NC Adjuster Exam Practice Questions
1. Smith and Jones own a building equally with an actual III and IV.
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.
2. Which of the following practices are considered un- Adding a surcharge on
fairly discriminatory? automobile liability insur-
A)Refusal to issue property coverage due to the occu- ance due to the age of the
pancy (use) of the structure. operator.
B)Adding a surcharge on automobile liability insur-
ance due to the age of the operator.
C)Placing coverage in a residual market due to infor-
mation supplied by a consumer reporting service.
D)Reducing rates for a specific class of insureds with-
out reducing rates for all insureds.
3. Coverage under a vandalism and malicious mischief 60 days
endorsement added to the standard fire policy is sus-
pended 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.
4. The cause of a loss.
, NC Adjuster Exam Practice Questions
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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.
5. Which of the following statements is true? Agents can bind coverage.
A)Agents can bind coverage.
B)Agents and brokers represent insurance compa-
nies.
C)Brokers can bind coverage.
D)Agents in the field of Property and Casualty insur-
ance issue conditional receipts.
6. Which of the following losses is covered under a SFP Damage caused by an
with the VMM endorsement? individual spray-painting
I. Theft of a TV set by vandals. graffiti on the dwelling.
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.
7. All of the following are essential elements in an insur- Counter-offer
ance contract EXCEPT:
A)Agreement.
B)Consideration.
C)Competent parties.
D)Counter-offer.
8. The Standard Fire policy insuring agreement cov- I, II, IIiI
ers: I. Lightning.II. Removal of contents from endan-
gered premises.III. Water damage caused by firemen
putting out a fire at the insured premises.
, NC Adjuster Exam Practice Questions
yp
A)I only.
B)II only.
C)I and II.
D)I, II, III.
9. Which of the following acts may an agent legally con- Charge an application fee
duct? based upon a written no-
A)Depositing collected premiums into the agent's own tification posted in the of-
bank account. fice.
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.
10. The clause in the standard fire policy that specifies the Pro-rata liability.
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.
11. All of the following are true about "insurable risk" The loss must not be defi-
EXCEPT: nite and definable
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.
12. An insurance contract is a unilateral contract which Only the insurer makes an
means that: enforceable promise.
A)Only the insurer makes an enforceable promise.
, NC Adjuster Exam Practice Questions
yp
B)Both parties must give up something of value.
C)Contract provisions are not required.
D)Both parties must perform with utmost good faith.
13. The practice of twisting: Involves inducing any pol-
A)Is perfectly legal in this state. icyholder to lapse a con-
B)Involves writing insurance that is unacceptable by tract of insurance for the
the company an agent is associated with. purpose of replacing the
C)Involves inducing any policyholder to lapse a con- policy with another to the
tract of insurance for the purpose of replacing the pol- detriment of the policy-
icy with another to the detriment of the policyholder. holder.
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.
14. When the Commissioner intends to hold a hearing 10 days in advance.
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.
15. Which of the following is the correct term when a Adhesion
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.
1. Smith and Jones own a building equally with an actual III and IV.
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.
2. Which of the following practices are considered un- Adding a surcharge on
fairly discriminatory? automobile liability insur-
A)Refusal to issue property coverage due to the occu- ance due to the age of the
pancy (use) of the structure. operator.
B)Adding a surcharge on automobile liability insur-
ance due to the age of the operator.
C)Placing coverage in a residual market due to infor-
mation supplied by a consumer reporting service.
D)Reducing rates for a specific class of insureds with-
out reducing rates for all insureds.
3. Coverage under a vandalism and malicious mischief 60 days
endorsement added to the standard fire policy is sus-
pended 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.
4. The cause of a loss.
, NC Adjuster Exam Practice Questions
yp
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.
5. Which of the following statements is true? Agents can bind coverage.
A)Agents can bind coverage.
B)Agents and brokers represent insurance compa-
nies.
C)Brokers can bind coverage.
D)Agents in the field of Property and Casualty insur-
ance issue conditional receipts.
6. Which of the following losses is covered under a SFP Damage caused by an
with the VMM endorsement? individual spray-painting
I. Theft of a TV set by vandals. graffiti on the dwelling.
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.
7. All of the following are essential elements in an insur- Counter-offer
ance contract EXCEPT:
A)Agreement.
B)Consideration.
C)Competent parties.
D)Counter-offer.
8. The Standard Fire policy insuring agreement cov- I, II, IIiI
ers: I. Lightning.II. Removal of contents from endan-
gered premises.III. Water damage caused by firemen
putting out a fire at the insured premises.
, NC Adjuster Exam Practice Questions
yp
A)I only.
B)II only.
C)I and II.
D)I, II, III.
9. Which of the following acts may an agent legally con- Charge an application fee
duct? based upon a written no-
A)Depositing collected premiums into the agent's own tification posted in the of-
bank account. fice.
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.
10. The clause in the standard fire policy that specifies the Pro-rata liability.
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.
11. All of the following are true about "insurable risk" The loss must not be defi-
EXCEPT: nite and definable
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.
12. An insurance contract is a unilateral contract which Only the insurer makes an
means that: enforceable promise.
A)Only the insurer makes an enforceable promise.
, NC Adjuster Exam Practice Questions
yp
B)Both parties must give up something of value.
C)Contract provisions are not required.
D)Both parties must perform with utmost good faith.
13. The practice of twisting: Involves inducing any pol-
A)Is perfectly legal in this state. icyholder to lapse a con-
B)Involves writing insurance that is unacceptable by tract of insurance for the
the company an agent is associated with. purpose of replacing the
C)Involves inducing any policyholder to lapse a con- policy with another to the
tract of insurance for the purpose of replacing the pol- detriment of the policy-
icy with another to the detriment of the policyholder. holder.
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.
14. When the Commissioner intends to hold a hearing 10 days in advance.
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.
15. Which of the following is the correct term when a Adhesion
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.
