10 exam-style questions with answers and explanations, straight from our 1,030-question bank. Tap an answer to check yourself. When you're ready, take the scored version in the free practice test.
The NM-PC exam has 150 questions and runs 2 hours 30 minutes.
These 10 free NM-PC questions are organized by exam domain, so you can see how each part of the New Mexico Property & Casualty Insurance Producer Exam blueprint is tested. Reveal the answer and explanation under each question.
During a New Mexico market-conduct examination, an agency's records show premiums for three insurers in one premium trust account. The ledger separately identifies each insurer's balance, and the agency never uses the money for operations. What rule governs this arrangement?
Correct answer: B - One fiduciary account is acceptable when each principal's amount is readily ascertainable
Before recommending a homeowners replacement, a producer accurately compares premium, wind deductible, loss settlement, and excluded water damage. The insured then elects the new policy. Which characterization fits the producer's conduct?
Correct answer: A - Lawful replacement based on accurate disclosure
Because information in a consumer report contributes to a higher auto premium, the underwriter proposes using the employment-style pre-adverse-action process before setting the rate. Under the FCRA, what should happen instead?
Correct answer: C - Make the decision, then send notice naming the CRA, the dispute right, and the 60-day free-report right
Although the agency agreement bars a producer from binding vacant dwellings, the insurer gives the producer branded binding receipts, lists the producer as authorized online, and repeatedly honors similar binders. An applicant reasonably relies on those outward signs. What authority is implicated?
Correct answer: A - Apparent authority
Replacement value is $800,000; the policy carries a $480,000 limit, an 80% coinsurance clause, and a $2,000 deductible. After a covered $160,000 partial loss, with no other limitation applying, the insurer's payment is:
Correct answer: C - $118,000
The jury in a New Mexico negligence case fixes compensatory damages at $240,000 and assigns 75% of the fault to the claimant. With no other limitation, pure comparative fault reduces the claimant's recovery to:
Correct answer: D - $60,000; the award is reduced by 75%
Overnight wind damage opens a store's roof, and rain begins entering. A building official says temporary access is safe, but the adjuster will not arrive until the next afternoon. What should the insured do now?
Correct answer: A - Arrange temporary protection, preserve evidence, and keep expense records
Under a DP-3 covering a rental house, landlord-owned appliances are insured under Coverage C. How are the building and personal-property perils written?
Correct answer: D - Coverages A and B are open-peril; Coverage C remains broad named-peril
A condominium owner asks for protection on personal property, unit improvements and alterations, loss of use, personal liability, and loss assessments. The appropriate homeowners form is:
Correct answer: C - HO-6 Unit-Owners
River overflow sends surface water through the ground-level doors of a home insured under an unendorsed HO-3. Which advice should the producer give?
Correct answer: B - The loss is excluded as flood and requires separate flood insurance
The NM-PC exam also covers these domains. Drill them in the full free practice test:
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