P&C

All of the following are true about umbrella liability EXCEPT: A)Certain losses excluded by the primary insurance are covered under an umbrella. B)The umbrella provides insurance on an excess basis .C)A deductible exists between primary policy and the umbrella. D)Umbrella limits are not level at the top.

.C)A deductible exists between primary policy and the umbrella.

An insured person has property valued at $500,000 insured with a company that has become insolvent. The policy value is $450,000 with a $1,000 property deductible. How much recovery may this insured expect from the Guaranty Association upon a total loss? A)$300,000.B)$450,000.C)$449,000.D)$500,000.

A)$300,000.

An uninsured motorist claim that cannot be settled between the insured and the insurance company is subject to which of the following? A)Arbitration.B)Appraisal.C)Subrogation.D)Pro rata liability.

A)Arbitration

How are the expenses of the North Carolina Underwriting Association recovered? A)Assessed proportionately among the members B)Legislative appropriation. C)Charged against policyholders through rating the coverage. D)Grants awarded by the Postassessment Guaranty Association.

A)Assessed proportionately among the members

Which of the following statements is FALSE concerning financial responsibility laws? A)Financial responsibility laws make insurance compulsory. B)Financial responsibility laws require proof of the ability to respond to damages following certain occurrences. C)Driving privileges may be lost if financial responsibility laws cannot be met after an accident. D)Proof of future financial responsibility is sometimes required.

A)Financial responsibility laws make insurance compulsory.

The Post Assessment Guaranty Association protects policyholders from financial loss due to: A)Insolvency of insurers. B)Insolvency of insureds. C)Insolvency of agents. D)Insolvency of brokers.

A)Insolvency of insurers.

Under the personal auto policy, all of the following could be covered EXCEPT: A)Property damage to the named insured's residence if struck by the insured's vehicle. B)Medical payments to an insured person if struck as a pedestrian. C)Repair of a window broken by a falling object. D)Theft of the vehicle.

A)Property damage to the named insured's residence if struck by the insured's vehicle.

Which of the following statements is or are true concerning the personal auto policy? I. The policy clarifies the meaning and simplifies the language of automobile policies for the consumer. II. The policy provides coverage for personal effects. III. The policy provides medical payments coverage to riders of motorcycles. A)I & III. B)I & II. C)II & III. D)I only.

B)I & II

11. All of the following violations could result in surcharges under the Safe Driver Incentive Plan EXCEPT: A)Driving while impaired B)Illegal parking in a designated fire lane. C)Speeding in excess of 15 MPH over the posted speed limit. D)Death by vehicle.

B)Illegal parking in a designated fire lane.

All of the following requirements apply to the N. C. Reinsurance Facility EXCEPT: A)The twelve members of the Board of Governors are appointed by the member insurers. B)Agents may not be given a quota of "clean risk" business in proportion to ceded business. C)Ceded operators cannot be provided different services or adjustment methods from non-ceded operators. D)Physical damage coverage may not be rated on the basis of ceded liability coverage.

A)The twelve members of the Board of Governors are appointed by the member insurers.

The purpose of liability insurance is: A)To protect the insured against financial loss by reason of liability imposed by law, resulting from accidental bodily injury or property damage to another person for which the insured is held responsible. B)To pay for injuries or property damage the insured received through no fault of their own. C)To provide remuneration for jury trials. D)None of the above.

A)To protect the insured against financial loss by reason of liability imposed by law, resulting from accidental bodily injury or property damage to another person for which the insured is held responsible.

All of the following violations could result in surcharges under the Safe Driver Incentive Plan EXCEPT: A)Driving while impaired B)Illegal parking in a designated fire lane. C)Speeding in excess of 15 MPH over the posted speed limit. D)Death by vehicle.

B)Illegal parking in a designated fire lane.

A $1,000,000 Umbrella policy was issued over a homeowners policy with personal liability limits of $300,000. The umbrella could have been issued with a $1,000 self-insured retention (SIR). The homeowners policy has canceled. However, the company issuing the umbrella does not become aware of the homeowners cancellation until an occurrence takes place. An award of $700,000 is granted to the injured party. How much will the umbrella policy pay? A)0.B)$400,000.C)$699,000.D)$700,000.

B)$400,000

Automobile limits of liability expressed as 50/100/50 mean: A)$50,000 bodily injury, $100,000 property damage, $50,000 medical payments per occurrence. B)$50,000 bodily injury per person, $100,000 bodily injury per occurrence, $50,000 property damage per occurrence. C)$50,000 property damage per occurrence, $100,000 bodily injury per occurrence, $50,000 bodily injury per person. D)None of the above.

B)$50,000 bodily injury per person, $100,000 bodily injury per occurrence, $50,000 property damage per occurrence.

Under an automobile policy with liability limits of $50,000/$100,000/$50,000, what would be the extent of the company's liability arising out of an accident where claimant A sustains injuries in the amount of $50,500; claimant B, $40,000; and claimant C, $9,000? A)$50,000.B)$99,000.C)$99,500.D)$100,000.

B)$99,000

An insurer may cancel a personal automobile liability policy for non-payment of premium by giving the insured how many days notice? A)10.B)15.C)30.D)60.

B)15

If a proposed automobile rate filing is not felt to be in compliance with the regulations of the State of North Carolina, the Insurance Commissioner must notify the North Carolina Rate Bureau within: A)30 days of the filing. B)50 days of the filing C)60 days of the filing. D)210 days of the filing.

B)50 days of the filing

The definition of an uninsured motor vehicle under the personal auto policy includes all of the following EXCEPT: A)A hit and run vehicle whose driver cannot be identified. B)A vehicle newly acquired by the named insured that has not been reported to the insurer. C)A vehicle to which no liability bond or insurance policy provides coverage at the time of the accident. D)A vehicle insured by a company that is insolvent.

B)A vehicle newly acquired by the named insured that has not been reported to the insurer.

Under the PAP, supplementary payments could provide payment for all of the following expenses EXCEPT: A)Court costs if a civil lawsuit is defended. B)Charges incurred for renting a car when the insured's vehicle was disabled in a wreck. C)A parking garage fee that the insured incurs while attending a deposition at an attorney's office. D)Lost wages the insured might suffer by attending court proceedings.

B)Charges incurred for renting a car when the insured's vehicle was disabled in a wreck.

Which of the following losses would normally be covered under "comprehensive" coverage (other than collision)? A)Upset on the roadway. B)Collision with a deer. C)Collision with a bicycle. D)Collision with a forklift.

B)Collision with a deer.

Damage to a windshield by a bird would be covered under: A)Collision.B)Comprehensive.C)Liability.D)All of the above.

B)Comprehensive.

Which of the following results of an application would be considered an adverse underwriting decision? A)Reinsuring the risk with another insurer. B)Denying coverage of the property. C)Charging a higher premium for property insurance due to exposure changes to the property. D)Providing for back-up protection through the Postassessment Guaranty Association.

B)Denying coverage of the property.

All of the following coverages fall under the jurisdiction of the North Carolina Rate Bureau EXCEPT: A)Residential property with less than 5 units. B)General liability. C)Workers compensation. D)Non-fleet motor vehicles.

B)General liability.

A deductible usually applies to which of the following automobile coverages? A)Liability. B)Underinsured Motorist Coverage. C)Medical Payments. D)Physical Damage.

D)Physical Damage.

If the Commissioner disapproves a rate filing made by the Rate Bureau, the Bureau may: A)Ignore the disapproval with support from the majority of Bureau members. B)Implement the proposed rates pending a judicial appeal. C)Refile after a twelve-month waiting period. D)Implement the proposed rates after winning a judicial appeal.

B)Implement the proposed rates pending a judicial appeal.

Under a personal automobile policy, liability for bodily injury resulting from the insured's use of a non-owned auto is: A)Provided by the insured's policy on a primary basis. B)Provided by the insured's policy on an excess basis. C)Shared proportionally between the insured's policy and the policy covering the car. D)Not covered because of the care, custody and control exclusion.

B)Provided by the insured's policy on an excess basis.

Which of the following statements is correct regarding the Towing and Labor endorsement to the PAP: A)The basic limit is $50. B)To be covered, the labor must be performed at the place of disablement. C)The endorsement is provided without additional premium if comprehensive coverage is purchased. D)Labor required to correct a mechanical breakdown is provided a benefit if conducted by a certified mechanic.

B)To be covered, the labor must be performed at the place of disablement.

Auto comprehensive covers all of the following EXCEPT A)Flood.B)Upset.C)Theft.D)Hail damage.

B)Upset.

The named insured wants to cover an additional auto under an existing personal auto policy. They must notify the company: A)Immediately. B)Within 30 days of purchase. C)Within 30 days of inception of the policy. D)Anytime during the policy period.

B)Within 30 days of purchase

What are the maximum liability limits obtainable through the Facility? A)25/50/15. B)30/60/25. C)100/300/50. D)There is no maximum.

C)100/300/50.

When insurance rates come under the jurisdiction of the North Carolina Rate Bureau and an insurer wishes to change those rates, the insured must be given written notice of this change at least: A)5 days in advance. B)10 days in advance. C)15 days in advance. D)30 days in advance.

C)15 days in advance.

Who must be members of the North Carolina Insurance Underwriting Association? A)All admitted insurance companies writing insurance in this state. B)All admitted insurance companies, agencies and agents. C)All admitted insurance companies writing direct loss property insurance. D)All admitted insurance companies with an A.M. Best rating of B or higher

C)All admitted insurance companies writing direct loss property insurance.

Where must property be located to receive coverage through the North Carolina Insurance Underwriting Association? A)Anywhere within the territorial boundaries of North Carolina. B)Anywhere within North Carolina east of the Piedmont. C)Anywhere within North Carolina east and/or south of the intracoastal waterway. D)Anywhere in North Carolina within 5 miles of the coast.

C)Anywhere within North Carolina east and/or south of the intracoastal waterway.

The Postassessment Guaranty Association applies to all of the following coverages EXCEPT: A)Homeowners policies. B)Dwelling policies. C)Business Income policies. D)Personal Automobile policies.

C)Business Income policies.

The perils covered by the North Carolina Insurance Underwriting Association include all of the following EXCEPT: A)Vandalism.B)Fire.C)Flood.D)Smoke.

C)Flood.

Liability policies I. Pay on behalf of the insured. II. Defend the insured against real and alleged claims. III. Pay only when the insured is proven negligent in court. A)I. B)III. C)I, II. D)I, II, III.

C)I, II.

Rates proposed by the Rate Bureau: A)Must be conformed to by all companies. B)Are recommended rates that are not binding on the companies. C)May be altered if such deviations are filed and approved. D)Identify rates that are excessive.

C)May be altered if such deviations are filed and approved.

All of the following are true for loss of use from theft under transportation expense coverage EXCEPT: A)Will pay $15 a day. B)Will pay a total of $450. C)Payments start immediately. D)Such transportation expenses are provided automatically with the purchase of O.T.C.

C)Payments start immediately.

All of the following statements regarding property insurance are true EXCEPT: A)All other applicable property insurance must be considered when determining the amount of insurance available to be written on a property. B)The maximum time between renewals may be 7 years. C)Policies written in violation of the laws governing property insurance are not binding on the company issuing the policy. D)Property coverage written in this state may provide for a settlement of claims on a basis other than the actual cash value of the property at the time of loss.

C)Policies written in violation of the laws governing property insurance are not binding on the company issuing the policy.

Medical payments under the personal auto policy pays all reasonable medical expenses incurred within: A)One year from the date of the accident. B)Two years from the date of the accident. C)Three years from the date of the accident. D)None of the above.

C)Three years from the date of the accident.

What is the purpose of the North Carolina Insurance Underwriting Association? A)To provide all-risk property insurance to owners of beach property. B)To discriminate in the rates charged for property insurance on high-risk beach property. C)To promote the orderly growth and development of coastal areas. D)To provide property and liability insurance to insurable risks located in coastal areas.

C)To promote the orderly growth and development of coastal areas.

All of the following statements regarding the personal automobile policy are false EXCEPT: A)Liability coverage excludes non-owned automobiles. B)Liability coverage is usually written with a single limit. C)Under medical payments, family members are covered as pedestrians. D)Business use of a van by a distributor is covered.

C)Under medical payments, family members are covered as pedestrians.

An insured driver is involved in an accident in which she avoids hitting an animal, loses control of the vehicle and hits a telephone pole. The damage to the insured's vehicle would be covered: A)Under the comprehensive coverage since the loss involved an animal. B)Under the property damage coverage. C)Under the collision coverage. D)There would be no coverage for this accident.

C)Under the collision coverage.

The minimum split limits of liability on an automobile required by the State of North Carolina are A)15/30/10. B)10/20/5. C)25/50/15. D)30/60/25.

D)30/60/25.

Professional liability coverage is likely to be purchased by any of the following EXCEPT: A)A doctor.B)An accountant.C)An insurance agent.D)A manufacturer.

D)A manufacturer.

All professional liability insurance is a form of malpractice insurance. Which of the following statements are correct? A)The term "malpractice" is used when the nature of the claim involves bodily injury, such as those involving medical practitioners. B)The term "errors and omissions" is used for all types of claims where bodily injury is not normally a factor. C)Insurance agents would buy errors and omissions coverage. D)All of the above.

D)All of the above.

18. In North Carolina, the owner/operator of a vehicle must periodically furnish proof of financial responsibility using which of the following means? A)Receiving certification of self-insurance by depositing assets with the Department of Motor Vehicles B)Filing a bond acceptable to the Department of Motor Vehicles. C)Providing evidence of a valid automobile policy. D)Any of the above.

D)Any of the above.

What recourse does an applicant have if property coverage has been declined by the North Carolina Joint Underwriting Association? A)There is no recourse. B)Obtain coverage through a surplus lines carrier. C)File suit in the court of jurisdiction to reverse the decision. D)Appeal to the Commissioner to overturn the decision.

D)Appeal to the Commissioner to overturn the decision.

When operating a vehicle outside the State of North Carolina, the PAP liability coverage will: A)Suspend coverage. B)Maintain the same limits. C)Conform to the requirements of the other State. D)Conform to the requirements of the other State if greater than the insured maintains.

D)Conform to the requirements of the other State if greater than the insured maintains.

All of the following statements concerning medical payments coverage in the personal automobile policy are true EXCEPT: A)It provides medical expense coverage for the insured and any passengers in the vehicle. B)It pays regardless of fault. C)It can cover medical expenses incurred within three years of an accident. D)It can cover injuries caused by the insured to a pedestrian if they lose control of the vehicle.

D)It can cover injuries caused by the insured to a pedestrian if they lose control of the vehicle.

The North Carolina Reinsurance Facility: A)Assigns substandard drivers to insurers. B)Is done voluntarily by insurers. C)Takes only substandard drivers of private passenger cars. D)Makes motor vehicle insurance available for hard to place risks.

D)Makes motor vehicle insurance available for hard to place risks.

John's automobile dealership loans him a car while his vehicle is being repaired. The "loaner" vehicle would be classified as a(n): A)Nonowned.B)Uninsured.C)Underinsured.D)Temporary substitute.

D)Temporary substitute.