NC Adjuster License Exam Prep Material Newest 2025/2026 Complete Questions And
Correct Answers (Verified Answers)|Brand New Version!
Insurance Services Office - (ANSWER)Calculates rates and creates policy forms such as homeowners and
auto for property and casualty insurers.
National Association of Insurance Commissioners (NAIC) - (ANSWER)governing org. for all state
insurance commissioners, directors. Works towards standardization of insurance codes in various states.
All legislation passed is non-binding on the states until passed by the state legislative.
Domestic Insurers - (ANSWER)organized under the laws of the same state in which they are domiciled.
Foreign Insurers - (ANSWER)Formed under the laws of a different state from the one in which they are
doing business.
Alien Insurers - (ANSWER)Formed under the laws of another country from the one in which they are
doing business in.
Indemnity Contract - (ANSWER)Contract type that promises to pay an amount equal to the loss covered
under the policy.
Reimbursement Contract - (ANSWER)Is a contract type which reimburses expenses.
Valued Contract - (ANSWER)A contract type in which the insurer agrees to pay a specific sum of money
no matter what the amount of loss may be. Ex. Life Insurance
Adverse Selection - (ANSWER)Selection of such a risk has a greater than average chance of producing a
loss.
Estoppel - (ANSWER)Legal impediment to one party denying the consequences of its own actions.
Pro-Rata - (ANSWER)Insurance company must return any advanced unused premium paid by the policy
owner if the insurance company terminates the contract before policy ends.
, NC Adjuster License Exam Prep Material Newest 2025/2026 Complete Questions And
Correct Answers (Verified Answers)|Brand New Version!
Risk - (ANSWER)Uncertainty of a financial loss
Speculative Risk - (ANSWER)Uncertain prospect of a financial gain or loss and are uninsurable. Ex.
Lottery
Pure Risk - (ANSWER)Involving a chance of loss or no loss, but no gain, and are insurable.
Risk Avoidance - (ANSWER)Ensures that an individual or business does not get involved in an activity
leading to a potential financial loss.
Risk Assumption - (ANSWER)Is a method in which the individual or business assumes the expected losses
from its own financial resources.
Risk Transference - (ANSWER)Transfer of risk to an insurance company.
Risk Sharing - (ANSWER)Involves the insured and the insurer each accepting part of the risk. Deductibles
and coinsurance are methods of risk sharing.
Risk Reduction - (ANSWER)Lowers the possibility of a loss. Ex. Wearing a seatbelt reduces the number of
injuries in an accident.
Hazard - (ANSWER)Any circumstance that increases a possible loss (peril).
Insurable Interest - (ANSWER)Is an expectation of a financial loss that can be covered by insurance. Can't
insure more than your stake nor can you collect.
Binder - (ANSWER)Temporary Insurance contract providing coverage until a permanent policy is issued.
Correct Answers (Verified Answers)|Brand New Version!
Insurance Services Office - (ANSWER)Calculates rates and creates policy forms such as homeowners and
auto for property and casualty insurers.
National Association of Insurance Commissioners (NAIC) - (ANSWER)governing org. for all state
insurance commissioners, directors. Works towards standardization of insurance codes in various states.
All legislation passed is non-binding on the states until passed by the state legislative.
Domestic Insurers - (ANSWER)organized under the laws of the same state in which they are domiciled.
Foreign Insurers - (ANSWER)Formed under the laws of a different state from the one in which they are
doing business.
Alien Insurers - (ANSWER)Formed under the laws of another country from the one in which they are
doing business in.
Indemnity Contract - (ANSWER)Contract type that promises to pay an amount equal to the loss covered
under the policy.
Reimbursement Contract - (ANSWER)Is a contract type which reimburses expenses.
Valued Contract - (ANSWER)A contract type in which the insurer agrees to pay a specific sum of money
no matter what the amount of loss may be. Ex. Life Insurance
Adverse Selection - (ANSWER)Selection of such a risk has a greater than average chance of producing a
loss.
Estoppel - (ANSWER)Legal impediment to one party denying the consequences of its own actions.
Pro-Rata - (ANSWER)Insurance company must return any advanced unused premium paid by the policy
owner if the insurance company terminates the contract before policy ends.
, NC Adjuster License Exam Prep Material Newest 2025/2026 Complete Questions And
Correct Answers (Verified Answers)|Brand New Version!
Risk - (ANSWER)Uncertainty of a financial loss
Speculative Risk - (ANSWER)Uncertain prospect of a financial gain or loss and are uninsurable. Ex.
Lottery
Pure Risk - (ANSWER)Involving a chance of loss or no loss, but no gain, and are insurable.
Risk Avoidance - (ANSWER)Ensures that an individual or business does not get involved in an activity
leading to a potential financial loss.
Risk Assumption - (ANSWER)Is a method in which the individual or business assumes the expected losses
from its own financial resources.
Risk Transference - (ANSWER)Transfer of risk to an insurance company.
Risk Sharing - (ANSWER)Involves the insured and the insurer each accepting part of the risk. Deductibles
and coinsurance are methods of risk sharing.
Risk Reduction - (ANSWER)Lowers the possibility of a loss. Ex. Wearing a seatbelt reduces the number of
injuries in an accident.
Hazard - (ANSWER)Any circumstance that increases a possible loss (peril).
Insurable Interest - (ANSWER)Is an expectation of a financial loss that can be covered by insurance. Can't
insure more than your stake nor can you collect.
Binder - (ANSWER)Temporary Insurance contract providing coverage until a permanent policy is issued.
