New Jersey Property And Casualty Insurance Practice Test

Under the Special risk definition for commercial lines under the act, what threshold defines a special risk?

Annual premium over $5,000 Annual premium over $10,000 Annual premium over $15,000 Annual premium over $20,000

Correct Answer:

Annual premium over $10,000

Explanation:

The concept being tested is how the act defines a “special risk” in commercial lines by a premium threshold. The act specifies that a risk becomes a special risk when the annual premium exceeds ten thousand dollars. So, any commercial policy with annual premium greater than $10,000 qualifies. For example, a policy with a $12,000 annual premium is a special risk, while a policy with $9,500 is not. The other dollar amounts listed do not meet the defined threshold.

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