Evergreen Insurance Prep

New Jersey Property & Casualty Insurance License, Practice Exams

New Jersey Property & Casualty producer licensing (PSI). National P&C insurance knowledge plus New Jersey insurance law (choice no-fault auto, property and homeowners, workers' compensation), authored from public-domain statutes.
Content last updated 2 July 2026

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Each module is scored separately here so you know exactly where you stand. To pass the real New Jersey exam you need 70%.

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The free sample gives you about 20 questions per module. The full bank contains every question — general insurance plus state law — with written, statute-cited explanations. $49, one time, lifetime access on up to 3 devices — every state and line we add later included.

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Frequently asked questions

How is the New Jersey producer licensing exam structured?

New Jersey licenses Property & Casualty producers through PSI, requiring 70% to pass. This bank covers the national property & casualty material plus New Jersey law - choice no-fault auto (the Standard vs. Basic policy, the current 35/70/25 minimum limits and the verbal-threshold tort options), property and homeowners (the standard fire policy, the FAIR Plan and PLIGA), and workers' compensation (the 70%-of-wage benefit and the Second Injury Fund).

What score do I need to pass?

You need 70%. Practice each module to that level and run the full exam simulation before your test date.

Are these real exam questions?

No vendor publishes the live exam. Every question here is original, written to the official content outline and grounded in public-domain sources — including the New Jersey statutes (Titles 17, 39 and 34) for the state-law questions, with the statute section cited in each explanation.

How many practice questions are included?

The full New Jersey bank contains 1023 questions (general insurance plus New Jersey law), with written, source-cited explanations. The free sample gives you about 20 questions per module.

What does access cost?

$49, one time, for lifetime access — and it includes every state and line we add later, at no extra charge. No subscription.

Can I use it on more than one device?

Yes. One purchase works on up to 3 of your devices, for example your laptop, phone and tablet, so you can practise wherever you are. Your progress is saved on each device.

Do I need to create an account?

No. The practice tests run in your browser with no signup. Your score history is saved on your own device.

Sample New Jersey Property & Casualty Insurance License practice questions

A selection of free questions with answers and explanations. Use the interactive modules above for timed, scored drills.

Which Part of the Workers Compensation and Employers Liability Policy pays the benefits required by the workers' compensation law of a listed state, with no dollar limit on the amount paid?

  1. Part Three — Other States Insurance
  2. Part One — Workers Compensation ✓
  3. Part Four — Your Duties
  4. Part Two — Employers Liability

Why: Part One pays promptly all benefits required by the workers' compensation law of the states listed; because the law sets the benefits, there is no policy limit on Part One.

A dockworker loading and unloading ships, injured while working on the pier and over navigable waters, is most likely covered by:

  1. The Jones Act
  2. FELA
  3. Black Lung Benefits Act
  4. The Longshore and Harbor Workers' Compensation Act (LHWCA) ✓

Why: The LHWCA provides no-fault workers' compensation benefits to longshore, harbor, and maritime workers (such as those loading/unloading vessels) who are not seamen.

How do CGL aggregate limits reinstate?

  1. They reinstate automatically at the start of each new policy period (annual policy term) ✓
  2. They reinstate after each occurrence
  3. They never reinstate
  4. They reinstate only after a claim is paid

Why: Aggregate limits are the most paid during the policy period and reset at each new annual policy term, not after each claim.

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Under the health-insurer-primary PIP option, what is the role of the insured's own health coverage?

  1. The insured's health plan, HMO, or government program becomes primary for medical expenses, with auto PIP paying what health does not cover up to the PIP limit ✓
  2. The insured forfeits all PIP medical benefits and must rely solely on the health plan
  3. Auto PIP always pays medical bills first and the insured's health coverage responds only in excess
  4. It has no effect on personal injury protection benefits, which are paid the same either way

Why: Under the subsection d. option, the insured's health insurance/HMO/government program is primary for medical expense benefits and the auto insurer pays reasonable expenses not covered by health, up to the PIP limit.

What is the standard waiting period before Business Income coverage begins?

  1. No waiting period
  2. 72 hours ✓
  3. 24 hours
  4. 30 days

Why: The standard ISO Business Income form has a 72-hour waiting period from the time of direct physical loss before coverage applies.

The period of restoration under Business Income coverage ends on the earlier of:

  1. The policy expiration only
  2. One year after the loss in all cases
  3. 30 days after the loss, or when the building is sold
  4. The date the property is repaired/replaced with reasonable speed, or business resumes at a new location ✓

Why: The period of restoration ends on the date the property should be repaired/replaced with reasonable speed and similar quality, or when business resumes at a new permanent location, whichever is sooner.

The Accounts Receivable floater covers loss resulting from:

  1. Customers refusing to pay valid invoices
  2. Bad credit decisions
  3. Market downturns
  4. Inability to collect because records were destroyed by a covered peril ✓

Why: Accounts Receivable coverage pays for sums the insured cannot collect because receivable records were lost or destroyed by a covered cause of loss, plus extra collection and reconstruction costs.

In insurance terms, risk is best defined as:

  1. The financial value of a loss
  2. The certainty that a loss will occur
  3. The cause of a loss
  4. Uncertainty regarding the occurrence of a loss ✓

Why: Risk is the uncertainty about whether a loss will happen. Without uncertainty there is no insurable risk.

Which of the following losses is covered under "Other Than Collision" (comprehensive) rather than Collision?

  1. Rolling the vehicle over in a ditch
  2. Striking a guardrail
  3. Damage from hail, fire, theft, or hitting a deer ✓
  4. Colliding with another vehicle at an intersection

Why: Other Than Collision (comprehensive) covers losses such as fire, theft, hail, vandalism, glass breakage, and contact with animals like a deer.

Compared with the standard CGL, professional liability and D&O policies most often pay defense costs:

  1. Within the limit of insurance, eroding the available limit ✓
  2. Only after the SIR is doubled
  3. In addition to the limit
  4. Never

Why: Many specialty/management liability policies use defense-within-limits, so defense costs reduce the amount available for settlements.

The requirement that contracting parties be of legal age, sane, and not under the influence refers to which contract element?

  1. Offer and acceptance
  2. Competent parties ✓
  3. Legal purpose
  4. Consideration

Why: Competent parties means each party must have the legal capacity to contract, being of legal age, mentally competent, and sober.

In a liability policy, the insurer's 'duty to defend' generally means it must:

  1. Provide and pay for the insured's legal defense for covered claims, even groundless ones ✓
  2. Defend only criminal charges
  3. Pay only judgments, not legal costs
  4. Defend only after the insured hires a lawyer

Why: The duty to defend obligates the insurer to provide a legal defense against covered claims, including those that are groundless, false, or fraudulent.

Because insurance contracts are drafted by the insurer and the insured must accept them as written, they are characterized as contracts of:

  1. Utmost good faith
  2. Adhesion ✓
  3. Indemnity
  4. Aleatory nature

Why: A contract of adhesion is prepared by one party, the insurer, and offered on a take-it-or-leave-it basis; ambiguities are construed against the drafter.

Storing oily rags near a furnace is an example of which type of hazard?

  1. Speculative hazard
  2. Moral hazard
  3. Physical hazard ✓
  4. Morale hazard

Why: A physical hazard is a tangible condition of property or environment that increases the chance of loss, such as flammable materials near a heat source.

Part A of the PAP provides coverage for:

  1. Damage to the insured's own auto
  2. Medical payments to occupants of the insured auto
  3. Bodily injury and property damage liability the insured becomes legally responsible for ✓
  4. Theft of the insured vehicle

Why: Part A — Liability covers bodily injury and property damage for which an insured becomes legally liable due to an auto accident.

The 'Separation of Insureds' condition in the CGL means that:

  1. Each insured has separate limits
  2. Claims between insureds are always covered
  3. The policy applies separately to each insured as though each were the only insured, except as to the limits ✓
  4. The aggregate is doubled

Why: Separation of insureds applies the coverage separately to each insured (except for the shared limits), as if each were separately insured.

Even where PLIGA is obligated on a covered claim, in no event will it pay more than:

  1. The applicant's proven actual damages, with no dollar limit
  2. The limits of liability stated in the insolvent insurer's policy ✓
  3. Three times the statutory per-claimant covered-claim cap
  4. The full amount of any court judgment entered on the claim

Why: Section 8 provides the Association shall not be obligated 'in an amount in excess of the limits of liability stated in the policy of the insolvent insurer.'

Under the Building and Personal Property Coverage Form, which coverage applies to the building structure and permanently installed fixtures?

  1. Coverage A — Building ✓
  2. Coverage C — Personal Property of Others
  3. Coverage B — Business Personal Property
  4. Coverage D — Extra Expense

Why: Coverage A (Building) covers the described building, completed additions, fixtures, permanently installed machinery, and equipment.

Under N.J.S.A. 17:29B-4(9), failing to attempt in good faith to effectuate prompt, fair, and equitable settlement is prohibited in claims where:

  1. Liability has become reasonably clear ✓
  2. An appraisal has been demanded
  3. The claim exceeds the policy limit
  4. The insured has retained an attorney

Why: Subsection (9)(f) prohibits 'not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear.'

A bar overserves a patron who then injures a third party in a fight. Which coverage is designed to respond to the bar's liability?

  1. Workers Compensation
  2. Liquor Liability / Dram Shop coverage ✓
  3. Surety bond
  4. CGL Coverage A

Why: Because the CGL excludes the liquor business's liability, the bar needs liquor liability/dram shop coverage for injuries connected to serving alcohol.

Under the liberalization clause, if the insurer broadens coverage during the policy term without additional premium:

  1. The change applies only to new policyholders
  2. The insured must pay extra to receive it
  3. The broadened coverage automatically applies to the existing policy ✓
  4. The policy is canceled

Why: The liberalization clause automatically extends any coverage-broadening change to existing policies at no extra cost.

An individual producer lets her license lapse by missing the renewal fee due date. Under N.J.S.A. 17:22A-33, within what period may she reinstate the same license without re-taking the written examination?

  1. Within 6 months of the due date
  2. Within 30 days of the due date
  3. Within 24 months of the due date
  4. Within 12 months from the due date of the renewal fee ✓

Why: N.J.S.A. 17:22A-33(c) allows reinstatement of the same license without a written examination within 12 months from the due date of the renewal fee.

When a compensable death occurs in New Jersey, dependents are entitled to compensation computed at what percentage of the deceased worker's wages?

  1. 75% of wages
  2. 70% of wages ✓
  3. 66 2/3% of wages
  4. 50% of wages

Why: N.J.S.A. 34:15-13(a) provides that for one or more dependents, death benefits are 70% of wages, subject to the same maximum and minimum as subsection 12(a).

When a business entity applies for an insurance producer license, the Commissioner must find that the entity has paid the fees and:

  1. Maintains an office in New Jersey
  2. Has designated a licensed producer or producers responsible for the entity's compliance with the insurance laws and regulations ✓
  3. Has at least five licensed producers on staff
  4. Has posted a fidelity bond

Why: N.J.S.A. 17:22A-32(b) requires a business entity to designate a licensed producer or producers responsible for the business entity's compliance with the insurance laws, rules and regulations of this State.

Under New Jersey's schedule, the loss of vision of one eye is compensated at how many weeks?

  1. 200 weeks ✓
  2. 100 weeks
  3. 150 weeks
  4. 260 weeks

Why: N.J.S.A. 34:15-12(c), paragraph 16, provides 200 weeks for the loss of vision of an eye (with an additional 25 weeks for enucleation).

Hired auto physical damage coverage under the BACF can be provided by:

  1. Symbol 7 only
  2. Workers compensation endorsement
  3. Symbol 1 automatically with no extra step
  4. Endorsement or designation that extends physical damage to autos the insured hires or rents ✓

Why: Physical damage on hired autos is added via the appropriate symbol (e.g., 8) or hired auto physical damage endorsement, often with a stated limit.

Which of the following best describes the trade-off at the heart of the workers' compensation 'grand bargain'?

  1. Employees get higher tort damages; employers get lower premiums
  2. Employees waive all benefits; employers self-insure
  3. Employees get prompt no-fault benefits; employers get limited, predictable liability (immunity from most tort suits) ✓
  4. Employees sue freely; employers pay nothing

Why: In the historic compromise, workers gained certain, prompt, no-fault benefits while employers gained protection from most tort lawsuits and predictable, limited liability.

New Jersey is best described as which type of automobile insurance state?

  1. A choice no-fault state offering a Standard and a Basic policy ✓
  2. A pure tort (fault) state with no PIP
  3. A monopolistic state fund state
  4. An add-on no-fault state with unlimited medical only

Why: New Jersey is a choice no-fault state: motorists may buy the Standard policy or elect the alternative Basic policy, and Standard buyers also choose a tort option.

An injured interstate railroad worker wishes to recover for an on-the-job injury. Which law governs the claim, and on what basis?

  1. FELA, requiring proof of employer negligence (fault-based) ✓
  2. The Jones Act, on a no-fault basis
  3. FECA, on a no-fault basis
  4. The LHWCA, on a no-fault basis

Why: The Federal Employers' Liability Act (FELA) covers interstate railroad workers and is fault-based, requiring the worker to prove employer negligence rather than providing automatic no-fault benefits.

Under N.J.S.A. 17:29B-4, refusing to issue or renew a homeowners policy because of the applicant's race, creed, color, national origin, or ancestry is:

  1. A lawful underwriting judgment
  2. Permitted if actuarially justified
  3. Permitted with the Commissioner's approval
  4. Prohibited unfair discrimination ✓

Why: Subsection (7)(c) prohibits discrimination against any person because of race, creed, color, national origin or ancestry in the issuance, withholding, extension, or renewal of any policy.