NC Casualty Insurance Exam Practice Latest Update 2026
| Exam Prep | 100% Accurate Answers
1. What does the Object Definitions form in a Boiler and Machinery policy
specifically define?
The coverage limits of the policy.
The claims process for the policy.
The items insured under the policy.
The exclusions of the policy.
2. If an insurance agent offers a client a discount on their premium as a form of
rebating, what legal consequences might they face?
They could face penalties for violating insurance regulations.
They would be rewarded with a bonus from their agency.
They would receive a commendation for customer service.
They would be allowed to continue the practice if disclosed.
3. What term describes the act of offering a financial incentive to a client for
purchasing insurance?
Rebating
Twisting
Defamation
Good Business
4. What is the required number of pre-licensing hours for a property insurance
license in North Carolina?
, 30 hours.
40 hours.
20 hours.
24 hours.
5. A restaurant in North Carolina serves alcohol but only has Businessowner's
liability coverage. If a patron is injured due to intoxication, what type of
coverage might the restaurant need to address this liability?
Pollution liability coverage
Contractual liability coverage
Products liability coverage
Liquor liability coverage
6. What is the maximum limit for bodily injury coverage in North Carolina auto
insurance policies?
$1,000.
$10,000.
$100,000.
$1,000,000.
7. If an insurance agent offers a $100 gift card to clients who purchase a policy,
what regulatory issue might arise from this action?
Improved sales performance
Enhanced brand reputation
Potential violation of rebating laws
Increased customer satisfaction
,8. If a new business operates in a 5-story office building that is 120,000 square
feet, what type of insurance policy would they likely not qualify for?
Businessowners policy
Workers' compensation policy
Commercial property policy
General liability policy
9. Interpret the significance of issuing a true statement about insurance policy
terms in the context of North Carolina insurance regulations.
Issuing a true statement only benefits the insurance company, not the
insured.
Issuing a true statement ensures transparency and compliance with
regulatory standards in the insurance industry.
Issuing a true statement is irrelevant to the terms of the policy.
Issuing a true statement is optional and does not affect policy validity.
10. Which type of vehicle is specifically mentioned as ineligible for a Personal
Auto Policy?
A farmer's pickup truck used for farming only.
A pickup used by a distributor to make deliveries.
A station wagon that holds nine passengers.
A panel truck used to drive to and from work.
11. Which one of the following would be covered by Other than Collision
coverage?
The insured's vehicle was ran off the road by another vehicle
, The insured's vehicle slid on the ice and hit a mail box
A bird hit the windshield
A collision with a tree
12. The cost of replacement minus depreciation is the definition of:
Market Value
Valued Policy
Replacement Cost
Actual Cash Value
13. If the umbrella policy had a $1,000 self-insured retention and the
Homeowners policy was still active, how much would the umbrella policy
pay for the $700,000 award?
$1,000,000
$699,000
$700,000
$300,000
14. Describe the primary purpose of Liability insurance policies in relation to
claims made against the insured.
Liability insurance policies do not provide any defense against claims.
Liability insurance policies are designed to defend the insured
against claims and pay for damages on their behalf.
Liability insurance policies only cover damages if the insured is found
guilty in court.
| Exam Prep | 100% Accurate Answers
1. What does the Object Definitions form in a Boiler and Machinery policy
specifically define?
The coverage limits of the policy.
The claims process for the policy.
The items insured under the policy.
The exclusions of the policy.
2. If an insurance agent offers a client a discount on their premium as a form of
rebating, what legal consequences might they face?
They could face penalties for violating insurance regulations.
They would be rewarded with a bonus from their agency.
They would receive a commendation for customer service.
They would be allowed to continue the practice if disclosed.
3. What term describes the act of offering a financial incentive to a client for
purchasing insurance?
Rebating
Twisting
Defamation
Good Business
4. What is the required number of pre-licensing hours for a property insurance
license in North Carolina?
, 30 hours.
40 hours.
20 hours.
24 hours.
5. A restaurant in North Carolina serves alcohol but only has Businessowner's
liability coverage. If a patron is injured due to intoxication, what type of
coverage might the restaurant need to address this liability?
Pollution liability coverage
Contractual liability coverage
Products liability coverage
Liquor liability coverage
6. What is the maximum limit for bodily injury coverage in North Carolina auto
insurance policies?
$1,000.
$10,000.
$100,000.
$1,000,000.
7. If an insurance agent offers a $100 gift card to clients who purchase a policy,
what regulatory issue might arise from this action?
Improved sales performance
Enhanced brand reputation
Potential violation of rebating laws
Increased customer satisfaction
,8. If a new business operates in a 5-story office building that is 120,000 square
feet, what type of insurance policy would they likely not qualify for?
Businessowners policy
Workers' compensation policy
Commercial property policy
General liability policy
9. Interpret the significance of issuing a true statement about insurance policy
terms in the context of North Carolina insurance regulations.
Issuing a true statement only benefits the insurance company, not the
insured.
Issuing a true statement ensures transparency and compliance with
regulatory standards in the insurance industry.
Issuing a true statement is irrelevant to the terms of the policy.
Issuing a true statement is optional and does not affect policy validity.
10. Which type of vehicle is specifically mentioned as ineligible for a Personal
Auto Policy?
A farmer's pickup truck used for farming only.
A pickup used by a distributor to make deliveries.
A station wagon that holds nine passengers.
A panel truck used to drive to and from work.
11. Which one of the following would be covered by Other than Collision
coverage?
The insured's vehicle was ran off the road by another vehicle
, The insured's vehicle slid on the ice and hit a mail box
A bird hit the windshield
A collision with a tree
12. The cost of replacement minus depreciation is the definition of:
Market Value
Valued Policy
Replacement Cost
Actual Cash Value
13. If the umbrella policy had a $1,000 self-insured retention and the
Homeowners policy was still active, how much would the umbrella policy
pay for the $700,000 award?
$1,000,000
$699,000
$700,000
$300,000
14. Describe the primary purpose of Liability insurance policies in relation to
claims made against the insured.
Liability insurance policies do not provide any defense against claims.
Liability insurance policies are designed to defend the insured
against claims and pay for damages on their behalf.
Liability insurance policies only cover damages if the insured is found
guilty in court.
