Free North Dakota Casualty practice questions

Answer: A. 30 consecutive days

When the owner of a secured motor vehicle gives notice that it will stay off public roads and highways for a period of at least 30 consecutive days, the basic no-fault insurer must suspend the coverage on a pro rata basis, or offer a similar credit, to the extent the owner requests, until the owner asks for reinstatement. The statute sets the minimum at 30 consecutive days, so a notice need not promise 60, 90 or 180 days of nonuse to trigger the insurer's duty.

Answer: A. 20 days

Sec. 26.1-40-03 requires written notice of cancellation, sent to the named insured at the address shown in the policy, at least 20 days before the effective date. The 10-day period in the same section applies only when the cancellation is for nonpayment of premium. Thirty days is the advance notice period for a nonrenewal, and 45 days has no basis in the statute.

Answer: B. The coverage does not apply, and the insurer is not bound by the settlement she made

North Dakota's uninsured and underinsured motorist limitations remove coverage when the insured, without the insurer's written consent, makes an agreement or settlement with a person who may be legally liable and that agreement adversely affects the insurer's rights. The insurer is also not bound by a settlement made without its prior knowledge and consent. So the coverage is lost rather than merely reduced by the settlement amount. The consent limitation covers both coverages; the only carve-out is for underinsured coverage where the insured gave the advance written notice and the insurer failed to advance the required payment, which does not fit an uninsured claim. Reporting to law enforcement is a separate limitation, stated as soon as practicable rather than within 30 days, and it does not override the unauthorized-settlement limitation.

Answer: B. Its auto liability policies, wherever issued, count as the required security here

The filing declares that the insurer's motor vehicle liability policies, wherever they were issued, are treated as providing the security North Dakota's no-fault chapter requires when the vehicle is operated in North Dakota. Because the declaration covers policies wherever issued, an option exempting out-of-state policies is wrong, and so is one limiting the declaration to vehicles registered in North Dakota. Self-insurance is a separate route under the same section, made by filing an undertaking and evidence of financial arrangements, and is not what the insurer's form declares.

Answer: C. It may cancel, since the listed ground covers misstatements in a claim

Sec. 26.1-40-02(1)(c) lists fraud or material misrepresentation, made by an insured or with an insured's knowledge, as a cancellation ground when it occurs in obtaining the policy, continuing it, or presenting a claim under it. The ground is therefore not limited to the application, it supports a midterm cancellation rather than only a nonrenewal, and the statute does not require a criminal conviction.

Answer: C. Continuous security covering both basic no-fault benefits and auto liability

The owner of a motor vehicle required to be registered in North Dakota must keep security in place continuously while operation in the state is contemplated, and that security must pay basic no-fault benefits and also cover the liabilities insured by motor vehicle liability insurance. Because both are required, an option that makes either one a matter of the owner's choice is wrong. The duty is continuous and comes before any accident, so an option that waits for a first accident is also wrong.

Answer: A. A policy of insurance covering its obligations under the contracts

North Dakota requires a person who issues a written automobile warranty contract, mechanical breakdown contract or service contract to maintain an insurance policy that covers the person's contractual obligation, and the same section requires that policy to be issued by an insurer authorized to do business in the state. The section names an insurance policy as the required protection; it does not describe a surety bond, producer licensing of employees or a trust account.

Answer: A. It falls outside the definition of an uninsured motor vehicle because a political subdivision owns it

North Dakota's uninsured and underinsured motorist definitions list vehicles that are never treated as uninsured or underinsured, and one of them is a vehicle owned by a governmental unit, political subdivision, or agency. A county is a political subdivision, so the truck is carved out even though it carried no policy. The lack of a liability policy would ordinarily make a vehicle uninsured, but the government-ownership carve-out overrides that. An underinsured motor vehicle requires a liability policy or bond in effect with limits below the insured's underinsured limit, and the same carve-out reaches underinsured vehicles too. Verification by a disinterested witness matters only when the owner or operator cannot be identified, and here the owner is known.

Answer: C. No, the requirement does not reach excess or umbrella policies that are not primary auto coverage

North Dakota's uninsured and underinsured motorist provisions state that no insurer must offer, provide, or make available that coverage with an excess policy, an umbrella policy, or any other policy that does not provide primary motor vehicle insurance for a specifically insured vehicle. The umbrella here is exactly that kind of policy, so no offer is required. The requirement is not imposed on every policy touching auto liability, and it does not attach at the underlying policy's limits. A written request from the named insured does not create an obligation, because the exemption contains no such condition.

Answer: C. Written or electronic evidence of the policy's type, term and vehicle

North Dakota requires an insurer that issues an auto policy to provide the insured with proof of insurance in written or electronic form, showing the policy's terms as to type, duration and the vehicle covered. Electronic evidence is expressly allowed, so a paper-only rule is wrong. The duty runs to the insured and is not conditioned on a request from an officer. A document that omits the vehicle fails because the proof must address the vehicle covered.