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NC Casualty Insurance Exam Practice
questions with correct answers
Which |!|of |!|the |!|following |!|acts |!|of |!|an |!|agent |!|would |!|be |!|considered |!|an |!|Unfair |!| Trade |!|Practice? A) Offering |!|to |!|review |!|the |!|applicant's |!|insurance |!|coverages |!|annually. B) Allowing |!|an |!|existing |!|customer |!|to |!|use |!|the |!|agent's |!|season |!|tickets |!|to |!|a |!| sporting |!|event. C) Stating |!|that |!|the |!|marketing |!|activities |!|of |!|another |!|agent |!|are |!|under |!| investigation. D) Informing |!|the |!|applicant |!|that |!|having |!|a |!|pool |!|on |!|the |!|property |!|may |!|increase |!| premiums. |!|- |!|correct |!|answer |!| ✔ C Which |!|of |!|the |!|following |!|best |!|defines |!|"risk"? A) The |!|chance |!|for |!|gain |!|or |!|loss. B) The |!|original |!|cause |!|of |!|loss. C) The |!|decrease |!|in |!|economic |!|value.
D)
The |!|uncertainty |!|of |!|loss. |!|- |!|correct |!|answer |!| ✔ D The |!|Surety |!|Bond |!|consists |!|of |!|three |!|separate |!|parties. |!|Who |!|is |!|responsible |!|for |!| assuring |!|that |!|the |!|work |!|will |!|be |!|done? A) Obligee. B) Principal. C) Surety. D) Contractor. |!|- |!|correct |!|answer |!| ✔ C A |!|temporary |!|contract |!|of |!|insurance |!|is |!|known |!|as |!|a(n)? A) Binder. B) Rider. C) Warranty. D) Endorsement. |!|- |!|correct |!|answer |!| ✔ A
When |!|an |!|insurer |!|cancels |!|a |!|Commercial |!|Package |!|policy, |!|it |!|must |!|give |!|the |!| insured: A) 30 |!|days |!|advance |!|notice |!|in |!|all |!|cases. B) 10 |!|days |!|advance |!|notice |!|for |!|nonpayment |!|of |!|premium, |!| 30 |!|days' |!|notice |!|for |!| other |!|reasons. C) 20 |!|days |!|notice |!|in |!|all |!|cases. D) 15 |!|days |!|advance |!|notice |!|for |!|nonpayment |!|of |!|premium, |!| 45 |!|day's |!|notice |!|for |!| other |!|reasons. |!|- |!|correct |!|answer |!| ✔ B Which |!|type |!|of |!|Commercial |!|Crime |!|form |!|covers |!|losses |!|that |!|are |!|sustained |!| during |!|the |!|policy |!|period |!|and |!|discovered |!|either |!|during |!|the |!|policy |!|period |!|or |!| up |!|to |!|one |!|year |!|after |!|the |!|policy |!|expires? A) Loss |!|sustained. B) Claims-made. C) Occurrence. D) Discovery. |!|- |!|correct |!|answer |!| ✔ A
Which |!|of |!|the |!|following |!|coverages |!|is |!|NOT |!|available |!|through |!|the |!|North |!| Carolina |!|Motor |!|Vehicle |!|Reinsurance |!|Facility? A) Medical |!|Payments. B) Physical |!|Damage. C) Uninsured |!|Motorists. D) Property |!|Damage. |!|- |!|correct |!|answer |!| ✔ B 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. |!|- |!|correct |!|answer |!| ✔ A
A |!|N.C. |!|agent's |!|license |!|can |!|be |!|issued |!|temporarily, |!|not |!|to |!|exceed? A) 100 |!|days. B) 180 |!|days. C) One |!|year. D) 30 |!|days. |!|- |!|correct |!|answer |!| ✔ B Which |!|of |!|the |!|following |!|is |!|NOT |!|an |!|insurance |!|company |!|adverse |!|underwriting |!|decision |!|under |!|the |!|"Insurance |!|Information |!|and |!|Privacy |!|Protection |!|Act"? A) Canceling |!|a |!|policy. B) Charging |!|a |!|higher |!|rate |!|because |!|of |!|changing |!|loss |!|exposure |!|at |!|the |!|insured's |!| property. C) Declining |!|an |!|application |!|for |!|insurance |!|coverage. D) Placing |!|coverage |!|in |!|a |!|residual |!|market |!|mechanism. |!|- |!|correct |!|answer |!| ✔ B Which |!|of |!|the |!|following |!|practices |!|are |!|considered |!|unfairly |!|discriminatory? A)
Refusal |!|to |!|issue |!|property |!|coverage |!|due |!|to |!|the |!|occupancy |!|(use) |!|of |!|the |!| structure. B) Adding |!|a |!|surcharge |!|on |!|automobile |!|liability |!|insurance |!|due |!|to |!|the |!|age |!|of |!|the |!|operator. C) Placing |!|coverage |!|in |!|a |!|residual |!|market |!|due |!|to |!|information |!|supplied |!|by |!|a |!| consumer |!|reporting |!|service. D) Reducing |!|rates |!|for |!|a |!|specific |!|class |!|of |!|insureds |!|without |!|reducing |!|rates |!|for |!|all |!|insureds. |!|- |!|correct |!|answer |!| ✔ B 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 |!|by |!|which |!|of |!|the |!|following? 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. |!|- |!|correct |!|answer |!| ✔ C The |!|Liberalization |!|clause |!|of |!|a |!|Businessowners |!|policy |!|automatically |!|applies |!| favorable |!|expansions |!|of |!|coverage, |!|for |!|which |!|a |!|premium |!|is |!|not |!|charged, |!|if |!|
Twisting. B) Rebating. C) Defamation. D) Good |!|Business. |!|- |!|correct |!|answer |!| ✔ B Which |!|of |!|the |!|following |!|situations |!|would |!|Workers |!|Compensation |!|insurance |!| cover? A) Intentional |!|injury |!|of |!|an |!|employee |!|to |!|himself |!|or |!|herself. B) An |!|employee |!|is |!|injured |!|while |!|being |!|intoxicated |!|on |!|the |!|job. C) A |!|claim |!|for |!|damages |!|which |!|falls |!|outside |!|the |!|scope |!|of |!|statutory |!|benefits. D) Injury |!|to |!|an |!|exempt |!|employee |!|for |!|whom |!|benefits |!|were |!|voluntarily |!| purchased. |!|- |!|correct |!|answer |!| ✔ D The |!|contract |!|for |!|transferring |!|the |!|risk |!|of |!|loss |!|from |!|an |!|insured |!|to |!|an |!|insurer |!|is |!|called |!|what? A) Insurance. B)
Insurable |!|interest. C) Risks. D) Moral |!|hazard. |!|- |!|correct |!|answer |!| ✔ A The |!|Commissioner |!|of |!|Insurance |!|has |!|the |!|power |!|to? A) Set |!|Fire |!|and |!|Liability |!|rates |!|charged |!|in |!|North |!|Carolina. B) Revoke |!|an |!|agent's |!|license(s) |!|before |!|a |!|hearing. C) Issue |!|subpoenas |!|on |!|behalf |!|of |!|individuals |!|in |!|order |!|to |!|conduct |!|a |!|hearing. D) Issue |!|verbal |!|Cease |!|and |!|Desist |!|orders. |!|- |!|correct |!|answer |!| ✔ C Which |!|of |!|the |!|following |!|is |!|eligible |!|for |!|a |!|Businessowners |!|policy? A) An |!|8-story |!|office |!|building. B) A |!|94-unit |!|apartment |!|building. C) A |!|mercantile |!|risk |!|with |!|gross |!|sales |!|of |!|$5 |!|million |!|annually. D)
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. |!|- |!|correct |!|answer |!| ✔ C A |!|potential |!|agent |!|must |!|have |!|satisfied |!|all |!|of |!|the |!|following |!|requirements |!| prior |!|to |!|effectuating |!|insurance |!|coverage |!|in |!|this |!|state |!|EXCEPT: A) Received |!|an |!|appointment |!|from |!|an |!|admitted |!|insurer. B) Completed |!|an |!|educational |!|course |!|from |!|an |!|approved |!|school. C) Posted |!|a |!|$50,000 |!|surety |!|bond. D) Received |!|an |!|insurance |!|license |!|from |!|the |!|Department |!|of |!|Insurance. |!|- |!|correct |!| answer |!| ✔ C When |!|an |!|agent |!|signs |!|a |!|blank |!|application |!|for |!|a |!|client |!|s/he |!|is |!|guilty |!|of |!| what? A)
Misdemeanor. B) Felony. C) Rebating. D) Breaking |!|the |!|Privacy |!|Protection |!|Act. |!|- |!|correct |!|answer |!| ✔ A 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. |!|- |!|correct |!|answer |!| ✔ A 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)
Has |!|liquor |!|coverage. C) Pollution |!|liability. D) Products |!|liability. |!|- |!|correct |!|answer |!| ✔ B Which |!|term |!|below |!|best |!|describes |!|the |!|replacement |!|cost |!|minus |!|depreciation? A) Agreed |!|amount. B) Market |!|value. C) Actual |!|Cash |!|Value. D) Repair |!|cost. |!|- |!|correct |!|answer |!| ✔ C 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. |!|- |!|correct |!|answer |!| ✔ D Which |!|of |!|the |!|following |!|does |!|Uninsured |!|Motorists |!|cover? A) Covers |!|injuries |!|caused |!|by |!|hit-and-run |!|drivers. B) Applies |!|when |!|the |!|insured |!|vehicle |!|is |!|used |!|to |!|carry |!|persons |!|for |!|a |!|fee. C) Permits |!|the |!|insured |!|to |!|settle |!|the |!|claim |!|without |!|the |!|insurer's |!|consent. D) Covers |!|someone |!|who |!|steals |!|the |!|insured's |!|vehicle. |!|- |!|correct |!|answer |!| ✔ A Which |!|statement |!|below |!|best |!|describes |!|the |!|practice |!|of |!|twisting? A) Is |!|perfectly |!|legal |!|in |!|this |!|state. B) Involves |!|writing |!|insurance |!|that |!|is |!|unacceptable |!|by |!|the |!|company |!|an |!|agent |!|is |!|associated |!|with. C) Involves |!|an |!|agent |!|coercing |!|an |!|insured |!|to |!|purchase |!|insurance |!|from |!|them |!| and |!|that |!|decision |!|is |!|to |!|the |!|detriment |!|of |!|the |!|insured. D)
When |!|a |!|"high |!|risk" |!|driver |!|wishes |!|to |!|purchase |!|automobile |!|liability |!| insurance, |!|it |!|is |!|obtained |!|by? A) Submitting |!|an |!|application |!|to |!|an |!|admitted |!|carrier |!|who |!|may |!|then |!|choose |!|to |!| cede |!|the |!|coverage. B) Applying |!|to |!|the |!|North |!|Carolina |!|Reinsurance |!|Facility |!|who |!|then |!|assigns |!|the |!| coverage |!|to |!|a |!|carrier. C) Appealing |!|to |!|the |!|court |!|of |!|jurisdiction |!|after |!|being |!|denied |!|coverage |!|by |!|at |!| least |!|three |!|carriers. D) Petitioning |!|the |!|Commissioner |!|for |!|assignment |!|of |!|the |!|coverage |!|to |!|a |!|carrier. |!|- |!|correct |!|answer |!| ✔ A What |!|is |!|the |!|maximum |!|limit |!|available |!|for |!|purchase |!|for |!|bodily |!|injury |!|in |!|auto |!|insurance? A) $1,000,000. B) $100,000. C) $10,000. D) $1,000. |!|- |!|correct |!|answer |!| ✔ A
Which |!|term |!|listed |!|below |!|best |!|describes |!|an |!|increase |!|in |!|the |!|possibility |!|that |!| a |!|loss |!|might |!|occur? A) Risk. B) Exposure. C) Peril. D) Hazard. |!|- |!|correct |!|answer |!| ✔ D How |!|many |!|hours |!|of |!|pre-licensing |!|does |!|a |!|potential |!|agent |!|need |!|for |!|a |!| property |!|license? A) 20 |!|hours. B) 24 |!|hours. C) 30 |!|hours. D) 40 |!|hours. |!|- |!|correct |!|answer |!| ✔ A Boiler |!|and |!|Machinery |!|coverage |!|is? A) Not |!|available |!|on |!|a |!|BOP.
