New York Independent General Adjuster Practice Test: New York law, Part 2

Correct answer: D. It forfeits pre-repair inspection, and talks are generally limited to labor and parts prices

Section 216.7(b)(1) gives the insurer six business days after notice of claim to inspect a vehicle that is available, and to make a good faith offer in that period. Under 216.7(b)(8), missing the window forfeits the right to inspect before repairs; unless the insured allows a later inspection, negotiation is limited to labor and parts prices and, absent objective evidence, cannot dispute the damage or manner of repair.

Reference: 11 NYCRR 216.7(b)(1) and (8) (Insurance Regulation 64)

Correct answer: B. $14,300

Section 216.7(c)(1)(i) starts with the average of the retail values in two approved manuals: ($14,600 + $15,200) / 2 = $14,900. The insurer may deduct documented, reasonable dealer preparation charges, but only up to $100, leaving $14,800. Subtracting the $500 deductible gives $14,300. Deducting the full $160 of preparation charges ($14,240) exceeds the cap.

Reference: 11 NYCRR 216.7(c)(1)(i) (Insurance Regulation 64)

Correct answer: B. 57,200 miles

The rule allows the greater of 4,000 miles or 10% of the insured vehicle's mileage at the date of loss. Ten percent of 52,000 is 5,200, which beats 4,000, so a comparable may have up to 52,000 + 5,200 = 57,200 miles. Using the 4,000-mile figure (56,000) applies the smaller allowance. The comparable must also match make, model, year, condition and major options.

Reference: 11 NYCRR 216.7(a)(4) (Insurance Regulation 64)

Correct answer: C. $950

Section 216.7(g)(2) defines net recovery as total recovery minus allocated loss adjustment expenses: $6,000 - $300 = $5,700. The insured's share is the deductible divided by the total loss, times net recovery: $1,000 / $6,000 x $5,700 = $950. The insurer must send it within 30 calendar days of the recovery. Returning the full $1,000 ignores the prorated expenses.

Reference: 11 NYCRR 216.7(g) (Insurance Regulation 64), Subrogation agreements

Correct answer: B. The insurer may not require a particular shop, and may recommend one only if the insured asks

Section 2610(a) forbids an insurer providing collision or comprehensive coverage from requiring that repairs be made at a particular place or shop, and 2610(b) bars it from even recommending a shop unless the insured expressly asks (claims solely for window glass are excepted). The insurer's estimate must also print a notice of the insured's right to use the shop of their choice.

Reference: N.Y. Insurance Law Section 2610

Correct answer: D. $25,000/$50,000 for injury, $50,000/$100,000 for death, and $10,000 for property damage

VTL Section 311(4) sets limits of $25,000 for bodily injury to one person and $50,000 for the death of one person, $50,000 for bodily injury and $100,000 for death of two or more persons in one accident, and $10,000 for property damage. An answer that lists only the 25/50 injury limits misses the higher death limits that make New York's minimums distinctive.

Reference: N.Y. Vehicle and Traffic Law Section 311(4)

Correct answer: A. $4,320

Basic economic loss includes lost earnings up to $2,000 per month for up to three years, and Section 5102(b)(1) reduces first-party benefits by 20% of lost earnings. Her earnings are under the cap, so the benefit is 80% of $5,400, or $4,320, which counts toward the $50,000 per person basic economic loss limit. Paying $5,400 ignores the 20% reduction.

Reference: N.Y. Insurance Law Section 5102(a)(2) and (b)(1)

Correct answer: A. Notice within 30 days of the accident; health service bills within 45 days after services are rendered

The mandatory PIP endorsement requires written notice no more than 30 days after the accident and proof of claim for health service expenses no later than 45 days after services are rendered. Proof of work loss and other necessary expenses is due within 90 days. Late submission is excused only with written proof giving clear and reasonable justification for the delay.

Reference: 11 NYCRR 65-1.1 (Insurance Regulation 68), Mandatory personal injury protection endorsement, Conditions

Correct answer: C. No, because protection against an unidentified driver requires physical contact

Section 3420(f)(1) requires uninsured motorist coverage of at least $25,000 per person and $50,000 per accident for injury, including injury caused by an unidentified vehicle that leaves the scene. Section 3420(f)(3), however, withholds that protection against a person whose identity cannot be ascertained unless the injury arose from physical contact with the insured or the vehicle the insured occupied. A no-contact miss does not qualify.

Reference: N.Y. Insurance Law Section 3420(f)(1) and (3)

Correct answer: B. Report it to police within 24 hours and file an MVAIC affidavit within 90 days

Section 5208(a)(2) covers a qualified person injured by a driver whose identity cannot be ascertained: the accident must be reported within 24 hours to a police, peace or judicial officer or the DMV commissioner, and the affidavit must reach MVAIC within 90 days after the claim accrues. The 180-day period applies to claims against a known uninsured vehicle. A late report may be excused if a timely one was not reasonably possible.

Reference: N.Y. Insurance Law Section 5208(a)(2)

Correct answer: B. Notify the insured and the injured person in writing as soon as reasonably possible

Section 3420(d)(2) requires an insurer that disclaims liability or denies coverage for death or bodily injury from a motor vehicle accident, or any other type of accident in New York, to give written notice as soon as is reasonably possible to both the insured and the injured person or other claimant. The 60-day period in 3420(d)(1) is different: it covers confirming coverage and limits on a claimant's written request.

Reference: N.Y. Insurance Law Section 3420(d)

Correct answer: A. It is a joint underwriting association that insurers writing fire and extended coverage in New York must join

Section 5402 continues NYPIUA as a joint underwriting association of insurers writing fire and extended coverage on a direct basis in New York, including in homeowners and commercial package policies, and membership is a condition of writing those lines. It insures property found insurable after inspection, and Section 5401(g) forbids considering neighborhood or area location. Drivers who cannot find auto coverage go to the New York Automobile Insurance Plan.

Reference: N.Y. Insurance Law Sections 5401 and 5402

Correct answer: C. $1,000,000

Section 7603(a)(2) caps payment from the Property/Casualty Insurance Security Fund at $1,000,000 on any one claim and bars payment to anyone owning or controlling 10% or more of the insolvent insurer's voting securities. Payments are made through the superintendent acting as liquidator and never exceed the policy limit. A $300,000 cap is common in other states' guaranty associations, not New York's fund.

Reference: N.Y. Insurance Law Sections 7603(a)(2) and 7608

Correct answer: B. $10,000

Section 25.7(a) caps a public adjuster's fee at 12.5% of the recovery: $80,000 x 12.5% = $10,000. A fee of up to 20% ($16,000 here) is allowed only on a supplemental claim, and only if the aggregate fee stays at or below 12.5% of the full claim payment. Any referral fee the public adjuster receives counts toward the same cap.

Reference: 11 NYCRR 25.7, Maximum compensation (Insurance Regulation 10, public adjusters)

Correct answer: C. Midnight on Monday, October 5

Section 25.8(a) lets the insured cancel until midnight of the third business day after signing. For public adjuster contracts, 25.5(a) counts every day except Sundays and listed holidays, so Saturday is a business day: Friday (1), Saturday (2), Monday (3). The deadline is midnight Monday, October 5. Skipping Saturday, as Regulation 64's business-day definition would, gives Tuesday.

Reference: 11 NYCRR 25.5(a) and 25.8 (Insurance Regulation 10, public adjusters)