Free Practice Questions for Insurance Licensing NY-Independent-General-Adjuster Exam

The correct answer is A — insurer. Under standard claims-made CGL wording, a claim by a person or organization seeking damages is generally considered made when notice of the claim is received and recorded by any insured or by the insurer, whichever occurs first. Judicial decisions reproducing standard claims-made CGL language apply exactly this trigger.

This differs fundamentally from an occurrence-based CGL policy. Under an occurrence form, coverage is principally tied to when the bodily injury or property damage occurs. Under a claims-made form, the timing of the claim being made—and where required, reported—becomes a central coverage trigger. A retroactive date and applicable Extended Reporting Period may also affect whether the claim is covered.

Receipt by the injured party does not constitute the relevant claim-made trigger because the injured party is ordinarily the person asserting the claim. Likewise, receipt by the claimant's attorney does not satisfy the contractual language. An insurance agent may transmit notice, but the standardized answer asks which party, in addition to an insured, is expressly identified in the claims-made provision: the insurer.

The Series 17-70 outline specifically tests occurrence versus claims-made, claims-made and reported coverage, trigger, retroactive date, and Extended Reporting Periods.

Therefore, A is correct.

The correct answer is D — Personal Property Replacement Cost. Under standard homeowners loss-settlement principles, personal property is commonly settled initially on an actual cash value (ACV) basis unless replacement-cost treatment is provided by the policy or an endorsement. ACV normally reflects depreciation, whereas replacement cost measures the amount required to replace damaged property with property of like kind and quality without deducting depreciation, subject to the policy's conditions and limitations.

The Personal Property Replacement Cost endorsement, HO 04 90, modifies the homeowners contract so qualifying Coverage C personal property may be settled on a replacement-cost basis instead of ordinary ACV treatment. The official Series 17-70 content outline specifically identifies Personal Property Replacement Cost (HO 04 90) as a selected homeowners endorsement and separately tests ACV and replacement-cost valuation.

Inflation guard principally adjusts coverage limits to reflect increasing construction costs; it does not itself convert contents from ACV to replacement cost. “Other insurance” governs coordination when multiple policies apply. Increased cost of construction typically addresses additional building costs generated by enforcement of ordinances or laws rather than depreciation on personal property.

New York DFS distinguishes replacement cost from ACV by noting that replacement-cost settlement does not deduct depreciation.

Therefore, D is correct.

The correct answer is C — submitting surveys of the insured business to the insurer. The CPP Common Policy Conditions grant the first named insured several special rights and responsibilities. The first named insured may cancel the policy by providing the required written notice, is the party to whom applicable premium refunds are sent, and is authorized to make policy changes with the insurer's consent. Therefore, requesting an adjustment to policy limits falls within the first named insured's authority to seek policy changes.

The Inspections and Surveys condition operates differently. It gives the insurer the right, but generally not the obligation, to make inspections and surveys, provide reports concerning conditions found, and recommend changes. The policy does not impose a standard responsibility on the first named insured to prepare and submit surveys of the business. Standard common-policy wording expressly assigns the inspection-and-survey right to the insurer.

The first named insured also has important premium-related functions. Standard CPP wording provides for return premiums to be sent to the first named insured and recognizes the first named insured's cancellation authority.

The Series 17-70 outline specifically tests CPP components, Common Policy Declarations, Common Policy Conditions, and the First Named Insured.

The correct answer is C — No benefit to bailee. A bailee is a person or organization that temporarily has possession or custody of another person's property. A commercial storage facility holding the insured's stock is therefore functioning as a bailee.

The commercial property condition commonly called No Benefit to Bailee prevents the insurance purchased by the property owner from directly or indirectly benefiting a person or organization merely because that party has custody of the covered property. Court decisions quoting standard commercial property wording state that a person or organization having custody of covered property does not benefit from the insured's property insurance.

The provision preserves the insurer's ability, where appropriate, to pursue recovery against a negligent bailee after paying the insured. Without such wording, a bailee might attempt to rely on the owner's insurance as protection against its own responsibility.

Liberalization automatically broadens coverage when specified policy changes occur. A mortgage clause protects qualifying mortgagees. Assignment concerns transfer of policy rights and generally requires insurer consent.

The Series 17-70 outline tests Commercial Property Conditions, Covered Property, loss conditions, subrogation concepts, and common policy provisions.

Thus, C is the precise answer.

The correct answer is A. Aircraft Medical Payments coverage pays specified medical expenses resulting from bodily injury sustained in connection with a covered aircraft accident, generally without requiring the injured person first to establish negligence against the aircraft owner or operator.

AOPA's aviation-insurance guidance specifically states that aircraft Medical Payments coverage includes expenses such as ambulance, surgical, dental, and professional nursing services. It can also apply to injuries occurring while a person is entering or leaving the aircraft, subject to the policy's limits and conditions.

This protection is distinct from bodily injury liability coverage. Liability insurance responds when an insured is legally responsible for another person's bodily injury, whereas Medical Payments is designed to fund qualifying medical expenses on a limited no-fault basis.

Option B is incorrect because a deductible is the portion of a covered loss retained by the insured rather than a benefit paying medical expenses. Option C refers to the consideration paid for insurance coverage. Option D, fiduciary liability, protects against specified breaches of fiduciary duty and has no relationship to ambulance transportation following an aircraft accident.

The Series 17-70 curriculum includes specialized aviation insurance concepts together with medical-payment and liability distinctions.

Therefore, ambulance charges are properly classified under Medical Payments, making A correct.

The correct answer is A. Standard homeowners property forms contain a broad earth movement exclusion, encompassing events such as earthquake, landslide, mudslide, earth sinking, rising, or shifting, subject to the precise policy wording and any endorsements purchased. Earthquake coverage ordinarily requires a separate endorsement or policy. The Series 17-70 examination outline specifically requires knowledge of Homeowners Policy additional coverages, perils insured against, exclusions, conditions, and selected endorsements, including an earthquake endorsement.

The remaining choices describe protections commonly appearing as Additional Coverages rather than general exclusions. Debris Removal reimburses reasonable expenses for removing debris of covered property following a covered cause of loss. Insurance-regulator guidance confirms debris removal is ordinarily incorporated into homeowners coverage when the underlying damage results from an insured peril.

Likewise, Property Removed protects covered property against direct loss while it is being removed from endangered premises to safeguard it from an insured peril, subject to the form's time limitations. Fire Department Service Charge provides a specified additional amount when an insured incurs a contractual fire-department service charge. These provisions are standard examples of homeowners additional coverages.

Therefore, among the four choices, earth movement is the excluded cause of loss.

The correct answer is B. Under Businessowners liability coverage, the insurer ordinarily has both a duty to indemnify for covered damages and a duty to defend the insured against qualifying suits. The defense obligation is broad, but it is not unlimited.

Standard BOP wording provides that the insurer's duty to defend terminates when the applicable limit of insurance has been used up through payment of judgments or settlements. Importantly, merely offering or depositing the policy limit is not necessarily sufficient; exhaustion must occur in accordance with the policy's contractual language.

Option A has no relationship to the policy's defense obligation. Tax-payment status is not a BOP liability-defense trigger. Option C can eventually create policy cancellation or lapse issues if premium obligations are not satisfied, but it does not describe the specific provision controlling termination of defense after a covered liability claim has arisen. Option D is entirely unsupported by the contract: an insurer cannot terminate its contractual defense obligation simply because it considers the insured's prior claim history excessive.

The Series 17-70 outline specifically tests Businessowners liability coverage, limits of insurance, liability exclusions, conditions, and claim handling.

Therefore, once the applicable liability limit has been properly exhausted through judgments or settlements, the duty to defend can end.

Thus, B is correct.

The correct answer is B — MCS-90 endorsement. The MCS-90 is the federally prescribed endorsement attached to a motor carrier's liability insurance policy to demonstrate compliance with applicable public-liability financial-responsibility requirements.

The Federal Motor Carrier Safety Administration identifies Form MCS-90 as the Endorsement for Motor Carrier Policies of Insurance for Public Liability under Sections 29 and 30 of the Motor Carrier Act of 1980. FMCSA further states that the endorsement is required under 49 CFR §387.15 for motor carriers subject to the applicable federal financial-responsibility rules.

The MCS-90 is attached to the carrier's liability policy rather than to a specific individual vehicle. Its purpose is to assure payment, within the federally required limits, of qualifying final judgments for public liability arising from negligence in the operation, maintenance, or use of covered motor vehicles.

The Additional Insured-Lessor endorsement deals with leased-vehicle relationships. The Individual Named Insured endorsement addresses particular personal-type coverage needs under commercial auto forms. The Mobile Equipment endorsement addresses equipment that otherwise falls outside ordinary automobile classifications.

The Series 17-70 commercial-auto material includes Motor Carrier coverage, federal financial responsibility, endorsements, liability limits, and commercial automobile forms.

Therefore, MCS-90, option B, is the required endorsement.

The correct answer is D — covering large losses that exceed the underlying liability coverage. A commercial umbrella policy is designed primarily to provide an additional layer of liability protection above specified underlying insurance, commonly Commercial General Liability, Business Auto Liability, and Employers Liability.

When a covered catastrophic claim exceeds the applicable underlying policy limit, the umbrella can respond above that exhausted limit, subject to its attachment point, exclusions, retained limits, and other contractual provisions. Insurance industry guidance describes commercial umbrella insurance as protection intended for unusually large losses after the underlying liability limits have been used up.

Option A is incorrect because statutory minimum insurance requirements are generally satisfied through required primary insurance, not by purchasing an umbrella. Option B is unrelated; the NAIC does not mandate umbrella insurance merely to make an insured's policies uniform. Option C is also incorrect because reinsurance protects insurers and surplus lines insurance addresses risks that may not be available in the admitted market; neither is replaced simply by an insured purchasing umbrella coverage.

A commercial umbrella may also provide broader protection than pure follow-form excess insurance, depending on its specific wording.

The Series 17-70 curriculum specifically tests Commercial Umbrella CU 00 01, underlying limits, excess coverage, stand-alone coverage, and follow-form concepts.

Therefore, D is correct.