New York Personal Lines Final Exam –
Questions with Rationales
1. Under New York’s no-fault insurance law, what is the basic economic loss
threshold for an injured person to be able to sue for pain and suffering?
Answer:- Serious injury” defined as death, dismemberment, significant
disfigurement, fracture, loss of a fetus, permanent loss of use of a body
organ/member/function/ system, permanent consequential limitation of use of
a body organ or member, significant limitation of use of a body function or
system, or a medically determined injury or impairment of a non-permanent
nature which prevents the injured person from performing substantially all of
the material acts which constitute such person’s usual and customary daily
activities for not less than 90 days during the 180 days immediately following
the occurrence.
*Rationale: New York’s No-Fault law (Insurance Law §5102(d)) defines “serious
injury” to restrict tort lawsuits. Without meeting this threshold, injured persons can
only recover economic losses (medical, lost wages) from their own insurer
regardless of fault.*
2. A New York personal auto policy includes Part B – Personal Injury Protection
(PIP). What is the minimum PIP limit required per person?
Answer:- $50,000 per person for basic economic loss (medical, lost wages, etc.)
*Rationale: NY requires $50,000 PIP per person. This covers necessary medical
expenses, lost earnings (up to $2,000/month for 3 years), and other reasonable
expenses up to $25/day for up to one year.*
3. An insured is hit by an uninsured motorist in New York. The insured’s auto
policy includes uninsured motorists coverage (UM). What is the minimum UM
limit required?
Answer:- $25,000 per person / $50,000 per accident for bodily injury
*Rationale: NY requires UM limits equal to the state’s minimum liability limits
(25/50/10) for bodily injury caused by an uninsured or hit-and-run driver.*
,4. What is the maximum time limit for an insured to file a Notice of Claim for
Supplementary Uninsured Motorist (SUM) coverage in New York?
Answer:- Within 90 days of the accident, or as soon as practicable but not
exceeding the policy’s limitation period
Rationale: SUM claims require prompt notice. NY regulations allow the insurer to
deny if notice is unreasonably delayed without good cause.
5. A driver has liability limits of 25/50/10. They cause an accident that injures
three people: one has $30,000 in medical bills, the other two have $15,000 each.
How much will the policy pay total?
Answer:- $50,000 (the per-accident limit for bodily injury)
*Rationale: The 25/50/10 means $25,000 per person maximum, $50,000 per
accident maximum for bodily injury. Even though the first person has $30,000,
they get capped at $25,000. The other two get $15,000 each = $30,000, but total
cannot exceed $50,000. So $25k + $15k + $10k = $50,000.*
6. An insured’s car is damaged when a tree falls on it during a windstorm. Under a
personal auto policy, which coverage pays?
Answer:- Other-Than-Collision (Comprehensive)
Rationale: Comprehensive coverage (Part D – Other-Than-Collision) pays for
damage from falling objects, fire, theft, vandalism, windstorm, hail, flood, and
contact with animals (but not collision with another vehicle or object).
7. A New York auto policy includes Medical Payments coverage (Part B-2). What
is the typical limit?
Answer:- Usually $5,000 or $10,000 per person, but it is optional and separate
from PIP
Rationale: Medical Payments (MedPay) is optional in NY and pays medical
expenses regardless of fault, but is excess over PIP for covered expenses. PIP is
primary.
, 8. Under the New York Motor Vehicle Financial Security Act, what are the
mandatory minimum liability limits for a personal auto policy?
Answer:- $25,000 per person bodily injury, $50,000 per accident bodily injury,
$10,000 per accident property damage (25/50/10)
Rationale: These are the statutory minimums required for all registered vehicles in
NY.
9. A passenger is injured while getting into a friend’s car. Both the passenger and
the driver have made payments coverage under their auto policies. Which policy is
primary?
Answer:- The driver’s policy is primary
Rationale: Under standard auto policy provisions, coverage for an occupant of a
vehicle typically follows the vehicle (the driver’s policy) as primary, with the
passenger’s policy being excess if applicable.
10. Adverse selection is a concept best described as:
Answer:- Risks with a higher probability of loss seeking insurance more often
than other risks
Rationale: Adverse selection occurs when those most likely to have losses purchase
and maintain insurance, while low-risk individuals drop coverage, leading to
higher claim costs.
11. An example of an alien insurer doing business in New York is one formed by
the laws of:
Answer:- Mexico
Rationale: An alien insurer is domiciled outside the United States. Mexico is a
foreign country, so an insurer formed under Mexican laws is an alien insurer.
(Note: insurers from other US states are “foreign”; from NY are “domestic”.
12. According to the NY Motor Vehicle Financial Responsibility Law, what are
the required limits of liability on auto policies issued in this state?
Answer:- $25,000/$50,000/$10,000
Rationale: This is the statutory minimum for liability coverage.
Questions with Rationales
1. Under New York’s no-fault insurance law, what is the basic economic loss
threshold for an injured person to be able to sue for pain and suffering?
Answer:- Serious injury” defined as death, dismemberment, significant
disfigurement, fracture, loss of a fetus, permanent loss of use of a body
organ/member/function/ system, permanent consequential limitation of use of
a body organ or member, significant limitation of use of a body function or
system, or a medically determined injury or impairment of a non-permanent
nature which prevents the injured person from performing substantially all of
the material acts which constitute such person’s usual and customary daily
activities for not less than 90 days during the 180 days immediately following
the occurrence.
*Rationale: New York’s No-Fault law (Insurance Law §5102(d)) defines “serious
injury” to restrict tort lawsuits. Without meeting this threshold, injured persons can
only recover economic losses (medical, lost wages) from their own insurer
regardless of fault.*
2. A New York personal auto policy includes Part B – Personal Injury Protection
(PIP). What is the minimum PIP limit required per person?
Answer:- $50,000 per person for basic economic loss (medical, lost wages, etc.)
*Rationale: NY requires $50,000 PIP per person. This covers necessary medical
expenses, lost earnings (up to $2,000/month for 3 years), and other reasonable
expenses up to $25/day for up to one year.*
3. An insured is hit by an uninsured motorist in New York. The insured’s auto
policy includes uninsured motorists coverage (UM). What is the minimum UM
limit required?
Answer:- $25,000 per person / $50,000 per accident for bodily injury
*Rationale: NY requires UM limits equal to the state’s minimum liability limits
(25/50/10) for bodily injury caused by an uninsured or hit-and-run driver.*
,4. What is the maximum time limit for an insured to file a Notice of Claim for
Supplementary Uninsured Motorist (SUM) coverage in New York?
Answer:- Within 90 days of the accident, or as soon as practicable but not
exceeding the policy’s limitation period
Rationale: SUM claims require prompt notice. NY regulations allow the insurer to
deny if notice is unreasonably delayed without good cause.
5. A driver has liability limits of 25/50/10. They cause an accident that injures
three people: one has $30,000 in medical bills, the other two have $15,000 each.
How much will the policy pay total?
Answer:- $50,000 (the per-accident limit for bodily injury)
*Rationale: The 25/50/10 means $25,000 per person maximum, $50,000 per
accident maximum for bodily injury. Even though the first person has $30,000,
they get capped at $25,000. The other two get $15,000 each = $30,000, but total
cannot exceed $50,000. So $25k + $15k + $10k = $50,000.*
6. An insured’s car is damaged when a tree falls on it during a windstorm. Under a
personal auto policy, which coverage pays?
Answer:- Other-Than-Collision (Comprehensive)
Rationale: Comprehensive coverage (Part D – Other-Than-Collision) pays for
damage from falling objects, fire, theft, vandalism, windstorm, hail, flood, and
contact with animals (but not collision with another vehicle or object).
7. A New York auto policy includes Medical Payments coverage (Part B-2). What
is the typical limit?
Answer:- Usually $5,000 or $10,000 per person, but it is optional and separate
from PIP
Rationale: Medical Payments (MedPay) is optional in NY and pays medical
expenses regardless of fault, but is excess over PIP for covered expenses. PIP is
primary.
, 8. Under the New York Motor Vehicle Financial Security Act, what are the
mandatory minimum liability limits for a personal auto policy?
Answer:- $25,000 per person bodily injury, $50,000 per accident bodily injury,
$10,000 per accident property damage (25/50/10)
Rationale: These are the statutory minimums required for all registered vehicles in
NY.
9. A passenger is injured while getting into a friend’s car. Both the passenger and
the driver have made payments coverage under their auto policies. Which policy is
primary?
Answer:- The driver’s policy is primary
Rationale: Under standard auto policy provisions, coverage for an occupant of a
vehicle typically follows the vehicle (the driver’s policy) as primary, with the
passenger’s policy being excess if applicable.
10. Adverse selection is a concept best described as:
Answer:- Risks with a higher probability of loss seeking insurance more often
than other risks
Rationale: Adverse selection occurs when those most likely to have losses purchase
and maintain insurance, while low-risk individuals drop coverage, leading to
higher claim costs.
11. An example of an alien insurer doing business in New York is one formed by
the laws of:
Answer:- Mexico
Rationale: An alien insurer is domiciled outside the United States. Mexico is a
foreign country, so an insurer formed under Mexican laws is an alien insurer.
(Note: insurers from other US states are “foreign”; from NY are “domestic”.
12. According to the NY Motor Vehicle Financial Responsibility Law, what are
the required limits of liability on auto policies issued in this state?
Answer:- $25,000/$50,000/$10,000
Rationale: This is the statutory minimum for liability coverage.
