Free Practice
Real questions in the style of the New York Property & Casualty licensing exam, pulled straight from the TESTivity course, each with a plain-English explanation. Start with the New York-specific rules below, then work the rest, and unlock the full simulator when you're ready to drill.
That's right — 38% of test-takers do not pass the New York Property & Casualty exam on their first attempt. Make sure you're part of the 62% who do.
First-time pass rate: 62% · Source: NAIC, 2024 (most recent available statistics)
Question 1
In New York, how many hours of continuing education must a resident producer complete each 2-year renewal period - notably fewer than most states?
New York requires only 15 hours of CE every 2 years (including 1 hour on insurance fraud) - significantly less than the 24-hour standard used by most states, and a tested New York-specific distinction. Hook: NY CE is a light 15 hours, with 1 hour on fraud.
Question 2
The New York Department of Financial Services (NYDFS) is headed by a Superintendent of Financial Services who is:
New York's Superintendent of Financial Services is appointed by the Governor and confirmed by the New York Senate. NYDFS was created in 2011 by merging the former Insurance and Banking Departments, and the Superintendent's authority spans insurance, banking, and other financial services. Hook: in NY, the Governor appoints the NYDFS Superintendent, with Senate confirmation.
Question 3
In New York, how many days of advance notice must an insurer give to nonrenew a homeowners policy, and what else is required?
New York requires 45 days advance notice to nonrenew a homeowners policy and that the insurer state the reason - joining Georgia, Pennsylvania, Illinois, and North Carolina among reason-required states. (NY also uses a 30-day any-reason cancellation window in the initial period.) Hook: NY homeowners nonrenewal is 45 days with the reason stated.
Question 4
As a no-fault state, what minimum no-fault Personal Injury Protection (PIP) benefit does New York require on every auto policy?
New York requires $50,000 basic no-fault PIP per person (covering 80% of lost earnings up to a monthly maximum, plus a $2,000 death benefit) - substantially higher than New Jersey's $15,000 minimum. NY liability minimums are 25/50 BI and $10,000 PD, with mandatory UM. Hook: NY no-fault PIP is a hefty $50,000 - far above NJ's $15,000.
Question 5
New York's insurance guaranty mechanisms protect policyholders of insolvent insurers. Which insurers' policyholders are covered?
Guaranty protection covers policyholders of admitted insurers only; surplus lines and non-admitted carriers are excluded, and the fund may not be used as a sales inducement. Hook: guaranty funds back admitted insurers only - never surplus lines.
Question 6
Under New York's prompt-payment law, within how many days must an insurer pay a clean ELECTRONIC claim?
New York requires clean electronic claims paid within 30 days and clean paper claims within 45 days, with 12% annual interest on late payments (the same rate as Florida). Hook: NY prompt pay is 30 days electronic, 45 days paper, 12% late interest.
Question 7
In addition to workers' compensation, New York uniquely requires employers to provide which two benefits?
Beyond workers' comp (with NYSIF as the state fund/last resort), New York requires employers to provide DBL - short-term disability for non-work-related injuries, separate from workers' comp - and PFL, paid family leave; New York was among the first states to mandate PFL. Both are distinctive New York-only items. Hook: NY employers must add DBL (off-the-job disability) and PFL (paid family leave) on top of workers' comp.
Question 8
The GLBA generally gives consumers the right to:
Consumers can opt out of having their nonpublic personal information shared with many nonaffiliated third parties, subject to exceptions. The privacy notice explains how to exercise that right. Hook: GLBA lets consumers opt out of sharing their data with outside companies.
Question 9
Information such as a customer's account numbers, Social Security number, and policy details would be considered:
Personal financial details a customer gives an insurer, like account and Social Security numbers and policy information, are nonpublic personal information protected by the GLBA. Hook: account numbers, SSNs, and policy data are protected NPI.
Question 10
The GLBA Safeguards requirement obligates financial institutions, including insurers, to:
Beyond privacy notices, the GLBA Safeguards requirement directs institutions to put real security measures in place, administrative, technical, and physical, to protect customer information. Hook: GLBA also demands real safeguards, not just a privacy notice.
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Question 1
Cans of gasoline stored in a residential garage are an example of a:
A physical hazard is a tangible condition that increases the likelihood or severity of a loss: gasoline in the garage, a slippery floor, frayed wiring. You can see or touch it. If it's an attitude problem it's morale; if it's dishonesty it's moral; if it's a physical thing sitting there raising the odds, it's physical.
Question 2
Adverse selection refers to the tendency of:
Adverse selection is the insurer's headache: the people most likely to have a loss are also the most eager to buy and keep coverage. If underwriting didn't push back, the risk pool would fill up with bad risks and the math would collapse. It's exactly why underwriting and exclusions exist.
Question 3
The primary purpose of reinsurance is to:
Reinsurance is insurance for insurance companies. The original insurer (the ceding company) hands off part of its risk to a reinsurer so one giant loss doesn't sink it. Individuals never deal with reinsurers directly; it all happens behind the scenes between carriers.
Question 4
In a reinsurance transaction, the insurer that transfers risk to the reinsurer is known as the:
The company giving away (ceding) the risk is the ceding company; the company taking it on is the reinsurer. Easy hook: to 'cede' is to give up, so the one giving up the risk is the ceding company.
Question 5
For the law of large numbers to work effectively, the exposures in a group should be:
The law of large numbers needs lots of similar exposures to make predictions reliable. A big pool of comparable homes lets the insurer forecast losses; a handful of wildly different ones doesn't. And concentrating them all in one spot is actually bad: one hurricane could wipe out the whole pool at once.
Question 6
A reciprocal insurance company is managed by a(n):
A reciprocal (an unincorporated group of members who insure each other) is run by an attorney-in-fact. The members are both insureds and insurers to one another. Niche, but the exam likes the 'attorney-in-fact' detail, so tuck it away.
Question 7
The authority specifically granted to an agent in the agency contract is known as:
Express authority is the authority written right into the agency agreement, the powers the insurer explicitly hands the agent. Implied authority fills in the gaps needed to use that express authority, and apparent authority is what the public reasonably assumes. Express equals expressly stated.
Question 8
An insurance contract is described as 'aleatory' because:
Aleatory means the exchange of value can be lopsided and depends on chance. You might pay $600 in premium and collect $200,000 on a claim, or pay for years and never file one. That built-in inequality, hinging on whether a loss happens, is what makes the contract aleatory.
Question 9
Insurance contracts are considered 'unilateral' because:
Unilateral means only one side makes a legally enforceable promise, and it's the insurer, who promises to pay covered claims. The insured doesn't actually promise to keep paying premiums; they just won't get coverage if they stop. One enforceable promise equals unilateral.
Question 10
The intentional failure to disclose a known material fact when applying for insurance is called:
Concealment is staying silent about a material fact you know the insurer would want, and if it's intentional, it can void the policy. It's the sin-of-omission version of misrepresentation (which is an active false statement). Both turn on the fact being 'material,' meaning it would have affected the insurer's decision.
Question 1
A replacement cost policy pays a property loss based on what?
Replacement cost coverage pays to rebuild or replace with new property of like kind and quality, with no depreciation subtracted, so the insured isn't out-of-pocket for wear and tear. It usually requires meeting a coinsurance or insurance-to-value condition. Hook: replacement cost pays new-for-old, depreciation ignored.
Question 2
In property insurance, depreciation refers to what?
Depreciation is the loss in a property's value from age, use, and obsolescence. It's subtracted from replacement cost to arrive at actual cash value. Hook: depreciation is the wear-and-tear value the insurer subtracts under ACV.
Question 3
A key difference between a named perils policy and an open perils (special form) policy involves the burden of proof. Under an open perils policy, who carries the burden regarding coverage?
Under named perils, the insured must show the loss was caused by a listed peril. Under open perils (all-risk or special form), coverage is presumed unless the insurer proves an exclusion applies, so the burden shifts to the insurer. Open perils is the broader coverage. Hook: named perils, the insured proves it's covered; open perils, the insurer proves it's excluded.
Question 4
A direct loss in property insurance is best described as what?
A direct loss is the immediate physical damage a peril causes, like a fire burning a building. It contrasts with indirect (consequential) losses that follow from it. Hook: direct loss is the physical damage itself, the fire burning the house.
Question 5
The policy limit (limit of insurance) represents what?
The limit of insurance is the most the insurer will pay for a covered loss; amounts above it are the insured's responsibility. Hook: the limit is the ceiling on what the insurer pays.
Question 6
When does the coinsurance penalty NOT reduce a property claim payment?
If the insured met the coinsurance requirement, carrying at least the required percentage of value, no penalty applies and the loss is paid in full up to the limit. The penalty only bites when coverage falls short. Hook: meet the coinsurance requirement and there's no penalty.
Question 7
To establish negligence, a claimant must generally prove all of the following EXCEPT:
The four elements of negligence are a duty owed, a breach of that duty, the breach being the proximate cause, and actual damages. Intent is not required; in fact, negligence is unintentional, which separates it from an intentional tort. Hook: duty, breach, causation, damages, but never intent for negligence.
Question 8
Under an excess other insurance provision, a policy pays how?
An excess provision makes that policy pay only after other primary coverage has been used up; it sits on top as a second layer. Hook: excess coverage waits its turn, paying only after the primary is exhausted.
Question 9
In insurance terms, a peril is the cause of loss, while a hazard is what?
A peril is what actually causes a loss (fire, theft, windstorm), while a hazard is a condition that makes a loss more likely or more severe, like oily rags raising the chance of fire. Hook: peril is the cause; hazard is what makes the cause more likely.
Question 10
A morale hazard is best described as what?
A morale hazard is an attitude of carelessness: a person takes fewer precautions simply because they know insurance will cover any loss (the why-worry-I'm-insured mindset). It differs from a moral hazard, which involves outright dishonesty. Hook: morale hazard is carelessness from having coverage; moral hazard is dishonesty.
Question 1
Which homeowners form is designed for renters or tenants, covering personal property but not the dwelling?
HO-4, the Contents Broad Form, is the renters or tenants policy. It covers the tenant's personal property and liability but not the building, which the landlord insures. Hook: HO-4 is the renters form, contents and liability, no building.
Question 2
Coverage A under a homeowners policy insures what?
Coverage A insures the dwelling itself, the house and structures attached to it. Hook: Coverage A is the dwelling, the house itself.
Question 3
Coverage B (Other Structures) typically insures detached structures for an amount equal to what?
Coverage B insures detached structures such as a garage, shed, or fence, usually for 10% of the Coverage A limit. The owner can raise it by endorsement if needed. Hook: Coverage B is detached structures, normally 10% of the dwelling limit.
Question 4
Coverage C (Personal Property) covers the insured's belongings:
Coverage C follows the insured's personal property anywhere in the world, so belongings are covered while traveling or temporarily off premises, often subject to a percentage limit when away from home. Hook: your stuff is covered worldwide, not only at the house.
Question 5
An insured owns a $12,000 engagement ring, but the homeowners policy caps theft of jewelry at $1,500. The best way to fully insure the ring against theft is to:
Raising Coverage C does not lift the special jewelry theft sublimit. Scheduling the ring on a personal articles floater (scheduled personal property endorsement) insures it for its full appraised value, usually on an open-perils basis and often with no deductible. Hook: beat the jewelry sublimit by scheduling the item, not by raising Coverage C.
Question 6
A standard homeowners policy (such as HO-3) generally requires that:
Standard homeowners forms require the dwelling to be owner-occupied, meaning it is the insured's residence. Non-owner-occupied or rental dwellings are insured under a dwelling policy instead. Hook: homeowners forms are for owner-occupied homes; rentals go on a dwelling policy.
Question 7
To receive full replacement cost on a partial dwelling loss, a homeowners insured must typically carry coverage equal to at least what percentage of the home's replacement cost?
The loss settlement condition usually requires carrying at least 80% of the dwelling's replacement cost to be paid full replacement cost on partial losses. Carry less and the payout is reduced. Hook: insure the dwelling to at least 80% of replacement cost to get full replacement on partial losses.
Question 8
A homeowner buys a house to rent out to tenants. The correct policy to insure the structure is:
Because the owner will not occupy it, a homeowners form does not fit. A dwelling policy insures the structure of a rental or non-owner-occupied home, and the tenant separately buys an HO-4 for their own contents. Hook: the rental structure goes on a dwelling policy; the tenant's belongings go on HO-4.
Question 9
Damage from which of the following is typically EXCLUDED under a standard homeowners policy?
Flood is excluded from homeowners policies and must be insured separately, usually through the National Flood Insurance Program (NFIP) or a private flood policy. Earth movement such as earthquake is likewise excluded. Hook: homeowners never covers flood, that is a separate NFIP policy.
Question 10
An ordinance or law endorsement helps pay for what?
After a covered loss, current building codes may require costlier rebuilding than the original construction. An ordinance or law endorsement covers that added expense, which the base policy may limit or exclude. Hook: ordinance or law pays the code-upgrade costs when you rebuild.
Question 1
Part C of the Personal Auto Policy provides:
Part C is Uninsured/Underinsured Motorist coverage, which protects the insured when an at-fault driver has no liability insurance or not enough of it. Hook: Part C covers you when the other driver Can't pay.
Question 2
A combined single limit (CSL) auto liability policy differs from a split-limit policy in that it:
A combined single limit gives one pool of money per accident that can be used for bodily injury and property damage in any combination, instead of separate per-person and per-accident caps. It offers more flexibility on large losses. Hook: combined single limit is one bucket for everything per accident.
Question 3
Uninsured motorist (UM) coverage protects the insured when:
UM coverage steps in when an at-fault driver has no liability insurance (or cannot be identified, as in a hit-and-run), paying the insured for injuries the other driver should have covered. Hook: uninsured motorist covers you when the at-fault driver has zero insurance.
Question 4
Collision coverage under Part D pays for damage to the insured's auto caused by:
Collision covers damage from the insured's auto colliding with another vehicle or object, or from overturning (upset). Losses like theft, fire, and hail fall under other-than-collision instead. Hook: collision is crashing into something or flipping over.
Question 5
Other-than-collision (comprehensive) coverage pays for losses such as:
Other-than-collision, often called comprehensive, covers the non-crash perils: theft, fire, hail, falling objects, vandalism, glass breakage, and animal strikes. Crashing or overturning is collision, not comprehensive. Hook: comprehensive is everything but the crash, fire, theft, hail, and Bambi.
Question 6
The newly acquired auto provision in the PAP:
The newly acquired auto rule automatically extends the policy to a car the insured buys during the term, for a limited window (commonly up to 14 days), so the insured is not driving uninsured before reporting it. Hook: buy a new car and you get an automatic grace period to add it.
Question 7
A temporary substitute auto, such as a loaner driven while the insured's car is in the shop, is generally:
A temporary substitute auto used because the insured's vehicle is out of service for repair, service, breakdown, or loss is treated as a covered auto, so the policy's coverages extend to it. Hook: a loaner while yours is being fixed is covered like your own car.
Question 8
An insured wants coverage for the cost of a tow truck after a breakdown on the highway. They should add:
Towing and labor coverage, sometimes called roadside assistance, pays for towing and on-site labor costs after a disablement. It is a low-cost optional endorsement. Hook: towing and labor is the tow-truck and roadside endorsement.
Question 9
Rental reimbursement coverage pays for:
Rental reimbursement (transportation expense) coverage pays a daily amount for a rental car while the insured's vehicle is being repaired or replaced after a covered loss, usually subject to a daily and total cap. Hook: rental reimbursement keeps you on the road while your car is in the shop.
Question 10
A state financial responsibility law, and forms such as the SR-22, are intended to:
Financial responsibility laws make drivers demonstrate the ability to pay for harm they cause, generally by carrying at least the state minimum liability limits. An SR-22 is a filing the insurer makes to confirm that coverage is in force. Hook: financial responsibility means prove you can pay, and SR-22 is the proof on file.
Question 1
How does a dwelling policy differ from a homeowners policy regarding liability coverage?
Unlike the homeowners policy, the dwelling policy is primarily a property form and does not build in personal liability. An insured who wants it adds a liability endorsement. Hook: the DP is property-only out of the box; liability is a bolt-on.
Question 2
The DP-3 (Special Form) covers the dwelling and other structures on what basis?
The DP-3 Special Form insures the dwelling and other structures on an open-perils basis, meaning all causes of loss are covered except those specifically excluded. It is the broadest of the dwelling forms. Hook: DP-3 is special, open perils on the structure.
Question 3
A dwelling is rented to tenants. After a covered fire makes it uninhabitable, the rent the owner can no longer collect is paid under:
Coverage D, Fair Rental Value, reimburses the owner for lost rental income when a covered loss makes a rented (or rentable) dwelling unfit to live in, for the time needed to repair it. Hook: lost rent on a rental goes to Coverage D, Fair Rental Value.
Question 4
Adding Extended Coverage (EC) to a DP-1 broadens it to include perils such as:
Extended Coverage adds the classic EC perils: windstorm, hail, explosion, riot and civil commotion, aircraft, vehicles, and smoke. Flood, earthquake, and war stay excluded. Hook: EC adds the WHARVES-style perils, wind, hail, aircraft, riot, vehicles, explosion, smoke.
Question 5
Theft coverage under the basic dwelling forms is:
Dwelling forms do not build in theft the way homeowners does; theft is added by endorsement, and the coverage is broader for owner-occupied dwellings than for rentals. Hook: theft is not standard on a DP; add it by endorsement.
Question 6
Compared with a homeowners policy, a dwelling policy generally does NOT automatically include:
The dwelling policy leaves out three things homeowners builds in: liability, theft, and medical payments. Each can be added by endorsement, but none is automatic. Hook: a DP skips liability, theft, and med pay unless you add them.
Question 7
A seasonal or secondary home that the owner occupies only part of the year is often insured under:
Seasonal and secondary residences often fail homeowners occupancy requirements, so they are written on a dwelling policy instead. Hook: the vacation or seasonal home usually lands on a dwelling policy.
Question 8
A dwelling policy can be written to cover a dwelling occupied by:
Dwelling policies are flexible on occupancy: they can cover owner-occupied, tenant-occupied, or even vacant dwellings, with endorsements and conditions adjusting the coverage for each situation. Hook: a DP can insure owner-occupied, rented, or vacant homes.
Question 9
On a dwelling policy covering a rental, Coverage C (Personal Property) would insure:
Coverage C protects the named insured's (owner's) personal property kept at the dwelling, like appliances or upkeep equipment. The tenant insures their own belongings under a renters (HO-4) policy. Hook: on a rental DP, Coverage C is the owner's property; the tenant buys HO-4.
Question 10
The DP-2 Broad Form differs from the DP-1 mainly because it:
The DP-2 keeps the named-perils approach but lengthens the peril list and, unlike the DP-1, settles the dwelling on a replacement cost basis. Open perils is the DP-3, not the DP-2. Hook: DP-2 adds perils and upgrades the dwelling to replacement cost, still named perils.
Question 1
Which of the following is a common advantage of writing coverages in a package policy rather than separate monoline policies?
Packaging usually lowers the premium (a package credit) and reduces the chance of gaps or overlaps between separately written policies. It does not erase deductibles, conditions, or exclusions. Hook: packages save money and close the gaps between separate policies.
Question 2
The Common Policy Declarations in a CPP show:
The common declarations identify who and what is insured: named insured, mailing address, policy period, a list of the coverage parts in the package, and the premium for each. Hook: the common dec is the who, when, and what of the whole package.
Question 3
The Building and Personal Property Coverage Form (BPP) is part of which CPP coverage part?
The BPP is the workhorse coverage form of the commercial property coverage part, insuring buildings and business personal property. Hook: the BPP is the heart of the commercial property part.
Question 4
The three commercial causes-of-loss forms are:
Commercial property attaches one of three causes-of-loss forms, Basic, Broad, or Special, to decide which perils are covered. They run narrowest to broadest. Hook: commercial causes of loss are Basic, Broad, Special.
Question 5
The Special causes-of-loss form provides:
The Special form is open perils: it covers all causes of loss except those specifically excluded, making it the broadest causes-of-loss form. Basic and Broad are named-perils. Hook: Special form is open perils, the broadest of the three.
Question 6
Business income (business interruption) coverage is designed to pay:
Business income coverage replaces the net income (and continuing expenses like payroll) the business would have earned had a covered loss not suspended operations. It is time-element coverage. Hook: business income replaces the profit you lose while you are shut down.
Question 7
CGL Coverage B insures:
Coverage B covers personal and advertising injury offenses: libel, slander, false arrest, wrongful eviction, and infringing on copyright or slogans in the insured's advertising. Hook: Coverage B is the reputation and advertising offenses, libel and slander.
Question 8
How does a claims-made CGL form differ from an occurrence form?
A claims-made form is triggered by when the claim is first reported, not when the injury happened, and a retroactive date sets the earliest loss date it will respond to. Extended reporting (tail) coverage can fill gaps at expiration. Hook: claims-made looks at when the claim is reported, bounded by the retro date.
Question 9
The CGL general aggregate limit is:
The general aggregate caps total payments for the policy period across most coverages, separate from the per-occurrence limit and from the products-completed operations aggregate. Hook: the general aggregate is the year's total ceiling, separate from each-occurrence.
Question 10
Equipment breakdown (boiler and machinery) coverage pays for:
Equipment breakdown, the modern boiler and machinery coverage, pays for sudden and accidental breakdown of boilers, pressure vessels, and mechanical or electrical equipment, plus resulting damage. Hook: equipment breakdown covers the machine blowing up, not wear and tear.
Question 1
Which type of business is typically ELIGIBLE for a BOP?
Classic eligible BOP classes include small offices, retail and mercantile stores, and apartment buildings. Auto dealers, financial institutions, and heavy manufacturers fall outside the eligible classes. Hook: offices, shops, and apartments are bread-and-butter BOP risks.
Question 2
Which of the following businesses is generally INELIGIBLE for a standard BOP?
Auto dealers, banks and financial institutions, and bars or similar amusement places are typically excluded from the BOP because of their distinct hazards. Offices, apartments, and small retail are eligible. Hook: car lots, banks, and bars are classic BOP no-gos.
Question 3
An underwriter reviewing a BOP application checks the building's square footage and the business's annual sales mainly because:
BOP programs cap eligibility by size, commonly using floor area and annual gross sales or receipts for the class. Exceed the thresholds and the risk must move to a CPP. Hook: square footage and sales are eligibility gates, too big and it is a CPP.
Question 4
Under a BOP, the property coverage insures:
BOP property coverage protects the business's building (if owned) and its business personal property, such as contents and stock, at the described premises. Hook: BOP property is the building and the business contents.
Question 5
Because business income is built into the BOP, a small business owner benefits by:
Built-in business income means a covered shutdown is protected by default, which guards against the common small-business mistake of forgetting to purchase interruption coverage. Hook: built-in business income protects owners who would otherwise forget to buy it.
Question 6
The liability section of a BOP provides coverage similar to:
The BOP liability section mirrors a commercial general liability form, covering the business's liability for bodily injury and property damage to third parties, plus defense. Hook: BOP liability works like a CGL, third-party bodily injury and property damage.
Question 7
A customer slips and is injured inside a store insured under a BOP. This claim would be handled under the BOP's:
A customer hurt on the premises is a third-party bodily injury claim, handled under the BOP liability section (with small medical bills possibly paid under medical payments). Hook: a hurt customer is a liability claim, not a property claim.
Question 8
Like other property policies, a BOP typically excludes:
Flood and earth movement (including earthquake) are excluded under a BOP just as under other property forms, and must be insured separately. Fire, theft, and vandalism are typically covered. Hook: BOP still excludes flood and earthquake, buy those separately.
Question 9
Apartment buildings, offices, and small retail (mercantile) risks are examples of:
Apartments, offices, and small mercantile (retail) operations are the staple eligible classes the BOP was designed for. Hook: apartments, offices, and small retail are the textbook eligible BOP classes.
Question 10
The fact that a BOP bundles property, liability, and business income into one form mainly benefits the small business owner by:
Bundling the core coverages into one BOP reduces the chance of gaps, simplifies administration, and usually costs less than separate policies, which is the whole appeal for a small business. Hook: one bundled BOP means fewer gaps, less hassle, and lower cost.
Question 1
Medical benefits under workers compensation are typically:
Workers compensation medical benefits generally cover the full reasonable cost of treating the job injury, with no deductible and no overall dollar cap, unlike most health plans. Hook: comp medical is usually first-dollar and unlimited for the work injury.
Question 2
The workers compensation benefit that replaces lost wages while an injured worker cannot work at all but is expected to recover and return is:
Temporary total disability (TTD) replaces a portion of wages while the worker is fully unable to work but is expected to recover and return. Once recovery plateaus, the case may move to a permanent classification. Hook: temporary total is off work now, expected back later.
Question 3
Permanent partial disability benefits are paid when an employee:
Permanent partial disability (PPD) applies when the worker is left with a lasting impairment, such as the loss of use of a limb, but retains some ability to work. Benefits often follow a statutory schedule. Hook: permanent partial means a lasting impairment, but still able to work somewhat.
Question 4
If a worker dies from a covered job injury, workers compensation generally provides:
A fatal work injury triggers death benefits to the worker's surviving dependents (often a percentage of wages) along with a burial or funeral allowance set by statute. Hook: a fatal claim pays the dependents plus a burial allowance.
Question 5
Part Two (Employers Liability) of the policy covers:
Part Two protects the employer against lawsuits for work-related injuries that escape the exclusive-remedy bar, such as a third-party-over action or a consequential injury claim by a family member. It backstops the gaps Part One does not address. Hook: Part Two catches the work-injury suits that slip past exclusive remedy.
Question 6
Workers compensation rates are commonly expressed as a rate per:
Workers compensation rates are quoted as a dollar rate per $100 of payroll for each classification, so payroll drives the premium. Hook: comp rates are dollars per $100 of payroll.
Question 7
Sole proprietors, partners, and executive officers are often:
Many states let sole proprietors, partners, and corporate officers opt out of their own workers compensation coverage or elect to be included, since they are owners rather than ordinary employees. Hook: owners can often opt in or out of their own comp coverage.
Question 8
A genuine independent contractor, who is not an employee, is generally:
Because workers compensation covers employees, a true independent contractor is normally not covered by the hiring firm's policy and is expected to carry their own. Misclassifying employees as contractors is a common compliance problem. Hook: real independent contractors are not on the hiring firm's comp.
Question 9
In a monopolistic fund state, an employer must buy workers compensation insurance from:
In a monopolistic state, workers compensation must be purchased from the state fund, and private insurers do not write the coverage there. Hook: monopolistic means one seller, the state fund.
Question 10
A Second Injury Fund (subsequent injury fund) is designed to:
Second Injury Funds limit an employer's liability when a new work injury combines with a worker's prior impairment to cause a greater disability, removing a disincentive to hire workers with pre-existing conditions. Hook: second injury funds make it safer to hire workers with prior impairments.
Question 1
A commercial umbrella policy provides excess limits over which underlying coverages?
A commercial umbrella adds limits above primary liability lines like CGL, business auto liability, and employers liability. It is excess liability, not excess property coverage. Hook: the commercial umbrella tops up the liability lines, not property.
Question 2
An insured wants protection against earthquake damage to their home. The most accurate statement is:
Standard property forms exclude earth movement, but earthquake coverage can be added by endorsement or bought separately, commonly with a deductible expressed as a percentage of the dwelling limit rather than a flat dollar amount. The NFIP covers flood, not quake. Hook: earthquake is excluded but buy-back-able, usually with a percentage deductible.
Question 3
A key advantage of scheduling jewelry on a personal articles floater rather than relying on a homeowners policy is that the floater:
A floater insures scheduled items for an agreed or appraised value on a broad, open-perils basis, getting past the low special theft sublimits a homeowners policy places on jewelry. Hook: schedule the ring on a floater to beat the homeowners jewelry sublimit.
Question 4
Despite its name, inland marine insurance today mostly covers:
Inland marine grew out of ocean marine to cover property that moves over land or is hard to insure at a fixed site, plus transportation instrumentalities like bridges and tunnels. Hook: inland marine is property on the move over land, not on the sea.
Question 5
A small pleasure boat, such as a canoe or small outboard, is often covered within limits under:
Homeowners policies give limited coverage for small, low-powered watercraft, but larger or faster boats require a dedicated boatowners or yacht policy. Hook: little boats may ride on the homeowners; real boats need their own policy.
Question 6
Aircraft are excluded under standard homeowners and auto policies, so aviation exposures require:
Aviation risks (hull and liability for aircraft) are excluded from standard personal lines and must be written on specialized aviation policies. Hook: planes need aviation insurance, never the home or auto policy.
Question 7
A surety bond is fundamentally different from an insurance policy because it involves:
A surety bond is a three-party guarantee: the surety guarantees to the obligee that the principal will perform an obligation. Insurance, by contrast, is a two-party contract covering accidental loss. Hook: surety is three parties and a guarantee; insurance is two parties and a loss.
Question 8
When a surety pays a loss because the principal failed to perform, the surety generally:
Unlike insurance, a surety expects the principal to ultimately bear the loss, so after paying the obligee the surety can seek reimbursement from the principal. Hook: the surety pays, then comes back to the principal to be repaid.
Question 9
A contractor required to guarantee it will complete a construction project as agreed would typically provide a:
A performance bond is a surety bond guaranteeing the contractor will complete the project according to the contract; if not, the surety makes the obligee whole. Hook: performance bonds guarantee the job gets finished.
Question 10
A mobile or manufactured home that is not permanently affixed is often insured under:
Mobile and manufactured homes have unique construction and transport exposures, so they are commonly written on a specialized mobile-homeowners form rather than a standard HO-3. Hook: mobile homes get their own mobile-homeowners policy.
The rest of the New York P&C system
Requirements, fees, and the exact path to the P&C license.
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