NJ PSI PROPERTY AND CASUALTY RELIABLE TEST QUESTIONS
WITH SOLUTIONS A+ 2025/2026
Which of the following defenses against negligence reduces damages in proportion to
the degree of negligence?
A
Statute of limitations
B
Assumption of risk
C
Comparative negligence
D
Contributory negligence - ✔✔C
✔✔casualty basics:
personal injury liability includes which of the following:
A
Libel and slander
B
Sickness and disease
C
Theft
D
Medical payments
it is injury other than bodily injury or property damage - ✔✔A
personal injury includes, libel, slander, false arrest, invasion of privary and copy
infringment
✔✔casualty basics:
what are punitive damages
Punitive damages are so limited as to be punitive toward the plaintiff
B
Punitive damages are assessed in addition to specific damages and are typically
covered by insurance policies
C
Punitive damages are assessed as a punishment for extremely objectionable conduct
by a negligent party
D
Punitive damages are limited to disfigurement and mental anguish - ✔✔C
Punitive damages are an AWARD to an injured party, in addition to compensatory
damages intended to discourage a wrongdoer from repeating acts of negligence
✔✔Casualty basics:
,Which of the following might be considered a negligent act?
A
Breach of an employment contract
B
Robbery of a sporting goods store
C
Assaulting a neighbor over a boundary dispute
D
Unintentionally renting a leaky boat to vacationers - ✔✔D
✔✔causality basics:
negligent act - ✔✔type of tort which that is an unintentional, civil act (ruling out robbery
and assault)
unintentional failure to exercise a reasonable degree of care, making it an example of
negligence.
✔✔state law-
Temporary licenses are granted by the Commissioner in the following situations, except:
A
Prospective licensees sells insurance while preparing to take the state licensing exam
B
The spouse of a disabled producer operates their agency until they can return to work
C
A designee acts on behalf of an individual entering active duty in the armed forces
D
A partner maintains the license of a business entity following the death of the entity's
designated license - ✔✔A
temporary license allows individuals to assume management of an insurance business
on behalf of deceased or disabled, active militant,
Prospective licensees must complete the prelicensing education and examination
requirements and be licensed before they can sell, solicit, or negotiate insurance.
✔✔state law-
All of the following statements regarding prerequisites for producer licensing are correct,
except:
A
Individual applicants must be fingerprinted
B
Business entities must complete prelicensing education requirements
C
An applicant holding a CLU is exempt from prelicensing education requirements
D
Applicants for credit insurance need not take a licensing exam - ✔✔B
, business entities must designate one individual to be responsible for all insurance
related activities
✔✔state law:
funeral expense benefit
-2,000
-5,000
-2500
-1500 - ✔✔2500
✔✔a standard fire policy in pennsylvania may be cancelled by the insurer - ✔✔at any
time with 5 days written notice
✔✔conditioins that increase the probability of an insured loss - ✔✔hazard
✔✔courts may rely on this legal doctrine to see if coverage applies - ✔✔reasonable
expectations
✔✔a person decides not to get phyiscal damage coverage on their snowmobile what
form of risk management is this - ✔✔retention
✔✔what is a component of a rate - ✔✔loss reserves, loss adjusting expenses, operating
expenses, profits
✔✔ambiguous wording on an insurance contract would be most helpful towards -
✔✔the insured
✔✔Which HO form covers damage to the DWELLING that occurs as the result of any
event that is not specifically excluded in the polic - ✔✔HO-3 Special Form
Coverage for the home and other structures is written on an all-risk basis - damage from
any peril is covered, unless specifically excluded. Broad coverages extends to dwelling
✔✔A temporary license may be issued without state examination to all of the following
EXCEPT - ✔✔A prospective producer who is currently enrolled in a pre-licensing
insurance class
✔✔Garage liability insurance - ✔✔offers financial protection against lawsuits for those
who sell, store, and service vehicles. This includes auto dealers, service stations, and
parking garage
✔✔What is the term if the buyer of an insurance policy receives any part of the
producers commission or anything else of significant values as an inducement to
purchase a policy. - ✔✔rebating
WITH SOLUTIONS A+ 2025/2026
Which of the following defenses against negligence reduces damages in proportion to
the degree of negligence?
A
Statute of limitations
B
Assumption of risk
C
Comparative negligence
D
Contributory negligence - ✔✔C
✔✔casualty basics:
personal injury liability includes which of the following:
A
Libel and slander
B
Sickness and disease
C
Theft
D
Medical payments
it is injury other than bodily injury or property damage - ✔✔A
personal injury includes, libel, slander, false arrest, invasion of privary and copy
infringment
✔✔casualty basics:
what are punitive damages
Punitive damages are so limited as to be punitive toward the plaintiff
B
Punitive damages are assessed in addition to specific damages and are typically
covered by insurance policies
C
Punitive damages are assessed as a punishment for extremely objectionable conduct
by a negligent party
D
Punitive damages are limited to disfigurement and mental anguish - ✔✔C
Punitive damages are an AWARD to an injured party, in addition to compensatory
damages intended to discourage a wrongdoer from repeating acts of negligence
✔✔Casualty basics:
,Which of the following might be considered a negligent act?
A
Breach of an employment contract
B
Robbery of a sporting goods store
C
Assaulting a neighbor over a boundary dispute
D
Unintentionally renting a leaky boat to vacationers - ✔✔D
✔✔causality basics:
negligent act - ✔✔type of tort which that is an unintentional, civil act (ruling out robbery
and assault)
unintentional failure to exercise a reasonable degree of care, making it an example of
negligence.
✔✔state law-
Temporary licenses are granted by the Commissioner in the following situations, except:
A
Prospective licensees sells insurance while preparing to take the state licensing exam
B
The spouse of a disabled producer operates their agency until they can return to work
C
A designee acts on behalf of an individual entering active duty in the armed forces
D
A partner maintains the license of a business entity following the death of the entity's
designated license - ✔✔A
temporary license allows individuals to assume management of an insurance business
on behalf of deceased or disabled, active militant,
Prospective licensees must complete the prelicensing education and examination
requirements and be licensed before they can sell, solicit, or negotiate insurance.
✔✔state law-
All of the following statements regarding prerequisites for producer licensing are correct,
except:
A
Individual applicants must be fingerprinted
B
Business entities must complete prelicensing education requirements
C
An applicant holding a CLU is exempt from prelicensing education requirements
D
Applicants for credit insurance need not take a licensing exam - ✔✔B
, business entities must designate one individual to be responsible for all insurance
related activities
✔✔state law:
funeral expense benefit
-2,000
-5,000
-2500
-1500 - ✔✔2500
✔✔a standard fire policy in pennsylvania may be cancelled by the insurer - ✔✔at any
time with 5 days written notice
✔✔conditioins that increase the probability of an insured loss - ✔✔hazard
✔✔courts may rely on this legal doctrine to see if coverage applies - ✔✔reasonable
expectations
✔✔a person decides not to get phyiscal damage coverage on their snowmobile what
form of risk management is this - ✔✔retention
✔✔what is a component of a rate - ✔✔loss reserves, loss adjusting expenses, operating
expenses, profits
✔✔ambiguous wording on an insurance contract would be most helpful towards -
✔✔the insured
✔✔Which HO form covers damage to the DWELLING that occurs as the result of any
event that is not specifically excluded in the polic - ✔✔HO-3 Special Form
Coverage for the home and other structures is written on an all-risk basis - damage from
any peril is covered, unless specifically excluded. Broad coverages extends to dwelling
✔✔A temporary license may be issued without state examination to all of the following
EXCEPT - ✔✔A prospective producer who is currently enrolled in a pre-licensing
insurance class
✔✔Garage liability insurance - ✔✔offers financial protection against lawsuits for those
who sell, store, and service vehicles. This includes auto dealers, service stations, and
parking garage
✔✔What is the term if the buyer of an insurance policy receives any part of the
producers commission or anything else of significant values as an inducement to
purchase a policy. - ✔✔rebating
