NORTH CAROLINA ADJUSTER LICENSE PRACTICE EXAM 2026 | Complete Questions & 100% Correct Solutions | Verified Study Guide | Guaranteed Pass

NORTH CAROLINA ADJUSTER
LICENSE PRACTICE EXAM 2026 |
Complete Questions & 100% Correct
Solutions | Verified Study Guide |
Guaranteed Pass
NORTH CAROLINA ADJUSTER LICENSE PRACTICE EXAM 2026

Complete 300 Questions | 100% Verified Solutions | Guaranteed Pass




SECTION 1: INSURANCE FUNDAMENTALS


Question 1 What is the primary purpose of insurance?

A. To eliminate all risks faced by individuals

B. To generate profit for insurance companies

C. C. To transfer risk from an individual to a larger group

D. To invest premiums in the stock market

E. To reduce government spending on public welfare

CORRECT ANSWER: C RATIONALE: Insurance works by pooling risks among
many individuals. The insured transfers the financial burden of potential loss to the
insurer, who spreads that risk across a large group of policyholders.



Question 2 Which of the following best defines an "adjuster"?

A. A person who sells insurance policies to clients

B. A person who underwrites insurance applications

C. A person who investigates and settles insurance claims

D. A person who regulates insurance companies

, E. A person who issues insurance licenses

CORRECT ANSWER: C RATIONALE: An adjuster is a professional who
investigates insurance claims, determines the extent of the insurer's liability, and
negotiates settlements with claimants on behalf of the insurer or the insured.



Question 3 In North Carolina, who regulates the insurance industry?

A. The Federal Insurance Office

B. The National Association of Insurance Commissioners (NAIC)

C. The Department of Financial Services

D. The North Carolina Department of Insurance (NCDOI)

E. The Office of Consumer Affairs

CORRECT ANSWER: D RATIONALE: The North Carolina Department of
Insurance (NCDOI) is the state agency responsible for regulating the insurance industry
in North Carolina, including licensing adjusters and overseeing insurance company
practices.



Question 4 What is a "claimant" in the context of insurance?

A. The insurance company paying out a claim

B. A person who makes a claim under an insurance policy

C. The adjuster assigned to a claim
D. The underwriter who issued the policy

E. The agent who sold the policy

CORRECT ANSWER: B RATIONALE: A claimant is any individual or entity that
submits a claim requesting payment or benefits under an insurance policy after a
covered loss or event.



Question 5 Which type of adjuster is employed directly by an insurance company?

A. Staff adjuster

B. Public adjuster

, C. Independent adjuster

D. Catastrophe adjuster

E. Subrogation adjuster

CORRECT ANSWER: A RATIONALE: A staff adjuster is a salaried employee who
works directly for one insurance company. In contrast, independent adjusters work for
multiple insurers on a contract basis, and public adjusters represent policyholders.



Question 6 What does "subrogation" mean in insurance?

A. The cancellation of a policy by the insurer
B. The transfer of a policy from one insurer to another
C. The right of the insured to sue a third party

D. The insurer's right to recover a paid claim from the responsible third
party

E. The process of renewing a lapsed insurance policy

CORRECT ANSWER: D RATIONALE: Subrogation is the legal right of an insurer,
after paying a claim, to step into the shoes of the insured and pursue recovery from the
third party responsible for the loss.


Question 7 What is a "deductible"?

A. The total premium paid for the policy

B. The maximum amount an insurer will pay on a claim

C. The amount the insured must pay out-of-pocket before insurance
coverage kicks in

D. The fee paid to an adjuster for settling a claim

E. The grace period before a policy lapses

CORRECT ANSWER: C RATIONALE: A deductible is the portion of a covered
loss that the insured is responsible for paying before the insurance company begins
paying. It helps reduce moral hazard and lowers premium costs.

, Question 8 The principle of indemnity states that:

A. Insureds should profit from their insurance claims

B. Insurers must pay all claims within 30 days

C. Insureds should be restored to the same financial position they were in
before the loss

D. All claims must be settled through arbitration
E. Insurers can deny claims without explanation

CORRECT ANSWER: C RATIONALE: The principle of indemnity ensures that
insurance compensates the insured for actual financial losses, placing them back in the
same financial position as before the loss — not better, not worse. This prevents
insurance from becoming a source of profit.



Question 9 What is "insurable interest"?

A. The interest rate applied to unpaid premiums
B. The profit margin earned by insurers

C. A financial stake in the subject of insurance such that loss would cause
financial harm

D. The interest earned on invested premiums

E. The insurance company's interest in minimizing claims

CORRECT ANSWER: C RATIONALE: Insurable interest means the policyholder
must have a financial relationship with the insured property or person such that a loss
would cause them genuine financial harm. It must exist at the time of policy inception
and at the time of loss for property insurance.


Question 10 What is "proximate cause" in an insurance claim?

A. The last event that triggered a claim

B. The location where the loss occurred

C. The dominant or primary cause of a loss

D. The estimated cost of a loss