NC ADJUSTER CERTIFICATION SCRIPT
2026 QUESTIONS WITH SOLUTIONS
GRADED A+
◍ Replacement Cost Coverage.
Answer: insurance coverage that pays to replace the insured item at today's
prices
◍ Accident / Occurrence.
Answer: A loss that occurs at a specific time and place. Home policies are
per occurrence, auto policies are per accident, and boiler machinery policies
are per accident
◍ Economic Loss.
Answer: It is one of the elements of insurability; in order for a loss to be
insurable, it must cause financial or economic loss. The insurance company
must receive enough premium to make feasible to provide insurance, the
insured has to feel financial distress in order to purchase the insurance
product.
◍ Personal Injury.
Answer: Injury other than bodily injury arising. out of such things such as
libel, slander, false arrest, wrongful entry, violation of privacy, and
malicious prosecution. Homeowners will need this coverage endorsed.
Commercial General Liability policies provide his coverage automatically
◍ Commercial General Liability Coverages.
Answer: Coverage A - Bodily Injury and Property DamageCoverage B -
Personal Injury and Advertising InjuryCoverage C - Medical Payments
◍ Named perilvsOpen peril.
Answer: A NAMED PERIL policy is an insurance policy that insured
, against perils that are specifically listed in that policy. Examples: fire, wind,
lightning. The insurance company determines the perilsAn OPEN PERIL
policy is an insurance policy that insures against all risks of physical loss,
except those that are specifically excluded in the policy. This type of policy
is called open, all risk, or special coverage
◍ Homeowner Additional Coverages Section I.
Answer: Debris removal;Reasonable repairs;Trees, shrubs, and other plants:
loss by fire, lightning, explosion, usually max of $500;Fire dept -
$500;Property removed - 30 days;Credit card - $500;Loss assessment -
$1000
◍ Collision.
Answer: The impact of an auto covered by the policy with another object or
vehicle, or the upset of a vehicle
◍ Watercraft Exceptions on Homeowners Policy.
Answer: Can be insured under the homeowner form if watercraft is powered
by inboard or inboard/outboard motors or engines that have 50 HP or
less;Watercraft powered by outboard engine of 25 HP or less;Sailing vessels
less than 26 ft long;Watercraft in storage
◍ Coverage B: Other Structures.
Answer: -protects other, unattached, dwellings on the property.-covers
landscaping as well as buildings, but not the land. -does not cover other
structures used for business purposes.
◍ Building and Personal Property Form Additional Coverages.
Answer: Debris removal;Preservation of Property - 30 days;Fire dept
Service Charge - $1000;Pollutant Cleanup and removal - $10000/180
days;Increased Cost of Construction - $10000These coverages can triggered
if needed EVEN if not enough coinsurance
◍ HO-5 Policy Perils.
Answer: Broadest policy. Provides open peril coverage for Coverage A, B,
and C.
, ◍ Building And Personal Property Form (3 Major Coverages).
Answer: 1. Building2. Business personal property - within 100 ft3. Personal
Property of Others - ACV onlyFor Building and Business Personal Property,
can be ACV or RC - trigger on declarations
◍ Direct lossvsIndirect loss(Loss of use).
Answer: Direct loss: a loss that actually happens to the property. Example
would be a fire to a houseIndirect loss: is the financial consequential impact
of the direct loss, including expense the insured would not have incurred had
there not been a loss. Example would be the insured had to move into hotel
because of the fire to their houseFire is the direct loss, hotel expenses are the
indirect oss
◍ Workers Compensation: Compulsory vs Elective.
Answer: COMPULSORY - Require employers to carry Workers
Compensation. NC is a compulsory state. ELECTIVE - States permit an
employer to reject coverage, but an employer will not be protected under the
law. NC is not an elective state.
◍ Deposit Premium/Audit.
Answer: Premiums are paid at the beginning of the policy period based on
an estimate of the final premium amount, with adjustments based on reports
submitted by the insurer. The deposit premium is also called the estimated
premium. At the end of the policy year, there will be an audit to determine
the actual exposures. Usually these exposures are based on payroll or sales.
CGL and WC policies are usually audited. Umbrella policies are not
audited.
◍ HO-3 Policy Perils and Loss Settlement.
Answer: Open perils on Coverage A and BBroad perils on Coverage C -
endorse HO 15 for open perilsLosses settled RC on Coverage A and B,
ACV on Coverage C
◍ Free on Board (FOB).
Answer: The price for goods includes delivery at the seller's expense to a
2026 QUESTIONS WITH SOLUTIONS
GRADED A+
◍ Replacement Cost Coverage.
Answer: insurance coverage that pays to replace the insured item at today's
prices
◍ Accident / Occurrence.
Answer: A loss that occurs at a specific time and place. Home policies are
per occurrence, auto policies are per accident, and boiler machinery policies
are per accident
◍ Economic Loss.
Answer: It is one of the elements of insurability; in order for a loss to be
insurable, it must cause financial or economic loss. The insurance company
must receive enough premium to make feasible to provide insurance, the
insured has to feel financial distress in order to purchase the insurance
product.
◍ Personal Injury.
Answer: Injury other than bodily injury arising. out of such things such as
libel, slander, false arrest, wrongful entry, violation of privacy, and
malicious prosecution. Homeowners will need this coverage endorsed.
Commercial General Liability policies provide his coverage automatically
◍ Commercial General Liability Coverages.
Answer: Coverage A - Bodily Injury and Property DamageCoverage B -
Personal Injury and Advertising InjuryCoverage C - Medical Payments
◍ Named perilvsOpen peril.
Answer: A NAMED PERIL policy is an insurance policy that insured
, against perils that are specifically listed in that policy. Examples: fire, wind,
lightning. The insurance company determines the perilsAn OPEN PERIL
policy is an insurance policy that insures against all risks of physical loss,
except those that are specifically excluded in the policy. This type of policy
is called open, all risk, or special coverage
◍ Homeowner Additional Coverages Section I.
Answer: Debris removal;Reasonable repairs;Trees, shrubs, and other plants:
loss by fire, lightning, explosion, usually max of $500;Fire dept -
$500;Property removed - 30 days;Credit card - $500;Loss assessment -
$1000
◍ Collision.
Answer: The impact of an auto covered by the policy with another object or
vehicle, or the upset of a vehicle
◍ Watercraft Exceptions on Homeowners Policy.
Answer: Can be insured under the homeowner form if watercraft is powered
by inboard or inboard/outboard motors or engines that have 50 HP or
less;Watercraft powered by outboard engine of 25 HP or less;Sailing vessels
less than 26 ft long;Watercraft in storage
◍ Coverage B: Other Structures.
Answer: -protects other, unattached, dwellings on the property.-covers
landscaping as well as buildings, but not the land. -does not cover other
structures used for business purposes.
◍ Building and Personal Property Form Additional Coverages.
Answer: Debris removal;Preservation of Property - 30 days;Fire dept
Service Charge - $1000;Pollutant Cleanup and removal - $10000/180
days;Increased Cost of Construction - $10000These coverages can triggered
if needed EVEN if not enough coinsurance
◍ HO-5 Policy Perils.
Answer: Broadest policy. Provides open peril coverage for Coverage A, B,
and C.
, ◍ Building And Personal Property Form (3 Major Coverages).
Answer: 1. Building2. Business personal property - within 100 ft3. Personal
Property of Others - ACV onlyFor Building and Business Personal Property,
can be ACV or RC - trigger on declarations
◍ Direct lossvsIndirect loss(Loss of use).
Answer: Direct loss: a loss that actually happens to the property. Example
would be a fire to a houseIndirect loss: is the financial consequential impact
of the direct loss, including expense the insured would not have incurred had
there not been a loss. Example would be the insured had to move into hotel
because of the fire to their houseFire is the direct loss, hotel expenses are the
indirect oss
◍ Workers Compensation: Compulsory vs Elective.
Answer: COMPULSORY - Require employers to carry Workers
Compensation. NC is a compulsory state. ELECTIVE - States permit an
employer to reject coverage, but an employer will not be protected under the
law. NC is not an elective state.
◍ Deposit Premium/Audit.
Answer: Premiums are paid at the beginning of the policy period based on
an estimate of the final premium amount, with adjustments based on reports
submitted by the insurer. The deposit premium is also called the estimated
premium. At the end of the policy year, there will be an audit to determine
the actual exposures. Usually these exposures are based on payroll or sales.
CGL and WC policies are usually audited. Umbrella policies are not
audited.
◍ HO-3 Policy Perils and Loss Settlement.
Answer: Open perils on Coverage A and BBroad perils on Coverage C -
endorse HO 15 for open perilsLosses settled RC on Coverage A and B,
ACV on Coverage C
◍ Free on Board (FOB).
Answer: The price for goods includes delivery at the seller's expense to a
