North Carolina Property Insurance-
Questions and Answers
Insurable Interest Correct Ans-1. In order t purchase insurance, one must have an insurable
interest (financial interest) in the subject of insurance.
No insured may recover more than their insurable interest under any policy of insurance. If
property is over insured, the policy will only pay the ACV plus a proportional share of the excess
premium plus interest.
2. When must the insurable interest exist?
a. At the time of loss
3. How is insurable interest created?
a. Ownership
b. Contract
x. relationship
The principle of indemnity Correct Ans-1. Purpose is to "indemnify" the insured.
2. Principle? To restore the insured to the same financial condition that existed prior to the loss.
Indemnity----> make whole
3. Does not offer the insured the potential for financial gain.
Types of Insurance Correct Ans-Property Insurance: Covers loss to Real Property
(buildings, dwellings, other structures)
Property (contents, etc) owned by individuals and businesses.
, Personal Vs. Commercial Insurance
1. Personal sold to individuals or families
2. Commercial sold to businesses
*Monoline Policies Vs. Package Policies Correct Ans-Monoline: Provides a single coverage;
i.e., property or liability only.
Package: Combines property and casualty coverages under a single policy.
Policy Provisions Correct Ans-A. Application- Contains applicant's personal information and
underwriting information.
B.* Representations- Statements on the application which reflect information to the best of the
insured's knowledge. A statement of utmost good faith.
C. Warranties- Breach of warranty entitles the insurer to treat the insurance contract as void.
Policy Structures Correct Ans-*1. Declarations
a. Name & address of insured
b. Policy period
c. Description of coverage
d. Limits of coverage
e. Deductibles
2. Definitions- Words and terms in policy
*3. Insuring agreement- Obligations assumed by the insurance company in a contract of
insurance. **A promise**
Questions and Answers
Insurable Interest Correct Ans-1. In order t purchase insurance, one must have an insurable
interest (financial interest) in the subject of insurance.
No insured may recover more than their insurable interest under any policy of insurance. If
property is over insured, the policy will only pay the ACV plus a proportional share of the excess
premium plus interest.
2. When must the insurable interest exist?
a. At the time of loss
3. How is insurable interest created?
a. Ownership
b. Contract
x. relationship
The principle of indemnity Correct Ans-1. Purpose is to "indemnify" the insured.
2. Principle? To restore the insured to the same financial condition that existed prior to the loss.
Indemnity----> make whole
3. Does not offer the insured the potential for financial gain.
Types of Insurance Correct Ans-Property Insurance: Covers loss to Real Property
(buildings, dwellings, other structures)
Property (contents, etc) owned by individuals and businesses.
, Personal Vs. Commercial Insurance
1. Personal sold to individuals or families
2. Commercial sold to businesses
*Monoline Policies Vs. Package Policies Correct Ans-Monoline: Provides a single coverage;
i.e., property or liability only.
Package: Combines property and casualty coverages under a single policy.
Policy Provisions Correct Ans-A. Application- Contains applicant's personal information and
underwriting information.
B.* Representations- Statements on the application which reflect information to the best of the
insured's knowledge. A statement of utmost good faith.
C. Warranties- Breach of warranty entitles the insurer to treat the insurance contract as void.
Policy Structures Correct Ans-*1. Declarations
a. Name & address of insured
b. Policy period
c. Description of coverage
d. Limits of coverage
e. Deductibles
2. Definitions- Words and terms in policy
*3. Insuring agreement- Obligations assumed by the insurance company in a contract of
insurance. **A promise**
