Insurance Fundamentals
Not publishedof exam
risk conceptscontract lawpolicy partsloss settlement
Property Coverage
Not publishedof exam
dwelling formshomeowners formscommercial propertyinland marine
Casualty Coverage
Not publishedof exam
liability lawpersonal autocommercial liabilityworkers compensation
New Jersey Law
Not publishedof exam
producer licensingtrade practicesNew Jersey autoresidual markets
Quick Facts
- Exam structure
- Two separate producer exams
- Property exam
- 79 published items
- Casualty exam
- 91 published items
- Time limit
- 210 minutes each
- Passing score
- 70% each
- Current PSI fee
- $38 each; verify checkout
- Exam delivery
- Test center or remote
- State regulator
- New Jersey DOBI
- Prelicensing
- 20 hours per line
- Unscored items
- Possible 5-19 experimental
Risk and Contract Essentials
- Pure risk
- Loss or no loss
- Speculative risk
- Loss or possible gain
- Peril
- Direct cause of loss
- Hazard
- Condition increasing loss chance
- Insurable interest
- Financial stake in preservation
- Indemnity
- Restores approximate pre-loss position
- Subrogation
- Insurer pursues responsible third party
- Aleatory
- Unequal values depend on chance
Policy Parts and Contract Law
- Declarations
- Who, what, where, limits
- Insuring agreement
- Insurer's core coverage promise
- Conditions
- Duties and coverage requirements
- Exclusions
- Removed causes or property
- Representation
- Applicant's substantially true statement
- Concealment
- Withholding a material fact
- Binder
- Temporary evidence of coverage
- Estoppel
- Blocks inconsistent asserted rights
Homeowners Coverage Letters
Home, structures, belongings, loss, liability, medical.
A dwellingB structuresC propertyD useE liabilityF medical
Named Perils vs Open Perils
Named perils
- Listed causes only
- Insured proves cause
Open perils
- All except exclusions
- Insurer proves exclusion
Coverage burden follows peril form
Property Claim Coverage Path
- Identify damaged property→Check property eligibility
- Identify initiating cause→Apply proximate cause
- Named-peril form→Insured proves listed peril
- Open-peril form→Insurer proves exclusion
- Direct damage covered→Check indirect coverage
- Valuation disputed→Compare ACV and replacement
- Underinsured property→Apply coinsurance formula
- Payment calculated→Subtract applicable deductible
Property Loss and Valuation
- Direct loss
- Immediate physical damage
- Indirect loss
- Consequence of direct loss
- Named perils
- Only listed causes covered
- Open perils
- All causes except exclusions
- Actual cash value
- Replacement cost minus depreciation
- Replacement cost
- Replace without depreciation deduction
- Coinsurance
- Rewards insurance to value
- Proximate cause
- Unbroken dominant loss cause
ACV vs Replacement Cost
Actual cash value
- Depreciation deducted
- Lower settlement likely
Replacement cost
- No depreciation deduction
- Replacement conditions may apply
Read valuation condition first
Dwelling and Homeowners Forms
- DP-1
- Basic named-peril dwelling form
- DP-2
- Broad named-peril dwelling form
- DP-3
- Open-peril dwelling coverage
- HO-2
- Broad named-peril homeowners
- HO-3
- Open dwelling; named contents
- HO-4
- Renters contents and liability
- HO-5
- Open dwelling and contents
- HO-6
- Condominium unit-owners coverage
- HO-8
- Modified older-home coverage
Commercial Property Coverages
- Building coverage
- Scheduled building and fixtures
- Business personal property
- Insured's business contents
- Others' property
- Custodied third-party property
- Basic causes
- Limited named-peril form
- Broad causes
- Expanded named-peril form
- Special causes
- Open-peril commercial form
- Business income
- Replaces covered lost earnings
- Extra expense
- Funds faster business continuation
- Equipment breakdown
- Covers specified mechanical breakdown
Negligence Elements
Duty, breach, cause, damages build negligence.
DutyBreachCausationDamages
Collision vs Comprehensive
Collision
- Vehicle impact
- Vehicle overturn
Comprehensive
- Theft, fire, flood
- Animal impact included
Animal impact is comprehensive
Liability Coverage Selection Path
- Third-party injury alleged→Test negligence elements
- Business injury or damage→Check CGL Coverage A
- Advertising offense alleged→Check CGL Coverage B
- Minor premises injury→Check CGL Coverage C
- Vehicle causes injury→Check auto liability
- Employee suffers job injury→Check workers compensation
- Employer separately sued→Check employers liability
- Primary limit exhausted→Check umbrella attachment
Liability Law Essentials
- Duty
- Required standard of conduct
- Breach
- Failure meeting required duty
- Causation
- Breach produces claimed injury
- Damages
- Legally recognized loss
- Compensatory damages
- Repay actual claimant loss
- Punitive damages
- Punish egregious misconduct
- Strict liability
- Fault proof not required
- Vicarious liability
- Responsibility for another's acts
Personal Auto Parts
A liability, B medical, C uninsured, D damage.
A liabilityB medicalC uninsuredD damage
Occurrence vs Claims-Made
Occurrence
- Injury timing controls
- Later claims may qualify
Claims-made
- Reporting timing controls
- Retroactive date matters
Find trigger before exclusions
Personal Auto Policy Map
- Part A
- Liability coverage
- Part B
- Medical payments coverage
- Part C
- Uninsured motorists coverage
- Part D
- Damage to your auto
- Collision
- Impact or vehicle overturn
- Other-than-collision
- Specified noncollision causes
- Temporary substitute
- Replaces unavailable covered auto
- Nonowned auto
- Used but not owned
CGL Coverage Letters
A damage, B offenses, C medical.
A BI and PDB personal advertisingC medical
Workers Compensation vs Employers Liability
Workers compensation
- Statutory benefits
- Job-related employee injury
Employers liability
- Specified employer suits
- Policy limits apply
Classify benefit versus lawsuit
Commercial Casualty Coverages
- CGL Coverage A
- Bodily injury; property damage
- CGL Coverage B
- Personal and advertising injury
- CGL Coverage C
- Medical payments
- Occurrence form
- Trigger follows injury timing
- Claims-made form
- Trigger follows claim reporting
- Retroactive date
- Bars earlier-caused claims
- Extended reporting period
- Extends claim reporting window
- Workers compensation
- Statutory employee benefits
- Employers liability
- Covers specified employer lawsuits
- Umbrella
- Broad excess liability layer
NJ Standard vs Basic Auto
Standard policy
- 35/70/25 minimum liability
- UM/UIM available
Basic policy
- $5,000 property damage
- Bodily injury optional
Basic sacrifices important protections
New Jersey Auto Claim Path
- Insured suffers injury→Start with PIP
- Insured causes injury→Use bodily injury liability
- Insured damages property→Use property damage liability
- Uninsured driver causes loss→Check UM coverage
- Underinsured driver causes loss→Check UIM coverage
- Covered auto collides→Check collision coverage
- Theft or flood occurs→Check comprehensive coverage
- Pain-and-suffering suit→Apply selected lawsuit option
New Jersey Producer Rules
- NJDOBI
- State insurance regulator
- PSI
- Current examination administrator
- Property education
- 20 approved hours
- Casualty education
- 20 approved hours
- Resident CE
- 24 credits biennially
- Ethics CE
- Three credits within total
- Score validity
- One year
- Temporary authority
- 60 supervised days
- Current exam fee
- $38; verify PSI checkout
Limited vs Unlimited Lawsuit
Limited lawsuit
- Threshold injury required
- Noneconomic suits restricted
Unlimited lawsuit
- No injury threshold
- Broader noneconomic suit rights
Option affects pain-and-suffering rights
New Jersey Auto and Markets
- Standard liability floor
- 35/70/25
- Basic property damage
- $5,000 per accident
- Basic bodily injury
- Optional $10,000 per accident
- Basic PIP
- $15,000 per person accident
- Standard PIP range
- $15,000 through $250,000 plus
- Standard UM/UIM
- Available up to liability limits
- Limited lawsuit
- Threshold controls noneconomic suits
- Unlimited lawsuit
- Retains broader noneconomic suit rights
- PAIP
- Personal auto residual market
- FAIR Plan
- Property residual market
- NJPLIGA
- Licensed-insurer insolvency safety net
Common Traps
Not One Combined Exam
Property and Casualty separate ≠ Each receives independent score
Conflicting Fee Pages
Current PSI bulletin says $38 ≠ Always verify PSI checkout
Stale Auto Minimums
Current Standard floor 35/70/25 ≠ 25/50/25 ended after 2025
Open Perils Still Exclude
Open never means unlimited ≠ Exclusions still control
PIP Is Not Liability
PIP starts insured injury coverage ≠ Liability protects against third-party claims
Basic Means Minimal
No standard bodily injury ≠ No UM/UIM coverage
Claims-Made Needs Two Dates
Check retroactive date ≠ Check reporting window
Last Minute
- 1.Schedule Property and Casualty separately
- 2.Verify current PSI checkout fee
- 3.Memorize 79 and 91 items
- 4.Know 210 minutes each
- 5.Target at least 70% each
- 6.Map policy declarations through exclusions
- 7.Distinguish named and open perils
- 8.Practice ACV and coinsurance math
- 9.Memorize PAP Parts A-D
- 10.Memorize CGL Coverages A-C
- 11.Know NJ Standard 35/70/25
- 12.Contrast Standard and Basic policies
- 13.Contrast both lawsuit options
- 14.Review PAIP, FAIR Plan, NJPLIGA
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