NC Insurance Agent Property
In business income additional coverage in a businessowners policy (BOP), the waiting period that must occur before the period of restoration may being is
72 hours
A policyholder has an equipment breakdown policy with a $200,000 limit. If a boiler explosion causes $100,000 damage to the boiler itself, $50,000 damage to the insured's building, and $30,000 of expediting expenses, how much will the insured collect under the policy?
$175,000
The insured's home is covered by an HO-3. Two years ago, the insured bought the home for $58,000. Today, it's replacement value is $60,000. How much Coverage A does the insured need to qualify for replacement cost coverage?
$48,000
If an insured covered under a Mobile Homeowners Policy moves the mobile home to protect it from a covered peril, the policy will pay up to
$500
Under businessowners policy Section I, if an insurer wants to nonrenew a policy, how many days before the expiration date must the insurer notify the mortgageholder?
10 days
When an agent changes email address, the Department if Insurance must be notified within
10 days
Within the first 60 days of coverage under a dwelling policy, how much notice is required for the cancellation of a policy?
10 days
Johanna purchased a National Flood Insurance policy 10 days after her community entered an emergency program. When would her coverage be effective?
12:01 am the day after the application and premium payment are mailed
The earthquake and volcanic eruption endorsement added to commercial property policies consider all earthquake shock as one earthquake if they occur within what maximum time period?
168 hours
The appraisal clause of the standard fire policy allows for the process of settling disputes over the ACV of the property or the amount of loss. When disputes arise, each party (insurer and the insured) must select an impartial appraisal within...
20 days
Under the dwelling policy, if an insurer chooses to repair or replace damaged or lost property, it must inform the insured within how many days of receiving proof of loss?
30 days
If any insurance agent or broker embezzles or fraudulently converts to his own use any money received from insurance transactions, that agent or broker is guilty of
A felony and is subject to fines based on the dollar amount in question
A businessowners policy is
A self-contained prepackaged policy.
An applicant is purchasing a homeowners policy. A producer comes to her home, fills out the paperwork, and tells the applicant that her home will be covered as soon as she signs all of the paperwork, and that she will receive a new policy in the mail in 5 business days. Even though the policy is not issued, the applicant's home is temporarily covered until then. Which of he following makes that possible?
Binder
Which of the following other coverages in NOT included in the basic form dwelling policy?
Breakage of glass
HO-2
Broad Form
Which of the following is not found in a commercial package policy?
Certificate of Authority
HO-5
Comprehensive Form
HO-6
Condominium Unit Owner
Representations are written or oral statements made by the applicant that are
Considered true to the best of the applicant's knowledge
HO-4
Contents Broad Form
The difference in the contents coverage on an HO-3 and HO-5 is which of the following?
Contents are covered open peril on HO-5 and named peril on HO-3
An individual's construction company leaves mobile equipment and construction machinery on the job sit until the project is completed. What could this individual use to insure it?
Contractors equipment floater
Which of the following property coverages 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
Which type of losses are covered by the standard policy?
Direct losses only
When an insurance agency published an advertising brochure, it emphasized the company's financial stability and sound business practices. In reality, it's financial health is terrible, and the company will soon have to file for bankruptcy. Which of the following terms best describes the advertisement?
False financial statement.
In commercial policies, who has control of the policy?
First Named Insured
The perils covered by the beach area property plan include all of the following except
Flood
Maps that indicate which areas in the community are subject to severe flooding are called...
Flood Hazard Boundary Maps
A Mobile Homeowners Policy is structured the same as a
Homeowners Policy
A private investigator has been hired by an insurance company to obtain a character report on an insurance applicant. The investigator contacts the applicant and requests an interview stating that he is conducting a research for a publication. The applicant permits the interview and unknowingly gives information that will be used in the underwriting decision. Which of the following does this scenario describe?
Pretext interview
Eligibility requirements for obtaining property coverage in the FAIR Plan include all of the following EXCEPT
Property at risk must be owner occupied
What is the purpose of the North Carolina FAIR plan?
Provide property coverage to persons outside the standard markets
In case of a loss, the indemnity provision in insurance policies
Restores an insured person to the same financial state as before the loss
All of the following help determine flood insurance rates EXCEPT...
Simple flood definitions
HO-3
Special Form
under a businessowners policy, a loss of earnings is subject to
a 12 month time limit for business income.
When applying for an individual life insurance policy, an applicant states that he went to the doctor for nausea, but fails to mention that he was also having severe chest pains. This is an example of
concealment
Which of the following risks is eligible for coverage under a businessowners policy?
condominiums
The causes of loss insured against in an insurance policy are known as
perils
Coverage C
personal property
All of the following are additional causes of loss included in the broad form of a commercial property policy except
replacement cost
An insured is a member of the neighborhood association, and has become liable for damage to a third party. Each member of the association has been assessed a portion of the loss equal to $2,000. How much will the Loss Assessment additional coverage of the insured's homeowners liability policy pay?
up to $1,000
First aid costs for others injured on the insured's premises
Are paid in addition to the liability limit.
Additional coverages in the liability section of a homeowners policy cover all of the following except
Damage to a third party property for which the insured is legally liable.
Which of the following would be covered under the Broad Form (DP-2) policy's falling object peril?
Interior building damage if the exterior was damaged first
Which BEST describes the perils covered under a standard fire policy?
Named perils contract
A building insured with commercial property insurance has been vacant 90 days. Which of the following is NOT true?
Payment for unnamed perils is reduced by 25%.
All of the following are characteristics of the dwelling policy EXCEPT
The dwelling must be owner-occupied
All of the following are included within the Insurance Commissioner's duties except
Writing North Carolina insurance laws
Under businessowners policy Section I, if an insurer wants to cancel a policy for any reason expect no payment or premium, how many days before the expiration date must the insurer notify the mortgageholder?
30 days
Removal coverage under a standard fire policy remains in effect for
5 days
Insurance interest in the property covered in a policy must be proven...
At time of loss
According to the common policy conditions for a commercial package policy, if the insured dies, the policy rights and duties
Automatically transfer to a legal representative
Business Personal Property Coverage Form covers all of the following except
Automobiles held for sale.
With regards to a homeowners policy, which coverage provides for indirect or consequential losses?
Coverage D
Coverage parts
General liability Commercial property Inland marine Commercial auto Equipment breakdown Crime Farm
Coverage B
Other Structures
Which situation would not be covered by the basic causes of loss form under a commercial property policy?
The Surf Side Club Waterfront Restaurant is damaged when flood waters rise and seep into the restaurant.
Under a businessowners policy, the inspections and surveys condition specified all of the following except
The insurer does not have the right to inspect the insured's property and operations
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?
Warranty
What is the maximum number of roomers or boarders for properties insured under the dwelling policy?
5
Vandalism and Malicious Mischief would be covered if the insured's premises have been vacant for no more than how many days?
60
For an additional premium, the extended coverages written on the basic form dwelling policy would cover which of the following?
Riot
An installations floater is used to insure
Appliances intended to become a permanent part of the building
If an insurer makes a change to broaden coverage in a dwelling policy while it is in effect, the changes will apply
Automatically
How much coverage is provided under a homeowners policy for theft or unauthorized use of a credit card?
$500
Standard fire policies specify the time for the inception and expiration of coverage. Which of the following is the most common time?
12:01 AM
If the ownership of an insured vessel changes involuntarily, within how may 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
Within how many years of a loss may an insured bring a lawsuit against an insurer, according to the dwelling policy?
2 year
A resident applicant for a single-line license has an educational training class prerequisite of
20 hours
If the actual values exceed the limit of insurance, the businessowners policy (BOP) contains a seasonal increase provision that automatically increases the limit of insurance for business personal property by
25%
SDIP surcharges are applied to premiums for what time period?
3 years
After appointing an agent, how long does an insurer have to file with the Commissioner the form detailing the agent's name, address, and other needed information?
30 days
If an insured 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
Harold's building has standard fire coverage, but Harold has purchased separate policies from three different companies. Each of the three companies' policy limit is $100,000. According to the pro rata liability clause, in the event of a loss how much will each company pay for the loss?
33 1/3%
How long must a complaint record be maintained?
5 years
The Commissioner is required to examine books and records of all domestic insurers 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
To be eligible for businessowners policy (BOP) coverage, an office building cannot be higher than
6 stories
Coverage E
Additional Living Expenses
Which of the following would be considered causes for flood conditions covered by the National Flood Insurance Program?
All of the above (overflow of inland or tidal waters; unusual and rapid accumulation or runoff of surface waters from any source; mudflow)
In cases where the Commissioner shall find upon substantial evidence that any complaint against a company is justified, in addition to any penalties, the company shall
Also be liable for the expense of the investigation
Debating is an unfair trade practice and is regulated by law. All of the following would be considered to be rebating EXCEPT...
An agent misrepresents policy benefits to convince a Policyowner to replace policies
The equipment breakdown coverage form provides coverage for all of the following EXCEPT
Bodily injury liability
Which of the following is NOT a primary coverage in homeowners coverage?
Collapse
An applicant unknowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of
Concealment
The extra expense coverage form provides
Coverage that will permit the insured to continue in business without interruption following a property damage loss.
Which of the following dwelling policies insured a structure on an actual cash value basis?
DP-1
All of the following are optional endorsements that may be added to the standard equipment breakdown form EXCEPT
Debris removal
The commercial property declarations page contains which of the following information?
Description of the property insured
Which types of losses are covered by the standard fire policy?
Direct losses only
Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called?
Discrimination
When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered
Discrimination
Coverage A
Dwelling
All of the following are other coverages under the dwelling policy EXCEPT
Earth movement
The general powers and duties of the Commissioner of Insurance include all of the following EXCEPT
Enact statutes to govern the insurance industry
Which of the following would modify the original insurance contract by either adding or removing coverage?
Endorsements
All of the following are excluded in the equipment breakdown basic policy EXCEPT
Explosion of steam boilers
Coverage D
Fair Rental Value
In a commercial package policy, who may cancel the policy in writing and make changes to the policy with the consent of the insurer?
First named insured
Which homeowners form provides open peril coverage for dwelling (Coverage A) and contents (Coverage C)?
Form 5
Replacement cost is defined as
Full replacement of property at its current cost, new and without reduction for depreciation.
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
Which of the following policies does NOT contain an automatic reinstatement provision?
General liability written with an aggregate limit
Which of the following homeowners forms is designed for individuals that own and reside in a condominium?
HO-6
Elaborate homes and those with detailed designs or decorative architecture with replacement costs greater than ACV or market value are insured on
HO-8
The policy conditions define
How parties to the contract must act following a loss.
What type of ocean marine insurance provides physical damage coverage for the ship while it is transit?
Hull
What do individuals use to transfer their risk of loss to a larger group?
Insurance
An agent represents the
Insurer
Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?
Making comparisons between different policies
Which of the following coverages is included in an unendorsed homeowners policy?
Medical Payments to Others
The part of the insurance contract that describes the covered perils and the nature of coverage of the of the contractual agreement between the insurer and the insured is called the
Insuring agreement
In a dwelling policy, which of the following is true regarding personal liability coverage?
It must be added as a supplement or written as a separate policy
Which of the following is the type of property NOT covered by the homeowners policy?
Land on which the property is located
For a contract to be enforceable by law, the purpose of the contract must be
Legal and not against public policy
Which of the following policy provisions would automatically broaden coverage under a policy without requiring additional premium?
Liberalization
Insurance is a contract by which one seeks to protect another from
Loss
Fair rental value coverage in the dwelling policy is similar to which homeowners policy form?
Loss of use
Coverage territory of the businessowners policy (BOP) includes all of the following EXCEPT
Mexico
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. What is the company guilty of
Misrepresentation
HO-8
Modified Coverage Form
Losses cause 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?
Occurence
An insured has a liability policy that sets the amount for all claims that arise from a single incident at $50,000. Which type of limit of liability does this insured's policy have?
Per occurrence
Businessowners liability coverage automatically includes all of the following liability coverages EXCEPT
Pollution
Which of the following types of property would be covered under Coverage C - Personal Property in a dwelling policy?
Rowboats
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
All of the following people would be considered insureds under the liability section of a homeowners policy except
The 22 year old niece of the insured who is visiting
Which of the following is not the consideration in a policy?
The application given to a prospective insured
Peril is most easily defined as
The cause of loss insured against
A golfer slices a tee shot and the ball goes through the window of a house beside the fairway. The broken glass is paid for by
The golfer's homeowners liability coverage
If more than one person has an insurable interest in the property coverage under a dwelling policy...
The insurer will be liable for only the insured's interest in the damaged property
Which of the following claims does NOT fall under the scope of liability coverage of Section II of a homeowners policy?
The named insured is borrowing a friend's jacket which is later damaged
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
Which of the following losses would most likely NOT be covered under Coverage A in the dwelling policy?
Theft of a renter's lawnmower used to service the premises
A specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean?
There is no coverage
Which of the following is true regarding single dwellings that are insured to at least 80% of the replacement value?
They are automatically provided with replacement cost coverage
When a licensee is accused of any act, omission, or misconduct that would subject the licensee to a license suspension or revocation, with the approval of the Commissioner, the license may be surrendered for a period of
Time to be set by the Commissioner
What is the purpose of the SDIP?
To distinguish between safe and high-risk drivers
All of the following identify purposes of the Insurance Information and Privacy Act EXCEPT
To establish fair and marketable advertisement procedures
What is the purpose of the ordinance or law coverage endorsement?
To remove the exclusion of losses resulting from ordinances or laws
The insured ship has been stranded. The insurer will pay
To sight the bottom even if not damage is found
An insured relocated to another state for work. However, she still owns and insures a house in this state, but has had no one living in it for 3 months. She is also storing some of furniture and clothes in the house. From an insurance standpoint, the insured's house is considered
Unoccupied
All of the following are essential elements of a commercial package policy (CPP) EXCEPT
Valuations and/or settlement provisions
Which of the following is NOT one of the available additional coverages in the builders risk form?
Vandalism
The insurer will NOT pay maintenance and wages for the master and crew
While the ship is laid up for repairs
Which of the following exclusions applies to both personal injury and advertising injury in the business owners policy?
Willful violation of a penal statute or ordinance committed by the insured
Provided that a loss did not result from negligence by the assured, the owners, or the managers of the vessel, additional perils are covered under the
inchmaree clause