NC Adjuster Exam(solved,verified&updated)

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 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 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 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 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 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 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 B. Executory condition The insured person is the _______ to the contract. A. Third party B. Promise C. First party D. Second party 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 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 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 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 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 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 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 D. An endorsement All of the following are actions the Commissioner/Director/Superintendent may take, after a hearing where it has been determined that a violation has been committed by an insurance licensee, EXCEPT: A. Issue a cease and desist order B. Impose a fine C. Impose criminal penalties D. Suspend or revoke the license C. Impose criminal penalties All of the following are true regarding State Guaranty Associations, EXCEPT: A. The association allows any admitted insurer to advertise that they are a member of the Guaranty Association B. The association does not apply a maximum limit to workers compensation claims C. The association does not assess surplus lines companies for funding D. The association covers the claims of admitted insurer who becomes insolvent. A. The association allows any admitted insurer to advertise that they are a member of the Guaranty Association Each person who is elected or appointed as Insurance Commissioner/Director/Superintendent: A. Sets the premium rates for all insurers in their state. B. Is authorized to create insurance laws in the state C. Automatically holds a seat in the state legislature D. Automatically becomes a member of the National Association of Insurance Commissioners (NAIC) D. Automatically becomes a member of the National Association of Insurance Commissioners (NAIC) Which of the following is a type of insurer that may conduct business in a state without holding a certificate of authority? A. A surplus lines company B. An authorized company C. A nonadmitted company D. An admitted company A. A surplus lines company All of the following are duties of the Insurance Commissioner/Director/Superintendent, EXCEPT: A. Setting insurance rates for insurers within their state B. Monitoring the financial solvency of insurance companies C. Issuing licenses and certificates of authority D. Conducting hearings on insurance matters to determine if violations have occurred. A. Setting insurance rates for insurers within their state A doctrine stating that if loss or damage to property occurs as a result of 2 or more causes, and 1 cause is covered under the policy but the other cause is not covered, the damages will likely be compensated by the insurer, is known as: A. Coinsurance B. Indirect loss coverage C. Concurrent causation D. Loss settlement C. Concurrent causation When an existing coverage under the policy is expanded, this is a(n): A. Rider B. Endorsement C. Coverage extension D. Additional coverage C. Coverage extension 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 C. Partial average loss