NC INSURANCE EXAM

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Which of the following could be covered on a basic dwelling policy form if purchased?

Damage from vandalism to a property vacant for 45 days

Which policy part in property or casualty insurance policies will explain who the named insured is under the policy?

Declarations

Prior to insurance policy paying a claim, an insured must pay a certain dollar amount on the claim, referred to as

Deductible

Commingling

Depositing client funds in the broker's personal account or general business account

Which of the following is covered under a dwelling policy

Freezing of plumbing systems

Which of the following perils is excluded in all dwelling policy forms

Government actuin

Which of the following homeowners forms would be best for a person renting half a duplex?

HO-4 (renters broad form)

Collapse

Hidden decay, insect or vermin damage, weight of contents, equipment, weight of rain

Which of the following is not insured's dirty after accident or loss?

Hire an appraiser to evaluate damages

An insured has purchased a used car. When does collision coverage for his car begin?

Immediately after insured acquired ownership/purchases

Which principle describes restoring the insured to his/her original financial status after loss?

Indemnity

If an insurer accepts premium payments by credit card, who is responsible for paying the fees charged by a credit card company?

Insurer accepting payment

If a policy owner wants to know whether or not a specific loss is covered by an insurance policy, policy owner should review

Insuring agreement

If an insured is involved in an accident in another state where limits of liability are higher than those of the insureds home state, the insured's auto policy will pay ______

Limits set by the state in which accident occurs

The average territory of the PAP personal auto policy includes all expect

Mexico

An insured has an HO-8 modified coverage form. While the insured is on vacation, his $1,500 laptop is stolen. How much coverage is provided under the HO-8 for this loss?

Nothing; HO-8 forms do not cover theft of personal property off oermises

Which of the following is not considered a rebate?

Offering a prospective insured a multi-policy discount

When may an insurer change a rate different from the one promulgated by the NC rate bureau?

Only when insured files the proposed deviation to the commissioner and bureau

What are general property exclusions?

Ordinance or law (requires tearing down), earth movement (earthquake, mudslide, sinkhole), water damage (flood, overflow, sewer backup), power failure, neglect, war, nuclear hazard, intentional loss, government action

In auto insurance, eligible vehicle titles by the insured during the policy are considered

Owned autos

In a personal auto policy which of the following covers medical payments

Part B

Grave Markers

Pay up to $5,000 if caused by peril insured against

In insurance contracts, consideration on the part of the insured is

Payment of premiums and representation made in the applications

Which of the following refers to the upper limit a liability policy will pay out for all claims that arise from a single accident

Per occurrence

Section 1 of the homeowners insurance policy covers?

Personal property

Which of the following describes twisting?

Policy replacement that is to the detriment of the policy owner.

All of the following practices would be prohibited except

Projecting a dividend on a participating policy

Privacy Protection Act

Purpose is to establish standards for the collection and use of information gathered in connection with insurance transactions

Debris Removal

Reasonable expense, 5% additional to coverage limit

An agent who offers a cash reward to a prospect for buying a policy is guilty of:

Rebating

Which of the following is not required of an insured after a loss in an homeowner's policy?

Replace property that's lost within 30 days (because you have 60 days)

Financial Responsibility Law

Require motor vehicle operator must: -demonstrate ability to respond to BI or PD claims that arise out of their operation of vehicle -licensed as operator, licenses a vehicle -involved in any accident that causes $500 or more of property damage or death

All are grounds for license suspension, revocation, or refusal except:

Sharing commission with another agent

What is covered under DP-3?

Special form, open peril. Covers all but theft which needs endorsement.

For what reason may an insurer cancel a personal auto policy that has been in place for more than 60 days?

The insured fails to pay premium

Limits of Liability

The maximum amount co money the insurance company will pay for a particular loss, or loss during a period of time, is known as

Insurer makes a statement misrepresenting or incompletely comparing the terms of any insurance policy to induce a policyholder to drop existing policy is guilty of

Twistinf

Which of the following is a coverage part of a personal auto policy?

Uninsured motorist coverage (part C)

Landlord Furnishings

Up to $2,500 for insured's appliance, carpeting, and other furnishings (rented)

Ordinance or Law

Up to 10% of limit liability for Coverage A

In a hull policy the insured ship is referred to as the

Vessel

Glass or Safety Glazing Material

Will pay for breakage of glass if not vacant for 60 days prior; $100 per loss for HO-8

Credit Card

Will pay up to $500 for loss through counterfeit, forged check (no deductible)

Fire Department Service Charge

Will pay up to $500 no deductible

Under a personal auto liability coverage, damage to a vehicle may be covered if the person driving the insured vehicle is_______

a family member in the same household.

An insured has homeowners policy and requires her to be a member of the homeowners association. Community building has been damaged and she has to pay her part, how much will the homeowner's policy pay?

$1,000 per occurrence

Loss Assessment/Homeowners Association Fees

$1,000 per occurrence

An insured loses $2,500 worth of precious stones in a burglary. How much will the insurer's homeowners policy cover?

$1,500

An insured driver has a policy with a medical payments coverage limit of $20,000. If the driver sustains $20,000 in bodily injuries and a passenger sustains $25,000 how much will policy pay each injured person?

$20,000

James has an auto liability policy with limits of 15/30/5. He is involved in an accident caused by his negligence and is held legally liable for bodily injuries of 3 people in the other auto as follows: Person A $20,000, Person B $50,000, and Person C $10,000. How much will James's insured pay in total for injuries?

$30,000

Your home is insured on an HO-3. Your neighbors tree fell into your house during a windstorm. How much will your policy pay toward the cost of removing the tree?

$500/tree with HO-3

Dwelling Coverage Eligibility

- 1-4 unit dwellings with borders -vacation dwellings -rental dwellings -dwelling under construction (needs endorsement) -mobile homes (need endorsement) -up to 5 roomers/boarders DOES NOT COVER FARMS

Duties of the insured after a loss

- give immediate written notice -protect property from further damage -Provide proof of loss -submit to physical exams -authorize insurer access to medical records

General Property Exclusions

- ordinance or law - earth movement - water damage - power failure - neglect - war - nuclear hazard - intentional loss - government action

Safe Driver Incentive Plan

-Bureau's responsibility -rates for at fault accidents or moving violation conviction -surcharges up to 3 years -convictions must be obtained annually from NCDMV

North Carolina Insurance Underwriting Association

-adopted to promote growth of coastal area, issuance of property insurance for coastal risk areas -made up of admitted companies writing direct loss property of NC -does not have agents

NC Motor Vehicle Reinsurance Facility

-created to provide auto liability, med pay, and uninsured motorist/underinsured motorist coverage to "eligible risks" who are difficult to place in normal market -may transfer risk to facility -ceded premiums = much higher rates and reduced max coversge

What causes an adverse underwriting decision?

-decline of insurance coverage -termination -failure to apply by agent -charging higher rate based on differing information from applicant -agent placed co enrage with residual market, applicant didn't know

FAIR PLAN

-facilitate issuance of basic property insurance to encourage improvement and arrest decline -for when insured is unable to to obtain coverage in the voluntary marketplace

NC Rate Bureau

-tweak and recommend policy forms and rates to Commissioner -residential property w/ no more than 4 units -rates proposed to be adequate, not excessive and discriminatory

Commissioner must be given how many days written notice of all hearings?

10 days

If a lincensee is convicted in any court or any offenses other than a traffic violation, the licensee must notify the commissioner within how many days of conviction?

10 days

If an insurer cancels a dwelling policy that has been in place for 50 days, for reasons other than nonpayment of premium, how much advance notice must be provided to the insured?

10 days

After receiving notice of loss, the insured must provide claim forms within _____

15 days

If a PAP is terminated for nonpayment of the premium the effective date may be hoe many days from the date of notice mailed

15 days

How many days does an insured have to select a competent and disinterested appraiser?

20 days

An insurer's insolvency protection ensures uninsured motorist claims be paid within how many years of becoming insolvent?

3 years

How many years does an insured have to file a lawsuit against a homeowners insurer?

3 years

After receiving proof of loss from an insured, an insurer must notify the insured of its intent to repair or replace damaged or log property within

30 days

An insured's homeowner policy covers an antique dining set. After a water pipe bursts, the insured moves the set to a storage shed to protect from further damages. What is the longest period of time the homeowners policy will extend coverage to the dining set?

30 days

How long is the waiting period after the application has been accepted before flood coverage goes into effect?

30 days

If a person holding a resident insurance license moves out of state, that person must surrender his or her license to the Commissioner within how many days of terminating their residence?

30 days

If required, advertisements must be filed for review at least how many days before the insurer can use them?

30 days

A policyowner has terminated an insurance policy. The insurer must maintain records for a least how long?

5 hesrd

The commissioner is required to examine books and records of all domestic insurers at least once every

5 years

Once the insurer has determined they owe the insured money for a loss covered by a homeowners policy the loss must be paid within how many days

60 days

Which of the following would NOT be covered under a dwelling property policy?

A farm used to raise and sell cattle

Under which of the following circumstance would a loss be covered under the HO-2 policy form?

A hail storm pokes a hole in a roof and a bedroom has hail damage

Which of the following would be eligible for coverage under a dwelling policy

A house divided into 3 apartments

Which of the following would be eligible for coverage under a dwelling policy?

A house divided into 3 apartments

What is covered under DP-1?

Basic form not open. Fire, lightning, internal explosion.

In an auto policy, what does the first limit represent in split liability limits?

Bodily injury coverage to one person in a single accident

What is covered under DP-2?

Broad form not open. Fire, lightning, internal explosion, WHARVES, V &MM, BBBICEGOLF.

Lawns, plants, shrubs, and trees

Caused by peril, limited to $500/tree or 5% of Coverage A. ($250 for HO-8)

Which of the following provides written evidence that an insurance policy has been issued?

Certificate of insurance

A building contractor constructs a rental property home using straw bale construction that does not conform to standard building codes. The contractor is the owner and does not want insurance on the building but wants coverage on as many things as he can get. What coverages plan should a producer recommend?

Coverage cannot be extended on this structure.

Reasonable repairs

Coverage provided to protect from further damage following an insured peril

Removal

Covered for 30 days

FAIR is designed to

Crate a shared market to provide fire and extended coverage insurance to individuals unable to obtain this coverage through a standard marketplace

Regulation of Credit Insurance

Credit accident and health insurance may not be required of any borrower

Blanket insurance

A single insurance policy that covers multiple class of property at a single location

Accident

A sudden, unforeseen, unintended, and unplanned event from which loss or damage results

An uninsured motor vehicle includes all of the following except

A vehicle being used for public livery

Basic dwelling for DP1 provides all of the following coverages except

Additional living expenses

All of the following are allowable reasons for terminating a policy through the NC motor vehicle reinsurance facility except

An at fault accident

Which of the following is an example of indirect loss?

An insured not being able to stay in home, stays in hotel because of fire damage to home

The North Carolina motor vehicle reinsurance facility is designed to provide auto insurance to a person who:

Are not able to obtain it through normal means

Which of the following is covered by the NC POST ASSESSMENT GURANTY ASSOCIATION

Automobile policies

Loss

Awning, fence, patio, deck, pavement, pipes, pool, not included in collapse unless loss is result of collapse

In property or liability insurance, anything that modifies the original contract, either adding or removing coverage, is done through

endorsements


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