Licensing

Which of the following is NOT one of the four primary elements considered in establishing negligence?

Proof of carelessness

An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of

Rebating

In a dwelling policy, which of the following other structures would be covered?

Rented to a neighbor for use as a private garage

A Certificate of Insurance is a written document that

Shows the types and amounts of insurance issued to the insured

All of the following must be found on a premium payment receipt EXCEPT

Signature of the person making the payment

All of the following are duties of the insured following a loss in a standard fire policy EXCEPT

Submit a signed proof of loss within 30 days

The amount an insurer will pay under Coverage D (Loss of Use) depends on

The amount of coverage on a dwelling

The contents coverage on a homeowners policy would pay how much after the loss of one of a pair of golden candlesticks?

The difference in the actual cash value as a pair and as a single

When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays

The excess over the self-insured retention

If the Commissioner of Insurance is unable to complete their term

The governor appoints a replacement.

If the Commissioner of Insurance is unable to complete their term,

The governor appoints a replacement.

Personal property coverage under a homeowners policy would cover

The insured's camera if it is stolen while the insured is on vacation.

On a DP-3 Dwelling Property Special Form policy, the coverage provided for personal property is

The same as provided on the DP-2 Broad Form

All of the following are true regarding notice of cancellation of an auto policy EXCEPT

The written notice of cancellation does not have to include a statement advising the insured of the penalties for operating a vehicle without insurance

Which loss listed below would be fully covered by a homeowners policy?

$2,000 silver tea set stolen

What is the basic limit for costs incurred at the place a vehicle is disabled provided by the towing and labor costs endorsement?

$25

The insured's home is covered by an HO-3. Two years ago, the insured bought the home for $58,000. Today, its replacement value is $60,000. How much Coverage A does the insured need to qualify for replacement cost cover rage?

$48,000

If the ownership of an insured vessel changes involuntarily, within how many days of the ownership transfer will the hull policy terminate?

15

When an insurer makes changes to premium rates, the insurer must notify policy owners within how many days of the change?

15 days

Records related to terminated auto policies must be kept for at least how many years?

3 years

SDIP surcharges are applied to premiums for what time period?

3 years

The removal coverage included in the broad form dwelling policy will cover property temporarily removed from the premises to protect it from damage for how long?

30 days

The removal coverage that is included in the broad form dwelling policy will cover property temporarily removed from the premises to protect it from damage for how long?

30 days

What are the minimum limits for uninsured motorist auto coverage in this state?

30/60/25

What is the maximum number of roomers or boarders for properties insured under the dwelling policy?

5 Dwelling policies may insure a property that allows up to 5 roomers or boarders

The Commissioner must examine every domestic insurer at least once every

5 years

Under Coverage C of a homeowners policy. the amount of insurance provided to cover personal property of the insured is

50% of the amount provided as Coverage A

Under Coverage C of a homeowners policy the amount of insurance provided to cover personal property of the insured is

50% of the amount provided as Coverage A.

According to the Insured Duties after a Loss provision in homeowners policies, if the insurer requires a signed, sworn proof of loss, the insured must provide within how many days?

60 days

Which of the following losses would NOT be covered by a homeowners policy?

A coin collection valued at $500 lost in a fire

The insured ship has been stranded. The insurer will pay

To sight the bottom even if no damage is found

A top agent for a national insurer is competing in a company contest for a grand prize of $25,000. The agent found that prospects like getting "rebates" from other consumer services companies, so the agent decided to pay the applicants the first month's premium as an incentive for buying the policy. This would be considered

A rebate or refund of premiums and is a violation of marketing laws,

Coverage F (medical payments) under a homeowners policy would cover

A residence employee who is injured on the job

In a personal auto policy, the medical payments coverage is similar to

Accident insurance, because it pays medical expenses regardless of fault.

Which of the following risks would NOT be eligible for coverage under a homeowners policy?

An applicant who owns and lives on a commercial farm

Which of the following could be covered by an HO policy?

An oriental rug in an on-premises apartment

While an insured's covered auto is in the repair shop following damage caused by a collision, the insured would have coverage for which of the following vehicles under a personal auto policy?

Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair

The insured's mother-in-law broke her leg falling down the front steps of the insureds premises. The insured's homeowners medical payments coverage will

Apply to injuries of any guests or visitors.

First aid costs for others injured on the insured's premises

Are paid in addition to the liability limit

Every insurer who writes essential property insurance in this state must be a member of the North Carolina Insurance Underwriting Association

As a condition of its authority to continue to transact the business of insurance in North Carolina.

If a licensee is convicted of a criminal violation, the licensee's insurance license is

Automatically suspended

An insurer may be exempt from coverage under the North Carolina Motor Vehicle Reinsurance Facility by the direct authority of

Board of Governors.

Z is the proud owner of a vintage sports car, to which he has added a high performance engine that cost several thousand dollars. Z has added an endorsement to his auto policy that will provide coverage against loss or damage to the engine. This type of endorsement is known as

Damage to Your Auto (Customized Equipment)

Which of the following is a mandatory part of an insurance policy that varies with each individual policy?

Declarations

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

Dividends from a mutual insurer.

When an insurance agency published an advertising brochure, it emphasized the company's financial stability and sound business practices. In reality, its financial health is ternble, and the company will soon have to file for bankruptcy. Which of the following terms best describes the advertisement?

False financial statement

The homeowners policy covers collapse caused by all of the following EXCEPT

Foundation cracks

When an insurer requires a written proof of loss after notice of such loss has been given by the insured or beneficiary, the company must

Furnish a blank form to be used for that purpose

A Mobile Homeowners Policy is structured the same as a

Homeowners policy

Which of the following personal auto coverages would pay for the insured's travel expenses and loss of earnings while involved in the settlement process of a covered loss?

Liability coverage

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of

Misrepresentation

The HO-3 homeowners policy provides

Open peril coverage on the dwelling and broad form coverage on personal property.

Which of the following best describes the amount of loss assessment coverage included under a homeowners policy liability coverage section?

Up to $1,000 per occurrence

On behalf and on request of an insurer by which an agent or limited representative is appointed, the agent or limited representative may from time to time act as an adjuster and investigate and report upon claims; however, he may do so

Without being licensed as an adjuster.

An insurance policy is prepared by the insurance company, with little or no input from the insured. This means that an insurance policy is a

adhesion contract

The Post-Assessment Insurance Guaranty Association covers which type of direct insurance?

automobile insurance

Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as

coercion

An insured was involved in an automobile accident for which the insured was at fault. Which of the following coverages would pay for damage to the insured's automobile?

collision

An insured was involved in an automobile accident for which the insured was at fault. Which of the following coverages would pay for damage to the insured's automobile?

collision

The perils covered by the Beach Area Property Plan include all of the following EXCEPT

flood

All of the following are major coverages included in the homeowners policy EXCEPT

loss of income

Losses caused by continuous or repeated exposure to conditions resulting in injury to persons or damage to property that is neither intended nor expected is the definition of which of the following terms?

occurrence

All of the following are additional liability coverages automatically provided in a homeowners policy EXCEPT

personal injury

Which of the following liability coverages must be added by endorsement to a homeowners policy in order to apply?

personal injury

Coverage for all of the following is found in Section I of a homeowners policy EXCEPT

personal liability

All statements of the insured in any application for a policy of insurance are deemed

representations

How long is a waiting period upon purchase of flood coverage through NFIP?

30 days

If an insured is in the process of moving to a new location, his personal property coverage under the dwelling policy will apply on a pro rata basis at both locations for

30 days

The initial binding period for new workers compensation coverage issued by the North Carolina Rate Bureau is

30 days

According to the Insured Duties after a Loss provision in homeowners policies, if the insurer requires a signed, sworn proof of loss, the insured must provide within how many days?

60 days

What type of form is H0-4?

Contents broad form

Contracts that are prepared by one party and submitted to the other party on a "take it or leave it" basis are classified as

Contracts of Adhesion

Which of the following coverages in the dwelling policy would provide protection to contents damaged by fire?

Coverage C

Which of the following is the Fair Rental Value coverage in the dwelling policy?

Coverage D

With regards to a homeowners policy, which coverage provides for indirect or consequential losses?

Coverage D

Which of the following examples of losses paid under an HO-3 also would be paid under an HO-2 homeowners policy?

Damage to the dwelling caused by lava or dust from a volcanic eruption

The Commissioner has the power to examine and investigate the affairs of every insurance institution or agent doing business in North Carolina to determine which of the following?

If the insurer remains solvent and conducts business in compliance with state laws and regulations

All of the following are conditions commonly found in the insurance policy EXCEPT

Insuring agreement

All of the following are true of Coverage B - Other Structures in homeowners policies EXCEPT

It must be added by endorsement to a homeowners policy.

How does the mobilehome endorsement affect the other coverage of law or ordinance in a homeowners policy?

It removes the coverage

Which of the following coverages in dwelling and homeowners policies is for indirect losses?

Loss of use

The process of determining the premium charged and how much insurance is required for a particular loss is called

Loss valuation

An agent is completing an insurance application for a client. The agent is required to provide the client with a "notice of information practices" at all of the following times EXCEPT

No notice is ever required at the initial completion of the application.

During renovations to a home, a roof opening is left exposed. A heavy rainstorm causes $20,000 of damage to the interior of the home. How much would the HO-2 policy pay for damages?

Nothing, HO-2 is a named peril policy, and rain is not a covered peril.

Rental Reimbursement is only available if the policy includes which coverage?

Other Than Collision Coverage

All of the following help determine flood insurance rates EXCEPT

Simple flood definition.

Who is covered by an HO-4 policy?

Tenants The HO-4 is a tenant broad form that may not be issued to an owner-occupant.

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?

Warranty A warranty in insurance is a statement guaranteed to be true. When an applicant is applying for an insurance contract, the statements he or she makes are generally not warranties, but representations. Representations are statements that are true to the best of the applicant's knowledge.

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT

conditions

Who pays the annual agent appointment fee?

insurer

A common exclusion found under physical damage to your auto includes

mechanical breakdown

If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT

physical damage

In property and casualty insurance, what is the term for the amount of a loss that the insured must cover out of pocket, and the insurer will only pay for the additional amount of the loss above this limit?

deductible

An ocean marine loss that occurs through the voluntary sacrifice of a part of the vessel or cargo to save the ship, crew, or other cargo is known as

general average