North Carolina Adjuster License Final Exam verified with correct answers
2026/2027 version with rationales
1. The primary responsibility of an insurance adjuster is to:
A. Sell insurance policies
B. Investigate, evaluate, and settle claims fairly
C. Determine premium rates
D. Represent only the insured
Correct Answer: B
Rationale:
An adjuster investigates losses, determines coverage, evaluates damages, and helps resolve
claims according to the insurance contract and applicable laws.
2. An insurance contract is considered a contract of:
A. Gambling
B. Adhesion
C. Employment
D. Ownership
Correct Answer: B
Rationale:
Insurance policies are contracts of adhesion because the insurer prepares the contract and the
insured accepts the terms.
3. The principle requiring honesty and full disclosure between insurer and
insured is called:
A. Utmost good faith
B. Subrogation
C. Indemnity
D. Contribution
Correct Answer: A
Rationale:
Utmost good faith requires both parties to act honestly and disclose material facts.
,4. The purpose of insurance is primarily to:
A. Create profit for insureds
B. Transfer risk of financial loss
C. Eliminate all accidents
D. Increase property value
Correct Answer: B
Rationale:
Insurance transfers the financial risk of loss from an individual or business to an insurer.
5. The principle of indemnity means:
A. The insured should profit from a loss
B. The insured should be restored financially to approximately the pre-loss condition
C. The insurer pays unlimited amounts
D. Every claim must be paid
Correct Answer: B
Rationale:
Indemnity prevents insureds from profiting from insurance claims.
6. A material fact is information that:
A. Has no effect on insurance decisions
B. Would influence an insurer’s decision about coverage or risk
C. Is personal opinion only
D. Is never required
Correct Answer: B
Rationale:
A material fact affects underwriting, coverage, or claim decisions.
7. An adjuster’s investigation should begin by:
,A. Determining fault immediately
B. Gathering facts and reviewing the policy
C. Denying the claim
D. Paying the claim without review
Correct Answer: B
Rationale:
A proper investigation requires reviewing coverage, facts, damages, and applicable policy
provisions.
8. The person who receives insurance benefits after a covered loss is usually the:
A. Insured
B. Adjuster
C. Agent
D. Underwriter
Correct Answer: A
Rationale:
The insured is the person or entity protected under the policy.
9. An insurance policy contains the agreement between:
A. Adjuster and contractor
B. Insurer and insured
C. Agent and customer only
D. Government and claimant
Correct Answer: B
Rationale:
The policy is a legal contract between the insurance company and the insured.
10. The adjuster should avoid:
A. Accurate documentation
B. Fair investigation
, C. Misrepresentation of policy terms
D. Reviewing evidence
Correct Answer: C
Rationale:
Adjusters must act ethically and avoid misleading claimants or insureds.
11. A claim file should contain:
A. Investigation notes and supporting documents
B. Personal opinions only
C. Unverified rumors
D. No records
Correct Answer: A
Rationale:
Proper documentation supports claim decisions and regulatory compliance.
12. The person who evaluates risks before issuing policies is the:
A. Adjuster
B. Underwriter
C. Claimant
D. Appraiser
Correct Answer: B
Rationale:
Underwriters evaluate risks and determine policy terms and premiums.
13. A first-party claim involves:
A. An insured making a claim against their own policy
B. Two strangers
C. Only government agencies
D. A lawsuit only
Correct Answer: A
2026/2027 version with rationales
1. The primary responsibility of an insurance adjuster is to:
A. Sell insurance policies
B. Investigate, evaluate, and settle claims fairly
C. Determine premium rates
D. Represent only the insured
Correct Answer: B
Rationale:
An adjuster investigates losses, determines coverage, evaluates damages, and helps resolve
claims according to the insurance contract and applicable laws.
2. An insurance contract is considered a contract of:
A. Gambling
B. Adhesion
C. Employment
D. Ownership
Correct Answer: B
Rationale:
Insurance policies are contracts of adhesion because the insurer prepares the contract and the
insured accepts the terms.
3. The principle requiring honesty and full disclosure between insurer and
insured is called:
A. Utmost good faith
B. Subrogation
C. Indemnity
D. Contribution
Correct Answer: A
Rationale:
Utmost good faith requires both parties to act honestly and disclose material facts.
,4. The purpose of insurance is primarily to:
A. Create profit for insureds
B. Transfer risk of financial loss
C. Eliminate all accidents
D. Increase property value
Correct Answer: B
Rationale:
Insurance transfers the financial risk of loss from an individual or business to an insurer.
5. The principle of indemnity means:
A. The insured should profit from a loss
B. The insured should be restored financially to approximately the pre-loss condition
C. The insurer pays unlimited amounts
D. Every claim must be paid
Correct Answer: B
Rationale:
Indemnity prevents insureds from profiting from insurance claims.
6. A material fact is information that:
A. Has no effect on insurance decisions
B. Would influence an insurer’s decision about coverage or risk
C. Is personal opinion only
D. Is never required
Correct Answer: B
Rationale:
A material fact affects underwriting, coverage, or claim decisions.
7. An adjuster’s investigation should begin by:
,A. Determining fault immediately
B. Gathering facts and reviewing the policy
C. Denying the claim
D. Paying the claim without review
Correct Answer: B
Rationale:
A proper investigation requires reviewing coverage, facts, damages, and applicable policy
provisions.
8. The person who receives insurance benefits after a covered loss is usually the:
A. Insured
B. Adjuster
C. Agent
D. Underwriter
Correct Answer: A
Rationale:
The insured is the person or entity protected under the policy.
9. An insurance policy contains the agreement between:
A. Adjuster and contractor
B. Insurer and insured
C. Agent and customer only
D. Government and claimant
Correct Answer: B
Rationale:
The policy is a legal contract between the insurance company and the insured.
10. The adjuster should avoid:
A. Accurate documentation
B. Fair investigation
, C. Misrepresentation of policy terms
D. Reviewing evidence
Correct Answer: C
Rationale:
Adjusters must act ethically and avoid misleading claimants or insureds.
11. A claim file should contain:
A. Investigation notes and supporting documents
B. Personal opinions only
C. Unverified rumors
D. No records
Correct Answer: A
Rationale:
Proper documentation supports claim decisions and regulatory compliance.
12. The person who evaluates risks before issuing policies is the:
A. Adjuster
B. Underwriter
C. Claimant
D. Appraiser
Correct Answer: B
Rationale:
Underwriters evaluate risks and determine policy terms and premiums.
13. A first-party claim involves:
A. An insured making a claim against their own policy
B. Two strangers
C. Only government agencies
D. A lawsuit only
Correct Answer: A
