NJ PUBLIC ADJUSTMENTFINAL PAPER 2025/2026
QUESTIONS WITH ANSWERS GUARANTEE A+
✔✔Physical Hazard - ✔✔circumstance that increases the likelihood a probable severity
of a loss. For example, the storing of explosives in a home basement
✔✔Loss - ✔✔the experienced reduction of value, partial or complete, for which an
insured places a claim with the insurance company
✔✔Direct Loss - ✔✔property loss in which the insured peril is the proximate cause (an
unbroken chain of events) of the damage or destruction
✔✔Indirect Loss - ✔✔loss that is not a direct result of a peril. For example, damage to
property of a business firm would be a direct loss, but the loss of business earnings
because of a fire on its premises would be indirect loss
✔✔Consequential Losses - ✔✔value of loss resulting from loss of use of property. For
example fire damaging refrigeration equipment resulting in food spoilage
✔✔Friendly Fire - ✔✔kindling intentionally set in a fireplace, stove, furnace or other
containment that has not spread beyond it
✔✔Hostile Fire - ✔✔unfriendly fire not confined to its normal habitat. For example, fire in
the fireplace leaps onto the sofa
✔✔Actual Cash Value - ✔✔cost of replacing damaged or destroyed property with
comparable new property, minus depreciation
✔✔Replacement Cost Value - ✔✔sum it takes to replace an insured's damaged or
destroyed property with one of like kind and quality
✔✔Automatic Restoration of Limits - ✔✔provision in a property or liability policy stating
that after a loss has been paid, the total original limits of the policy are once again in
effect
✔✔Subrogation - ✔✔section of property insurance and liability insurance policies giving
an insurer the right to take legal action against a third party responsible for a loss to an
insured for which a claim has been paid
✔✔Appraisal - ✔✔valuation of property insurance and liability insurance policies giving
an insurer the right to take legal action against a third party responsible for a loss to an
insured for which a claim has been paid
, ✔✔Coinsurance - ✔✔is a clause in policies stating that the insured must insure to at
least 80% of the replacement cost of their property. Its primary purpose is to encourage
the property owner to insure to value
✔✔Other Insurance Clause - ✔✔provision in a property or liability policy stipulating the
extent of coverage in the event that other insurance covers the same property
✔✔Contributing Insurance - ✔✔when two or more policies apply to the loss, each policy
pays its part of the loss
✔✔Pro Rata Liability - ✔✔provision in a property or liability policy stipulating the extent
of coverage in the event that other insurance covers the same property
✔✔Apportionment Clause - ✔✔clause in a property insurance policy that requires that
insurance coverage in that policy to be allocated in the proportion that it bears to the
total insurance coverage in force from all policies covering that particular property
✔✔Principle of Indemnity - ✔✔in a property casualty contract, the objective is to restore
an insured to the same financial position after the loss that he or she was in prior to the
loss. But the insured should not be able to profit by damage or destruction of property,
nor should the insured be in a worse financial position after a loss
✔✔Exclusions - ✔✔provision in an insurance policy that indicates what is denied
coverage
✔✔Demolition Insurance - ✔✔coverage that will indemnify the insured for the expense if
a building is damaged by a peril and zoning requirement codes mandate the building be
demolished
✔✔Demolition Clause - ✔✔provision that excludes the insurance company's liability for
indemnification of the insured for the insured's expenses incurred in the demolition of
undamaged property
✔✔Ordinance or Law Coverage - ✔✔coverage providing for the cost or restoration to
the undamaged portion of the damaged building, by building codes that is in force. This
coverage would also apply to the costs of demolition and debris removal of the
undamaged portions of the property in order to bring that portion up to code. Also
covers increased cost of reconstruction due to building code
✔✔Salvage - ✔✔legal status giving an insurance company all rights to an insured's
property. Once the insurance company has decided to pay you for your damaged
property, the insurance company has the right to recover part of the loss by the sale of
the damaged goods
QUESTIONS WITH ANSWERS GUARANTEE A+
✔✔Physical Hazard - ✔✔circumstance that increases the likelihood a probable severity
of a loss. For example, the storing of explosives in a home basement
✔✔Loss - ✔✔the experienced reduction of value, partial or complete, for which an
insured places a claim with the insurance company
✔✔Direct Loss - ✔✔property loss in which the insured peril is the proximate cause (an
unbroken chain of events) of the damage or destruction
✔✔Indirect Loss - ✔✔loss that is not a direct result of a peril. For example, damage to
property of a business firm would be a direct loss, but the loss of business earnings
because of a fire on its premises would be indirect loss
✔✔Consequential Losses - ✔✔value of loss resulting from loss of use of property. For
example fire damaging refrigeration equipment resulting in food spoilage
✔✔Friendly Fire - ✔✔kindling intentionally set in a fireplace, stove, furnace or other
containment that has not spread beyond it
✔✔Hostile Fire - ✔✔unfriendly fire not confined to its normal habitat. For example, fire in
the fireplace leaps onto the sofa
✔✔Actual Cash Value - ✔✔cost of replacing damaged or destroyed property with
comparable new property, minus depreciation
✔✔Replacement Cost Value - ✔✔sum it takes to replace an insured's damaged or
destroyed property with one of like kind and quality
✔✔Automatic Restoration of Limits - ✔✔provision in a property or liability policy stating
that after a loss has been paid, the total original limits of the policy are once again in
effect
✔✔Subrogation - ✔✔section of property insurance and liability insurance policies giving
an insurer the right to take legal action against a third party responsible for a loss to an
insured for which a claim has been paid
✔✔Appraisal - ✔✔valuation of property insurance and liability insurance policies giving
an insurer the right to take legal action against a third party responsible for a loss to an
insured for which a claim has been paid
, ✔✔Coinsurance - ✔✔is a clause in policies stating that the insured must insure to at
least 80% of the replacement cost of their property. Its primary purpose is to encourage
the property owner to insure to value
✔✔Other Insurance Clause - ✔✔provision in a property or liability policy stipulating the
extent of coverage in the event that other insurance covers the same property
✔✔Contributing Insurance - ✔✔when two or more policies apply to the loss, each policy
pays its part of the loss
✔✔Pro Rata Liability - ✔✔provision in a property or liability policy stipulating the extent
of coverage in the event that other insurance covers the same property
✔✔Apportionment Clause - ✔✔clause in a property insurance policy that requires that
insurance coverage in that policy to be allocated in the proportion that it bears to the
total insurance coverage in force from all policies covering that particular property
✔✔Principle of Indemnity - ✔✔in a property casualty contract, the objective is to restore
an insured to the same financial position after the loss that he or she was in prior to the
loss. But the insured should not be able to profit by damage or destruction of property,
nor should the insured be in a worse financial position after a loss
✔✔Exclusions - ✔✔provision in an insurance policy that indicates what is denied
coverage
✔✔Demolition Insurance - ✔✔coverage that will indemnify the insured for the expense if
a building is damaged by a peril and zoning requirement codes mandate the building be
demolished
✔✔Demolition Clause - ✔✔provision that excludes the insurance company's liability for
indemnification of the insured for the insured's expenses incurred in the demolition of
undamaged property
✔✔Ordinance or Law Coverage - ✔✔coverage providing for the cost or restoration to
the undamaged portion of the damaged building, by building codes that is in force. This
coverage would also apply to the costs of demolition and debris removal of the
undamaged portions of the property in order to bring that portion up to code. Also
covers increased cost of reconstruction due to building code
✔✔Salvage - ✔✔legal status giving an insurance company all rights to an insured's
property. Once the insurance company has decided to pay you for your damaged
property, the insurance company has the right to recover part of the loss by the sale of
the damaged goods
