Quizzes for NC property
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 Expediting expenses cannot exceed $25,000
Failure to notify the Commissioner of changes to a licensee's address within 10 business days may result in an administrative fee of
$50
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
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
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 Policy will pay loss of use due to civil authority for a max of 2 weeks
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%
A licensee who ceases to maintain residency in NC is required to deliver any insurance licenses to the Commissioner by mail or in person within how many days after terminating residency?
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
flood insurance waiting period
30 days
how many days prior to an insurer becoming insolvent may a claim be covered by the NC insurance guaranty association? 30 days 45 days 60 days 90 days
30 days
What is the max number of roomers or boarders for properties insured under the dwelling policy?
5
Removal coverage under a standard fire policy remains in effect for
5 days
an automobile rate filing made by the NC rating Bureau is deemed to be approved after
50 days
Coverage F (medical payments) under a homeowners policy would cover
A residence employee who is injured on the job
what is a material misrepresentation
A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company
what type of liability would a person who owns a wild animal have?
Absolute
When a mortgagee is named in a mortgagee clause attached to a fire or other direct damage policy: A. the loss reimbursement will be paid to the mortgagee as their interest my appear B. the mortgagee's rights of recovery will not be defeated by any act or neglect of the insured C. the mortgagee may bring a suit in their own name to recover damages to covered property D. all of the above
All of the above
Any agent, broker, or limited representative who acts for a person other than himself negotiating a contract of insurance, for the purpose of receiving a premium, is deemed to be
An agent of the company Any agent, broker, or limited representative knowingly procuring by fraudulent representations payment of a premium may be found guilty of a Class 1 misdemeanor
Dwelling policy Coverage C- Personal Property will cover all of the following except A. Hobby aircraft B. Computer software C. Canoes D. Animals and birds
Animals and birds
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 hearings are not impaired Insurers cannot refuse to insure, limit the amount, extent, or kind of coverage to an individual, or charge an individual a different rate for the same coverage solely because of blindness or deafness
Licensing fees must by paid annually by
April 1
The Commissioner reports any violations of insurance laws and regulations to the
Attorney general
The Post-Assessment Insurance Guaranty Association covers which type of direct insurance?
Automobile insurance Post-Assessment Insurance Guaranty Association provides protection for automobile insurance and workers compensation
Which of the following is not found in a commercial package policy
Certificate of authority Policy will have the following essential elements: common policy declarations page, common policy conditions, interline endorsements, and coverage parts
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
Which of the following will not be considered unfair discrimination by insurers?
Discriminating in benefits and coverages based on the insured's habits and lifestyle Discriminating between individuals of the same class with equal life expectancies, or by reason of race, nationality, or ethnic group would be considered unfair discrimination. Insurers are also not allowed to cancel individual coverage due to a change in marital status. Discriminating in benefits based on the insured's habit and lifestyle is acceptable.
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT A. an offer of employment B. stocks, securities, or bonds C. an offer to share in commissions generated by the sale D. dividends from a mutual insurer
Dividends from a mutual insurer Dividends paid to policyholders of a mutual insurer are not considered to be a rebate because the policy specifies that they might be paid.
Circulating deceptive sales material to the public is what type of Unfair Trade Practice?
False advertising
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
A Mobile Homeowners policy is structured the same as
Homeowner's policy
Prior to approving the application for resident insurance license, the Commissioner shall find that the individual meets all of the following requirements EXCEPT
Is at least 21 years of age Applicant only needs to be 18
Which of the following policy provisions would automatically broaden coverage under a policy without requiring additional premium?
Liberization
Which of the following coverages in dwelling and homeowners policies is for indirect losses?
Loss of use Applies after a direct loss caused by a covered peril has occurred
The need for essential property insurance for the beach and coastal areas of North Carolina resulted in the creation of the
North Carolina Insurance Underwriting Association
In case of a loss, the indemnity provision in insurance policies
Restores an insured person to the same financial state as before the loss
In order for an insurer to deviate from the rates set by the Bureau, the deviation must be approved by the Commissioner and be based on
Sound actuarial principles An insurer may deviate from the rates promulgated by the Bureau if the insurer has filed the proposed deviation with the Bureau and the Commissioner, if the proposed deviation is based on sound actuarial principles, and if the proposed deviation is approved by the Commissioner
When a mortgagee is named in a mortgagee clause attached to a fire or other direct damage policy
The loss reimbursement will be paid to the mortgagee as their interest may appear, their rights of recovery will not be defeated by any act or neglect of the insured, and they may bring a suit in their own name to recover damages to covered property
Insurable interest must be proven at
The time of the loss
all of the following statements are true regarding fire department service charge additional coverage under the BOP except
This coverage limit pays in place of the limit of insurance shown in the declarations $2500 of additional insurance for fire department service charge coverage
The insured ship has been stranded. The insurer will pay
To sight the bottom even if no damage is found
A building is insured, but no one has lived or worked in it for 10 years. The building is completely empty of any furniture or personal belongings. From an insurance standpoint, the building is considered
Vacant
When is a producer allowed to charge a service fee in addition to the premium for the processing of an application for insurance?
When consented to in writing by the applicant
A BOP is
a self-contained prepackaged policy covers business exposure for both property and liability loss
The declarations page of the homeowners policy provides all of the following information EXCEPT A. a statement that earthquake damage is not covered B. the amount of premium charged for each coverage C. the insured's address D. what deductible amount applies to each loss covered by the policy
a statement that earthquake damage is not covered
following a property loss that is covered under a BOP, if the insurer and insured cannot agree on the amount of the loss, what method is used to resolve the issue
appraisal
every insurer who writes essential property insurance in this state must be a member of the NC Insurance Underwriting association
as a condition of its authority to continue to transact the business of insurance in NC
Which inland marine form would provide the best protection for a dry cleaning company against loss or damage to their customer's property while in the care, custody, and control of the dry cleaners?
bailee's customer policy
An insurance contract must contain all of the following to be considered legally binding except A. competent parties B. beneficiary's consent C. offer and acceptance D. consideration
beneficiary's consent The four essential elements of all legal contracts are offer and acceptance, consideration, competent parties, and legal purpose
which of the following endorsements under a boiler and machinery policy is used for calculating the amount to be paid on a lost business claim after a direct loss?
business income- report of values
The Business Pursuits endorsement under Section II of a homeowners policy will cover all of the following EXCEPT
business liability
Homeowners policies provide coverage for
business property while on the residence premises Up to $2500
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
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 property coverages would provide protection to contents damaged by fire coverage D coverage A coverage B coverage C
coverage C personal property coverage
Which of the following coverages will respond if a claim is made or a suit is brought against an insured for damages due to bodily injury or property damage caused by an occurrence to which the coverage applies?
coverage E- personal liability
which of the following examples of losses paid under an HO3 also would be paid under an HO2 homeowner's policy?
damage to the dwelling caused by lava or dust from a volcanic eruption
an insurance institution or agent that discloses information in violation of the information privacy and disclosure statutes of nc 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 who the information relates no individual shall be entitled to a monetary award that exceeds the actual damages sustained by the individual as a result of a violation
Which of the following is a mandatory part of an insurance policy that varies with each individual policy
declarations
Which of the following is a mandatory part of the insurance policy that varies with each individual policy
declarations
the commercial property declarations page contains which of the following information?
description of the property insured
In addition to the common policy conditions, all of the following conditions apply to liability coverage EXCEPT separation of insured legal action against insurer backruptcy employers liability
employers liability
Which of the following would modify the original insurance contract by either adding or removing coverage
endorsements
Which of the following would modify the original insurance contract by either adding or removing coverages?
endorsements
The section of an insurance policy that details what perils are not insured against and what persons are not insured is known as the
exclusions
the perils covered by the beach area property plan include all of the following except
flood
maps that indicate which areas in a community are subject to severe flooding are called
flood hazard boundary maps
The major portion of the premium for an equipment breakdown policy pays
for inspections and examinations inspecting the machinery to be insured is critical to the underwriting of equipment breakdown coverage. Finding flaws that could lead to losses and requiring corrective action is the purpose
the insured owns an older home with lath and plaster walls. following a kitchen fire, the insurance company pays to have the wall replaced with drywall that is just as functional, but costs less than lath and plaster. which loss valuation allows the insurance company to have plaster replaced with drywall?
functional replacement cost
What type of ocean marine insurance provides physical damage coverage for the ship while it is in transit?
hull
to purchase insurance, the policy owner must have financial interest in the property being insured. this is known as
insurable interest Means the insured would incur a financial loss if the insured property was damaged
all of the following are conditions commonly found in the insurance policy except
insuring agreement
which of the following examples of losses paid under an HO3 also would be paid under an HO2 homeowners policy?
interior damage caused by water seeping under the shingles of the roof
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 is not true concerning the fair rental value coverage provided in a dwelling policy?
loss or expense caused by the cancellation of a lease is covered
All of the would be covered under the medical expense coverage of a BOP except
mental health counseling Coverage includes accidental bodily injury only, it does not cover any counseling
an insured owns and operates a commercial business. he has included a business income coverage form with his CPP. when the insureds business is severely damaged by fire, the business income coverage will pay for
net income plus continuing expenses of the business
which of the following watercraft will NOT be covered by business liability insurance
owned watercraft 53 feet long watercraft while on shore at a premises owned by the insured and nonowned watercraft less than 51 feet not being used to carry persons or property for a fee will be covered.
All of the following are options of the insurer in the loss settlement of a standard fire policy EXCEPT A. pay replacement value cost B. take possession of the damaged property C. Repair or replace the property D. rebuild the property with material of like kind and quality
pay replacement cost value in most cases, the insurer will pay the ACV or appraised value of a loss. Other two options are take possession or repair, rebuild, or replace
HMS toys carries more inventory from Oct 1 to Dec 31. which of these would provide higher coverage limits during those months and lower limits during the rest of the year? spoilage inventory increase peak season value reporting
peak season
The causes of loss insured against in an insurance policy are known as
perils
which of the following is not one of the four primary elements considered in establishing negligence?
proof of carelessness
all of the following are considered parts of the policy structure except
provisions
All of the following are considered parts of the policy structure except
provisions Essential parts of the policy are declarations, insuring clause, conditions and exclusions
an individual who sells insurance solely as a foreign military sales agent works with a alien license restricted license military license temporary license
restricted license
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 A single limit is a single dollar limit of liability applying to the total of damages for bodily injury and property damage, combined, resulting from one accident or occurrence
The policy provision found in property insurance policies that prevents the insured from collecting twice for the same loss is called
subrogation
Negligence may be defined as
the failure to use reasonable and prudent care
Which of the following is most likely to occur if it is determined by the audit that the deposit premium was too high
the insured will receive a returned premium
under a BOP, the inspections and surveys condition specifies all of the following except
the insurer does not have the right to inspect the insured's property and operations
which of the following does not fall under the scope of liability coverage of Section II of a homeowner's policy?
the named insured is borrowing a friend's jacket which is later damaged damage to property of others in the care, custody, or control of the insured is specifically excluded
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
all of the following are essential elements of a commercial package policy except
valuations and or settlement provisions
Besides the peril of earthquake, which other peril is covered by the earthquake cause of loss form under a commercial property policy?
volcanic eruption
personal business property out in the open is covered under CPP only while
within 100 feet of the described premises
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
