17 Free North Carolina P&C Practice Questions: North Carolina Casualty Law (2026)

Question 1 (Chapter 8)

An insurance company wants to use the North Carolina Rate Bureau’s loss‑cost study to set rates for a fleet of delivery vans. Under G.S. 58‑36‑20, is this permissible?

• A) No, the Bureau’s recommended rates are limited to private passenger automobiles.
• B) Yes, the Bureau’s study covers all motor vehicles, including commercial fleets.
• C) Yes, but only if the insurer obtains written permission from the Commissioner.
• D) No, because the study is confidential and cannot be used by insurers.

Question 2 (Chapter 8)

A policyholder files a single large liability claim after a multi-vehicle accident. Can the North Carolina Motor Vehicle Reinsurance Facility provide coverage for this single claim?

• A) No, the Facility is intended to address catastrophic aggregate losses, not individual claims.
• B) Yes, because any sufficiently large individual claim is automatically covered by the Facility.
• C) Yes, but only if the insurer has exhausted its own separate reinsurance arrangements first.
• D) No, because the Facility only covers property damage, not bodily injury.

Question 3 (Chapter 8)

An insurer in Charlotte wants to cancel or nonrenew a motor vehicle liability policy, citing nonpayment of premium. Which statement about the insurer's obligations under G.S. 20-310 is accurate?

• A) No notice of any kind is required; the insurer may cancel or nonrenew immediately.
• B) The insurer needs the policyholder's written consent before it may cancel or nonrenew.
• C) The required notice is governed by the North Carolina Rate Bureau rather than by G.S. 20-310.
• D) G.S. 20-310 requires the insurer to give the insured notice before cancellation or nonrenewal; it does not permit cancellation or nonrenewal without any notice.

Question 4 (Chapter 8)

An employer classifies a delivery driver as an independent contractor to avoid workers' compensation premiums. Which factor is most determinative under Chapter 97 in deciding whether the driver is actually an employee?

• A) Whether the driver provides his own vehicle.
• B) Whether the driver is paid a salary versus per-delivery fees.
• C) Whether the driver signs a written independent contractor agreement.
• D) The degree of control the employer exercises over the driver's work schedule and methods.

Question 5 (Chapter 8)

A policyholder purchases a standard motor vehicle liability policy. Under G.S. 20-279.21, which of the following coverages must be included in the policy to comply with North Carolina law?

• A) Medical payments coverage for the policyholder and passengers.
• B) Collision coverage for damage to the policyholder's vehicle.
• C) Comprehensive coverage for non-collision losses like theft or hail.
• D) Uninsured motorist bodily injury coverage.

Question 6 (Chapter 8)

An employer in a North Carolina town hires its first employees. Under the North Carolina Workers' Compensation Act (Chapter 97), which statement about the employer's obligation to obtain coverage is accurate?

• A) Chapter 97 requires the employer to have workers' compensation coverage in place within the time the statute allows once it becomes subject to the Act; coverage is not optional once the threshold applies.
• B) The employer need not obtain coverage until after an employee files a claim.
• C) The employer may postpone obtaining coverage indefinitely as long as no injury has occurred yet.
• D) Coverage is required only if the employer operates in more than one North Carolina county.

Question 7 (Chapter 8)

The North Carolina Motor Vehicle Reinsurance Facility assesses insurers to fund its operations. Under Article 37, which of the following statements about these assessments is correct?

• A) Assessments are based on each insurer’s market share of private passenger auto policies in North Carolina.
• B) Assessments are only applied to insurers that have been involved in a prior catastrophic loss event.
• C) Assessments are waived for insurers that participate in the North Carolina Rate Bureau’s loss-cost studies.
• D) Assessments are calculated as a percentage of each insurer’s premiums written for motor vehicle liability policies.

Question 8 (Chapter 8)

An insurer in Charlotte files a rate increase for private passenger auto policies. The North Carolina Rate Bureau reviews the filing and issues a recommendation that differs from the insurer's proposed rate. Under G.S. 58-36-25, what is the insurer's next step?

• A) The insurer must adopt the Bureau's recommended rate exactly as issued.
• B) The insurer may ignore the recommendation entirely and need not file anything further with the Commissioner.
• C) The insurer must hold a public hearing before the Commissioner will accept any filing.
• D) The insurer may file its own proposed rate with the Commissioner, together with justification for any deviation from the Bureau's recommendation.

Question 9 (Chapter 8)

A motor insurer files a rate that is lower than the Rate Bureau’s recommendation for a class of drivers. Which of the following must the insurer do to comply with North Carolina law?

• A) Submit a filing showing actuarial justification for the lower rate.
• B) Obtain a written waiver from the Rate Bureau.
• C) Nothing; the insurer may use any rate it chooses.
• D) File a petition with the state legislature to amend the Rate Bureau’s recommendation.

Question 10 (Chapter 8)

How is the North Carolina Motor Vehicle Reinsurance Facility primarily funded?

• A) Assessments on participating insurers, with possible supplemental funding from the state’s general fund.
• B) Premiums paid by policyholders directly to the Facility.
• C) Federal disaster relief grants.
• D) A special sales tax levied on motor vehicle purchases.

Question 11 (Chapter 8)

Under G.S. 20‑279.21, which of the following best defines a "motor vehicle liability policy" in North Carolina?

• A) A policy that provides coverage for bodily injury and property damage arising out of the ownership, maintenance, or use of a motor vehicle.
• B) Any policy that provides coverage for collision, comprehensive, and uninsured motorist bodily injury.
• C) A policy that includes personal injury protection (PIP) and medical payments coverage.
• D) Any insurance contract that includes coverage for rental reimbursement.

Question 12 (Chapter 8)

Which coverage is NOT required to be included in a standard North Carolina motor vehicle liability policy?

• A) Collision coverage
• B) Bodily injury liability
• C) Property damage liability
• D) Uninsured motorist bodily injury

Question 13 (Chapter 8)

An employee sustains a work-related injury and files a workers' compensation claim. Under Chapter 97, which benefits must the employer provide to the employee?

• A) Full salary replacement for a fixed period, regardless of the employee's ability to work.
• B) Medical expenses only, with no wage-replacement component of any kind.
• C) A lump-sum settlement equal to the employee's annual salary, paid immediately upon filing the claim.
• D) Compensation for lost wages at a statutory percentage of the employee's average weekly wage, subject to statutory maximums, plus medical expenses.

Question 14 (Chapter 8)

An employee suffers a back injury at work and delays notifying the employer well beyond the period Chapter 97 allows. Is the employee's claim barred?

• A) No, because there is no statutory notice period for workers' compensation claims.
• B) No, because the employer can always waive the notice requirement regardless of the circumstances.
• C) Yes, but only if the employer files a formal objection after receiving the late notice.
• D) Yes, the claim may be barred because the employee failed to give written notice within the period Chapter 97 requires.

Question 15 (Chapter 8)

Which of the following reasons for nonrenewal of a motor vehicle liability policy would be prohibited under North Carolina unfair trade practices statutes (G.S. 58‑63‑15)?

• A) The insured has three at‑fault accidents in the past 12 months.
• B) The insured’s credit score falls below the insurer’s underwriting threshold.
• C) The insured’s vehicle is a high‑performance sports car.
• D) The insured belongs to a protected class based on race.

Question 16 (Chapter 8)

An insurer in the Triangle region is reviewing a rate filing for private passenger auto policies and wants to deviate from the North Carolina Rate Bureau's recommended rate for a specific demographic. Under G.S. 58-36-20, which statement is TRUE?

• A) The insurer may deviate from the Bureau's recommended rate, but the filing must include the insurer's own actuarial justification for the deviation.
• B) The Bureau's recommended rate is mandatory; the insurer may not deviate from it under any circumstances.
• C) The insurer may deviate without any filing or justification, since the Bureau's recommendation is purely advisory.
• D) The deviation must first be approved by the North Carolina Rate Bureau itself before the insurer may use it.

Question 17 (Chapter 8)

An employee is injured on the job and files a workers' compensation claim. Which statement accurately reflects the benefit rules under Chapter 97?

• A) Medical benefits are payable only if the employee can prove the employer was negligent.
• B) Medical benefits are subject to a fixed dollar cap set by the insurer, not the statute.
• C) Medical benefits are payable only after the employee exhausts all personal health insurance coverage.
• D) Medical benefits are payable regardless of fault, provided the injury arose out of and in the course of employment.