NC ADJUSTER LICENSE EXAM AND
PRACTICE EXAM NEWEST 2026/ 2027 |
NC ADJUSTER LICENSE EXAM PREP
WITH COMPLETE REAL EXAM
QUESTIONS AND CORRECT VERIFIED
ANSWERS/ ALREADY GRADED A+
(MOST RECENT!!)
Detail Information
Governing Authority North Carolina Department of Insurance (NCDOI)
Exam Provider Pearson VUE
Exam Format Multiple-choice
Number of Questions 100
Time Limit 2 hours and 15 minutes
Passing Score 70%
Exam Fee $45
Application Fee $50
Licensing Fee $75
Minimum Age 18 years
,SECTION 1: INSURANCE FUNDAMENTALS & PRINCIPLES
(Questions 1-20)
Question 1
Which of the following best defines a "hazard" in insurance terms?
A) The actual cause of a loss, such as a fire or windstorm
B) The chance or possibility of a loss occurring
C) A condition that increases the probability of a peril occurring
D) The amount of financial loss experienced
Answer: C. A condition that increases the probability of a peril occurring
Rationale: A hazard is a condition that increases the likelihood or severity of a loss.
Examples include faulty wiring (physical hazard) or dishonest tendencies (moral hazard).
The cause of the loss itself is the peril .
Question 2
Which type of risk involves the chance of both loss and gain and is generally NOT
insurable?
A) Pure risk
B) Speculative risk
C) Fundamental risk
D) Particular risk
Answer: B. Speculative risk
,Rationale: Speculative risk involves the possibility of either a loss or a gain (e.g.,
gambling, investing in the stock market). Insurance is designed to protect against pure
risk, which involves only the chance of loss .
Question 3
The mathematical principle that allows insurers to predict future losses based on prior
experience is called the:
A) Law of Adverse Selection
B) Law of Large Numbers
C) Principle of Indemnity
D) Rule of Proximate Cause
Answer: B. Law of Large Numbers
Rationale: The Law of Large Numbers states that as the number of similar exposure
units increases, the actual loss experience will more closely approach the expected or
predicted loss. This is the statistical foundation of insurance .
Question 4
Pure risk is best defined as:
A) A risk that involves both the chance of loss and the chance of gain
B) A risk that involves only the chance of loss or no loss
C) A risk that affects a large segment of the population
D) A risk that can be controlled by the insured
, Answer: B. A risk that involves only the chance of loss or no loss
Rationale: Pure risk involves only the possibility of loss or no loss, with no opportunity
for financial gain. This is the only type of risk that is insurable .
Question 5
The principle of indemnity means that:
A) The insured must have a financial interest in the property insured
B) The insured should not profit from a loss but should be restored to the same financial
position as before the loss
C) Both parties must act in good faith
D) The insured must disclose all material facts
Answer: B. The insured should not profit from a loss but should be restored to the
same financial position as before the loss
Rationale: Indemnity ensures that the insured is restored to the approximate financial
condition they were in before the loss, without profiting from the insurance claim .
Question 6
Insurable interest must exist:
A) Only at the time the policy is purchased
B) Only at the time of the loss
C) At the time the policy is purchased and at the time of the loss
D) Only when the policy is renewed
PRACTICE EXAM NEWEST 2026/ 2027 |
NC ADJUSTER LICENSE EXAM PREP
WITH COMPLETE REAL EXAM
QUESTIONS AND CORRECT VERIFIED
ANSWERS/ ALREADY GRADED A+
(MOST RECENT!!)
Detail Information
Governing Authority North Carolina Department of Insurance (NCDOI)
Exam Provider Pearson VUE
Exam Format Multiple-choice
Number of Questions 100
Time Limit 2 hours and 15 minutes
Passing Score 70%
Exam Fee $45
Application Fee $50
Licensing Fee $75
Minimum Age 18 years
,SECTION 1: INSURANCE FUNDAMENTALS & PRINCIPLES
(Questions 1-20)
Question 1
Which of the following best defines a "hazard" in insurance terms?
A) The actual cause of a loss, such as a fire or windstorm
B) The chance or possibility of a loss occurring
C) A condition that increases the probability of a peril occurring
D) The amount of financial loss experienced
Answer: C. A condition that increases the probability of a peril occurring
Rationale: A hazard is a condition that increases the likelihood or severity of a loss.
Examples include faulty wiring (physical hazard) or dishonest tendencies (moral hazard).
The cause of the loss itself is the peril .
Question 2
Which type of risk involves the chance of both loss and gain and is generally NOT
insurable?
A) Pure risk
B) Speculative risk
C) Fundamental risk
D) Particular risk
Answer: B. Speculative risk
,Rationale: Speculative risk involves the possibility of either a loss or a gain (e.g.,
gambling, investing in the stock market). Insurance is designed to protect against pure
risk, which involves only the chance of loss .
Question 3
The mathematical principle that allows insurers to predict future losses based on prior
experience is called the:
A) Law of Adverse Selection
B) Law of Large Numbers
C) Principle of Indemnity
D) Rule of Proximate Cause
Answer: B. Law of Large Numbers
Rationale: The Law of Large Numbers states that as the number of similar exposure
units increases, the actual loss experience will more closely approach the expected or
predicted loss. This is the statistical foundation of insurance .
Question 4
Pure risk is best defined as:
A) A risk that involves both the chance of loss and the chance of gain
B) A risk that involves only the chance of loss or no loss
C) A risk that affects a large segment of the population
D) A risk that can be controlled by the insured
, Answer: B. A risk that involves only the chance of loss or no loss
Rationale: Pure risk involves only the possibility of loss or no loss, with no opportunity
for financial gain. This is the only type of risk that is insurable .
Question 5
The principle of indemnity means that:
A) The insured must have a financial interest in the property insured
B) The insured should not profit from a loss but should be restored to the same financial
position as before the loss
C) Both parties must act in good faith
D) The insured must disclose all material facts
Answer: B. The insured should not profit from a loss but should be restored to the
same financial position as before the loss
Rationale: Indemnity ensures that the insured is restored to the approximate financial
condition they were in before the loss, without profiting from the insurance claim .
Question 6
Insurable interest must exist:
A) Only at the time the policy is purchased
B) Only at the time of the loss
C) At the time the policy is purchased and at the time of the loss
D) Only when the policy is renewed
