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North Carolina Insurance Adjuster Licensing Exam
Questions with Correct Answers and explanations
LATEST THIS YEAR -JUST RELEASED
Summarized Exam Coverage
The North Carolina Insurance Adjuster Licensing Exam is administered by Pearson VUE on behalf of the
North Carolina Department of Insurance . Adjuster candidates are not required to complete
prelicensing education, but must pass the licensing examination .
Key Exam Domains:
• General Insurance Concepts: Risk, perils, hazards, indemnity, insurable interest, law of large
numbers
• Property Insurance: Standard Fire Policy, dwelling forms (DP-1, DP-2, DP-3), homeowners
policies (HO-2, HO-3, HO-4, HO-5, HO-6, HO-8)
• Casualty Insurance: Personal Auto Policy (PAP) coverages (Parts A-F), liability, medical
payments, UM/UIM, physical damage
• Commercial Insurance: Commercial Package Policy (CPP), Business Auto Policy (BAP), Business
Income, Workers' Compensation
• Claims Handling: Investigation, documentation, settlement practices, unfair claims settlement
practices
• North Carolina-Specific Laws: Contributory negligence, Motor Vehicle Reinsurance Facility
(100% participation), unfair claims settlement practices
• Flood Insurance: National Flood Insurance Program (NFIP), 30-day waiting period, regular vs.
emergency program
• Bonds & Surety: Surety bonds, fidelity bonds, performance bonds
North Carolina is a contributory negligence state . Under the doctrine of contributory negligence, if an
injured party contributed in any way to their own injury due to their own negligence, they cannot
recover any damages from the other party . This is distinct from comparative negligence states, where
recovery is reduced by the percentage of fault.
Key NP: "It is a violation of North Carolina insurance regulations to knowingly and willfully engage in
an unfair claim settlement practice. The Department of Insurance considers these violations serious
and will take appropriate regulatory action. North Carolina General Statute 58-63-15(11) lists 14
specific unfair claims settlement practices."
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1. What is the definition of an "occurrence" in insurance?
A) A sudden, unforeseen, and unintended one-time event
B) Something that continues to happen and may cause injury later on
C) Any event that results in a loss regardless of foreseeability
D) A planned event that causes damage
Answer: B
An occurrence is an event that continues over time and may cause injury or damage later, distinguishing
it from a sudden accident .
2. What is the difference between an "accident" and an "occurrence" under insurance policies?
A) An accident is a sudden, unforeseen, and unintended one-time event; an occurrence includes events
that continue over time
B) There is no difference; the terms are interchangeable
C) An occurrence is sudden; an accident happens over time
D) Accidents are always covered; occurrences never are
Answer: A
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An accident is a one-time unexpected event, while an occurrence can be a continuous condition that
results in damage over time .
3. Under North Carolina's contributory negligence law, what happens if an insured party is found to have
contributed in any way to their own injury?
A) The recovery is reduced by their percentage of fault
B) The insurer pays nothing at all
C) The insured recovers double damages
D) The claim goes to binding arbitration
Answer: B
North Carolina is a contributory negligence state; if an insured contributed in any way to their injury due
to their own negligence, the insurer will not pay anything .
4. Which state follows the contributory negligence rule?
A) California
B) Florida
C) North Carolina
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D) Texas
Answer: C
North Carolina is a contributory negligence state, meaning any fault by the injured party bars recovery
entirely .
5. A hazard is best defined as:
A) The actual cause of loss
B) Any circumstance that increases a possible loss
C) The chance of loss from an uncontrollable event
D) An unexpected financial setback
Answer: B
A hazard is any circumstance that increases the probability of a loss occurring, such as bald tires
increasing the chance of an accident .
6. What is a "peril" in insurance terms?
A) A circumstance that increases the chance of loss
B) The actual cause of loss, such as fire, theft, or wind
North Carolina Insurance Adjuster Licensing Exam
Questions with Correct Answers and explanations
LATEST THIS YEAR -JUST RELEASED
Summarized Exam Coverage
The North Carolina Insurance Adjuster Licensing Exam is administered by Pearson VUE on behalf of the
North Carolina Department of Insurance . Adjuster candidates are not required to complete
prelicensing education, but must pass the licensing examination .
Key Exam Domains:
• General Insurance Concepts: Risk, perils, hazards, indemnity, insurable interest, law of large
numbers
• Property Insurance: Standard Fire Policy, dwelling forms (DP-1, DP-2, DP-3), homeowners
policies (HO-2, HO-3, HO-4, HO-5, HO-6, HO-8)
• Casualty Insurance: Personal Auto Policy (PAP) coverages (Parts A-F), liability, medical
payments, UM/UIM, physical damage
• Commercial Insurance: Commercial Package Policy (CPP), Business Auto Policy (BAP), Business
Income, Workers' Compensation
• Claims Handling: Investigation, documentation, settlement practices, unfair claims settlement
practices
• North Carolina-Specific Laws: Contributory negligence, Motor Vehicle Reinsurance Facility
(100% participation), unfair claims settlement practices
• Flood Insurance: National Flood Insurance Program (NFIP), 30-day waiting period, regular vs.
emergency program
• Bonds & Surety: Surety bonds, fidelity bonds, performance bonds
North Carolina is a contributory negligence state . Under the doctrine of contributory negligence, if an
injured party contributed in any way to their own injury due to their own negligence, they cannot
recover any damages from the other party . This is distinct from comparative negligence states, where
recovery is reduced by the percentage of fault.
Key NP: "It is a violation of North Carolina insurance regulations to knowingly and willfully engage in
an unfair claim settlement practice. The Department of Insurance considers these violations serious
and will take appropriate regulatory action. North Carolina General Statute 58-63-15(11) lists 14
specific unfair claims settlement practices."
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1. What is the definition of an "occurrence" in insurance?
A) A sudden, unforeseen, and unintended one-time event
B) Something that continues to happen and may cause injury later on
C) Any event that results in a loss regardless of foreseeability
D) A planned event that causes damage
Answer: B
An occurrence is an event that continues over time and may cause injury or damage later, distinguishing
it from a sudden accident .
2. What is the difference between an "accident" and an "occurrence" under insurance policies?
A) An accident is a sudden, unforeseen, and unintended one-time event; an occurrence includes events
that continue over time
B) There is no difference; the terms are interchangeable
C) An occurrence is sudden; an accident happens over time
D) Accidents are always covered; occurrences never are
Answer: A
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An accident is a one-time unexpected event, while an occurrence can be a continuous condition that
results in damage over time .
3. Under North Carolina's contributory negligence law, what happens if an insured party is found to have
contributed in any way to their own injury?
A) The recovery is reduced by their percentage of fault
B) The insurer pays nothing at all
C) The insured recovers double damages
D) The claim goes to binding arbitration
Answer: B
North Carolina is a contributory negligence state; if an insured contributed in any way to their injury due
to their own negligence, the insurer will not pay anything .
4. Which state follows the contributory negligence rule?
A) California
B) Florida
C) North Carolina
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D) Texas
Answer: C
North Carolina is a contributory negligence state, meaning any fault by the injured party bars recovery
entirely .
5. A hazard is best defined as:
A) The actual cause of loss
B) Any circumstance that increases a possible loss
C) The chance of loss from an uncontrollable event
D) An unexpected financial setback
Answer: B
A hazard is any circumstance that increases the probability of a loss occurring, such as bald tires
increasing the chance of an accident .
6. What is a "peril" in insurance terms?
A) A circumstance that increases the chance of loss
B) The actual cause of loss, such as fire, theft, or wind
