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North Dakota Casualty Practice Exam

20 exam-style questions drawn from the same bank as our full North Dakota Casualty course (North Dakota Insurance Producer - Casualty - Exam Prep). Answer all 20, then grade yourself — most state exams require 70% to pass. Explanations for every question are part of the full course.

1. Under NDCC 65-04-33, what must a North Dakota employer do first?
Choose a private carrierApply for workforce safety coverageFile a payroll bondObtain a Commissioner licence
2. Under NDCC 26.1-42.1-09, what must a claimant do before the association pays?
Obtain a Commissioner orderExhaust rights under other policiesFile suit against the insurerWait one year from insolvency
3. Vicarious liability imposes liability on one party for the acts of another. Which example BEST illustrates vicarious liability?
A property owner is held liable for injuries to a trespasser caused by a hidden hazard the owner deliberately created.A driver is held liable for injuries caused by the driver's own negligence while running a red light at an intersection.A manufacturer is held liable for a defective product without proof of negligence under strict liability rules.An employer is held liable for injuries caused by an employee driving within the course and scope of employment.
4. The four elements of a legally enforceable contract are:
The insurer entity, the appointed agent, the named insured, and a disinterested witnessOriginal application, temporary binder, final policy issuance, and any subsequent endorsementPremium remittance, claim notice, claim settlement, and final release of the carrierOffer, acceptance, consideration, legal purpose & capacity
5. Under NDCC 26.1-04-09, whom may the Commissioner examine and investigate?
Every person in the insurance businessOnly domestic insurersOnly companies under complaintOnly appointed producers
6. Replacement cost (RC) coverage in a liability-adjacent context (e.g., bailee repair of customer property) is usually:
Identical to ACV, because a bailee's liability is always limited to the depreciated value.Broader than ACV, no depreciation is deducted, but insured must actually repair or replace.Broader than ACV, and payment is made in full whether or not the property is repaired.Narrower than ACV, since depreciation is deducted twice, once at the loss and once at repair.
7. An insurer issues a CGL and later attaches a POLLUTION EXCLUSION endorsement. Which of the following is true?
An endorsement may amend, add, or delete coverage provisions of the policy and, in the event of conflict, an endorsement generally controls over the base form.If the endorsement conflicts with the base form, the base form always controls, because the endorsement is attached after the policy is issued.An endorsement can only add coverage to a policy and can never restrict it, so a pollution exclusion endorsement would be unenforceable.An endorsement attached mid-term takes effect only at the next renewal date, so the pollution exclusion cannot apply during the current policy term.
8. Under NDCC 26.1-41-01(21), which medical expense figure makes an injury a SERIOUS injury?
More than five thousand dollarsMore than ten thousand dollarsMore than two thousand five hundredMore than one thousand dollars
9. A commercial general liability policy has a deposit premium of $12,000 based on an estimate of $1M in annual receipts. The audit at year-end shows actual receipts of $1.4M. What does the insurer do?
Refund part of the deposit, because higher receipts earn a volume discount.Bill an additional premium for the difference between estimated and actual exposure.Cancel the policy for misrepresentation of exposure on the application.Absorb the difference, since the deposit premium is the final premium for the term.
10. A plaintiff proves $40,000 in medical expenses and $60,000 in lost wages. The jury also awards $100,000 for 'pain and suffering.' How are these damages categorized?
$100,000 is economic/special; $100,000 is punitive; no non-economic.$200,000 is all economic/special; none is non-economic; no punitive.$100,000 is economic/special; $100,000 is non-economic/general; no punitive.$60,000 is economic/special; $140,000 is non-economic/general; no punitive.
11. What does EXCLUSIVE REMEDY mean in workers compensation?
Compensation is the only remedyOnly medical bills are payableOnly one claim per employeeOnly the state may bring a claim
12. Under NDCC 26.1-39-13, after how long is cancellation limited to enumerated grounds?
Immediately on issueMore than sixty days in effectMore than ninety days in effectMore than thirty days in effect
13. What caps the surety's liability on a bond?
The obligee's actual lossThe contract price in fullThe premium paid times tenThe penal sum of the bond
14. Which of the following is an example of a SPECULATIVE risk that is NOT insurable?
Risk of fire damage to a buildingRisk of injury from an auto accidentRisk of loss on a stock investmentRisk of theft of inventory
15. An insured lets a required underlying policy lapse and a loss occurs. What happens?
The insured bears the gapThe umbrella drops down fullyThe umbrella is void from inceptionThe insurer must reinstate it
16. Which NDCC chapter is the property and casualty guaranty association?
26.1-38.126.1-0426.1-42.126.1-40
17. How does a commercial auto policy describe which vehicles are covered?
By listing every vehicle onlyBy the drivers named on itBy designation symbol categoriesBy the vehicle registration state
18. An 'examination under oath' (EUO) gives the insurer the right to:
Cancel the policy back to inception and refund the premium paid for the current policy termSue the insured for fraud immediately on receipt of the claim, before any investigation is doneQuestion the insured under oath about the loss as part of its investigationReject the claim without further investigation once the insured submits the sworn proof of loss
19. A business buys a truck and forgets to schedule it. When is it uninsured?
Where the symbol is described autosIn every case for thirty daysWhere the symbol is any autoWhere the symbol is owned autos
20. Which symbol category excludes a vehicle borrowed from an EMPLOYEE?
Non-owned autos onlyHired autos onlyOwned autos onlyAny auto

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