NC Adjuster Exam Correct 100%
The most common method of risk management is:
A. The sharing of risk
B. The assumption of risk
C. The transfer of risk
D. Risk avoidance - ANSWER C. The transfer of risk
Which of the following types of risk is associated with change is not insurable?
A. Fundamental risk
B. Particular risk
C. Dynamic risk
D. Static risk - ANSWER C. Dynamic risk
Insurers are able to calculate their probable losses and to establish the rates for
premiums that will cover losses and operating expenses, by using:
A. Insurable interest
B. Insurance
C. The principle of indemnity
D. The law of large numbers - ANSWER D. The law of large numbers
The process by which an insurance company selects certain types of risks that have
historically produced a profit, and rejecting those risks that have historically produced a
loss, is known as:
A. Underwriting
B. Reinsurance
C. Risk avoidance
D. Risk control - ANSWER A. Underwriting
Which of the following "hazards" arise out of an insured's attitude of apathy toward
causing or preventing a loss?
A. A dynamic hazard
B. A moral hazard
C. A morale hazard
D. A physical hazard - ANSWER C. A morale hazard
Concealment
A. Is the failure of the insured to reveal material facts when applying for insurance
,B. Is an insurance company making untrue statements regarding the provisions of an
insurance policy
C. Is making untrue statements on an application for insurance
D. Is lying when asked a direct question regarding an item on an insurance policy -
ANSWER A. Is the failure of the insured to reveal material facts when applying for
insurance
All of the following are elements of a valid contract, EXCEPT:
A. Consideration
B. Executory condition
C. Offer and acceptance
D. Competent parties - ANSWER B. Executory condition
The insured person is the _______ to the contract.
A. Third party
B. Promise
C. First party
D. Second party - ANSWER C. First party
Insurance contracts are contingent upon uncertain events, that provide for the unequal
transfer of value between the parties, this is known as an _____ contract.
A. Aleatory
B. Adhesion
C. Conditional
D. Indemnification - ANSWER A. Aleatory
Misrepresentations:
A. Are untrue statements made by the insured on an application for insurance
B. Are statements made on an application for insurance that are true to the applicant's
best knowledge and belief
C. Are the failure of the insured to reveal material facts when applying for insurance
D. A breach of one of the policy conditions by the insured - ANSWER A. Are untrue
statements made by the insured on an application for insurance
Which of the following is commonly debited from a claims payment before that amount
is remitted to the insured?
A. Salvage costs
B. A liability fee
C. A deductible
D. Future premiums - ANSWER C. A deductible
, Which of the following serves as temporary evidence that coverage is in effect?
A. An endorsement
B. A rider
C. An exclusion
D. A binder - ANSWER D. A binder
Which of the following is the definition of "accident" as it pertains to insurance?
A. A sudden and unforeseen event or a continuous and repeated exposure to an event
that results in a financial loss.
B. The actual injury or damage sustained by the insured
C. The state of being subject to loss because of some type of hazard
D. A sudden and unforeseen event resulting in a financial loss - ANSWER D. A sudden
and unforeseen event resulting in a financial loss
Which of the following is the clause that declares that the insurance company is entitled
to the insured's right of recovery from a negligent party?
A. Subrogation clause
B. Other insurance clause
C. "Other Sources of Recovery on Insurance under Two or More Policies" clause
D. Entire Contract clause - ANSWER A. Subrogation clause
A written modification of an insurance policy is:
A. A proof of loss
B. A condition
C. A deductible
D. An endorsement - ANSWER D. An endorsement
Which of the following is the type of loss where the cost to repair the damaged property
does not exhaust the policy limits?
A. Actual total loss
B. Constructive total loss
C. Partial average loss
D. General average loss - ANSWER C. Partial average loss
Which of the following is a type of loss when the covered property is destroyed beyond
repair and nothing of value remains?
A. General average loss
B. Constructive total loss
The most common method of risk management is:
A. The sharing of risk
B. The assumption of risk
C. The transfer of risk
D. Risk avoidance - ANSWER C. The transfer of risk
Which of the following types of risk is associated with change is not insurable?
A. Fundamental risk
B. Particular risk
C. Dynamic risk
D. Static risk - ANSWER C. Dynamic risk
Insurers are able to calculate their probable losses and to establish the rates for
premiums that will cover losses and operating expenses, by using:
A. Insurable interest
B. Insurance
C. The principle of indemnity
D. The law of large numbers - ANSWER D. The law of large numbers
The process by which an insurance company selects certain types of risks that have
historically produced a profit, and rejecting those risks that have historically produced a
loss, is known as:
A. Underwriting
B. Reinsurance
C. Risk avoidance
D. Risk control - ANSWER A. Underwriting
Which of the following "hazards" arise out of an insured's attitude of apathy toward
causing or preventing a loss?
A. A dynamic hazard
B. A moral hazard
C. A morale hazard
D. A physical hazard - ANSWER C. A morale hazard
Concealment
A. Is the failure of the insured to reveal material facts when applying for insurance
,B. Is an insurance company making untrue statements regarding the provisions of an
insurance policy
C. Is making untrue statements on an application for insurance
D. Is lying when asked a direct question regarding an item on an insurance policy -
ANSWER A. Is the failure of the insured to reveal material facts when applying for
insurance
All of the following are elements of a valid contract, EXCEPT:
A. Consideration
B. Executory condition
C. Offer and acceptance
D. Competent parties - ANSWER B. Executory condition
The insured person is the _______ to the contract.
A. Third party
B. Promise
C. First party
D. Second party - ANSWER C. First party
Insurance contracts are contingent upon uncertain events, that provide for the unequal
transfer of value between the parties, this is known as an _____ contract.
A. Aleatory
B. Adhesion
C. Conditional
D. Indemnification - ANSWER A. Aleatory
Misrepresentations:
A. Are untrue statements made by the insured on an application for insurance
B. Are statements made on an application for insurance that are true to the applicant's
best knowledge and belief
C. Are the failure of the insured to reveal material facts when applying for insurance
D. A breach of one of the policy conditions by the insured - ANSWER A. Are untrue
statements made by the insured on an application for insurance
Which of the following is commonly debited from a claims payment before that amount
is remitted to the insured?
A. Salvage costs
B. A liability fee
C. A deductible
D. Future premiums - ANSWER C. A deductible
, Which of the following serves as temporary evidence that coverage is in effect?
A. An endorsement
B. A rider
C. An exclusion
D. A binder - ANSWER D. A binder
Which of the following is the definition of "accident" as it pertains to insurance?
A. A sudden and unforeseen event or a continuous and repeated exposure to an event
that results in a financial loss.
B. The actual injury or damage sustained by the insured
C. The state of being subject to loss because of some type of hazard
D. A sudden and unforeseen event resulting in a financial loss - ANSWER D. A sudden
and unforeseen event resulting in a financial loss
Which of the following is the clause that declares that the insurance company is entitled
to the insured's right of recovery from a negligent party?
A. Subrogation clause
B. Other insurance clause
C. "Other Sources of Recovery on Insurance under Two or More Policies" clause
D. Entire Contract clause - ANSWER A. Subrogation clause
A written modification of an insurance policy is:
A. A proof of loss
B. A condition
C. A deductible
D. An endorsement - ANSWER D. An endorsement
Which of the following is the type of loss where the cost to repair the damaged property
does not exhaust the policy limits?
A. Actual total loss
B. Constructive total loss
C. Partial average loss
D. General average loss - ANSWER C. Partial average loss
Which of the following is a type of loss when the covered property is destroyed beyond
repair and nothing of value remains?
A. General average loss
B. Constructive total loss
