NC Property and Casualty State Exam | Actual Questions & Expertly Verified Answers (Newest Update 2026 | 2027 (Rated A+)

NC Property and Casualty State Exam | Actual Questions & Expertly Verified Answers (Newest Update 2026 | 2027 (Rated A+) Quiz_________________? - $100,000/$300,000/$100,000 with $2000 med pay - maximum limit for UM is $1,000,000/$1,000,000/$50,000 - maximum limity for UIM is $1,000,000/$1,000,000 - ANSWER Facility Maximum Limits Quiz_________________? - a document that evidences the existence of insurance coverage - ANSWER PAP: Certificate of Insurance Quiz_________________? - a lie regarding material information - two types: material and nonmaterial 1. Material - can declare the contract null and void; would have never written the policy having known this information 2. Nonmaterial - no effect on the contract (lie about age, etc.) - ANSWER Misrepresentation Quiz_________________? - a named peril endorsement to the SFP providing direct loss coverage for the perils of: W - wind H - hail A - aircraft R - riot V - vehicles (not owned by household) E - explosion S - smoke - ANSWER SFP: Extended Coverage Endorsement (EC) Quiz_________________? - a named peril policy - covers WHARVES, fire, lightning, VMM, volcanic eruption (air-born) **not vehicles owned by named insured/household - ANSWER Basic Form (DP-1) Quiz_________________? - a plan of spreading the risk of possible loss over a large number of people (Law of Large Numbers) - protects against the risk (uncertainty) of when a financial loss might occur - ANSWER Insurance Quiz_________________? - a risk the insurance company is willing to accept - characteristics of an insurable risk 1. Low probability of a loss occurring 2. Less than catastrophic results 3. The loss must be measurable 4. The loss must be significant 5. The loss must be accidental and unintended - ANSWER Insurable Risk Quiz_________________? - a sudden unforeseen and unintended one-time event that happens at a known place and at a known time - ANSWER PAP: Accident (definition) Quiz_________________? - accounting records of agents shall be SEPARATE and apart from any other business records, and funds due to insurers/policyholders must be available at all times - must keep separate personal and business accounts - ANSWER Commingling Quiz_________________? - addresses issues such as bankruptcy of the insured, legal action for misrepresentations, etc. - The Fraud or Material Misrepresentation Provision states that coverage is not provided when a named insured makes a material misrepresentation in the application EXCEPT LIABILITY COVERAGE UP TO THE MINIMUM LIMITS WILL APPLY (insurer has the right to recover such liability coverage payment from any insured who made the fraudulent statement) - ANSWER PAP: Part F (General Provisions) Quiz_________________? - adopted to promote the orderly growth and development of the coastal area - North Carolina Insurance Underwriting Association (Coastal Property Insurance Pool) was created to facilitate issuance of essential property insurance for these risks; applies to all property east and/or south of the intracoastal waterway and adjoining coastal counties; considered a residual market mechanism - ANSWER Essential Property Insurance for Beach Area Property (Coastal Property Insurance Pool) - BEACH PLAN Quiz_________________? - agent can represent more than one insurance company - owns the business and retains all rights to the accounts - ANSWER Independent Agency System Quiz_________________? - all dwellings containing no more than 4 apartments or families and dwellings containing five or fewer roomers or boarders - certain incidental businesses permitted if they are operated by an insured and provide SERVICE, NOT SALES (on premises) (ex: beauty parlor, piano lessons, etc.) **deductibles DO NOT APPLY to coverage D or E because they are Indirect Losses - ANSWER Eligibility for Dwelling Program Quiz_________________? - all records must be maintained for at least 5 years - any deductible or cost-sharing amount between the named insured and insurer must be expressed in the contract - unlawful for an insurer to discriminate based in rates based on age/sex - company must supply a proof of loss form within 15 days of receiving notification of the claim - illegal for an agent to charge excess of premium for policy fees or services unless a sign is posted, written consent is given, and a receipt - agents shall be held personally liable for unlawfully executed contracts - all payment receipts issued by an agent should be dated, contain name and address of agent and name of insurance company, and should be signed by the person accepting payment - ANSWER Regulations Regarding Insurance Transactions Quiz_________________? - an accident that includes a continuous or repeated exposure to conditions that might lead to injuries and/or damages that occurs over a period of time - ex: wear and tear of paint due to acid rain; hurricane - ANSWER PAP: Occurrence (defintion) Quiz_________________? - an attempt to prevent a loss or to reduce the amount of the loss - ex: installation of a sprinkler system to reduce the amount of loss - ANSWER Control/Reduction Quiz_________________? - an indirect loss coverage providing for ALE (additional living expenses) incurred while the dwelling is untenable - includes coverage for rental value and prohibited use for up to two weeks - Coverage D is additional insurance in all HO forms - ANSWER HO: Coverage D (Loss of Use)