N.C. Claims Adjuster Exam questions
& answers graded A+
an insurance policy covers the insured starting at 12:01am on the day on which coverage begins
and expires at 12:01am on the expiration day of the policy. - correct answer
✔✔Inception/Expiration Date
Date of which the loss occurred - correct answer ✔✔Occurrence Date
The loss report should include the names and addresses of the parties involved in the loss, the
names and addresses of any injured person(s) and the names and addresses of any witness(s). -
correct answer ✔✔Identification of parties involved
Identifies the type of coverage purchased (policy form) and the policy number for the particular
policy purchased by the insured. - correct answer ✔✔Policy Form/Number
Information concerning how, when and where the accident or loss happened is an essential
element in any loss report. - correct answer ✔✔Description of the Loss
Shows the type of coverage(s) purchased as well as the limits of coverage purchased. - correct
answer ✔✔Coverage
Are amounts paid to compensate the plaintiff for direct expenses such as medical treatment,
lost wages (both past and future), funeral expenses and rehabilitation expenses required
because of bodily injury. Special damages are paid for losses that can be determined and
documented. They are often referred to as "out-of-pocket" expenses. - correct answer
✔✔Damages - Special Compensatory damages
,Are paid for losses that cannot be specifically measured and itemized in order to compensate
the plaintiff for things such as pain and suffering, loss of the use of an arm or leg, loss of vision,
physical disfigurement and/or loss of consortium. - correct answer ✔✔Damages - General
Compensatory Damages
Are typically awarded to the plaintiff in addition to compensatory damages when the
defendants conduct has been especially malicious. Punitive damages are awarded to punish the
defendant and to deter others from engaging in similar actions. - correct answer ✔✔Damages -
Punitive Damages
1. Knowingly misrepresenting relevant facts or policy provisions relating to the coverage at
issue. 2. Failing to acknowledge with reasonable promptness communications pertaining to
claims. 3. Failing to adopt and implement reasonable standards for the prompt investigation of
claims. 4. Arbitrary and unreasonable refusal to pay claims. 5. Failing to affirm or deny coverage
of claims within a reasonable time after proof of loss has been completed. 6. Not attempting in
good faith to make prompt, fair and equitable claims settlement when the insurer's liability has
become reasonably clear. 7. Compelling insureds to institute suits to recover amounts due
under a policy by offering substantially less to settle immediately. 8. Attempting to settle claims
for less than the amount for which a reasonable person would believe one was entitled based
on written or printed advertising material accompanying or made a part of an ap - correct
answer ✔✔Unfair Claims Settlement Practices
1. If the insurer and the claimant are unable to reach an agreement as to the value of the
vehicle, the insurer shall base any further settlement offer not only on the published regional
average value of similar vehicles, but also on the value of the vehicle in the local market. 2.
Local market value shall be determined by using either the local price of a comparable vehicle
or if no comparable vehicle can be found, quotations from at least two qualified dealers within
the local market area. Additionally, if the claimant represents that the vehicle was in better than
average condition, the insurer shall give due consideration to the condition of the claimant's
vehicle prior to the accident. 3. When a motor vehicle is damaged in an amount which equals or
exceeds 75 percent of the preaccident actual cash value, an insurer shall "total loss" the vehicle
by paying the claimant the preaccident value and in return, receivi - correct answer ✔✔Total
Losses on Motor Vehicles/Miscellaneous Provisions
,An after market part is any part made by a non original manufacturer. - correct answer ✔✔After
Market Parts
When there is a chance of gain as well as a chance of loss. Insurance is not intended to protect
against this type of risk. - correct answer ✔✔Speculative Risk
When there is a chance of loss only. - correct answer ✔✔Pure Risk
One that an insurance company is willing to accept. - correct answer ✔✔Insurable Risk
1. Low probability of loss occurring, 2. Less than catastrophic results, 3. The loss must be
measurable, 4. The loss must be significant, 5. The loss must be accidental and unintended. -
correct answer ✔✔Characteristics of Insurable Risk
Measures the chance of an event occurring, it is the measure of uncertainty (risk). - correct
answer ✔✔Probability
Mathematical principle that makes it possible to predict future losses based upon prior
experience. - correct answer ✔✔Law of Large Numbers (Law of Averages)
Also used to decrease loss probability. This process involves spreading the company's policies
(exposures) over a broad geographical area in order to avoid large losses in the vent of a
catastrophic event. An example is a hurricane. - correct answer ✔✔Spread of Risk (Geographic
Dispersion)
Adverse selection occurs when insureds with a high risk of loss attempt to purchase insurance
and are successful in obtaining insurance. - correct answer ✔✔Adverse Selection
Are the actual cause of loss such as a fire, theft, wind, hail, etc. - correct answer ✔✔Perils
, Increase the probability of a peril occurring. Bald tires on an automobile increase the chance of
a wreck happening. The tires are the hazard, the wreck is the peril. - correct answer ✔✔Hazards
Indemnified (repays) a person or business with an interest in the physical integrity of tangible
property for its loss or the loss of income produced by that property. - correct answer
✔✔Property Insurance
Provides protection to meet the unexpected costs imposed by law due to acts that have caused
bodily injury or property damage to another individual. Included isn't he field of casualty
(liability) insurance are automobile, crime and surety bonds. - correct answer ✔✔Casualty
Insurance
Portion of the insurance industry where individuals seek coverage to meet recognized needs.
These coverages are neither required nor made available by government. An example would be
collision insurance in a personal automobile insurance policy. - correct answer ✔✔Private or
Voluntary Insurance
Programs either required or made available by government. - correct answer ✔✔Social
Insurance
Filed of the industry where insurers sell portions of their individual contracts of insurance to
other companies. This activity helps with the spread of risk and/or improves cash positions by
lowering reserve requirements for these contracts. Insurance companies also purchase
reinsurance to protect themselves in case of catastrophic losses. - correct answer
✔✔Reinsurance
Proprietary companies that are in business to make a profit for their stockholders. These
companies are owned by stockholders who retain management responsibility through the
selection of a Board of Directors. Profits are paid to the stockholders in the form of a
commercial stock dividend that is fully taxable to the stockholder. - correct answer ✔✔Capital
Stock Companies
& answers graded A+
an insurance policy covers the insured starting at 12:01am on the day on which coverage begins
and expires at 12:01am on the expiration day of the policy. - correct answer
✔✔Inception/Expiration Date
Date of which the loss occurred - correct answer ✔✔Occurrence Date
The loss report should include the names and addresses of the parties involved in the loss, the
names and addresses of any injured person(s) and the names and addresses of any witness(s). -
correct answer ✔✔Identification of parties involved
Identifies the type of coverage purchased (policy form) and the policy number for the particular
policy purchased by the insured. - correct answer ✔✔Policy Form/Number
Information concerning how, when and where the accident or loss happened is an essential
element in any loss report. - correct answer ✔✔Description of the Loss
Shows the type of coverage(s) purchased as well as the limits of coverage purchased. - correct
answer ✔✔Coverage
Are amounts paid to compensate the plaintiff for direct expenses such as medical treatment,
lost wages (both past and future), funeral expenses and rehabilitation expenses required
because of bodily injury. Special damages are paid for losses that can be determined and
documented. They are often referred to as "out-of-pocket" expenses. - correct answer
✔✔Damages - Special Compensatory damages
,Are paid for losses that cannot be specifically measured and itemized in order to compensate
the plaintiff for things such as pain and suffering, loss of the use of an arm or leg, loss of vision,
physical disfigurement and/or loss of consortium. - correct answer ✔✔Damages - General
Compensatory Damages
Are typically awarded to the plaintiff in addition to compensatory damages when the
defendants conduct has been especially malicious. Punitive damages are awarded to punish the
defendant and to deter others from engaging in similar actions. - correct answer ✔✔Damages -
Punitive Damages
1. Knowingly misrepresenting relevant facts or policy provisions relating to the coverage at
issue. 2. Failing to acknowledge with reasonable promptness communications pertaining to
claims. 3. Failing to adopt and implement reasonable standards for the prompt investigation of
claims. 4. Arbitrary and unreasonable refusal to pay claims. 5. Failing to affirm or deny coverage
of claims within a reasonable time after proof of loss has been completed. 6. Not attempting in
good faith to make prompt, fair and equitable claims settlement when the insurer's liability has
become reasonably clear. 7. Compelling insureds to institute suits to recover amounts due
under a policy by offering substantially less to settle immediately. 8. Attempting to settle claims
for less than the amount for which a reasonable person would believe one was entitled based
on written or printed advertising material accompanying or made a part of an ap - correct
answer ✔✔Unfair Claims Settlement Practices
1. If the insurer and the claimant are unable to reach an agreement as to the value of the
vehicle, the insurer shall base any further settlement offer not only on the published regional
average value of similar vehicles, but also on the value of the vehicle in the local market. 2.
Local market value shall be determined by using either the local price of a comparable vehicle
or if no comparable vehicle can be found, quotations from at least two qualified dealers within
the local market area. Additionally, if the claimant represents that the vehicle was in better than
average condition, the insurer shall give due consideration to the condition of the claimant's
vehicle prior to the accident. 3. When a motor vehicle is damaged in an amount which equals or
exceeds 75 percent of the preaccident actual cash value, an insurer shall "total loss" the vehicle
by paying the claimant the preaccident value and in return, receivi - correct answer ✔✔Total
Losses on Motor Vehicles/Miscellaneous Provisions
,An after market part is any part made by a non original manufacturer. - correct answer ✔✔After
Market Parts
When there is a chance of gain as well as a chance of loss. Insurance is not intended to protect
against this type of risk. - correct answer ✔✔Speculative Risk
When there is a chance of loss only. - correct answer ✔✔Pure Risk
One that an insurance company is willing to accept. - correct answer ✔✔Insurable Risk
1. Low probability of loss occurring, 2. Less than catastrophic results, 3. The loss must be
measurable, 4. The loss must be significant, 5. The loss must be accidental and unintended. -
correct answer ✔✔Characteristics of Insurable Risk
Measures the chance of an event occurring, it is the measure of uncertainty (risk). - correct
answer ✔✔Probability
Mathematical principle that makes it possible to predict future losses based upon prior
experience. - correct answer ✔✔Law of Large Numbers (Law of Averages)
Also used to decrease loss probability. This process involves spreading the company's policies
(exposures) over a broad geographical area in order to avoid large losses in the vent of a
catastrophic event. An example is a hurricane. - correct answer ✔✔Spread of Risk (Geographic
Dispersion)
Adverse selection occurs when insureds with a high risk of loss attempt to purchase insurance
and are successful in obtaining insurance. - correct answer ✔✔Adverse Selection
Are the actual cause of loss such as a fire, theft, wind, hail, etc. - correct answer ✔✔Perils
, Increase the probability of a peril occurring. Bald tires on an automobile increase the chance of
a wreck happening. The tires are the hazard, the wreck is the peril. - correct answer ✔✔Hazards
Indemnified (repays) a person or business with an interest in the physical integrity of tangible
property for its loss or the loss of income produced by that property. - correct answer
✔✔Property Insurance
Provides protection to meet the unexpected costs imposed by law due to acts that have caused
bodily injury or property damage to another individual. Included isn't he field of casualty
(liability) insurance are automobile, crime and surety bonds. - correct answer ✔✔Casualty
Insurance
Portion of the insurance industry where individuals seek coverage to meet recognized needs.
These coverages are neither required nor made available by government. An example would be
collision insurance in a personal automobile insurance policy. - correct answer ✔✔Private or
Voluntary Insurance
Programs either required or made available by government. - correct answer ✔✔Social
Insurance
Filed of the industry where insurers sell portions of their individual contracts of insurance to
other companies. This activity helps with the spread of risk and/or improves cash positions by
lowering reserve requirements for these contracts. Insurance companies also purchase
reinsurance to protect themselves in case of catastrophic losses. - correct answer
✔✔Reinsurance
Proprietary companies that are in business to make a profit for their stockholders. These
companies are owned by stockholders who retain management responsibility through the
selection of a Board of Directors. Profits are paid to the stockholders in the form of a
commercial stock dividend that is fully taxable to the stockholder. - correct answer ✔✔Capital
Stock Companies
