Exam Latest Update 2025-2026 200 Questions

North Carolina Property and Casualty State Exam Latest Update 2025-2026 200 Questions and 100% Verified Correct Answers Guaranteed A+

Additional Coverages Found in the Building and Personal Property Policy - CORRECT ANSWERS: 1. Debris removal due to a covered peril; most insurer will pay is 25% of the total payment plus the deductible; if actual debris removal expense exceeds the 25% imitation, or if the sum of the direct loss and debris removal expense exceeds the limit of insurance, the insurer will pay up to an additional $10,000 **If paid limit of A out, $10,000; Have not reached Coverage A limit

• Will pay removal coverage when removed property to protect it from further damage

for up to 30 days - PRESERVATION OF PROPERTY COVERAGE

Adhesion - CORRECT ANSWERS: - contract is purchased as it is worded and the

insured is "stuck" with that wording

• courts will interpret any ambiguity in favor of the insured (the party who did not write

the contract)

Adverse Selection - CORRECT ANSWERS: - occurs when insureds with a high risk of

loss attempt to purchase insurance and are successful in doing so

• insurers attempt to PREVENT THIS (bad risk)

- prevented by:

• refusal to write
• rating up
• insurability standards

*** deductibles do not prevent this

• / 4

Adverse Underwriting Decision - CORRECT ANSWERS: - when an application for

insurance has been rejected, an existing policy has been terminated, or coverage has been placed with a residual market mechanism

• failure to place coverage with a company requested by the applicant and the charging

of a higher rate based on information that differs from that supplied by the insured ***charging higher premium due to an increase in hazard is NOT considered an adverse underwriting decision

Agents - CORRECT ANSWERS: - representatives of the insurance company

• requires a contract and appointment (something stating they can sell insurance)
• given binding authority (binder = temporary evidence insurance is in effect); must be

written or oral (says you ARE covered); cannot cancel binder - only the policyholder or company can

Agents Duties to the Insurance Company - CORRECT ANSWERS: 1. Loyalty

• Obedience
• Use of Reasonable Care
• Accurate Accounting
• Communication of info held by the agent to the company

Application - CORRECT ANSWERS: The most important document when underwriting

is determining eligibility

Automobile Insurance - CORRECT ANSWERS: - classified as liability coverage

because the major coverage provided is the liability arising out the operation of an automobile

Basic Form (DP-1) - CORRECT ANSWERS: - a named peril policy

• covers WHARVES, fire, lightning, VMM, volcanic eruption (air-born)

**not vehicles owned by named insured/household 2 / 4

Broad Form (DP-2) - CORRECT ANSWERS: - property and contents

• named peril policy covering all DP-1's perils. plus damage done by burglars, fallen

objects, weight of ice, sleet, and snow, overflow of water from plumbing/appliances, damage from power surges, freezing, tearing apart of hot water systems

Broad Form (HO2) - CORRECT ANSWERS: - provides named peril coverage on the

following perils: WHARVES, fire, lightning, VMM, theft, volcanic eruption (airborne only), falling objects, weight of ice, snow, sleet, overflow of water, hot water heating damage, power surges **same perils as DP-2 + theft

Broker - CORRECT ANSWERS: - representatives of the insured

• shop the market for their customers and obtain coverage through an agent
• must have $15,000 bond
• CANNOT bind coverage

Building and Personal Property Form: Coverage A (building) - CORRECT ANSWERS: - restricted to the building shown on the policy declarations

• no requirement that the insured purchase coverage A; therefore businesses not

owning the structure can still use this form to cover their contents

Building and Personal Property Form: Coverage B (business personal

property/contents) - CORRECT ANSWERS: - can include stock, machinery, furniture, or any other property owned by the named insured and used I'm their business

• not restricted to only those item in the structure as coverage is provided within 100 feet

of the premises

Building and Personal Property Form: Coverage C (personal property of others) -

CORRECT ANSWERS: - relates to the property in the care, custody, and control of the named insured (Bailee's Coverage) 3 / 4

• again, extends to within 100 ft of the described premises

Capital Stock Companies - CORRECT ANSWERS: - in business to make a profit for

stockholders

• owned by stockholders; elect a board of directors
• profit is fully taxable to stockholder

Cause of Loss Forms Attached to the Building and Personal Property Coverage Form -

CORRECT ANSWERS: - identifies the perils insured against

• four cause of loss forms
• Basic Form - SFP perils, EC perils, VMM, sprinkler leakage, sink hole collapse,

volcanic eruption, glass

• Broad Form - basic form plus breakage of glass by vandalism ($100/plate, $500 per

occurrence)

• Special Form - provides open peril coverage for physical loss
• Earthquake Form - can be added with a previous cause of loss form; covers all

shocks or eruptions that occur WITHIN A 168 HOUR PERIOD (constitutes a single occurrence) and volcanic eruption LAND BORNE DAMAGE (exclusions under earthquake = fire, explosion, landslides, tidal waves, mudslides, power surges)

Claims Settlement for Dwelling Policies - CORRECT ANSWERS: 1. DP-1: based upon actual cash value (ACV - replacement cost less depreciation)

• DP-2&3: based upon replacement cost (no deduction for depreciation) IF THE

DWELLING IS INSURED WITHIN 80% OF ITS VALUE AT THE TIME OF THE LOSS

• Personal property/contents loss settlement will be based upon ACV in the DP-1, DP-

2, and DP-3; but, on DP-2 and DP-3 customer may purchase Personal Property Replacement Cost Coverage by endorsement which provides "new for old" or "replacement cost" for all items except fine art, memorabilia, collector items, or any other items that cannot be replaced to their unique quality

Classifications of Insurance Companies - CORRECT ANSWERS: 1. Domestic: organized in state

• / 4