NC ADJUSTER LICENSING EXAM QUESTIONS AND
CORRECT ANSWERS| ACCURATE REAL EXAM WITH
FREQUENTLY TESTED QUESTIONS AND
RATIONALE|ALREADY A GRADED|GUARANTEED
PASS|LATEST UPDATE 2025.
Which of the following is NOT excluded by Section II - Liability of the Business Automobile
policy? - CORRECT ANSWER Cost to defend the insured
The insured and her 18-year-old son, who lives in the insured's household, are crossing the street
when both of them are struck by a drunk driver. The Part B - Medical Payments coverage of the
insured's personal auto policy will: - CORRECT ANSWER Provide coverage for both the
insured and her son
All of the following are types of rehabilitative services provided under a workers' compensation
policy, EXCEPT: - CORRECT ANSWER Substance abuse
Which of the following statements defines a "bailee"? - CORRECT ANSWER Someone, other
than the insured, to whom the insured property is entrusted temporarily.
In North Carolina, the motor vehicle liability policy law requires owners of motor vehicles to
carry limits of: - CORRECT ANSWER $30/60/25
Many states amend property insurance coverage additions and extensions by statute due to
insufficient coverage amounts or time limits. All of the following are property insurance
additions or extensions that are frequently amended by state statute, EXCEPT: - CORRECT
ANSWER Other Structures
How are household personal property claims settled under the farm policy? - CORRECT
ANSWER Actual cash value
Which policy would be best for a prospective insured who wants coverage against liability
assumed by him under specific written agreements? - CORRECT ANSWER Contractual
Liability provided under a CGL policy
North Carolina law prohibits any Fire insurance policy covering property within the state of
North Carolina to be issued for a term: - CORRECT ANSWER Longer than seven years
Collin suffered a work-related injury on the morning of February 5th and was off work
completely until he returned to work on full duty on February 19th. Collin had worked for his
employer for four years and was paid $42,125 per year. Collin's state sets the TTD rate at 66
2/3rd percent of the average weekly wage. The state sets the maximum compensation rate at
$420 per week and the waiting period at 3 days retroactive after 10 days. Collin was not paid for
working on February 5th, so how many days of TTD compensation is Collin entitled to receive?
- CORRECT ANSWER 14
,All of the following are examples of insurable interest in property, EXCEPT: - CORRECT
ANSWER The interest an individual has in the property her parents will someday leave to her.
George went out for target practice one day with his handgun. He has practiced many times with
the same target located in the woods behind his house. Unbeknownst to George, a neighbor was
walking in the woods behind the target one day and was shot in the leg by George. Intentional
acts are never covered by insurance, however, the claim filed by the injured neighbor may be
covered under George's liability coverage. Which of the following is the most likely reason why?
- CORRECT ANSWER Shooting the gun was an intentional act committed by George, but the
consequences of act (his neighbor being shot) were not intended
The duties of the insured after a loss are included in insurance policy language to: - CORRECT
ANSWER Assist in the adjuster's investigation of the claim
The perils insured against by a Homeowners policy are contained within the: - CORRECT
ANSWER Insuring Agreements
Under a standard HO-3, the limit for Coverage C -- Personal Property for a one or two-family
dwelling: - CORRECT ANSWER Is set at 50% of Coverage A
Which of the following flood zones show a "flood depth" instead of a "base flood elevation" on a
FIRM? - CORRECT ANSWER AO
North Carolina law stipulates that buildings located within the state that are covered under a Fire
policy and suffer a total loss, the insurance company: - CORRECT ANSWER Is not liable to
pay amounts beyond the actual cash value of the insured property at the time of the loss or
damage
Which of the following is generally not considered to be a legal defense against claims of
negligence? - CORRECT ANSWER The loss to the plaintiff was caused intentionally by the
defendant. .
All of the following are true regarding the "Write Your Own" program of the NFIP, EXCEPT: -
CORRECT ANSWER Insurers are required to participate in the program
How are death benefits calculated for an employee who has died as a result of a work related
incident? - CORRECT ANSWER 66 2/3% of the employee's average weekly wage for 500
weeks
Sharon's North Carolina home is covered under a Homeowner's policy with a "Refrigerated
Property Coverage" endorsement attached. She stores large amounts of expensive meats in her
freezer at any given time. One morning, she doesn't hear the low hum of her freezer motor. When
she opens her freezer door, she finds that the freezer is no longer cold and all of her meat has
spoiled. Sharon collects her receipts and finds that the price of the spoiled meat totals $658 and
she submits a claim for this loss. How much will her insurer pay? - CORRECT ANSWER $500
,Which of the following terms does NOT apply to workers compensation coverage in North
Carolina? - CORRECT ANSWER Temporary sick leave with benefits
Coverage D - Loss of Use on the Homeowners forms provides coverage for "Civil Authority
Prohibits Use" for: - CORRECT ANSWER No more than two weeks
All of the following statements are TRUE of the terms used in the standard workers'
compensation policy, EXCEPT: - CORRECT ANSWER "State" means any state of the United
States, the District of Columbia, and all territories and possessions.
Under the comprehensive coverage of a Business Auto policy, which of the following would not
be a covered loss? - CORRECT ANSWER After sliding on an icy pavement, a driver hits a
guard rail.
Jerome was shopping at ABC Imports when a light fixture fell from the ceiling and hit him on
the head. Jerome's injuries resulted in an extended hospital stay, so he sued ABC Imports and
was awarded $400,000. Assuming ABC Imports carries a CGL with a General Aggregate of
$750,000 and a per occurrence limit of $250,000, what is the maximum that ABC's insurer will
pay for Jerome's injuries? - CORRECT ANSWER $250,000
Strict Liability: - CORRECT ANSWER holds a person liable for his actions regardless of how
much care he demonstrates.
Wendy hires Jim to build an addition to her house. Jim takes the job and finishes it in good time.
Unfortunately, as Wendy is walking across the threshold of the new addition, a floorboard gives
way and Wendy falls into the crawl-space below, injuring her leg and back. Which commercial
general liability coverage could help cover the cost of Wendy's injuries? - CORRECT
ANSWER Completed Operations Liability
In which case would the insured be indemnified by her auto liability coverage? - CORRECT
ANSWER NOT: None; liability coverage never indemnifies the insured. OR she causes property
damage to her neighbor
Lucille owns her own woodworking business, building custom items such as dressers, wooden
trunks, and mantelpieces. A fire destroys her entire operation and Lucille files a claim with her
insurer. Which of the following would be covered under Coverage A of the Building and
Personal Property Coverage Form in her commercial property policy? - CORRECT ANSWER
A bandsaw permanently affixed to the floor
In which of these situations could a Mississippi insurer cancel a policy after 60 days with
sufficient notice? - CORRECT ANSWER The policyholder's son has his license suspended
during the policy period.
Bonnie's PAP includes Comprehensive coverage. Which of the following losses could this
coverage pay for? - CORRECT ANSWER Bonnie's car catches fire
, Sam suffers $6,000 in injuries when Nicole runs a red light and crashes her uninsured car into
Sam's. Sam's own insurance company, ABC Insurance, immediately pays him $5,000 for his
injuries. Sam then ponders whether to file a $6,000 lawsuit against Nicole. Why can't Sam sue
Nicole for the full amount of his injuries? - CORRECT ANSWER By accepting payment from
ABC Insurance, Sam subrogated a portion of his rights against Nicole to ABC Insurance.
In order to be a licensed adjuster, a person must be at least ____ years old. - CORRECT
ANSWER 18
Grant works at ABC Convenience. One day, a man pulls up in an expensive car and pays cash
for his gas with a hundred dollar bill. Grant accepts the bill without checking its validity. When
Grant's manager checks the bill later, he discovers it is a fake. Which commercial crime coverage
could protect ABC Convenience from financial loss associated with accepting the fake hundred
dollar bill? - CORRECT ANSWER Money orders and counterfeit paper currency
States that allow private insurers to offer workers' comp coverage as an alternative to the state
workers' comp fund are called: - CORRECT ANSWER competitive
The Employee Retirement Income Security Act (ERISA): - CORRECT ANSWER requires that
every fiduciary of an employee benefit plan and every person who handles funds or other
property of those plans must be bonded
Bill lives in Mississippi and has the minimum auto liability coverage required for the state. He
causes an accident that results in $35,000 in property damage and $50,000 in bodily injury to
another person. How much will Bill have to pay out of pocket for this accident? - CORRECT
ANSWER $10,000 in property damage and $25,000 in medical expense
Which of the following statements regarding scheduled fidelity bonds is FALSE? - CORRECT
ANSWER All employees are bonded for the same aggregate amount.
D'Anton spills coffee in his lap while driving, causing him to veer off the road and smash into a
telephone pole. Which part of his Auto Insurance Policy will help him pay for the repairs to his
car? - CORRECT ANSWER Collision coverage
If an insurer decides to cancel a personal auto policy (for a reason other than non-payment of
premiums) after the policy has been in effect for 60 days, the insurer must provide written notice
to the insured __________ in advance. - CORRECT ANSWER 30 days
Acme Construction, Inc. has one contractor and one receptionist. The contractor makes $25/hr,
and the receptionist makes $10/hr. The contractor worked exactly 8 hours in 2010, so he made
$200. The receptionist worked 10 hours, so she made $100. Therefore, Acme's entire payroll for
2010 was $300. Assume that, for every $100 of payroll, the WC rate for contractors is $50 and
the rate for receptionists is $5. How much did Acme owe in WC premiums? - CORRECT
ANSWER $105
CORRECT ANSWERS| ACCURATE REAL EXAM WITH
FREQUENTLY TESTED QUESTIONS AND
RATIONALE|ALREADY A GRADED|GUARANTEED
PASS|LATEST UPDATE 2025.
Which of the following is NOT excluded by Section II - Liability of the Business Automobile
policy? - CORRECT ANSWER Cost to defend the insured
The insured and her 18-year-old son, who lives in the insured's household, are crossing the street
when both of them are struck by a drunk driver. The Part B - Medical Payments coverage of the
insured's personal auto policy will: - CORRECT ANSWER Provide coverage for both the
insured and her son
All of the following are types of rehabilitative services provided under a workers' compensation
policy, EXCEPT: - CORRECT ANSWER Substance abuse
Which of the following statements defines a "bailee"? - CORRECT ANSWER Someone, other
than the insured, to whom the insured property is entrusted temporarily.
In North Carolina, the motor vehicle liability policy law requires owners of motor vehicles to
carry limits of: - CORRECT ANSWER $30/60/25
Many states amend property insurance coverage additions and extensions by statute due to
insufficient coverage amounts or time limits. All of the following are property insurance
additions or extensions that are frequently amended by state statute, EXCEPT: - CORRECT
ANSWER Other Structures
How are household personal property claims settled under the farm policy? - CORRECT
ANSWER Actual cash value
Which policy would be best for a prospective insured who wants coverage against liability
assumed by him under specific written agreements? - CORRECT ANSWER Contractual
Liability provided under a CGL policy
North Carolina law prohibits any Fire insurance policy covering property within the state of
North Carolina to be issued for a term: - CORRECT ANSWER Longer than seven years
Collin suffered a work-related injury on the morning of February 5th and was off work
completely until he returned to work on full duty on February 19th. Collin had worked for his
employer for four years and was paid $42,125 per year. Collin's state sets the TTD rate at 66
2/3rd percent of the average weekly wage. The state sets the maximum compensation rate at
$420 per week and the waiting period at 3 days retroactive after 10 days. Collin was not paid for
working on February 5th, so how many days of TTD compensation is Collin entitled to receive?
- CORRECT ANSWER 14
,All of the following are examples of insurable interest in property, EXCEPT: - CORRECT
ANSWER The interest an individual has in the property her parents will someday leave to her.
George went out for target practice one day with his handgun. He has practiced many times with
the same target located in the woods behind his house. Unbeknownst to George, a neighbor was
walking in the woods behind the target one day and was shot in the leg by George. Intentional
acts are never covered by insurance, however, the claim filed by the injured neighbor may be
covered under George's liability coverage. Which of the following is the most likely reason why?
- CORRECT ANSWER Shooting the gun was an intentional act committed by George, but the
consequences of act (his neighbor being shot) were not intended
The duties of the insured after a loss are included in insurance policy language to: - CORRECT
ANSWER Assist in the adjuster's investigation of the claim
The perils insured against by a Homeowners policy are contained within the: - CORRECT
ANSWER Insuring Agreements
Under a standard HO-3, the limit for Coverage C -- Personal Property for a one or two-family
dwelling: - CORRECT ANSWER Is set at 50% of Coverage A
Which of the following flood zones show a "flood depth" instead of a "base flood elevation" on a
FIRM? - CORRECT ANSWER AO
North Carolina law stipulates that buildings located within the state that are covered under a Fire
policy and suffer a total loss, the insurance company: - CORRECT ANSWER Is not liable to
pay amounts beyond the actual cash value of the insured property at the time of the loss or
damage
Which of the following is generally not considered to be a legal defense against claims of
negligence? - CORRECT ANSWER The loss to the plaintiff was caused intentionally by the
defendant. .
All of the following are true regarding the "Write Your Own" program of the NFIP, EXCEPT: -
CORRECT ANSWER Insurers are required to participate in the program
How are death benefits calculated for an employee who has died as a result of a work related
incident? - CORRECT ANSWER 66 2/3% of the employee's average weekly wage for 500
weeks
Sharon's North Carolina home is covered under a Homeowner's policy with a "Refrigerated
Property Coverage" endorsement attached. She stores large amounts of expensive meats in her
freezer at any given time. One morning, she doesn't hear the low hum of her freezer motor. When
she opens her freezer door, she finds that the freezer is no longer cold and all of her meat has
spoiled. Sharon collects her receipts and finds that the price of the spoiled meat totals $658 and
she submits a claim for this loss. How much will her insurer pay? - CORRECT ANSWER $500
,Which of the following terms does NOT apply to workers compensation coverage in North
Carolina? - CORRECT ANSWER Temporary sick leave with benefits
Coverage D - Loss of Use on the Homeowners forms provides coverage for "Civil Authority
Prohibits Use" for: - CORRECT ANSWER No more than two weeks
All of the following statements are TRUE of the terms used in the standard workers'
compensation policy, EXCEPT: - CORRECT ANSWER "State" means any state of the United
States, the District of Columbia, and all territories and possessions.
Under the comprehensive coverage of a Business Auto policy, which of the following would not
be a covered loss? - CORRECT ANSWER After sliding on an icy pavement, a driver hits a
guard rail.
Jerome was shopping at ABC Imports when a light fixture fell from the ceiling and hit him on
the head. Jerome's injuries resulted in an extended hospital stay, so he sued ABC Imports and
was awarded $400,000. Assuming ABC Imports carries a CGL with a General Aggregate of
$750,000 and a per occurrence limit of $250,000, what is the maximum that ABC's insurer will
pay for Jerome's injuries? - CORRECT ANSWER $250,000
Strict Liability: - CORRECT ANSWER holds a person liable for his actions regardless of how
much care he demonstrates.
Wendy hires Jim to build an addition to her house. Jim takes the job and finishes it in good time.
Unfortunately, as Wendy is walking across the threshold of the new addition, a floorboard gives
way and Wendy falls into the crawl-space below, injuring her leg and back. Which commercial
general liability coverage could help cover the cost of Wendy's injuries? - CORRECT
ANSWER Completed Operations Liability
In which case would the insured be indemnified by her auto liability coverage? - CORRECT
ANSWER NOT: None; liability coverage never indemnifies the insured. OR she causes property
damage to her neighbor
Lucille owns her own woodworking business, building custom items such as dressers, wooden
trunks, and mantelpieces. A fire destroys her entire operation and Lucille files a claim with her
insurer. Which of the following would be covered under Coverage A of the Building and
Personal Property Coverage Form in her commercial property policy? - CORRECT ANSWER
A bandsaw permanently affixed to the floor
In which of these situations could a Mississippi insurer cancel a policy after 60 days with
sufficient notice? - CORRECT ANSWER The policyholder's son has his license suspended
during the policy period.
Bonnie's PAP includes Comprehensive coverage. Which of the following losses could this
coverage pay for? - CORRECT ANSWER Bonnie's car catches fire
, Sam suffers $6,000 in injuries when Nicole runs a red light and crashes her uninsured car into
Sam's. Sam's own insurance company, ABC Insurance, immediately pays him $5,000 for his
injuries. Sam then ponders whether to file a $6,000 lawsuit against Nicole. Why can't Sam sue
Nicole for the full amount of his injuries? - CORRECT ANSWER By accepting payment from
ABC Insurance, Sam subrogated a portion of his rights against Nicole to ABC Insurance.
In order to be a licensed adjuster, a person must be at least ____ years old. - CORRECT
ANSWER 18
Grant works at ABC Convenience. One day, a man pulls up in an expensive car and pays cash
for his gas with a hundred dollar bill. Grant accepts the bill without checking its validity. When
Grant's manager checks the bill later, he discovers it is a fake. Which commercial crime coverage
could protect ABC Convenience from financial loss associated with accepting the fake hundred
dollar bill? - CORRECT ANSWER Money orders and counterfeit paper currency
States that allow private insurers to offer workers' comp coverage as an alternative to the state
workers' comp fund are called: - CORRECT ANSWER competitive
The Employee Retirement Income Security Act (ERISA): - CORRECT ANSWER requires that
every fiduciary of an employee benefit plan and every person who handles funds or other
property of those plans must be bonded
Bill lives in Mississippi and has the minimum auto liability coverage required for the state. He
causes an accident that results in $35,000 in property damage and $50,000 in bodily injury to
another person. How much will Bill have to pay out of pocket for this accident? - CORRECT
ANSWER $10,000 in property damage and $25,000 in medical expense
Which of the following statements regarding scheduled fidelity bonds is FALSE? - CORRECT
ANSWER All employees are bonded for the same aggregate amount.
D'Anton spills coffee in his lap while driving, causing him to veer off the road and smash into a
telephone pole. Which part of his Auto Insurance Policy will help him pay for the repairs to his
car? - CORRECT ANSWER Collision coverage
If an insurer decides to cancel a personal auto policy (for a reason other than non-payment of
premiums) after the policy has been in effect for 60 days, the insurer must provide written notice
to the insured __________ in advance. - CORRECT ANSWER 30 days
Acme Construction, Inc. has one contractor and one receptionist. The contractor makes $25/hr,
and the receptionist makes $10/hr. The contractor worked exactly 8 hours in 2010, so he made
$200. The receptionist worked 10 hours, so she made $100. Therefore, Acme's entire payroll for
2010 was $300. Assume that, for every $100 of payroll, the WC rate for contractors is $50 and
the rate for receptionists is $5. How much did Acme owe in WC premiums? - CORRECT
ANSWER $105
