless of its location Which of the following would be an eligible risk under the BOP? - ANSWER-Fast food restaurant The Garage Liability section of the Garage Coverage Form covers which of the following? - ANSWER-Property damage for which the insured is legally responsible Which of the following would not be covered by the Ordinance or Law endorsement. - ANSWER-Building code fines Which statement is true regarding the Employers Liability Insurance Part of Workers' Compensation? - ANSWER-It provides coverage for employment-related liability outside of Workers' Compensation statute Benefits from which of the following will begin when other benefits end, and after the claimant applies for fund benefits? - ANSWER-Second injury fund A value limitation for a shipment is not included in which type of bill of lading? - ANSWER-Straight Which of the following is true regarding liability insurance? - ANSWER-A liability policy provides coverage for unintentional torts Which of the following is not a characteristic of the employer-employee relationship as it related to Workers' Compensation coverage? - ANSWER-The employer signs a contract with the employee Which of the following is not considered 'occupying an automobile'? - ANSWER-Standing by the car exchanging insurance information A fire sprinkler system installed in a factory is considered which of the following methods of managing risk? - ANSWER-Reduction The part of a property policy that gives basic information such as the named insured, a description of the property, the location of the property, and the amount of premium involved, is known as the: - ANSWER-Declarations Which Business Auto Symbol is the most broad of all Symbols? - ANSWER-Symbol 1 Which of the following is not covered under the Building and Personal Property Coverage Form? - ANSWER-Accounts, bills, currency, deeds, evidence of debt, money or securities A CGL policy provides coverage for: - ANSWER-Operations Liability A liability policy contains a per person bodily injury limit of $25,000 and a per occurrence limit of $50,000. If an accident were to occur and three persons have claims of $20,000 each, the total amount paid is: - ANSWER-$50,000 Which of the following claims would be covered under the Personal Injury Endorsement attached to an HO-3 Policy? - ANSWER-Liability arising from publication of material that violates another person's right of privacy The Condominium Commercial Unit-Owners Coverage Form does not cover which of the following? - ANSWER-Building exterior wall Which of the following is not an element of an insurable risk? - ANSWER-Catastrophic perils Which of the following homeowners coverages does not have a deductible? - ANSWER-Damage to Property of Others To which insurance would the Commercial Insurance Deregulation Act of 1982 apply? - ANSWER-Businessowners Loss of income suffered by a storeowner after his/her store is destroyed in a fire is considered a(n): - ANSWER-Indirect Loss Which of the following would be an insured under the CGL policy? - ANSWER-Spouse of a partner All of the following about the CGL's products liability coverage are correct, except: - ANSWER-Damage to the product itself is covered The maximum amount a policy will pay in the event of a loss, regardless of the number of insureds, claims made, lawsuits filed, or parties making claims is the: - ANSWER-Limit of liability A guest falls in K's house and is injured in an amount of $1,000. How much will K's Homeowners Policy pay regardless of fault, if the Coverage F limit is $1,500? - ANSWER-$1,000 Which of the following is true regarding the Business Auto Coverage Form? - ANSWER-The main distinction between a hired auto and a non-owned auto is whether or not the auto is owned by an employee A manager started receiving anonymous messages threatening damage to the company's facilities unless it changed its hiring practices. The manager chose not to report the threats to the insurer to minimize publicity and dealt the problem privately until the threats escalated to an incident of vandalism that caused significant damage to the company premises. How would the insurer respond to this loss? - ANSWER-The damage would be excluded because the insured did not report the extortionist's demands Under a Homeowners Policy, Coverage A includes coverage for: - ANSWER-The dwelling on the premises plus structures that are attached to the dwelling The definition of bodily injury in the Personal Auto Policy includes which of the following? - ANSWER-Bodily harm, sickness or disease Coverage B of a dwelling policy will not apply to a detached garage if which of the following is being stored? - ANSWER-A helium tank used for the insured's business Which of the following statements regarding Multi-Peril Crop Insurance is correct: - ANSWER-Multi-peril crop insurance is reinsured by the federal government by FCIC Coverage C of the Homeowners policy would cover which of the following? - ANSWER-A camera stolen while the insured is on vacation Section II of a Homeowners Policy covers which of the following for medical payments? - ANSWER-A guest of the insured on the residence premises Which form is designed for Tenants? - ANSWER-HO-4 The Personal Articles Floater is similar to which Homeowners endorsement? - ANSWER-Scheduled Personal Property Which of the following statements correctly describes requirements for service fees? - ANSWER-A maximum service fee of $15 may be charged for a producer acting as a broker or consultant upon placement of a renewal If property under a Personal Floater risk is insured at a $5,000 valued basis, how much would the insured receive if the item is a total loss, the actual cash value is $4,000, and an auction is selling the same item for $3,500? - ANSWER-$5,000 Which of the following is not considered ethical behavior for a producer? - ANSWER-Influence a client to buy a policy in order to be the agency's top producer Workers' Compensation provides coverage for all of the following, except: - ANSWER-Pain and suffering The party for whose benefit a surety bond is written is the: - ANSWER-Obligee Which of the following is not a provision found in Section IV of the CGL? - ANSWER-Inspection and surveys Policyholder S has an HO-5 policy with a $250,000 Coverage A limit. After a strong wind blows a mailbox into S's front picture window, causing $2,500 damage, S immediately buys $250 of wood and plastic sheeting to cover the damaged window and prevent further damage. How much will S's policy pay? - ANSWER-$2,750 Which of the following is defined as the failure to act in a reasonable and prudent manner? - ANSWER-Negligence Under a Commercial Crime policy, the definition of securities includes all of the following, except: - ANSWER-Bank notes All of the following definitions are true of a Homeowners Policy, except: - ANSWER-Property damage -- Physical injury to tangible property, but does not include loss of use of that property