District of Columbia Property and Casualty Insurance Quiz

What is the purpose of the D.C. Automobile Insurance Plan (AIP)?

• To offer coverage for vehicles used in commercial activities.

• To provide discounts for safe drivers.

• To provide insurance for luxury vehicles.

• To assign high-risk drivers to insurers when declined by admitted carriers.

Answer explanation

The D.C. Automobile Insurance Plan (AIP) is designed to assign high-risk drivers to insurers when they are declined coverage by admitted carriers, ensuring these drivers can still obtain necessary insurance.

What is required for a surplus lines producer to place a policy with a non-admitted carrier?

• A special permit from the D.C. government.

• Approval from the federal insurance board.

• Documentation of three declinations and verification of the carrier's solvency.

• A minimum of five declinations from admitted carriers.

Answer explanation

To place a policy with a non-admitted carrier, a surplus lines producer must provide documentation of three declinations from admitted carriers and verify the carrier's solvency.

What is the required notice period for nonpayment cancellations of P&C policies in D.C.?

• 5 days

• 10 days

• 30 days

• 15 days

Answer explanation

In D.C., the required notice period for nonpayment cancellations of property and casualty (P&C) policies is 10 days. This means insurers must notify policyholders at least 10 days before cancellation due to nonpayment.

What is the minimum Personal Injury Protection (PIP) coverage insurers must offer in D.C.?

• $5,000

• $50,000

• $12,000

• $25,000

Answer explanation

In D.C., the minimum Personal Injury Protection (PIP) coverage that insurers must offer is $12,000. This amount is designed to cover medical expenses and lost wages for the insured after an accident.

What is the minimum liability limit for bodily injury per person required for registered vehicles in D.C.?

• $100,000

• $25,000

• $10,000

• $50,000

Answer explanation

In D.C., the minimum liability limit for bodily injury per person is $25,000. This means that if an accident occurs, the insurance must cover at least this amount for injuries to one person.

Under what conditions can insurers cancel or non-renew P&C policies in D.C.?

• Only for nonpayment of premium, material misrepresentation, or excessive claims history.

• If the policyholder moves out of D.C.

• For any reason the insurer deems necessary.

• If the policyholder requests a change in coverage.

Answer explanation

Insurers in D.C. can only cancel or non-renew P&C policies for specific reasons: nonpayment of premium, material misrepresentation, or excessive claims history, making the first choice the correct one.

What is the purpose of the Assigned Risk Plan for workers' compensation in D.C.?

• To provide coverage for employers with excellent safety records.

• To offer coverage to employers unable to secure voluntary market coverage.

• To provide temporary coverage for new businesses.

• To reduce premiums for all employers.

Answer explanation

The Assigned Risk Plan provides coverage specifically for employers who cannot obtain workers' compensation insurance in the voluntary market, ensuring they have access to necessary coverage.

What must surplus lines producers do before placing risks with non-admitted insurers?

• Ensure the insurer is based in D.C.

• Demonstrate diligent effort to procure coverage in the admitted market.

• Obtain a federal license.

• Charge a 5 percent premium tax.

Answer explanation

Surplus lines producers must demonstrate diligent effort to procure coverage in the admitted market before placing risks with non-admitted insurers, ensuring all options are explored.

What does the Uninsured Motorist Fund in D.C. do?

• Provides loans to uninsured drivers.

• Compensates victims when a driver is at fault but cannot be identified or insured.

• Offers discounts on insurance premiums.

• Funds road safety programs.

Answer explanation

The Uninsured Motorist Fund in D.C. compensates victims when a driver is at fault but cannot be identified or insured, ensuring that victims receive support even in these challenging situations.

What must employers in D.C. do if they cannot secure voluntary market coverage for workers' compensation?

• Stop operations until coverage is obtained.

• Apply to the NCCI-administered Assigned Risk Plan.

• Increase employee wages to cover potential injuries.

• Seek coverage from international insurers.

Answer explanation

If employers in D.C. cannot secure voluntary market coverage for workers' compensation, they must apply to the NCCI-administered Assigned Risk Plan to obtain necessary coverage.