P&C Terms and Concepts
13%of exam
Personal Lines Coverage
39%of exam
Dwelling DPHomeowners HOPersonal AutoWatercraftUM/UIM
Commercial Lines Coverage
23%of exam
NC Law and Regulation
25%of exam
Quick Facts
- Exam Codes
- 830 Property / 920 Casualty
- Questions
- 55 each (110 combined)
- Time
- 75 min each part
- Pass
- Scaled 70 each part
- Fee
- $45 per exam ($90 both)
- Provider
- NCDOI / Pearson VUE
- Auto Min
- 50/100/50 from Jul 2025
- Prelicensing
- Repealed Oct 1 2025
Contract Elements
Offer + Acceptance + Consideration = Valid Contract
Offer: applicantAcceptance: insurer bindsConsideration: premium
Peril vs Hazard
Peril
- Cause of loss
- Fire wind theft
- Insured event
Hazard
- Increases peril
- Physical/moral/morale
- Condition not cause
Cause vs condition
Valuation Picker
- RCV policy→Replacement cost(No depreciation)
- DP-1 default→ACV(Minus depreciation)
- Older home→Functional(Equivalent replacement)
- Scheduled item→Agreed value(Parties set)
- Total loss→Policy limit(Up to max)
- Insured underinsured→Coinsurance penalty(If below required %)
Contract Principles
- Offer
- Applicant submits premium
- Acceptance
- Insurer agrees to bind
- Consideration
- Premium for promise
- Insurable interest
- Financial loss exposure
- Utmost good faith
- Honesty both sides
- Subrogation
- Insurer recovers from third party
- Indemnity
- Restore not profit
ACV vs RCV
ACV
- RCV minus depreciation
- DP-1 default
- Lower payout
RCV
- Replace no deduction
- HO-3 default
- Higher premium
Depreciation or not
Policy Anatomy
- Declarations
- Who what limits
- Insuring agreement
- Core promise
- Conditions
- Policyholder duties
- Exclusions
- Remove coverage
- Endorsement
- Modifies policy
- Definitions
- Clarify key terms
Named vs Additional Insured
Named insured
- Listed on declarations
- Full policy rights
- Pays premium
Additional insured
- Added by endorsement
- Limited coverage
- Often CGL request
Policyholder vs added
Loss Valuation
- ACV
- RCV minus depreciationDP/HO
- RCV
- Replace no deduction
- Functional
- Replace with equivalent
- Stated value
- Pre-set max
- Agreed value
- Parties set amount
- Salvage
- Damaged property value
HO Forms
HO-2 Broad | HO-3 Special | HO-5 Open
HO-2: named perilsHO-3: open dwellingHO-5: open both
HO-2 vs HO-3
HO-2
- Broad named perils
- Listed causes only
- Lower cost
HO-3
- Open perils dwelling
- Named perils contents
- Standard owner form
Named vs open perils
Home Form Picker
- Tenant rents unit→HO-4(Broad named perils)
- Condo owner→HO-6(Walls-in + personal property)
- Standard owner→HO-3(Open perils dwelling)
- High-value owner→HO-5(Open perils contents)
- Older home ACV→HO-8(Modified coverage)
- Rental dwelling→DP-3(Not owner occupied)
Dwelling Forms (DP)
- DP-1
- Basic named perilsACV
- DP-2
- Broad named perils
- DP-3
- Special open perils
- DP-8
- Modified coverage form
- Vandalism
- Vacancy over 60 days
- EC perils
- Fire wind hail
PAP Parts
A Liability | B Med | C UM | D Damage
A: 50/100/50B: medical paymentsC: UM requiredD: collision/OTC
HO-3 vs HO-5
HO-3
- Open perils dwelling
- Named perils contents
- Most common
HO-5
- Open perils both
- Broader contents
- High-value homes
Contents basis
Homeowners Forms (HO)
- HO-2
- Broad named perils
- HO-3
- Special open perils dwelling
- HO-4
- Tenants broad form
- HO-5
- Open perils contents too
- HO-6
- Condo unit owners
- HO-8
- Modified older homes ACV
- Section I
- Property coverage
- Section II
- Liability + medical
Personal Auto (PAP)
- Part A
- Liability 50/100/50 min
- Part B
- Medical payments
- Part C
- UM/UIM coverage
- Part D
- Physical damage
- Collision
- Upset or impact
- Other than collision
- Comprehensive perils
- Symbol 7
- Specific auto only
- Symbol 1
- Any auto
Watercraft + PDP
- Watercraft
- HO endorsement limits
- PDP
- Personal umbrella
- SIR
- Self-insured retention
- Underlying
- Required base limits
Occurrence vs Claims-Made
Occurrence
- Trigger when injury
- No retro date
- Standard CGL
Claims-Made
- Trigger when reported
- Retro date matters
- Tail needed
When trigger fires
Commercial Policy Picker
- Small main street biz→BOP(Bundled package)
- Custom package→CPP(Modular lines)
- Injury during operations→CGL occurrence(Standard GC)
- Professional service→Professional liability(E&O)
- Employees injured→Workers comp(Statutory)
Commercial Property
- BPP
- Building + personal property
- Cause of loss
- Basic broad special
- Coinsurance
- 80% to 100% rule
- Agreed value
- Waive coinsurance
- Replacement cost
- Optional endorsement
- BOP
- Small business bundle
CGL Trigger Picker
- Injury during policy→Occurrence(Standard)
- Claim during policy→Claims-made(Retro date key)
- Tail coverage→Extended reporting(After expiry)
- Prior acts cover→Retro date(Before policy)
CGL Coverage
- Occurrence
- When injury happens
- Claims-made
- When claim reported
- Coverage A
- Bodily injury + property damage
- Coverage B
- Personal + adv injury
- Coverage C
- Medical payments
- Products-completed ops
- After work done
Workers Compensation
- Part One
- Statutory WC benefits
- Part Two
- Employers liability
- Exclusive remedy
- Bars employee tort
- Monopolistic
- State fund only
- NCCI
- Rates + classifications
Commercial Auto
- Symbol 1
- Any auto liability
- Symbol 2
- Owned autos
- Symbol 7
- Specifically described
- Symbol 9
- Non-owned autos
- MCS-90
- Federal motor carrier
Bonds
- Surety bond
- Three-party guarantee
- Fidelity bond
- Covers employee dishonesty
- Principal
- Performs obligation
- Obligee
- Receives protection
NC Contributory Negligence
4 Contrib States + DC bar 1%
NC + VA + AL + MD + DC1% fault bars recoveryPure contributory
UM vs UIM
UM
- At-fault has none
- Cannot reject in NC
- Up to liability limits
UIM
- At-fault too low
- Offered not mandatory
- Stack with limits
Uninsured vs underinsured
NC Residual Market Picker
- Coastal wind/hail denied→NCIUA Beach Plan(18 coastal counties)
- Property denied voluntary→NCJUA FAIR Plan(Residual property)
- Auto denied voluntary→Reinsurance Facility(Auto residual)
- Admitted declines risk→Surplus lines(Nonadmitted + tax)
- Insurer insolvent→NCIGA(Coverage caps apply)
NCDOI + Licensing
- NCDOI
- Primary insurance regulator
- Commissioner
- Elected 4-year term
- Resident license
- Through NIPR + NCDOI
- Non-resident
- NIPR reciprocity
- Prelicensing
- Repealed Oct 1 2025
- Lines
- 830 Property + 920 Casualty
NC Auto Minimums
50 / 100 / 50 since Jul 1 2025
50K per person100K per accident50K property
NCIUA vs NCJUA
NCIUA
- Beach Plan
- Wind + hail
- 18 coastal counties
NCJUA
- FAIR Plan
- Residual property
- Statewide property access
Wind vs FAIR
NC Auto Law
- Min limits
- 50/100/50 from Jul 2025
- Prior min
- 30/60/25 pre Jul 2025
- SB 452
- Session Law 2023-133
- UM
- Cannot be rejected
- UIM
- Offered up to liability limits
- Financial responsibility
- G.S. 20-279.21
NC Residual Markets
- NCIUA
- Beach Plan wind/hail 18 counties
- NCJUA
- FAIR Plan residual property
- Reinsurance Facility
- Auto residual market
- NCRB
- Rate bureau filings
- Surplus lines
- Nonadmitted premium tax
- NCIGA
- Insolvency coverage caps
NC CE + Compliance
- CE hours
- 24 hrs every 2 years
- Ethics
- 3 hrs required
- Flood
- 3 hrs for property licensees
- Market conduct
- NCDOI enforcement
- Unfair practices
- G.S. 58-63-15
Common Traps
Peril vs Hazard
Peril is the cause ≠ Hazard increases peril
ACV vs RCV
ACV subtracts depreciation ≠ RCV replaces no deduction
UM vs UIM
UM other driver uninsured ≠ UIM other driver underinsured
Named vs Additional Insured
Named has full rights ≠ Additional limited by endorsement
Occurrence vs Claims-Made
Occurrence triggers at injury ≠ Claims-made at report
NCIUA vs NCJUA
NCIUA coastal wind/hail ≠ NCJUA statewide FAIR
HO-3 vs HO-5
HO-3 named perils contents ≠ HO-5 open perils contents
Scaled 70 vs raw 70%
Scaled adjusts for difficulty ≠ Raw % not reported to candidate
Last Minute
- 1.NC auto min 50/100/50
- 2.UM cannot be rejected in NC
- 3.NC is pure contributory negligence
- 4.Prelicensing repealed Oct 1 2025
- 5.CE 24h/2yr, 3 ethics, flood
- 6.Exams 830 Property and 920 Casualty
- 7.55 Q 75 min scaled 70
- 8.$45 per exam, $90 for both
- 9.NCIUA Beach Plan 18 coastal counties
- 10.NCJUA FAIR Plan residual property
- 11.Scaled 70 not raw 70%
- 12.NCDOI Commissioner elected 4-year term
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