New Jersey Property & Casualty Practice Test

Answer choices

1. A. $100,000 in addition to the at-fault driver's $35,000.
2. B. $35,000, because UIM always equals the other driver's liability limit. No further coverage qualification would apply here.
3. C. $135,000, because both policy limits are added together.
4. D. $65,000, the difference between Rosa's $100,000 UIM limit and the at-fault driver's $35,000 liability limit.

Wrong-answer review

• A. $100,000 in addition to the at-fault driver's $35,000.: Incorrect. New Jersey UIM is described as a difference-of-limits structure, not automatic stacking on top of the tortfeasor's full limit.
• B. $35,000, because UIM always equals the other driver's liability limit. No further coverage qualification would apply here.: Incorrect. The other driver's limit is subtracted from the insured's higher UIM limit. The choice also overstates the rule by treating that result as automatic instead of applying the complete policy and governing requirements.
• C. $135,000, because both policy limits are added together.: Incorrect. The limits are not simply stacked for the UIM maximum.

Answer choices

1. A. Collision coverage, because any physical dent is legally a collision. Categorically.
2. B. Bodily Injury Liability coverage.
3. C. Comprehensive coverage, sometimes called other-than-collision coverage.
4. D. PIP income continuation.

Answer choices

1. A. The act predates the retroactive date, so the claim may fall outside coverage even though it was made during the current policy period.
2. B. The claim is automatically covered because it was reported promptly.
3. C. The claim is automatically covered because no lawsuit existed in 2023. This outcome would follow from the stated circumstance alone under the described policy.
4. D. The claim must be treated as an occurrence-form claim.

Answer choices

1. A. DP-1, because every cause of loss is covered unless the policy specifically excludes it.
2. B. DP-3, because the dwelling is generally insured on an open-perils basis subject to the form's exclusions.
3. C. DP-2, because both the dwelling and personal property are automatically open-perils.
4. D. A standard flood policy, because it replaces the need for a dwelling policy on rental property.

Answer choices

1. A. Coinsurance, because witnesses determine the insurance-to-value percentage.
2. B. Replacement cost, because documents convert liability into property coverage. That result would apply automatically.
3. C. Cooperation with the insurer's investigation, subject to the applicable policy and claimant/insured obligations.
4. D. FAIR Plan eligibility.

Answer choices

1. A. New Jersey claims rules require a reasonable, specific explanation tying the policy basis to the facts of the claim.
2. B. There is no defect if the adjuster reached the correct result internally. The stated rule would govern without exception.
3. C. The only defect is failure to offer a higher deductible.
4. D. The denial must be oral rather than written.

Answer choices

1. A. Products-completed operations. This would operate automatically under the described form.
2. B. Flood coverage.
3. C. Forgery or alteration coverage, subject to the commercial crime form.
4. D. Workers compensation.

Answer choices

1. A. Whether the retailer can prove the loss exceeded the deductible by at least 20 percent. As a certainty.
2. B. Whether the cause of loss is one of the named causes insured by the Basic form.
3. C. Whether the business has a CGL policy with matching limits.
4. D. Whether the building is worth more on the loss date than at policy inception.

Answer choices

1. A. The policyholder is correct; a $250 deductible is fixed by statute for every policy.
2. B. The only permitted alternative is a $10,000 deductible.
3. C. PIP deductibles apply only to property damage, so the amount is irrelevant to medical benefits. The insurer could apply that result without examining another relevant contract provision.
4. D. $250 is a common/default choice, but higher PIP medical deductibles such as $500, $1,000, $2,000, or $2,500 may be selected to reduce premium.

Answer choices

1. A. The principal.
2. B. The surety.
3. C. The coinsurer.
4. D. The obligee.