NC ADJUSTER LICENSE EXAM AND
PRACTICE EXAM NEWEST 2026/ 2027
TEST BANK| EXAM QUESTIONS AND
CORRECT VERIFIED ANSWERS/ ALREADY
GRADED A+
1. Claim Handling & Timeframes
What is the maximum number of days an adjuster has to acknowledge
receipt of a claim in North Carolina?
A) 5 business days
B) 10 business days
C) 15 calendar days
D) 30 calendar days
ANSWER: B
Explanation: NC administrative code requires adjusters to acknowledge
claim receipt within 10 business days .
2. Unfair Claims Settlement Practices
Which of the following is an unfair claims settlement practice in NC?
A) Attempting to settle a claim for less than the amount a reasonable
person would believe they are entitled
B) Requesting additional documentation
C) Conducting a timely investigation
D) Offering a compromise settlement
ANSWER: A
Explanation: Lowballing or attempting to settle for less than a reasonable
person would expect is prohibited under NC unfair claims practices .
,3. Claim Definitions
A first-party claim is defined as:
A) Claim filed by a third party against an insured
B) Claim filed by an insured against their own insurance policy
C) Claim filed by a bystander
D) Claim filed by a government entity
ANSWER: B
Explanation: A first-party claim is a claim made by an insured directly
against their own insurance policy. This is contrasted with third-party
claims, which are filed by someone outside the insurance contract .
4. Adjuster Roles and Representation
A public adjuster represents:
A) The insurance company
B) The insured for a fee
C) The state insurance department
D) The reinsurer
ANSWER: B
Explanation: A public adjuster works for the policyholder, not the
insurance company, and is hired on a fee basis, typically a percentage of
the settlement .
5. Legal Concepts
What is the purpose of a reservation of rights letter?
A) To deny a claim outright
B) To inform the insured that coverage may not apply but insurer will
investigate
C) To cancel the policy retroactively
D) To request a higher premium
ANSWER: B
Explanation: A reservation of rights letter allows an insurer to investigate
potential coverage issues without waiving its policy defenses .
,6. North Carolina Specific Laws
Under NC law, how long does an insurer have to accept or deny a claim
after receiving proof of loss?
A) 15 days
B) 30 days
C) 45 days
D) 60 days
ANSWER: B
Explanation: NC law requires an insurer to accept or deny a claim within 30
days of receiving a completed proof of loss
Insurance Basics & Principles
7. What is the difference between a "peril" and a "hazard"?
A) Peril is a condition; hazard is a cause
B) Peril is the cause of loss; hazard increases the chance of loss
C) They are the same thing
D) Peril applies only to auto; hazard only to property
ANSWER: B
Explanation: Peril is the cause of loss (e.g., fire, theft, wind); hazard
increases the chance of loss (e.g., icy roads, poor housekeeping).
8. An insurer's right to recover from a third party after paying a claim
is called:
A) Indemnity
B) Subrogation
C) Arbitration
D) Appraisal
ANSWER: B
Explanation: Subrogation allows the insurer to "step into the insured's
shoes" to recover payments from a third party responsible for the loss.
, 9. A "fortuitous loss" is one that is:
A) Intentional and expected
B) Accidental and unexpected
C) Guaranteed to happen
D) Caused by the insured's negligence only
ANSWER: B
Explanation: Insurance covers only accidental, unforeseen losses.
10. Which of the following is considered a "physical hazard"?
A) An insured who sets fire to their own building
B) A house with a defective electrical system
C) An insured who is careless because they have insurance
D) An adjuster who accepts a bribe
ANSWER: B
Explanation: Physical hazards are tangible conditions (defective wiring,
slippery floors) that increase the risk of loss.
11. What is "reinsurance"?
A) Insurance purchased by the policyholder for a second property
B) Insurance purchased by an insurer to transfer risk to another insurer
C) A second policy covering the same risk with the same insurer
D) Cancellation of an existing policy
ANSWER: B
Explanation: Reinsurance allows primary insurers to share large or
catastrophic risks.
12. Which statement about "valued policies" is true?
A) The insured receives ACV regardless of policy limits
B) The policy pays a stated amount in a total loss regardless of actual value
C) They are illegal in all states
D) They apply only to auto insurance
ANSWER: B
PRACTICE EXAM NEWEST 2026/ 2027
TEST BANK| EXAM QUESTIONS AND
CORRECT VERIFIED ANSWERS/ ALREADY
GRADED A+
1. Claim Handling & Timeframes
What is the maximum number of days an adjuster has to acknowledge
receipt of a claim in North Carolina?
A) 5 business days
B) 10 business days
C) 15 calendar days
D) 30 calendar days
ANSWER: B
Explanation: NC administrative code requires adjusters to acknowledge
claim receipt within 10 business days .
2. Unfair Claims Settlement Practices
Which of the following is an unfair claims settlement practice in NC?
A) Attempting to settle a claim for less than the amount a reasonable
person would believe they are entitled
B) Requesting additional documentation
C) Conducting a timely investigation
D) Offering a compromise settlement
ANSWER: A
Explanation: Lowballing or attempting to settle for less than a reasonable
person would expect is prohibited under NC unfair claims practices .
,3. Claim Definitions
A first-party claim is defined as:
A) Claim filed by a third party against an insured
B) Claim filed by an insured against their own insurance policy
C) Claim filed by a bystander
D) Claim filed by a government entity
ANSWER: B
Explanation: A first-party claim is a claim made by an insured directly
against their own insurance policy. This is contrasted with third-party
claims, which are filed by someone outside the insurance contract .
4. Adjuster Roles and Representation
A public adjuster represents:
A) The insurance company
B) The insured for a fee
C) The state insurance department
D) The reinsurer
ANSWER: B
Explanation: A public adjuster works for the policyholder, not the
insurance company, and is hired on a fee basis, typically a percentage of
the settlement .
5. Legal Concepts
What is the purpose of a reservation of rights letter?
A) To deny a claim outright
B) To inform the insured that coverage may not apply but insurer will
investigate
C) To cancel the policy retroactively
D) To request a higher premium
ANSWER: B
Explanation: A reservation of rights letter allows an insurer to investigate
potential coverage issues without waiving its policy defenses .
,6. North Carolina Specific Laws
Under NC law, how long does an insurer have to accept or deny a claim
after receiving proof of loss?
A) 15 days
B) 30 days
C) 45 days
D) 60 days
ANSWER: B
Explanation: NC law requires an insurer to accept or deny a claim within 30
days of receiving a completed proof of loss
Insurance Basics & Principles
7. What is the difference between a "peril" and a "hazard"?
A) Peril is a condition; hazard is a cause
B) Peril is the cause of loss; hazard increases the chance of loss
C) They are the same thing
D) Peril applies only to auto; hazard only to property
ANSWER: B
Explanation: Peril is the cause of loss (e.g., fire, theft, wind); hazard
increases the chance of loss (e.g., icy roads, poor housekeeping).
8. An insurer's right to recover from a third party after paying a claim
is called:
A) Indemnity
B) Subrogation
C) Arbitration
D) Appraisal
ANSWER: B
Explanation: Subrogation allows the insurer to "step into the insured's
shoes" to recover payments from a third party responsible for the loss.
, 9. A "fortuitous loss" is one that is:
A) Intentional and expected
B) Accidental and unexpected
C) Guaranteed to happen
D) Caused by the insured's negligence only
ANSWER: B
Explanation: Insurance covers only accidental, unforeseen losses.
10. Which of the following is considered a "physical hazard"?
A) An insured who sets fire to their own building
B) A house with a defective electrical system
C) An insured who is careless because they have insurance
D) An adjuster who accepts a bribe
ANSWER: B
Explanation: Physical hazards are tangible conditions (defective wiring,
slippery floors) that increase the risk of loss.
11. What is "reinsurance"?
A) Insurance purchased by the policyholder for a second property
B) Insurance purchased by an insurer to transfer risk to another insurer
C) A second policy covering the same risk with the same insurer
D) Cancellation of an existing policy
ANSWER: B
Explanation: Reinsurance allows primary insurers to share large or
catastrophic risks.
12. Which statement about "valued policies" is true?
A) The insured receives ACV regardless of policy limits
B) The policy pays a stated amount in a total loss regardless of actual value
C) They are illegal in all states
D) They apply only to auto insurance
ANSWER: B
