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

Question 1 (Chapter 7)

A property insurer is preparing its first annual financial statement for the Commissioner. Which of the following is accurate under Article 43?

• A) The insurer need only file a statement if the Commissioner specifically requests one.
• B) No annual financial statement is required of property insurers under Article 43.
• C) The insurer may file the statement with the North Carolina Rate Bureau instead of the Commissioner.
• D) The insurer must file the statement with the Commissioner in the form and manner the Commissioner prescribes.

Question 2 (Chapter 7)

A resident of a coastal community files a claim for wind damage to a beachfront home. The insurer denies coverage, citing that the policy is a standard fire policy. Which statutory provision most directly addresses this type of exclusion?

• A) G.S. 58-45-15, which outlines exclusions for the Beach Plan.
• B) G.S. 58-46-10, which governs the FAIR Plan’s coverage limitations.
• C) G.S. 58-36-55, which sets the Rate Bureau’s data usage rules.
• D) G.S. 58-44-30, which defines the scope of fire insurance policies.

Question 3 (Chapter 7)

A property insurer is reviewing its record-keeping policies. Which of the following is a requirement of Article 43 regarding retention of policy records?

• A) Policy records need not be retained once the policy is cancelled or expires.
• B) Policy records must be retained indefinitely with no minimum or maximum.
• C) Retention of policy records is governed by the North Carolina Rate Bureau, not Article 43.
• D) Policy records must be retained for a minimum period set by rule, not left to the insurer's discretion.

Question 4 (Chapter 7)

A policyholder alleges that a fire insurance policy does not meet the statutory minimum required by G.S. 58-44-1. Which is a statutory minimum that must be included in every fire policy?

• A) A minimum dwelling coverage amount set by the insurer, not the statute.
• B) A clause requiring the insurer to pay for loss of use.
• C) A description of the insured premises and the named insured.
• D) A provision allowing the policy to be cancelled without notice.

Question 5 (Chapter 7)

A property insurer fails to file its annual financial statement with the Commissioner by the deadline set under Article 43. Which describes the Commissioner's authority under G.S. 58-43-10?

• A) The Commissioner may suspend or revoke the insurer's certificate of authority for the violation.
• B) The Commissioner may only issue a non-binding warning letter.
• C) Only a corrective action plan may be required; no suspension or revocation is possible.
• D) The Commissioner must refer the matter to the North Carolina Rate Bureau for enforcement.

Question 6 (Chapter 7)

A property insurer is reviewing its claim-file retention practices for compliance with Article 43 (G.S. 58-43-5) and the Department's rules. Which statement is accurate?

• A) Retention of claim files is left entirely to each insurer's internal policy, with no statutory minimum.
• B) Only claim files that go to litigation must be retained; all others may be discarded once closed.
• C) The retention requirement applies only to insurers domiciled outside North Carolina.
• D) The rule sets a minimum retention period for claim files; the insurer may not discard them before that period elapses.

Question 7 (Chapter 7)

A property insurer uses Rate Bureau loss-cost data to justify a rate increase. The Commissioner determines the data does not adequately reflect recent construction-cost inflation. Under G.S. 58-36-30, what authority does the Commissioner have?

• A) The Commissioner must approve the rate increase if the insurer certifies the Rate Bureau's data is accurate.
• B) The Commissioner must refer the matter to the North Carolina Rate Bureau for investigation.
• C) The Commissioner has no authority to question the Rate Bureau's data.
• D) The Commissioner may disapprove the rate increase and require the insurer to provide additional data or justification.

Question 8 (Chapter 7)

A property insurer is investigated for failing to provide a policyholder with a copy of a fire insurance policy. under the Department's rules, which statement about policy delivery is accurate?

• A) The insurer must deliver the policy, or a copy of it, to the insured within the period the rule sets, regardless of whether the insured requests it.
• B) The insurer need only provide a copy if the policyholder requests one, with no deadline otherwise.
• C) Delivery is required only once the policy lapses.
• D) No policy-delivery requirement exists under North Carolina law.

Question 9 (Chapter 7)

A homeowner in Wilmington purchases a fire insurance policy that lists "fire, lightning, and explosion" as covered perils. Which provision of G.S. 58-44-5 is the insurer complying with?

• A) The requirement that fire policies must be issued on a standard form approved by the Commissioner.
• B) The requirement that fire policies must name the insured and describe the premises.
• C) The requirement that fire policies must provide a replacement‑cost clause.
• D) The requirement that fire policies must list the perils of fire, lightning, and explosion.

Question 10 (Chapter 7)

A property insurer discovers that a competitor's fire policy excludes coverage for vandalism unless it occurs during a covered fire. The insurer argues this exclusion is permissible. Under G.S. 58-44-30, is the exclusion allowed?

• A) No, because G.S. 58-44-30 requires fire policies to cover all direct physical losses, including vandalism.
• B) No, because G.S. 58-44-5 separately requires coverage of smoke damage, making the vandalism exclusion unlawful.
• C) Yes, because G.S. 58-44-30 permits an insurer to exclude a premium-based coverage unless the policyholder pays extra for it.
• D) Yes, because vandalism is not one of the statutorily required perils, so excluding it is permissible as long as the policy's exclusions are clearly stated.

Question 11 (Chapter 7)

An insurer wants to become a member of the North Carolina Rate Bureau. Which of the following statements about membership is correct under G.S. 58-36-20?

• A) Membership is mandatory for all property insurers licensed in North Carolina.
• B) Members must submit loss data annually, but they may opt out of receiving the Bureau’s publications.
• C) Members receive guaranteed rate approvals from the Commissioner.
• D) Members are required to pay an annual fee and provide loss experience data as prescribed by the Bureau.

Question 12 (Chapter 7)

An insurer operating in the Outer Banks wants to offer coverage for a beachfront condo that is not eligible for standard homeowners insurance because of high wind risk. Which state program can the insurer use to provide required property coverage?

• A) The Essential Property Insurance for Beach Area Property (Beach Plan).
• B) The North Carolina Rate Bureau.
• C) The Fair Access to Insurance Requirements (FAIR) Plan.
• D) The North Carolina Workers' Compensation Fund.

Question 13 (Chapter 7)

A policyholder in Charlotte discovers that their fire policy does not contain a replacement‑cost endorsement. Under G.S. 58-44-5, what is the insurer required to include in a standard fire policy?

• A) A statement of the perils covered, which must include fire, lightning, and explosion.
• B) A clause stating that loss will be settled on an actual cash value basis.
• C) A provision allowing the insurer to change the policy limits without notice.
• D) A requirement that the insurer must offer a replacement‑cost option upon request.

Question 14 (Chapter 7)

A homeowner in a designated beach-area property applies for coverage through the Beach Plan. Which statement accurately reflects a feature of Beach Plan coverage under G.S. 58-45-10?

• A) The Beach Plan covers flood damage on the same basis as windstorm damage.
• B) The Beach Plan guarantees replacement-cost settlement for every covered loss, with no exceptions.
• C) The Beach Plan may impose a maximum coverage limit per dwelling, set by the plan rather than left open-ended.
• D) The Beach Plan's coverage limits are set exclusively by the North Carolina Rate Bureau.

Question 15 (Chapter 7)

A homeowner in Buxton purchases a standard fire insurance policy. The policy lists the covered perils as fire, lightning, and explosion. Which statutory provision requires these specific perils to be included in every fire insurance policy in North Carolina?

• A) G.S. 58-44-5
• B) G.S. 58-44-1
• C) G.S. 58-44-30
• D) G.S. 58-43-5

Question 16 (Chapter 7)

A property insurer is audited and found to have retained policy records for less time than the Department's rules require. What is the retention requirement for policy records under Article 43?

• A) A minimum period measured from policy termination, set by rule rather than left to the insurer.
• B) No minimum period; retention is entirely at the insurer's discretion.
• C) A minimum period measured from the date the policy was first issued, regardless of termination.
• D) Indefinite retention with no defined endpoint.

Question 17 (Chapter 7)

Under Article 43 (G.S. 58-43-5), what is a specific requirement regarding an insurer's records that must be made available to the Commissioner upon request?

• A) Accurate policy and claim records
• B) Records of all employee salaries and bonuses
• C) Copies of all reinsurance treaties
• D) Internal actuarial models used for rate making