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