NC P&C Study
A commercial property special form covers property in transit up to
$5,000
An individual has been found guilty of conducting insurance transactions without a proper license. What is the maximum fine they may face for each initial offense?
$5,000
What is the amount of coverage that would be available for a detached garage under the Coverage B - Other Structures of a homeowners policy?
10% of coverage A
The Earthquake and Volcanic Eruption Endorsement added to Commercial Property policies consider all earthquake shocks as one earthquake if they occur within what maximum time period?
168 hours. 7 days
Under the additional living expenses coverage, if a civil authority prohibits the insured from using the dwelling because of direct damage to a neighboring location from a peril covered in the insured's policy, loss would be covered for up to
2 weeks
What is the maximum number of roomers or boarders for properties insured under the dwelling policy?
5
An automobile rate filing made by the North Carolina Rating Bureau is deemed to be approved after
50 days
#40. All of the following statements are true regarding the relationship among the amounts of insurance EXCEPT a)The recovery may not exceed the ACV at the time of loss or the amount necessary to replace the property, whichever is smaller. b) The recovery may not exceed the ACV of the property at the time of loss. c) All property losses under the basic form are settled on a replacement cost basis. d) The recovery may not exceed the ACV at the time of loss or the policy limit, whichever is smaller.
All property losses under the basic form are settled on a replacement cost basis.
The Business Pursuits endorsement under Section II of a homeowners policy will cover all of the following EXCEPT -All business pursuits -Business liability -Insured's activities -Business pursuits that occur away from the premises.
Business Liability
Additional coverages in the liability section of a homeowners policy
Claims Expense, First Aid to others, Damage to the property of others, and Loss-assessment coverage
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 statements is true concerning the special form dwelling policy? -Coverage A is for all-risk perils, and Coverage C is for the broad form perils. -Both Coverage A and Coverage C are provided on an all-risk basis. -Both Coverage A and Coverage C are provided for the broad form perils. -Coverage A is for all-risk perils, and Coverage C is for basic perils only.
Coverage A is for all-risk perils, and Coverage C is for the broad form perils.
The extra expense coverage form provides
Coverage that will permit the insured to continue in business without interruption following a property damage loss.
In Businessowners policies, which of the following additional coverages will require a deductible? Fire department service charge Debris removal Extra expenses Business income
Debris Removal
A licensee decides to terminate his residency in this state. Which of the following would be an appropriate action?
Delivering the license to the Commissioner within 30 days
Intimidating or discouraging a claimant from seeking legal advice would be a violation of which of the following?
Ethical Standards
Circulating deceptive sales material to the public is what type of Unfair Trade Practice?
False Advertising
In North Carolina, a person who violates the law for False Pretenses and Cheats may be found guilty of a/an
Felony
The insured was mowing the lawn in his yard with a lawnmower borrowed from his brother. The fuel line ruptured, and the lawnmower was destroyed in the fire. How will the insured's homeowners liability policy respond?
It will cover the damage.
Which of the following coverages is included in an unendorsed homeowners policy? a)Medical payment to others b)Personal property replacement coverage c)Fungi, wet or dry rot, or bacteria d)Earthquake
Medical payment to others
Which BEST describes the perils covered under a standard fire policy
Named Perils
Which BEST describes the perils covered under a standard fire policy?
Named perils contract
Several insureds have become liable because of a single loss. How will the policy's limit of liability be affected?
No more than the per occurrence limit applies, no matter how many insureds are involved.
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 -At the time of policy delivery. -When personal information is collected from another source other than the applicants. -No notice is ever required at the initial completion of the application. -At the policy renewal date.
No notice is ever required at the initial completion of the application.
An insured has a personal property replacement cost endorsement under her homeowners policy. If an expensive painting and an antique chair are stolen from the insured's home, what will the insured receive on the claim under that endorsement?
Nothing, The personal property replacement cost endorsement excludes property such as art and antiques.
What are the four additional coverages offered by the builders risk form
The 4 additional coverages offered by the builders risk form are debris removal, fire department service charge, pollutant cleanup and removal, and preservation of property.
The Commissioner reports any violations of insurance laws and regulations to whom
The Attorney General
Who pays the annual agent appointment fee?
The Insurer
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
Losses that result from the freezing of a plumbing system while the dwelling is vacant would be EXCLUDED under a homeowners policy UNLESS
The insured had drained the plumbing system.
Which of the following losses would most likely NOT be covered under Coverage A in the dwelling policy? -Supplies used for repair of the dwelling -Theft of a renter's lawnmower used to service the premises -Fire damage to building material on the premises -Outdoor personal property of the insured
Theft of a renter's lawnmower used to service the premises
The business income coverage form covers consequential loss of business income that occurs when a business must suspend operations because of a direct loss. Which of the following terms best describes the nature of this type of coverage?
Time Element
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 furniture and clothes in the house. From an insurance standpoint, the insured's house is considered
Unoccupied
For how long can a Commissioner issue a temporary insurance agent license?
Up to 180 days
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?
Warranty
The part of the insurance contract that describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured is called the
insuring agreement.
An insured is in his garage with his two friends when some shelving loaded with heavy objects collapses and falls on them. All three of them are experiencing back pain, so they go to an emergency room where MRIs are performed at a cost of $750 each. How much will the medical expense coverage of the insured's dwelling policy pay for these costs?
$1,500. Limit is $1,000 each
Which loss listed below would be fully covered by a homeowners policy? -$2,000 silver tea set stolen -$1,200 pedigreed golden retriever stolen -$24,000 bass boat destroyed in a tornado -$5,000 firearm collection stolen
$2,000 silver tea set stolen is covered to $2,500
If a liability policy had split limits of 50/100/30, what is the maximum amount that would be payable in the event of injury to a single person?
$50,000
All of the following are special personal property limits under a homeowners policy EXCEPT $1,500 for trailers not used with watercraft. $2,500 for theft of firearms. $500 for business personal property on the insured premises. $1,500 for securities, accounts, deeds, and evidences of debt.
$500 for business personal property on the insured premises.
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.
If the commissioner is scheduling a hearing for a potential violation of the Insurance Code, what is the minimum required notice
10 Days
The required privacy disclosure notice must be provided by insurer to current policyholders at least once in any period of
12 months
Insurance companies are required to provide proof of loss forms to the claimant within how many days after receipt of notice of loss?
15
When an insurer makes changes to premium rates, the insurer must notify policy owners within how many days of the change?
15
After appointing an agent, how long does an insurer have to file with the Commissioner a notice of appointment
15 Days
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 years
The standard fire policy limits legal action against the insurance company to how many years?
3
An Insurer who terminates the appointment of an agent, must notify the commissioner in how many days
30 Days
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
A licensee who ceases to maintain residency in North Carolina is required to deliver any insurance licenses to the Commissioner by mail or in person within how many days after terminating residency?
30 days
An agent has completed a total of 30 hours of continuing education (CE) during a license renewal period. How many of these hours may the agent apply toward the next CE compliance period?
6 Hours, Carryover is unlimited
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 is the maximum term for a fire insurance policy issued in this state?
7 Years
As it applies to homeowners policies, the term "business" means
A trade, professions, or occupation.
Which part of an insurance policy covers claims-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses?
Additional coverage
All of the following statements are true regarding the relationship among the amounts of insurance EXCEPT -The recovery may not exceed the ACV of the property at the time of loss. -All property losses under the basic form are settled on a replacement cost basis. -The recovery may not exceed the ACV at the time of loss or the policy limit, whichever is smaller. -The recovery may not exceed the ACV at the time of loss or the amount necessary to replace the property, whichever is smaller.
All property losses under the basic form are settled on a replacement cost basis.
An installation floater is used to insure
Appliances intended to become a permanent part of the building
In cases when an applicant for insurance is blind or deaf, the insurer underwriting the policy may do which of the following?
Apply the same standards as are used for applicants whose sight and hearing are not impaired.
First aid costs for others injured on the insured's premises
Are paid in addition to the liability limit but do not apply to residents
Insurable interest in a property policy must be proven
At the time of loss.
An individual's construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What could this individual use to insure it?
Contractors Equipment Floater
Additional coverages in the liability section of a homeowners policy cover all of the following EXCEPT a)Expenses the insured incurs rendering first aid for bodily injury to third parties. b)Damage to the property of others. c)Damage to a third-party property for which the insured is legally liable. d)Claims expense.
Damage to a third-party property for which the insured is legally liable. (not additional)
An insurance institution or agent that discloses information in violation of the information privacy and disclosure statutes of North Carolina will be liable for Only such damages as can be proven in a court of law. Damages sustained by the individual to whom the information relates. Any legal action brought by the client within 5 years. The legal costs incurred by the client.
Damages sustained by the individual to whom the information relates.
The main difference between an HO-4 and an HO-6 is
HO-6 provides limited dwelling coverage as well as contents coverage
Which of the following statements concerning the builders risk coverage form is correct? a)It covers the interest of the builder only and cannot include coverage for the owner. b)It may not be written for perils other than fire and extended coverage. c)It may be written on a reporting form for the completed value of the structure. d)It usually continues in effect for one year after completion of the structure.
It may be written on a reporting form for the completed value of the structure.
Which of the following will be covered by the contractors equipment floater in an unfiled inland marine insurance? Mobile equipment only while it is located on the job site Mobile equipment owned by construction equipment dealers Any type of mobile equipment Mobile equipment during transportation to and from the job site
Mobile equipment during transportation to and from the job site
Which of the following homeowners endorsements covers liability exposures arising from an incidental business conducted within a building on the residence premises?
Permitted incidental occupancies
Which of the following liability coverages must be added by endorsement to a homeowners policy in order to apply? Personal injury Bodily injury Property damage liability Medical payments to others
Personal Injury
Which of the following regarding Flood Insurance is correct?a)Property located in a less hazardous zone will have higher rates.b)Pre-FIRM rates are used after the community's first FIRM was published.c)Post-FIRM rates are higher than Pre-FIRM rates.d)Pre-FIRM rates are higher than Post-FIRM rates.
Pre-FIRM rates are higher than Post-FIRM rates.
Which method of loss valuation is contrary to the basic concept of indemnity? -Agreed value -Replacement cost -Functional replacement cost -Market value
Replacement cost
An individual who sells insurance solely as a foreign military sales agent works with a
Restricted License
All of the following must be found on a premium payment receipt EXCEPT a)Printed name of the producer and the insurer. b)Signature of the person accepting the payment. c)Date. d)Signature of the person making the payment.
Signature of the person making the payment.
Lily is driving her car through a residential area. She loses control of the car, crashes into Max's front porch. Max, who was sitting on the porch, is injured. Lily's liability insurance policy has a limit set at $500,000. This amount applies to the total of damages for any bodily injury and property damage resulting from one accident. Which type of limit of liability does Lily have?
Single
The endorsement that can be attached to a Boiler and Machinery policy to provide coverage for perishable property for spoilage or damage caused by contact with refrigerant is called
The Refrigeration Interruption Coverage
The amount an insurer will pay under Coverage D (Loss of Use) depends on
The amount of coverage on the dwelling.
If more than one person has an insurable interest in the property covered under a dwelling policy,
The insurer will be liable for only the insured's interest in the damaged property.
If more than one person has an insurable interest in the property covered under a dwelling policy, -All involved insurers must decide which one will be liable for the loss. -All insureds must decide which one will be liable for the loss. -The insurer will be liable for only the insured's interest in the damaged property. -Liability will be split evenly among all people who have insurable interest.
The insurer will be liable for only the insured's interest in the damaged property.
What type of information would be found in a policy's insuring agreement?
The insuring agreement lists the parties to the contract, effective and renewal dates, the description of coverage provided, and perils (among other things). Location of premises, policy limits, supplemental representations, and insurer's name and address can all be found in the Declarations.
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. -The named insured's 8-year-old son throws a rock and strikes a neighbor's child, breaking her eye-glasses and cutting her face. -The named insured's dog bites the neighbor, tearing his clothes and causing him to be treated by a doctor. -A visitor slips on some ice causing him to be injured when falling down the porch steps.
The named insured is borrowing a friend's jacket which is later damaged.
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 a licensed adjuster
