Exam (elaborations)
NJ Property State Exam Questions and Answers 2024
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NJ Property State Exam
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NJ Property State ExamRisk - answer the chance or uncertainty of loss
Risk - answer used within the insurance industry to refer to the subject of the insurance
policy
Possibility of loss - answer the concept of risk involves ___________________
Insurance - answer a formal social device used to accomplish the transfer of risk from
an insured to the insurer
Insurance policy - answer a legal contract in which the premium paid represents a small
certain cost exchanged so that the insurer will cover the possibility of a large financial
loss
pure risks - answer risks which involve the possibility of loss only
pure risks - answer can legally be the subject of an insurance policy
speculative risks - answer risks which involve the chance of loss as well as the chance
of gain
speculative risks - answer cannot legally be the subject of an insurance policy
Perils - answer causes of loss
proximate cause - answer the event, which, in a natural and continuous sequence,
produced the loss
proximate cause - answer by definition the ___________________ of a loss would
include a chain reaction
vandals/vandalism - answer a local business is forced to close for repairs after vandals
smash the front window.
the loss is caused by the peril of _______________________.
out of control truck/collision - answera car is damaged in an accident by a truck which
ran out of control on the icy road
, proximate cause - answerthe original event which set the chain reaction in motion of the
ultimate loss
hazards - answersituations that increase the chance of loss
physical hazard, morale hazard and moral hazard - answersub-classifications of
hazards
physical hazard - answera tangible hazard
physical hazard - answera condition inherent to the property itself
physical hazard - answera ___________________________ can be visibly seen, and in
most instances, corrected.
morale hazard - answerthis increased chance of loss manifests itself in the attitude of
the insured
morale hazard - answerexists when an insured demonstrates attitude of carelessness or
indifference to the possibility of loss
moral hazard - answermarked by situations in which an insured intentionally causes a
loss, perhaps with the idea the he/she could possibly profit from the insurance policy
moral hazard - answera _______________ often involves insurance fraud
oral contract - answerwhen an agent tells an insured that their coverage is bound for a
certain period of time
written contract - answerthe insurance policy when it is eventually issued by the
insurance company
common characteristics of all contacts - answerThe parties must be competent.
The contract must be entered into for some legal purpose.
The parties must come to "agreement" as to the term usually through the process of
offer and acceptance.
The parties exchange items of valuable consideration.
competent - answerthen parties to any contract must be _______________, usually
based on age and mental competency
legal purpose - answerthe contract must be entered into for some
_____________________, which prevents persons from collecting benefits from a
fraudulent claims, or from insuring property in which they have no insurable interest.
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