NC ADJUSTER EXAM QUESTIONS
AND ANSWERS
Which of the following is a type of insurer that may conduct business in a state
without holding a certificate of authority?
A. A surplus lines company
B. An authorized company
C. A nonadmitted company
D. An admitted company - ANSWER-A. A surplus lines company
All of the following are duties of the Insurance
Commissioner/Director/Superintendent, EXCEPT:
A. Setting insurance rates for insurers within their state
B. Monitoring the financial solvency of insurance companies
C. Issuing licenses and certificates of authority
D. Conducting hearings on insurance matters to determine if violations have
occurred. - ANSWER-A. Setting insurance rates for insurers within their state
A doctrine stating that if loss or damage to property occurs as a result of 2 or more
causes, and 1 cause is covered under the policy but the other cause is not covered,
the damages will likely be compensated by the insurer, is known as:
A. Coinsurance
B. Indirect loss coverage
C. Concurrent causation
D. Loss settlement - ANSWER-C. Concurrent causation
When an existing coverage under the policy is expanded, this is a(n):
A. Rider
B. Endorsement
C. Coverage extension
D. Additional coverage - ANSWER-C. Coverage extension
Which of the following is the type of loss where the cost to repair the damaged
property does not exhaust the policy limits?
A. Actual total loss
B. Constructive total loss
C. Partial average loss
D. General average loss - ANSWER-C. Partial average loss
Which of the following is a type of loss when the covered property is destroyed
beyond repair and nothing of value remains?
,A. General average loss
B. Constructive total loss
C. Actual total loss
D. Partial average loss - ANSWER-C. Actual total loss
An insured has covered his dwelling for one limit, and his personal property for a
different limit under the same property insurance policy. He has insured his property
on a _______ basis.
A. Specific
B. Reporting form
C. Blanket
D. Per type - ANSWER-A. Specific
All of the following are NOT typically covered under standard unendorsed property
insurance policies, EXCEPT:
A. Mold
B. Fire
C. Flood
D. Earthquake - ANSWER-B. Fire
Which of the following is a method for calculating actual cash value (ACV) using a
combination of the fair market value and the cost of replacement, minus
depreciation?
A. Agreed value rule
B. The broad evidence rule
C. The stated value rule
D. Actual cash value rule - ANSWER-B. The broad evidence rule
Which of the following is the type of construction that is most fire resistant to fire and
to wind?
A. Joisted masonry
B. Masonry non-combustible
C. Frame
D. Non-combustible - ANSWER-B. Masonry non-combustible
Insurance contracts are contingent upon uncertain events, that provide for the
unequal transfer of value between the parties, this is known as an _____ contract.
A. Aleatory
B. Adhesion
C. Conditional
D. Indemnification - ANSWER-A. Aleatory
Misrepresentations:
A. Are untrue statements made by the insured on an application for insurance
, B. Are statements made on an application for insurance that are true to the
applicant's best knowledge and belief
C. Are the failure of the insured to reveal material facts when applying for insurance
D. A breach of one of the policy conditions by the insured - ANSWER-A. Are untrue
statements made by the insured on an application for insurance
Which of the following is commonly debited from a claims payment before that
amount is remitted to the insured?
A. Salvage costs
B. A liability fee
C. A deductible
D. Future premiums - ANSWER-C. A deductible
Which of the following serves as temporary evidence that coverage is in effect?
A. An endorsement
B. A rider
C. An exclusion
D. A binder - ANSWER-D. A binder
Which of the following is the definition of "accident" as it pertains to insurance?
A. A sudden and unforeseen event or a continuous and repeated exposure to an
event that results in a financial loss.
B. The actual injury or damage sustained by the insured
C. The state of being subject to loss because of some type of hazard
D. A sudden and unforeseen event resulting in a financial loss - ANSWER-D. A
sudden and unforeseen event resulting in a financial loss
Which of the following is the clause that declares that the insurance company is
entitled to the insured's right of recovery from a negligent party?
A. Subrogation clause
B. Other insurance clause
C. "Other Sources of Recovery on Insurance under Two or More Policies" clause
D. Entire Contract clause - ANSWER-A. Subrogation clause
A written modification of an insurance policy is:
A. A proof of loss
B. A condition
C. A deductible
D. An endorsement - ANSWER-D. An endorsement
All of the following are actions the Commissioner/Director/Superintendent may take,
after a hearing where it has been determined that a violation has been committed by
an insurance licensee, EXCEPT:
A. Issue a cease and desist order
AND ANSWERS
Which of the following is a type of insurer that may conduct business in a state
without holding a certificate of authority?
A. A surplus lines company
B. An authorized company
C. A nonadmitted company
D. An admitted company - ANSWER-A. A surplus lines company
All of the following are duties of the Insurance
Commissioner/Director/Superintendent, EXCEPT:
A. Setting insurance rates for insurers within their state
B. Monitoring the financial solvency of insurance companies
C. Issuing licenses and certificates of authority
D. Conducting hearings on insurance matters to determine if violations have
occurred. - ANSWER-A. Setting insurance rates for insurers within their state
A doctrine stating that if loss or damage to property occurs as a result of 2 or more
causes, and 1 cause is covered under the policy but the other cause is not covered,
the damages will likely be compensated by the insurer, is known as:
A. Coinsurance
B. Indirect loss coverage
C. Concurrent causation
D. Loss settlement - ANSWER-C. Concurrent causation
When an existing coverage under the policy is expanded, this is a(n):
A. Rider
B. Endorsement
C. Coverage extension
D. Additional coverage - ANSWER-C. Coverage extension
Which of the following is the type of loss where the cost to repair the damaged
property does not exhaust the policy limits?
A. Actual total loss
B. Constructive total loss
C. Partial average loss
D. General average loss - ANSWER-C. Partial average loss
Which of the following is a type of loss when the covered property is destroyed
beyond repair and nothing of value remains?
,A. General average loss
B. Constructive total loss
C. Actual total loss
D. Partial average loss - ANSWER-C. Actual total loss
An insured has covered his dwelling for one limit, and his personal property for a
different limit under the same property insurance policy. He has insured his property
on a _______ basis.
A. Specific
B. Reporting form
C. Blanket
D. Per type - ANSWER-A. Specific
All of the following are NOT typically covered under standard unendorsed property
insurance policies, EXCEPT:
A. Mold
B. Fire
C. Flood
D. Earthquake - ANSWER-B. Fire
Which of the following is a method for calculating actual cash value (ACV) using a
combination of the fair market value and the cost of replacement, minus
depreciation?
A. Agreed value rule
B. The broad evidence rule
C. The stated value rule
D. Actual cash value rule - ANSWER-B. The broad evidence rule
Which of the following is the type of construction that is most fire resistant to fire and
to wind?
A. Joisted masonry
B. Masonry non-combustible
C. Frame
D. Non-combustible - ANSWER-B. Masonry non-combustible
Insurance contracts are contingent upon uncertain events, that provide for the
unequal transfer of value between the parties, this is known as an _____ contract.
A. Aleatory
B. Adhesion
C. Conditional
D. Indemnification - ANSWER-A. Aleatory
Misrepresentations:
A. Are untrue statements made by the insured on an application for insurance
, B. Are statements made on an application for insurance that are true to the
applicant's best knowledge and belief
C. Are the failure of the insured to reveal material facts when applying for insurance
D. A breach of one of the policy conditions by the insured - ANSWER-A. Are untrue
statements made by the insured on an application for insurance
Which of the following is commonly debited from a claims payment before that
amount is remitted to the insured?
A. Salvage costs
B. A liability fee
C. A deductible
D. Future premiums - ANSWER-C. A deductible
Which of the following serves as temporary evidence that coverage is in effect?
A. An endorsement
B. A rider
C. An exclusion
D. A binder - ANSWER-D. A binder
Which of the following is the definition of "accident" as it pertains to insurance?
A. A sudden and unforeseen event or a continuous and repeated exposure to an
event that results in a financial loss.
B. The actual injury or damage sustained by the insured
C. The state of being subject to loss because of some type of hazard
D. A sudden and unforeseen event resulting in a financial loss - ANSWER-D. A
sudden and unforeseen event resulting in a financial loss
Which of the following is the clause that declares that the insurance company is
entitled to the insured's right of recovery from a negligent party?
A. Subrogation clause
B. Other insurance clause
C. "Other Sources of Recovery on Insurance under Two or More Policies" clause
D. Entire Contract clause - ANSWER-A. Subrogation clause
A written modification of an insurance policy is:
A. A proof of loss
B. A condition
C. A deductible
D. An endorsement - ANSWER-D. An endorsement
All of the following are actions the Commissioner/Director/Superintendent may take,
after a hearing where it has been determined that a violation has been committed by
an insurance licensee, EXCEPT:
A. Issue a cease and desist order
