NC Property Insurance Practice Exam
Questions & Answers
What type of property are buildings, land, and structures attached to them? Correct Ans->>
real property
Explanation: real property includes buildings, land, and structures attached to land
When meeting with a potential client, Taylor makes disparaging comments about the financial
stability & reputation of his competitor to dissuade the client from that company. Which unfair
trade practice has Taylor committed? Correct Ans->> defamation
Explanation: It is considered defamation to publish or circulate false, deceptive or misleading
statement about or in of an insurer.
Which dwelling form does NOT include Coverage E Additional Living Expense? Correct
Ans->> DP-1 Basic Form
Explanation: the DP-1 form does not include coverage E; however it can be added to the DP-1
through endorsement.
Which of the following is NOT a disciplinary measure that the commissioner can take against a
person who violates the insurance laws or regulations? Correct Ans->> imprisonment
, Explanation: It is not within the commissioners power to impose a prison term or jail sentence.
Which of the following is NOT a power granted to the NC insurance commissioner? Correct
Ans->> Prosecuting individuals for violating insurance laws
Explanation: the commissioner may examine financial statements of insurers, issues insurance
regulations, & enforce insurance laws, but the state Attorney General or other law officials
prosecute criminal acts.
Which of the following statements BEST describes the transfer of risk via an insurance
contract? Correct Ans->> Not all risks are transferable via insurance contracts
Explanation: not all risks are insurable; before an insurer agrees to accept an application, it must
determine if the risk is eligible.
Which of the following would not be included in the meaning of "insured" in a homeowners
policy? Correct Ans->> neighbor who mows the insured's lawn
Explanation: family members residing at home, children away at college, and an individual who
cares for a pet while the owner is away are all insureds under the policy. A neighbor who assists
the insured out of generosity is not an insured under the policy.
While driving a truck through a field at Valley Farm, an employee accidentally collides with one
of the farm's combines. Both the truck and the combine are damaged, is either damage to either
Questions & Answers
What type of property are buildings, land, and structures attached to them? Correct Ans->>
real property
Explanation: real property includes buildings, land, and structures attached to land
When meeting with a potential client, Taylor makes disparaging comments about the financial
stability & reputation of his competitor to dissuade the client from that company. Which unfair
trade practice has Taylor committed? Correct Ans->> defamation
Explanation: It is considered defamation to publish or circulate false, deceptive or misleading
statement about or in of an insurer.
Which dwelling form does NOT include Coverage E Additional Living Expense? Correct
Ans->> DP-1 Basic Form
Explanation: the DP-1 form does not include coverage E; however it can be added to the DP-1
through endorsement.
Which of the following is NOT a disciplinary measure that the commissioner can take against a
person who violates the insurance laws or regulations? Correct Ans->> imprisonment
, Explanation: It is not within the commissioners power to impose a prison term or jail sentence.
Which of the following is NOT a power granted to the NC insurance commissioner? Correct
Ans->> Prosecuting individuals for violating insurance laws
Explanation: the commissioner may examine financial statements of insurers, issues insurance
regulations, & enforce insurance laws, but the state Attorney General or other law officials
prosecute criminal acts.
Which of the following statements BEST describes the transfer of risk via an insurance
contract? Correct Ans->> Not all risks are transferable via insurance contracts
Explanation: not all risks are insurable; before an insurer agrees to accept an application, it must
determine if the risk is eligible.
Which of the following would not be included in the meaning of "insured" in a homeowners
policy? Correct Ans->> neighbor who mows the insured's lawn
Explanation: family members residing at home, children away at college, and an individual who
cares for a pet while the owner is away are all insureds under the policy. A neighbor who assists
the insured out of generosity is not an insured under the policy.
While driving a truck through a field at Valley Farm, an employee accidentally collides with one
of the farm's combines. Both the truck and the combine are damaged, is either damage to either
