NJ PSI PROPERTY AND CASUALTY EVALUATION EXAM
2025/2026 ANSWERS AND QUESTIONS GRADED A+
✔✔Insuring Agreement - ✔✔Promises — Policy coverages, additional coverages, perils
insured against, direct and indirect property losses.
✔✔Conditions - ✔✔Cancellation, non-renewal, misrepresentation, concealment or
fraud, Duties following a loss, valuation or loss settlement or how losses will be settled
✔✔Replacement Cost - ✔✔Replacement cost - depreciation equals actual cash value
✔✔Insurable Interest - ✔✔And property insurance in insurable interest must be present
at the time of the loss
✔✔Coinsurance - ✔✔Designed to encourage insurers to insure their property for the full
value many property policies require the insured to carry 80% properties replacement
cost
✔✔Other Insurance - ✔✔a provision in an insurance policy that defines how the policy
will respond if there is other valid insurance written on the same risk
✔✔Liberalization - ✔✔If the insured broadens coverage under a certain policy form or
endorsement without increasing the premium the insurance existing policy is considered
to contain the broad and coverage immediately liberalization condition only works to
broaden coverage not restrict
✔✔Bailee - ✔✔the party who acquires possession, but not the title, of personal property
by one party to another, under agreement
✔✔liability insurance - ✔✔Provides third-party coverage the third-party is a person who
suffers damages due to the actions of an insured
✔✔Torts - ✔✔legal wrongs committed against a person
✔✔Contributory Negligence - ✔✔A legal defense that may be raised when the
defendant feels that the conduct of the plaintiff somehow contributed to any injuries or
damages that were sustained by the plaintiff.
✔✔Comparative Negligence - ✔✔A theory in tort law under which the liability for injuries
resulting from negligent acts is shared by all parties who were negligent (including the
injured party), on the basis of each person's proportionate negligence.
✔✔Assumption of Risk - ✔✔voluntarily and knowingly subjecting oneself to danger
, ✔✔Vicarious Liability - ✔✔when one person is liable for the torts of another
✔✔Absolute Liability - ✔✔liability without fault
✔✔Supplementary Payments - ✔✔Provide extra coverage over and above the insured's
limits of liability, Used for defense costs.
✔✔Compensatory Damages - ✔✔Damages which are intended to compensate the
injured third party for actual losses incurred
✔✔Special damages also called economic losses - ✔✔Examples medical bills lost
income due to inability to work, funeral expenses, repair or temporary storage of
property.
✔✔General damages also called non-economic losses - ✔✔More difficult to calculate
but include compensation for pain and suffering, inconvenience, disfigurement, loss of
limbs, loss of sight or hearing, loss of consortium
✔✔Punitive Damages - ✔✔Monetary damages that may be awarded to a plaintiff to
punish the defendant and deter similar conduct in the future.
✔✔Aggregate Limit - ✔✔The maximum amount an insurer will pay for all covered losses
during the covered policy period.
✔✔umbrella policy - ✔✔Provide broad coverage for an insurance liability above and
beyond the coverage limits provided by underlying contracts
✔✔Personal Injury - ✔✔Mental anguish, false arrest, wrongful evection, libel, slander,
defamation, invasion of privacy.
✔✔Errors and omissions insurance - ✔✔Covered losses for insurance professional
would include the failure to recommend proper coverages or the failure to process
applications as required by insurance companies
✔✔Cancellation due to nonpayment of premium or moral hazard - ✔✔Written notice
must be mailed or delivered at least 10 days prior to the effective date of cancellation
✔✔Hurricane Deductible - ✔✔Insurers and the fair plan may file to use mandatory
hurricane deductibles up to 5% and optional hurricane deductibles up to 10%
✔✔Surplus lines insurance agent - ✔✔Requires prerequisite or corequisite of property
and casualty authorities
2025/2026 ANSWERS AND QUESTIONS GRADED A+
✔✔Insuring Agreement - ✔✔Promises — Policy coverages, additional coverages, perils
insured against, direct and indirect property losses.
✔✔Conditions - ✔✔Cancellation, non-renewal, misrepresentation, concealment or
fraud, Duties following a loss, valuation or loss settlement or how losses will be settled
✔✔Replacement Cost - ✔✔Replacement cost - depreciation equals actual cash value
✔✔Insurable Interest - ✔✔And property insurance in insurable interest must be present
at the time of the loss
✔✔Coinsurance - ✔✔Designed to encourage insurers to insure their property for the full
value many property policies require the insured to carry 80% properties replacement
cost
✔✔Other Insurance - ✔✔a provision in an insurance policy that defines how the policy
will respond if there is other valid insurance written on the same risk
✔✔Liberalization - ✔✔If the insured broadens coverage under a certain policy form or
endorsement without increasing the premium the insurance existing policy is considered
to contain the broad and coverage immediately liberalization condition only works to
broaden coverage not restrict
✔✔Bailee - ✔✔the party who acquires possession, but not the title, of personal property
by one party to another, under agreement
✔✔liability insurance - ✔✔Provides third-party coverage the third-party is a person who
suffers damages due to the actions of an insured
✔✔Torts - ✔✔legal wrongs committed against a person
✔✔Contributory Negligence - ✔✔A legal defense that may be raised when the
defendant feels that the conduct of the plaintiff somehow contributed to any injuries or
damages that were sustained by the plaintiff.
✔✔Comparative Negligence - ✔✔A theory in tort law under which the liability for injuries
resulting from negligent acts is shared by all parties who were negligent (including the
injured party), on the basis of each person's proportionate negligence.
✔✔Assumption of Risk - ✔✔voluntarily and knowingly subjecting oneself to danger
, ✔✔Vicarious Liability - ✔✔when one person is liable for the torts of another
✔✔Absolute Liability - ✔✔liability without fault
✔✔Supplementary Payments - ✔✔Provide extra coverage over and above the insured's
limits of liability, Used for defense costs.
✔✔Compensatory Damages - ✔✔Damages which are intended to compensate the
injured third party for actual losses incurred
✔✔Special damages also called economic losses - ✔✔Examples medical bills lost
income due to inability to work, funeral expenses, repair or temporary storage of
property.
✔✔General damages also called non-economic losses - ✔✔More difficult to calculate
but include compensation for pain and suffering, inconvenience, disfigurement, loss of
limbs, loss of sight or hearing, loss of consortium
✔✔Punitive Damages - ✔✔Monetary damages that may be awarded to a plaintiff to
punish the defendant and deter similar conduct in the future.
✔✔Aggregate Limit - ✔✔The maximum amount an insurer will pay for all covered losses
during the covered policy period.
✔✔umbrella policy - ✔✔Provide broad coverage for an insurance liability above and
beyond the coverage limits provided by underlying contracts
✔✔Personal Injury - ✔✔Mental anguish, false arrest, wrongful evection, libel, slander,
defamation, invasion of privacy.
✔✔Errors and omissions insurance - ✔✔Covered losses for insurance professional
would include the failure to recommend proper coverages or the failure to process
applications as required by insurance companies
✔✔Cancellation due to nonpayment of premium or moral hazard - ✔✔Written notice
must be mailed or delivered at least 10 days prior to the effective date of cancellation
✔✔Hurricane Deductible - ✔✔Insurers and the fair plan may file to use mandatory
hurricane deductibles up to 5% and optional hurricane deductibles up to 10%
✔✔Surplus lines insurance agent - ✔✔Requires prerequisite or corequisite of property
and casualty authorities
