NC Adjuster Exam Practice Questions & Answers
Latest Version
1. Smith and Jones own a building equally with an actual cash value of $100,000. It is insured for $100,000 in the
name of Smith only, and burns to the ground.
I. Smith gets all $100,000.
II. Smith and Jones share equally in the $100,000.
III. Smith gets $50,000.
IV. Jones gets nothing.A)I only.
B)I and IV.
C)III only.
D)III and IV.: III and IV.
2. Which of the following practices are considered unfairly discriminatory? A) Refusal to issue property
coverage due to the occupancy (use) of the structure.
B)Adding a surcharge on automobile liability insurance due to the age of the operator.
C)Placing coverage in a residual market due to information supplied by a consumer reporting service.
D)Reducing rates for a specific class of insureds without reducing rates for all insureds.: Adding a surcharge on
automobile liability insurance due to the age of the operator.
3. Coverage under a vandalism and malicious mischief endorsement added to the standard fire policy is
suspended if a building is left vacant for more than:
A) 15 consecutive days
.B) 30 consecutive days.
C) 60 consecutive days.
D) 90 consecutive days.: 60 days
4. A peril can be defined as:
A) The transfer of pure risk.
B) The cause of a loss.
C)A one-time event definite in time and place.
D)A condition increasing the chance of loss.: The cause of a loss.
,5. Which of the following statements is true? A)Agents can bind coverage.
B)Agents and brokers represent insurance companies.
C)Brokers can bind coverage.
D)Agents in the field of Property and Casualty insurance issue conditional receipts.: Agents can bind coverage.
6. Which of the following losses is covered under a SFP with the VMM
endorsement?
I. Theft of a TV set by vandals.
II. Vandalism on February 1st of a property that has been vacant since January 1st.
III. Damage caused by an individual spray-painting graffiti on the dwelling.: Damage caused by an individual
spray-painting graffiti on the dwelling.
7. All of the following are essential elements in an insurance contract EXCEPT:
A)Agreement.
B)Consideration.
C)Competent parties.
D)Counter-offer.: Counter-offer
8. The Standard Fire policy insuring agreement covers: I. Lightning.II. Removal of contents from endangered
premises.III. Water damage caused by firemen putting out a fire at the insured premises. A)I only.
B)II only.
C)I and II.
D)I, II, III.: I, II, IIiI
9. Which of the following acts may an agent legally conduct?
A)Depositing collected premiums into the agent's own bank account.
B)Conduct a pretext interview to verify information supplied on an application.
C)Represent multiple insurance companies.
D)Charge an application fee based upon a written notification posted in the office.: Charge an application fee based
upon a written notification posted in the office.
10. The clause in the standard fire policy that specifies the amount of recovery when more than one policy exists
on the same property is called: A)Pro-rata liability.
B)Co-insurance.
C)Actual cash value.
D)Pro-rata distribution.: Pro-rata liability.
, 11. All of the following are true about "insurable risk" EXCEPT: A)The law of large numbers should apply.
B)The loss must not be definite and definable.
C)The loss must not be catastrophic in nature.
D)The loss must be large enough to create hardship.: The loss must not be definite and definable
12. An insurance contract is a unilateral contract which means that: A)Only the insurer makes an enforceable
promise.
B)Both parties must give up something of value.
C)Contract provisions are not required.
D)Both parties must perform with utmost good faith.: Only the insurer makes an enforceable promise.
13. The practice of twisting:
A)Is perfectly legal in this state.
B)Involves writing insurance that is unacceptable by the company an agent is associated with.
C)Involves inducing any policyholder to lapse a contract of insurance for the purpose of replacing the policy with
another to the detriment of the policyholder.
D)Occurs when an agent gives directly or indirectly to an insurance buyer any rebate of premiums as an
inducement for the purchase of insurance.: Involves inducing any policyholder to lapse a contract of insurance for the
purpose of replacing the policy with another to the detriment of the policyholder.
14. When the Commissioner intends to hold a hearing concerning an agent's trade practices, notice of the hearing
must be given at least: A)5 days in advance.
B)10 days in advance.
C)20 days in advance.
D)30 days in advance.: 10 days in advance.
15. Which of the following is the correct term when a contract is prepared by one party and submitted to the
other party on a take-it or leave-it basis and where there is no bargaining power on the wording of the contract?
A)Adhesion.
B)Aleatory.
C)Conditional.
D)Valued contract.: Adhesion
16. A building, insured under a standard fire policy, is damaged by fire for which another person is responsible.
From whom will the insured receive payment for the loss?
A)The insured has to try to collect from the person responsible.
B)The insured can collect from the person responsible and also from the insurance company.
Latest Version
1. Smith and Jones own a building equally with an actual cash value of $100,000. It is insured for $100,000 in the
name of Smith only, and burns to the ground.
I. Smith gets all $100,000.
II. Smith and Jones share equally in the $100,000.
III. Smith gets $50,000.
IV. Jones gets nothing.A)I only.
B)I and IV.
C)III only.
D)III and IV.: III and IV.
2. Which of the following practices are considered unfairly discriminatory? A) Refusal to issue property
coverage due to the occupancy (use) of the structure.
B)Adding a surcharge on automobile liability insurance due to the age of the operator.
C)Placing coverage in a residual market due to information supplied by a consumer reporting service.
D)Reducing rates for a specific class of insureds without reducing rates for all insureds.: Adding a surcharge on
automobile liability insurance due to the age of the operator.
3. Coverage under a vandalism and malicious mischief endorsement added to the standard fire policy is
suspended if a building is left vacant for more than:
A) 15 consecutive days
.B) 30 consecutive days.
C) 60 consecutive days.
D) 90 consecutive days.: 60 days
4. A peril can be defined as:
A) The transfer of pure risk.
B) The cause of a loss.
C)A one-time event definite in time and place.
D)A condition increasing the chance of loss.: The cause of a loss.
,5. Which of the following statements is true? A)Agents can bind coverage.
B)Agents and brokers represent insurance companies.
C)Brokers can bind coverage.
D)Agents in the field of Property and Casualty insurance issue conditional receipts.: Agents can bind coverage.
6. Which of the following losses is covered under a SFP with the VMM
endorsement?
I. Theft of a TV set by vandals.
II. Vandalism on February 1st of a property that has been vacant since January 1st.
III. Damage caused by an individual spray-painting graffiti on the dwelling.: Damage caused by an individual
spray-painting graffiti on the dwelling.
7. All of the following are essential elements in an insurance contract EXCEPT:
A)Agreement.
B)Consideration.
C)Competent parties.
D)Counter-offer.: Counter-offer
8. The Standard Fire policy insuring agreement covers: I. Lightning.II. Removal of contents from endangered
premises.III. Water damage caused by firemen putting out a fire at the insured premises. A)I only.
B)II only.
C)I and II.
D)I, II, III.: I, II, IIiI
9. Which of the following acts may an agent legally conduct?
A)Depositing collected premiums into the agent's own bank account.
B)Conduct a pretext interview to verify information supplied on an application.
C)Represent multiple insurance companies.
D)Charge an application fee based upon a written notification posted in the office.: Charge an application fee based
upon a written notification posted in the office.
10. The clause in the standard fire policy that specifies the amount of recovery when more than one policy exists
on the same property is called: A)Pro-rata liability.
B)Co-insurance.
C)Actual cash value.
D)Pro-rata distribution.: Pro-rata liability.
, 11. All of the following are true about "insurable risk" EXCEPT: A)The law of large numbers should apply.
B)The loss must not be definite and definable.
C)The loss must not be catastrophic in nature.
D)The loss must be large enough to create hardship.: The loss must not be definite and definable
12. An insurance contract is a unilateral contract which means that: A)Only the insurer makes an enforceable
promise.
B)Both parties must give up something of value.
C)Contract provisions are not required.
D)Both parties must perform with utmost good faith.: Only the insurer makes an enforceable promise.
13. The practice of twisting:
A)Is perfectly legal in this state.
B)Involves writing insurance that is unacceptable by the company an agent is associated with.
C)Involves inducing any policyholder to lapse a contract of insurance for the purpose of replacing the policy with
another to the detriment of the policyholder.
D)Occurs when an agent gives directly or indirectly to an insurance buyer any rebate of premiums as an
inducement for the purchase of insurance.: Involves inducing any policyholder to lapse a contract of insurance for the
purpose of replacing the policy with another to the detriment of the policyholder.
14. When the Commissioner intends to hold a hearing concerning an agent's trade practices, notice of the hearing
must be given at least: A)5 days in advance.
B)10 days in advance.
C)20 days in advance.
D)30 days in advance.: 10 days in advance.
15. Which of the following is the correct term when a contract is prepared by one party and submitted to the
other party on a take-it or leave-it basis and where there is no bargaining power on the wording of the contract?
A)Adhesion.
B)Aleatory.
C)Conditional.
D)Valued contract.: Adhesion
16. A building, insured under a standard fire policy, is damaged by fire for which another person is responsible.
From whom will the insured receive payment for the loss?
A)The insured has to try to collect from the person responsible.
B)The insured can collect from the person responsible and also from the insurance company.
