Free North Carolina Property & Casualty Practice Exam 2026

North Carolina property and casualty insurance exam sample questions and answers

6 of the 110 practice questions, one from each topic, with the answer explained.

1. 1. During business hours, an auto agent receives an application from an eligible risk that his company would not normally accept. The agent must:

   • A.Send it to a surplus lines broker
   • B.Accept it and bind coverage
   • C.Refer it to the Rate Bureau
   • D.Decline it in writing

   Answer: B. G.S. 58-37-30(a) bars a producer from refusing an eligible risk and requires binding the coverage at once for at least six months. The insurer may cede the risk to the North Carolina Motor Vehicle Reinsurance Facility (G.S. 58-37-25, 58-37-35).

2. 2. Which commercial crime insuring agreement covers loss caused by an employee's dishonest acts?

   • A.Forgery or Alteration
   • B.Computer Fraud
   • C.Inside the Premises - Robbery or Safe Burglary
   • D.Employee Theft

   Answer: D. Employee theft, formerly employee dishonesty, covers theft of money, securities and other property by employees. The other agreements respond to outsiders.

3. 3. A North Carolina producer pleads no contest to a criminal violation of the state's insurance laws. The effect on the license is:

   • A.Automatic suspension
   • B.Revocation after 30 days
   • C.None until a hearing is held
   • D.A fine but no suspension

   Answer: A. Under G.S. 58-2-60(b) a conviction, which includes a guilty plea or a plea of nolo contendere, automatically suspends the license until the Commissioner reinstates it. No separate hearing is needed for the suspension to take effect.

4. 4. A North Carolina homeowners policy does not cover flood or earthquake. At issue and at each renewal, the insurer must:

   • A.Get the insured's signed waiver
   • B.Notify the mortgagee of the gap
   • C.Print a warning naming those perils
   • D.Offer an NFIP policy in writing

   Answer: C. G.S. 58-44-60 requires a warning page just before the declarations, in 16-point type, naming which of flood, earthquake, mudslide, mudflow, landslide or windstorm and hail the policy does not cover. No signed waiver is required.

5. 5. Under the North Carolina Workers' Compensation Act, an injured employee must give the employer written notice of the accident within:

   • A.10 days
   • B.90 days
   • C.30 days
   • D.Two years

   Answer: C. G.S. 97-22 requires written notice within 30 days of the accident unless the Industrial Commission accepts a reasonable excuse. Two years is the separate deadline for filing a claim with the Commission (G.S. 97-24).

6. 6. Ocean marine insurance covering the vessel itself is called:

   • A.Hull coverage
   • B.Cargo coverage
   • C.Freight coverage
   • D.Protection and indemnity

   Answer: A. Hull insures the ship, cargo insures the goods, freight insures the shipping charges, and protection and indemnity is the shipowner's liability coverage.