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North Dakota Property Practice Exam

20 exam-style questions drawn from the same bank as our full North Dakota Property course (North Dakota Insurance Producer - Property - 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. Which Section II exclusion sends a claim to another policy entirely?
Motor vehicles and aircraftControlled substancesCommunicable diseaseExpected or intended injury
2. During a covered windstorm, a tree falls and breaks a window. Rain then enters through the broken window and ruins interior carpet. The insurer pays for the carpet damage under the wind peril. This reflects which doctrine?
The doctrine of concurrent causation (any cause).The doctrine of utmost good faith (uberrimae fidei).The strict liability doctrine (absolute liability).The proximate cause doctrine (first efficient cause).
3. After adverse action, what is the consumer entitled to from the agency?
An automatic correction of the fileA free copy of the reportA refund of the premium chargedA written explanation of the decision
4. What must a consumer reporting agency do when an item is disputed?
Refer the consumer to the insurerSuspend the file for one yearCharge a fee for the reviewReinvestigate and correct or delete
5. How is BASEMENT property treated under a standard flood policy?
Largely limited to essential equipmentExcluded entirely from coverCovered in full as living spaceCovered only for tenants
6. Under most states' laws, an insurance producer who receives a signed application but does not promptly submit it to the carrier, causing a loss to go uninsured, may be liable under which theory?
Strict liability; the producer is liable without any showing of fault.Criminal fraud, since failing to submit an application is always intentional.No theory, because producers owe no duty to submit applications promptly.Negligence (errors and omissions); the producer owed a duty of reasonable care.
7. A homeowner comes home to find a burst pipe has flooded the kitchen. Which of the following is NOT an insured duty after loss under a standard ISO homeowners policy?
Cooperate with the insurer's investigation, including submitting to a sworn examination under oath if requiredIndependently hire a contractor and complete permanent repairs before the insurer can inspectGive prompt notice to the insurance company or its agentProtect the property from further damage, making reasonable and necessary temporary repairs
8. Which period is LONGER, cancellation on a general ground or nonrenewal?
Nonrenewal, at forty-five daysThey are the same periodNonrenewal, at thirty daysCancellation, at thirty days
9. Equipment breakdown coverage answers which gap?
A boiler that fails on its ownA boiler stolen from a siteA boiler damaged in transitA boiler damaged by a fire
10. Which risk is typically written on a dwelling policy rather than homeowners?
A tenant's apartment contentsA newly built owner occupied homeA condominium unit owned outrightA rental dwelling not owner occupied
11. Vicarious liability holds one party legally responsible for another's actions, most commonly when:
A stranger is injured by an unknown third party with no employment, agency, or other legal relationship connecting them to the insuredAn insured commits arson against the insured's own covered property to trigger a fraudulent fire-loss claim under the homeowners policyAn employer is held liable for an employee's negligent acts within the scope of employmentA motorist runs a red light and personally causes a collision, which is direct first-person negligence rather than vicarious responsibility
12. Which subsection of NDCC 26.1-04-03 covers rebating?
Subsection (2)Subsection (8)Subsection (4)Subsection (5)
13. Under NDCC 26.1-42.1-13, what caps a member insurer's annual assessment?
Five percent of net written premiumOne percent of surplusTwo percent of net written premiumTen percent of net written premium
14. What must happen before a business income claim can arise?
The insolvency of a major supplierAn order of a civil authority nearbyDirect physical loss to covered propertyA sustained drop in the insured revenue
15. Which term names the CAUSE of a loss?
LossRiskPerilHazard
16. An insured's home is damaged by a negligent contractor. The insurer pays the $40,000 repair under the homeowners policy and then sues the contractor to recover what it paid. What doctrine allows this?
EstoppelAssignmentSubrogationAbandonment
17. In January, a homeowner sells a rental house to a new buyer but does not cancel her existing homeowners policy on the property. In March, while the policy is still technically in force, a fire destroys the house. The buyer failed to arrange his own coverage. Can the former owner collect under her policy?
No, a property policy automatically terminates the moment the property is sold, so there was no policy in force on the date of loss.No, in property insurance, insurable interest must exist at the time of loss, and she no longer had a financial stake in the house.Yes, she paid the premium and the policy was in force on the date of the loss, so the insurer must pay her claim in full.Yes, in property insurance insurable interest only has to exist at policy inception, and she owned the house when the policy was written.
18. Under the Gramm-Leach-Bliley Act (GLBA), which notice must an insurer provide to customers at the beginning of the relationship and annually thereafter (when the annual-notice exception does not apply)?
A Privacy Notice describing categories of information collected, how it is used, and the consumer's opt-out rights for sharing with nonaffiliated third partiesA Medical Loss Ratio disclosure required under the federal Affordable Care Act for health insurance issuers, a healthcare-specific filing unrelated to the GLBA financial-privacy notice framework on the P&C sideA Summary Annual Report of the insurance carrier's audited financial condition, a solvency-disclosure document that has no application to the GLBA financial-privacy notice obligation owed to consumersA free annual consumer credit report voucher delivered to the insured under FCRA at the start of every annual policy term, a benefit not actually provided under GLBA at all and not delivered at policy issuance
19. Subrogation is best described as:
The insurer's right to step into the insured's legal position and pursue recovery from a negligent third party after paying a claim.The insured's right to collect from both the insurer and the negligent third party for the same loss without any offset.The right of two insurers covering the same loss to share the payment in proportion to their respective policy limits.The insurer's right to recover the claim payment from the insured if it later learns the insured contributed to the loss.
20. Under N.D. Admin. Code 45-05-04, how long must loss data be retained after termination?
Two yearsOne yearThree yearsSix months

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