New Jersey Property & Casualty Insurance License Exam — All Questions

New Jersey's auto insurance system is best described as:

• a.A pure tort state with no personal injury protection
• b.A state that prohibits liability insurance
• c.A no-fault state where personal injury protection (PIP) pays the insured's own medical expenses regardless of fault✓
• d.A state with no mandatory auto coverage of any kind

New Jersey is a no-fault state. Its Standard and Basic auto policies include personal injury protection (PIP), which pays the insured's own medical expenses from a covered accident regardless of who was at fault (verified via nj.gov/dobi auto insurance guidance). This is different from a pure at-fault/tort system.

On the New Jersey Standard auto policy, a driver must choose between the 'limited right to sue' and the 'unlimited right to sue' (tort) options. The limited right to sue option means the insured:

• a.Can never recover any damages after an accident
• b.Waives the right to sue for pain and suffering unless the injury meets a defined threshold such as permanent injury, significant disfigurement, or a displaced fracture✓
• c.Gives up the right to recover medical expenses and lost wages
• d.Must sue in another state

Per New Jersey DOBI (nj.gov/dobi), the limited right to sue option waives suits for pain and suffering unless the injury falls into a specified category (for example loss of a body part, significant disfigurement/scarring, a displaced fracture, loss of a fetus, permanent injury, or death). It does not affect the right to recover economic damages such as medical expenses and lost wages. The unlimited option preserves full ability to sue for pain and suffering, generally at a higher premium.

For a New Jersey Standard auto policy, what liability limits does the state describe as the minimum a driver can select?

• a.$15,000 per person / $30,000 per accident / $5,000 property damage
• b.$10,000 combined single limit
• c.$35,000 per person / $70,000 per accident bodily injury and $25,000 property damage✓
• d.There is no property damage requirement

New Jersey DOBI's Standard Policy guidance (nj.gov/dobi) shows Standard Policy bodily-injury liability starting at a minimum of $35,000 per person / $70,000 per accident, with property damage liability starting at $25,000 per accident. Higher limits are available. Because New Jersey has phased in increases, confirm the current minimums with DOBI before quoting them.

New Jersey offers a lower-cost 'Basic Policy' as an alternative to the Standard Policy. Compared with the Standard Policy, the Basic Policy generally:

• a.Provides higher liability limits than the Standard Policy
• b.Provides much more limited coverage (for example lower or no bodily-injury liability by default and reduced PIP), and is not right for everyone✓
• c.Is mandatory for all New Jersey drivers
• d.Eliminates the need to register the vehicle

New Jersey (nj.gov/dobi) lets consumers choose among the Standard Policy, the lower-cost Basic Policy, and, for eligible low-income drivers, the Special Automobile Insurance Policy (SAIP). The Basic Policy carries much more limited coverage than the Standard Policy and is not appropriate for every driver; producers must explain the trade-offs. Verify current Basic Policy features with DOBI.