Property and Casualty-NJ
1. A contract in which only one party - the insurer - makes an enforceable promise is said to be -
ANS-A- Quotation
B- Unilateral
C- A contract of Indemnity
D- A contract of Adhesion
B- Unilateral
An insurance policy is considered to be unilateral, since only one party to the contract, the
insurance company, makes an enforceable promise.
2. An insurer whose main home office is domiciled in the state where they write business is
known as a - ANS-A- Alien Insurer
B- Foreign Insurer
C- Surplus Lines Insurer
D- Domestic Insurer
D- Domestic Insurer
A Domestic insurer is one whose main home office is located in the state they are doing
business. A Surplus Lines insurer could be a domestic carrier but the best answer choice is D.
3. All of the following are true regarding the Assigned Risk Plan for Workers Compensation in
New Jersey, Except - ANS-A. It's a method for employers to obtain Workers Compensation
insurance when they are having difficulty in the normal marketplace
B. If an employer is unable to obtain coverage in the normal marketplace, the state will assign
an insurer to write the risk
C. The plan approves the rate structures used by all insurers writing workers compensation
coverage in the state.
D. All admitted carriers writing workers compensation insurance in the state must belong to the
plan
,C- The Assigned Risk Plan is NOT involved in approving rating plans of the various insurers in
the state. The other choices are all correct
4. Which of the following is true regarding coverage for a domestic employee for workers
compensation in New Jersey? - ANS-A. The assigned risk plan for workers compensation in
new jersey would provide the coverage automatically
B. Domestic employees are exempt from coverage
C. Coverage must be provided by the homeowners policy if the injured is to a resident or hired
domestic servant in the home
D. The employer must buy workers compensation insurance on the domestic employee
C- If a domestic servant is injured while working in the home, the homeowners insurance for the
employer must provide the workers compensation coverage for the domestic employee
5. Vacancy on the BOP can eliminate certain perils - ANS-A. After 60 Days
If the premises have been vacant for over 60 days, many important perils (such as glass
breakage, vandalism, and theft) will be excluded.
6. An insurer's shared participation percentage in the Urban Enterprise Zone (UEZ)program is
based on: - ANS-A. The number of written policies in the urban enterprise zone.
B. The discretion of the commissioner of insurance
C. The number of years operating in the state
D. the financial size of the insurer.
A- The insurer's participation percentage in the UEZ program is based on the number of policies
the insurer has in force in that urban enterprise zone.
7. The minimum limits of a basic automobile liability insurance required by the state of New
Jersey is: - ANS-A. 20/40/10
B. 25/50/25
C. 12.5/ 25/ 7.5
D. $15,000 of PIP and $5,000 of PDL
,D- By state law, the basic auto policy must contain PIP coverage and an optional $5,000 for
property damage liability.
8. The Commissioner may suspend, revoke, refuse to renew, or refuse to issue a license. Prior
to the revocation or denial of a license, the Commissioner must provide to the licensee or
applicant - ANS-A. An opportunity for the individual to have a hearing
B. Neither of the answers
C. Both of the answers
D. The findings which led to the commissioner's decision.
C- Before the Commissioner can take any action against an agent, the agent has the right to a
hearing regarding the Commissioner's findings.
9. An agent must notify the Department of Insurance of any administrative actions levied against
her within - ANS-A. 30 days of the final
disposition of the matter
B.60 days.
C.10 days of being charged.
D.24 hours.
A- An agent must notify the Department of Insurance of any administrative actions taken against
her within 30 days of the disposition of the action.
10. Which of the following is an optional coverage on the standard auto policy but not available
on the basic auto policy? - ANS-A. Personal injury protection
B. Roadside assistance
C. Auto physical damage coverage
D. Uninsured and underinsured motorists
D- Uninsured and underinsured motorist coverage is available as an option on the standard
auto policy but not available on the basic. The other three choices are all available on the basic
auto policy.
11. Making, circulating or distributing information about benefits which can confuse or mislead a
potential customer is an example of: - ANS-A. Defamation
, B. False
Advertising
C. Misrepresentation
D. Illegal Inducement
B- Advertising must be truthful in all aspects. Illegal inducement is another word for rebating.
Defamation is make false statements meant to injure someone in the insurance business
12. Policies are written for that person such as a home policy and do not transfer upon the sale
of that exposure are what type of contract - ANS-A. Aleatory Contract
B. Unilateral Contract
C. Conditional Contract
D. Personal Contract
D- Personal Contract
A policy is personal. In other words, with a sale of a car or house the policy does not
automatically transfer to the new owner.
13. An unauthorized company writing business in the state that is not subject to state approved
policy forms, rates, or rules is known as a - ANS-A. Stock insurer.
B. Surplus Lines insurer.
C. Reciprocal insurer.
D. Mutual insurer.
B- Surplus Lines Insurer
Surplus Lines companies can charge whatever they want and their policies can say whatever
they want. They are NOT authorized to do business in the state and therefore not subject to
state approved policy forms, rules and rates.
14. Making any misrepresentation or incomplete comparison of policies to any person for the
purpose of inducing that person to lapse a current policy best describes - ANS-A. coercion.
B. false advertising.
1. A contract in which only one party - the insurer - makes an enforceable promise is said to be -
ANS-A- Quotation
B- Unilateral
C- A contract of Indemnity
D- A contract of Adhesion
B- Unilateral
An insurance policy is considered to be unilateral, since only one party to the contract, the
insurance company, makes an enforceable promise.
2. An insurer whose main home office is domiciled in the state where they write business is
known as a - ANS-A- Alien Insurer
B- Foreign Insurer
C- Surplus Lines Insurer
D- Domestic Insurer
D- Domestic Insurer
A Domestic insurer is one whose main home office is located in the state they are doing
business. A Surplus Lines insurer could be a domestic carrier but the best answer choice is D.
3. All of the following are true regarding the Assigned Risk Plan for Workers Compensation in
New Jersey, Except - ANS-A. It's a method for employers to obtain Workers Compensation
insurance when they are having difficulty in the normal marketplace
B. If an employer is unable to obtain coverage in the normal marketplace, the state will assign
an insurer to write the risk
C. The plan approves the rate structures used by all insurers writing workers compensation
coverage in the state.
D. All admitted carriers writing workers compensation insurance in the state must belong to the
plan
,C- The Assigned Risk Plan is NOT involved in approving rating plans of the various insurers in
the state. The other choices are all correct
4. Which of the following is true regarding coverage for a domestic employee for workers
compensation in New Jersey? - ANS-A. The assigned risk plan for workers compensation in
new jersey would provide the coverage automatically
B. Domestic employees are exempt from coverage
C. Coverage must be provided by the homeowners policy if the injured is to a resident or hired
domestic servant in the home
D. The employer must buy workers compensation insurance on the domestic employee
C- If a domestic servant is injured while working in the home, the homeowners insurance for the
employer must provide the workers compensation coverage for the domestic employee
5. Vacancy on the BOP can eliminate certain perils - ANS-A. After 60 Days
If the premises have been vacant for over 60 days, many important perils (such as glass
breakage, vandalism, and theft) will be excluded.
6. An insurer's shared participation percentage in the Urban Enterprise Zone (UEZ)program is
based on: - ANS-A. The number of written policies in the urban enterprise zone.
B. The discretion of the commissioner of insurance
C. The number of years operating in the state
D. the financial size of the insurer.
A- The insurer's participation percentage in the UEZ program is based on the number of policies
the insurer has in force in that urban enterprise zone.
7. The minimum limits of a basic automobile liability insurance required by the state of New
Jersey is: - ANS-A. 20/40/10
B. 25/50/25
C. 12.5/ 25/ 7.5
D. $15,000 of PIP and $5,000 of PDL
,D- By state law, the basic auto policy must contain PIP coverage and an optional $5,000 for
property damage liability.
8. The Commissioner may suspend, revoke, refuse to renew, or refuse to issue a license. Prior
to the revocation or denial of a license, the Commissioner must provide to the licensee or
applicant - ANS-A. An opportunity for the individual to have a hearing
B. Neither of the answers
C. Both of the answers
D. The findings which led to the commissioner's decision.
C- Before the Commissioner can take any action against an agent, the agent has the right to a
hearing regarding the Commissioner's findings.
9. An agent must notify the Department of Insurance of any administrative actions levied against
her within - ANS-A. 30 days of the final
disposition of the matter
B.60 days.
C.10 days of being charged.
D.24 hours.
A- An agent must notify the Department of Insurance of any administrative actions taken against
her within 30 days of the disposition of the action.
10. Which of the following is an optional coverage on the standard auto policy but not available
on the basic auto policy? - ANS-A. Personal injury protection
B. Roadside assistance
C. Auto physical damage coverage
D. Uninsured and underinsured motorists
D- Uninsured and underinsured motorist coverage is available as an option on the standard
auto policy but not available on the basic. The other three choices are all available on the basic
auto policy.
11. Making, circulating or distributing information about benefits which can confuse or mislead a
potential customer is an example of: - ANS-A. Defamation
, B. False
Advertising
C. Misrepresentation
D. Illegal Inducement
B- Advertising must be truthful in all aspects. Illegal inducement is another word for rebating.
Defamation is make false statements meant to injure someone in the insurance business
12. Policies are written for that person such as a home policy and do not transfer upon the sale
of that exposure are what type of contract - ANS-A. Aleatory Contract
B. Unilateral Contract
C. Conditional Contract
D. Personal Contract
D- Personal Contract
A policy is personal. In other words, with a sale of a car or house the policy does not
automatically transfer to the new owner.
13. An unauthorized company writing business in the state that is not subject to state approved
policy forms, rates, or rules is known as a - ANS-A. Stock insurer.
B. Surplus Lines insurer.
C. Reciprocal insurer.
D. Mutual insurer.
B- Surplus Lines Insurer
Surplus Lines companies can charge whatever they want and their policies can say whatever
they want. They are NOT authorized to do business in the state and therefore not subject to
state approved policy forms, rules and rates.
14. Making any misrepresentation or incomplete comparison of policies to any person for the
purpose of inducing that person to lapse a current policy best describes - ANS-A. coercion.
B. false advertising.
