North Carolina Adjuster Exam Practice Questions and Answers
Question 1
Smith and Jones own a building equally with an actual 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.
Correct Answer
III and IV.
Question 2
The clause in the standard fire policy that specifies the 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.
Correct Answer
Pro-rata liability.
Question 3
In regard to personal property coverage in the Homeowner's program, all of the following
statements are correct EXCEPT:
A)Money and bullion are limited to $200.
B)Scheduled personal property coverage of greater than the established limits is available
through a Personal Articles Floater.
,C)The Special form (HO 00 03) provides open perils coverage on personal property.
D)Personal Property coverage is usually 50% of the limit provided for Coverage A.
Correct Answer
The Special form (HO 00 03) provides open perils coverage on personal property.
Question 4
An insured is involved in an accident while operating a non-owned automobile. The accident
results in property damage and bodily injury to another party. In what manner will the liability
for this accident be satisfied?
A)The insured's personal automobile policy will provide coverage up to its stated limits.
B)All damages are covered under the comprehensive portion of the personal automobile policy
of the insured.
C)The insured's personal automobile policy will pay up to its limits; the personal automobile
policy of the owner of the vehicle will cover any excess.
D)The non-owned vehicle's policy will pay to its limits; the personal automobile policy of the
insured will cover any excess.
Correct Answer
The non-owned vehicle's policy will pay to its limits; the personal automobile policy of the
insured will cover any excess.
Question 5
The Broad form Homeowner's policy restricts coverage of money and securities to:
A)MONEY SECURITIES
$100 $500
B)MONEY SECURITIES
$200 $1500
C)MONEY SECURITIES
$500 $1500
D)MONEY SECURITIES
$1000 $5000
Correct Answer
,MONEY SECURITIES
$200 $1500
Question 6
Which of the following acts is legal concerning property insurance policies and business
practices?
A)Providing a 10-year policy renewal period.
B)Listing the rates charged for specific types of property coverage.
C)Issuing a policy that insures property for amounts greater than the value of the property.
D)Adjusting losses according to company rules not stated in the policy.
Correct Answer
Listing the rates charged for specific types of property coverage.
Question 7
All of the following activities are the responsibility of the North Carolina Department of
Insurance EXCEPT:
A)Determining the competency of individuals wishing to market insurance.
B)Issuing regulations affecting the conduct of the insurance business.
C)Setting the rates charged for personal automobile insurance policies
D)Prior approval of all policies of insurance sold in this state.
Correct Answer
Setting the rates charged for personal automobile insurance policies
Question 8
The Standard Fire policy without endorsements provides coverage for:
A)Fire, lightning and removal of endangered property.
B)Fire only.
C)Fire and lightning only.
D)None of the above.
Correct Answer
Fire, lightning and removal of endangered property.
, Question 9
If the insured operates in other states, how will Workers Compensation benefits be satisfied for
those locations?
A)Coverage must always be purchased in that state
B)The state laws of the state of residence of the insured would apply to all other locations.
C)Coverage in compliance with the other state's requirements will become effective 60 days
after work commences.
D)Coverage is provided in compliance with the other state if the insurer is notified before or
within 30 days of work commencing.
Correct Answer
Coverage is provided in compliance with the other state if the insurer is notified before or
within 30 days of work commencing.
Question 10
Damage to a windshield by a bird would be covered under:
A)Collision.
B)Comprehensive.
C)Liability.
D)All of the above.
Correct Answer
Comprehensive.
Question 11
All of the following requirements apply to the N. C. Reinsurance Facility EXCEPT:
A)The twelve members of the Board of Governors are appointed by the member insurers.
B)Agents may not be given a quota of "clean risk" business in proportion to ceded business.
C)Ceded operators cannot be provided different services or adjustment methods from non-
ceded operators.
D)Physical damage coverage may not be rated on the basis of ceded liability coverage.
Correct Answer
Question 1
Smith and Jones own a building equally with an actual 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.
Correct Answer
III and IV.
Question 2
The clause in the standard fire policy that specifies the 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.
Correct Answer
Pro-rata liability.
Question 3
In regard to personal property coverage in the Homeowner's program, all of the following
statements are correct EXCEPT:
A)Money and bullion are limited to $200.
B)Scheduled personal property coverage of greater than the established limits is available
through a Personal Articles Floater.
,C)The Special form (HO 00 03) provides open perils coverage on personal property.
D)Personal Property coverage is usually 50% of the limit provided for Coverage A.
Correct Answer
The Special form (HO 00 03) provides open perils coverage on personal property.
Question 4
An insured is involved in an accident while operating a non-owned automobile. The accident
results in property damage and bodily injury to another party. In what manner will the liability
for this accident be satisfied?
A)The insured's personal automobile policy will provide coverage up to its stated limits.
B)All damages are covered under the comprehensive portion of the personal automobile policy
of the insured.
C)The insured's personal automobile policy will pay up to its limits; the personal automobile
policy of the owner of the vehicle will cover any excess.
D)The non-owned vehicle's policy will pay to its limits; the personal automobile policy of the
insured will cover any excess.
Correct Answer
The non-owned vehicle's policy will pay to its limits; the personal automobile policy of the
insured will cover any excess.
Question 5
The Broad form Homeowner's policy restricts coverage of money and securities to:
A)MONEY SECURITIES
$100 $500
B)MONEY SECURITIES
$200 $1500
C)MONEY SECURITIES
$500 $1500
D)MONEY SECURITIES
$1000 $5000
Correct Answer
,MONEY SECURITIES
$200 $1500
Question 6
Which of the following acts is legal concerning property insurance policies and business
practices?
A)Providing a 10-year policy renewal period.
B)Listing the rates charged for specific types of property coverage.
C)Issuing a policy that insures property for amounts greater than the value of the property.
D)Adjusting losses according to company rules not stated in the policy.
Correct Answer
Listing the rates charged for specific types of property coverage.
Question 7
All of the following activities are the responsibility of the North Carolina Department of
Insurance EXCEPT:
A)Determining the competency of individuals wishing to market insurance.
B)Issuing regulations affecting the conduct of the insurance business.
C)Setting the rates charged for personal automobile insurance policies
D)Prior approval of all policies of insurance sold in this state.
Correct Answer
Setting the rates charged for personal automobile insurance policies
Question 8
The Standard Fire policy without endorsements provides coverage for:
A)Fire, lightning and removal of endangered property.
B)Fire only.
C)Fire and lightning only.
D)None of the above.
Correct Answer
Fire, lightning and removal of endangered property.
, Question 9
If the insured operates in other states, how will Workers Compensation benefits be satisfied for
those locations?
A)Coverage must always be purchased in that state
B)The state laws of the state of residence of the insured would apply to all other locations.
C)Coverage in compliance with the other state's requirements will become effective 60 days
after work commences.
D)Coverage is provided in compliance with the other state if the insurer is notified before or
within 30 days of work commencing.
Correct Answer
Coverage is provided in compliance with the other state if the insurer is notified before or
within 30 days of work commencing.
Question 10
Damage to a windshield by a bird would be covered under:
A)Collision.
B)Comprehensive.
C)Liability.
D)All of the above.
Correct Answer
Comprehensive.
Question 11
All of the following requirements apply to the N. C. Reinsurance Facility EXCEPT:
A)The twelve members of the Board of Governors are appointed by the member insurers.
B)Agents may not be given a quota of "clean risk" business in proportion to ceded business.
C)Ceded operators cannot be provided different services or adjustment methods from non-
ceded operators.
D)Physical damage coverage may not be rated on the basis of ceded liability coverage.
Correct Answer
