Nebraska Personal Lines Insurance License Exam — All Questions

How does Nebraska handle liability for auto accidents?

• a.It is a pure no-fault state; each driver's own insurer pays regardless of fault
• b.It requires mandatory PIP on every policy in place of liability coverage
• c.It is a traditional at-fault (tort) state; the at-fault driver is responsible for the other party's injuries and damage✓
• d.It routes all auto claims through a state-run accident fund

Nebraska follows a traditional at-fault (tort) system: the driver responsible for a crash is liable for the other party's injuries and property damage, which is why liability limits matter. It does not use a no-fault/PIP system. Confirm current auto rules with the Nebraska Department of Insurance (https://doi.nebraska.gov/).

A client asks you for Nebraska's exact minimum auto liability limits. What is the best professional response?

• a.Quote any common figure from memory; the minimums never change
• b.Explain that Nebraska law sets minimum limits and confirm the current figures with the Nebraska Department of Insurance before advising✓
• c.Tell the client Nebraska has no minimum limits
• d.Refer the client to federal auto-insurance regulations

Statutory minimum limits can change, so a producer should confirm the current Nebraska figures with the Nebraska Department of Insurance (https://doi.nebraska.gov/) rather than rely on memory. Advise the client to carry at least the state minimum, and ideally higher limits to protect assets.

How are cancellation and nonrenewal of a personal auto or homeowners policy regulated in Nebraska?

• a.An insurer may cancel any personal policy at any time for any reason with no notice
• b.Only the policyholder may ever cancel; insurers can never cancel mid-term
• c.There are no notice rules; cancellation is governed solely by the contract
• d.State law limits the reasons an insurer may cancel or nonrenew and requires advance written notice to the insured; confirm the exact notice period with the Nebraska Department of Insurance✓

Nebraska, like other states, restricts mid-term cancellation of personal auto and homeowners policies to specified reasons (such as nonpayment or material misrepresentation) and requires advance written notice of cancellation or nonrenewal. The exact number of days varies by reason and line — verify the current Nebraska notice periods with the Nebraska Department of Insurance.

With respect to uninsured/underinsured motorist (UM/UIM) coverage on a Nebraska personal auto policy, which is generally true?

• a.UM/UIM is prohibited in the state
• b.UM/UIM automatically replaces liability coverage
• c.UM/UIM protects the insured when an at-fault driver has no or insufficient coverage; the specifics of how it is offered are set by Nebraska law✓
• d.UM/UIM is only available to commercial fleets

Uninsured/underinsured motorist coverage fills the gap when the at-fault driver has no or insufficient coverage — important in an at-fault state like Nebraska. How it must be offered, included, or rejected is governed by state law; confirm the current UM/UIM rules with the Nebraska Department of Insurance (https://doi.nebraska.gov/).

Which best describes the body that writes and enforces Nebraska's insurance regulations affecting personal lines policies?

• a.The Nebraska Department of Insurance, a state agency led by the Director of Insurance✓
• b.A private trade association of insurers with no government authority
• c.The federal Department of Insurance in Washington, D.C.
• d.The county clerk's office where the policy is issued

Insurance in Nebraska is regulated at the state level by the Nebraska Department of Insurance. There is no federal department of insurance; each state (including Nebraska) supervises its own market, licenses producers, and enforces cancellation, rating, and coverage rules. Source: Nebraska Department of Insurance (https://doi.nebraska.gov/).