N. C. Claims Adjuster Exam: N.C. Claims Adjuster
License Exam: Latest Updated A+ Guide Solution
Inception/Expiration Date - ANSWERan insurance policy covers the insured starting
at 12:01am on the day on which coverage begins and expires at 12:01am on the
expiration day of the policy.
Occurrence Date - ANSWERDate of which the loss occurred
Identification of parties involved - ANSWERThe loss report should include the names
and addresses of the parties involved in the loss, the names and addresses of any
injured person(s) and the names and addresses of any witness(s).
Policy Form/Number - ANSWERIdentifies the type of coverage purchased (policy
form) and the policy number for the particular policy purchased by the insured.
Description of the Loss - ANSWERInformation concerning how, when and where the
accident or loss happened is an essential element in any loss report.
Coverage - ANSWERShows the type of coverage(s) purchased as well as the limits of
coverage purchased.
Damages - Special Compensatory damages - ANSWERAre amounts paid to
compensate the plaintiff for direct expenses such as medical treatment, lost wages
(both past and future), funeral expenses and rehabilitation expenses required
because of bodily injury. Special damages are paid for losses that can be determined
and documented. They are often referred to as "out-of-pocket" expenses.
Damages - General Compensatory Damages - ANSWERAre paid for losses that cannot
be specifically measured and itemized in order to compensate the plaintiff for things
such as pain and suffering, loss of the use of an arm or leg, loss of vision, physical
disfigurement and/or loss of consortium.
Damages - Punitive Damages - ANSWERAre typically awarded to the plaintiff in
addition to compensatory damages when the defendants conduct has been
especially malicious. Punitive damages are awarded to punish the defendant and to
deter others from engaging in similar actions.
Unfair Claims Settlement Practices - ANSWER1. Knowingly misrepresenting relevant
facts or policy provisions relating to the coverage at issue. 2. Failing to acknowledge
with reasonable promptness communications pertaining to claims. 3. Failing to
adopt and implement reasonable standards for the prompt investigation of claims. 4.
Arbitrary and unreasonable refusal to pay claims. 5. Failing to affirm or deny
coverage of claims within a reasonable time after proof of loss has been completed.
6. Not attempting in good faith to make prompt, fair and equitable claims settlement
when the insurer's liability has become reasonably clear. 7. Compelling insureds to
,institute suits to recover amounts due under a policy by offering substantially less to
settle immediately. 8. Attempting to settle claims for less than the amount for which
a reasonable person would believe one was entitled based on written or printed
advertising material accompanying or made a part of an application. I. Attempting
settlement of claims on the basis of applications that were altered without notice to
knowledge of or consent of insureds.
Total Losses on Motor Vehicles/Miscellaneous Provisions - ANSWER1. If the insurer
and the claimant are unable to reach an agreement as to the value of the vehicle,
the insurer shall base any further settlement offer not only on the published regional
average value of similar vehicles, but also on the value of the vehicle in the local
market. 2. Local market value shall be determined by using either the local price of a
comparable vehicle or if no comparable vehicle can be found, quotations from at
least two qualified dealers within the local market area. Additionally, if the claimant
represents that the vehicle was in better than average condition, the insurer shall
give due consideration to the condition of the claimant's vehicle prior to the
accident. 3. When a motor vehicle is damaged in an amount which equals or exceeds
75 percent of the preaccident actual cash value, an insurer shall "total loss" the
vehicle by paying the claimant the preaccident value and in return, receiving
possession of the legal title for salvage purposes. 4. The insurer will be responsible
for all reasonable towing and storage charges until three days after the owner and
the storage facility are notified in writing that the insurer will no longer reimburse
the owner or storage facility for storage charges. 5. Loss and claims payments shall
be mailed or otherwise delivered within 10 business days after the claim is settled.
After Market Parts - ANSWERAn after market part is any part made by a non original
manufacturer.
Speculative Risk - ANSWERWhen there is a chance of gain as well as a chance of loss.
Insurance is not intended to protect against this type of risk.
Pure Risk - ANSWERWhen there is a chance of loss only.
Insurable Risk - ANSWEROne that an insurance company is willing to accept.
Characteristics of Insurable Risk - ANSWER1. Low probability of loss occurring, 2. Less
than catastrophic results, 3. The loss must be measurable, 4. The loss must be
significant, 5. The loss must be accidental and unintended.
Probability - ANSWERMeasures the chance of an event occurring, it is the measure of
uncertainty (risk).
Law of Large Numbers (Law of Averages) - ANSWERMathematical principle that
makes it possible to predict future losses based upon prior experience.
Spread of Risk (Geographic Dispersion) - ANSWERAlso used to decrease loss
probability. This process involves spreading the company's policies (exposures) over
,a broad geographical area in order to avoid large losses in the vent of a catastrophic
event. An example is a hurricane.
Adverse Selection - ANSWERAdverse selection occurs when insureds with a high risk
of loss attempt to purchase insurance and are successful in obtaining insurance.
Perils - ANSWERAre the actual cause of loss such as a fire, theft, wind, hail, etc.
Hazards - ANSWERIncrease the probability of a peril occurring. Bald tires on an
automobile increase the chance of a wreck happening. The tires are the hazard, the
wreck is the peril.
Property Insurance - ANSWERIndemnified (repays) a person or business with an
interest in the physical integrity of tangible property for its loss or the loss of income
produced by that property.
Casualty Insurance - ANSWERProvides protection to meet the unexpected costs
imposed by law due to acts that have caused bodily injury or property damage to
another individual. Included isn't he field of casualty (liability) insurance are
automobile, crime and surety bonds.
Private or Voluntary Insurance - ANSWERPortion of the insurance industry where
individuals seek coverage to meet recognized needs. These coverages are neither
required nor made available by government. An example would be collision
insurance in a personal automobile insurance policy.
Social Insurance - ANSWERPrograms either required or made available by
government.
Reinsurance - ANSWERFiled of the industry where insurers sell portions of their
individual contracts of insurance to other companies. This activity helps with the
spread of risk and/or improves cash positions by lowering reserve requirements for
these contracts. Insurance companies also purchase reinsurance to protect
themselves in case of catastrophic losses.
Capital Stock Companies - ANSWERProprietary companies that are in business to
make a profit for their stockholders. These companies are owned by stockholders
who retain management responsibility through the selection of a Board of Directors.
Profits are paid to the stockholders in the form of a commercial stock dividend that
is fully taxable to the stockholder.
Mutual Insurance Companies - ANSWERAre owned by their policyholders. Each
policyholder "owns" a part of the company equal to their proportionate share of the
company's total insurance in force. The policyholders select a board of directors who
appoint officers to be in charge of the company's daily operations. Operating
surpluses of these companies may be returned to their policyholders in the form of a
, non-taxable policy dividend. The dividend is non-taxable because it is a return of
premium (the company charged too much).
Reciprocal (Assessment) Companies - ANSWERAre non-incorporated associations of
individuals or businesses (subscribers) who engage in cooperative insurance. Each
policyholder is insured by all other policyholders and each policyholder insures the
others as coverage is exchanged on a reciprocal basis. Two important facts to
remember about reciprocals are: 1. Managed by Attorney-in-Fact (not necessarily a
lawyer), 2. The Attorney-in-Fact can assess the policyholders for additional premiums
if underwriting losses jeopardize financial solvency.
Domestic Companies - ANSWERCompanies organized in this state.
Foreign Companies - ANSWEROrganized in another state.
Alien Companies - ANSWEROrganized in another country.
Certificate Of Authority - ANSWERWhen authorized by the state and become known
as an Admitted or Authorized company.
Non-Admitted or non-authorized companies - ANSWERFor basic understanding,
property, casualty and personal lines insurance agents are not permitted to
represent or place insurance with non-admitted companies.
Independent Agency System - ANSWERSystem in which an agent may represent
more than one insurance company in the marketing of property and liability
insurance products. Independent agents own the business and they retain all rights
to the accounts they have placed with a company.
Direct Writers - ANSWERUse captive or exclusive agents or employees in the sale of
property and liability insurance products. Agents or employees can only represent
that particular insurance company.
Agents - ANSWERRepresentatives of the insurer. Agents must be licensed with the
state to legally conduct insurance transactions. Agents receive their authority to
operate on behalf of the company by the agency contract and by an appointment.
Property Casualty and Personal Lines Agents - ANSWERMay be given "binding"
authority. A binding premium receipt (binder) is temporary evidence that insurance
is in effect without condition.
Binder - ANSWERTemporary evidence that insurance is in effect without condition.
Binders may be written or oral. Oral binders must be replaced by a written binder as
soon as possible. The binder provides coverage until the policy arrives.
Brokers and representatives - ANSWERThey "shop the market" on behalf of their
clients and obtain coverage best fills the client's needs. In order to obtain a broker's
License Exam: Latest Updated A+ Guide Solution
Inception/Expiration Date - ANSWERan insurance policy covers the insured starting
at 12:01am on the day on which coverage begins and expires at 12:01am on the
expiration day of the policy.
Occurrence Date - ANSWERDate of which the loss occurred
Identification of parties involved - ANSWERThe loss report should include the names
and addresses of the parties involved in the loss, the names and addresses of any
injured person(s) and the names and addresses of any witness(s).
Policy Form/Number - ANSWERIdentifies the type of coverage purchased (policy
form) and the policy number for the particular policy purchased by the insured.
Description of the Loss - ANSWERInformation concerning how, when and where the
accident or loss happened is an essential element in any loss report.
Coverage - ANSWERShows the type of coverage(s) purchased as well as the limits of
coverage purchased.
Damages - Special Compensatory damages - ANSWERAre amounts paid to
compensate the plaintiff for direct expenses such as medical treatment, lost wages
(both past and future), funeral expenses and rehabilitation expenses required
because of bodily injury. Special damages are paid for losses that can be determined
and documented. They are often referred to as "out-of-pocket" expenses.
Damages - General Compensatory Damages - ANSWERAre paid for losses that cannot
be specifically measured and itemized in order to compensate the plaintiff for things
such as pain and suffering, loss of the use of an arm or leg, loss of vision, physical
disfigurement and/or loss of consortium.
Damages - Punitive Damages - ANSWERAre typically awarded to the plaintiff in
addition to compensatory damages when the defendants conduct has been
especially malicious. Punitive damages are awarded to punish the defendant and to
deter others from engaging in similar actions.
Unfair Claims Settlement Practices - ANSWER1. Knowingly misrepresenting relevant
facts or policy provisions relating to the coverage at issue. 2. Failing to acknowledge
with reasonable promptness communications pertaining to claims. 3. Failing to
adopt and implement reasonable standards for the prompt investigation of claims. 4.
Arbitrary and unreasonable refusal to pay claims. 5. Failing to affirm or deny
coverage of claims within a reasonable time after proof of loss has been completed.
6. Not attempting in good faith to make prompt, fair and equitable claims settlement
when the insurer's liability has become reasonably clear. 7. Compelling insureds to
,institute suits to recover amounts due under a policy by offering substantially less to
settle immediately. 8. Attempting to settle claims for less than the amount for which
a reasonable person would believe one was entitled based on written or printed
advertising material accompanying or made a part of an application. I. Attempting
settlement of claims on the basis of applications that were altered without notice to
knowledge of or consent of insureds.
Total Losses on Motor Vehicles/Miscellaneous Provisions - ANSWER1. If the insurer
and the claimant are unable to reach an agreement as to the value of the vehicle,
the insurer shall base any further settlement offer not only on the published regional
average value of similar vehicles, but also on the value of the vehicle in the local
market. 2. Local market value shall be determined by using either the local price of a
comparable vehicle or if no comparable vehicle can be found, quotations from at
least two qualified dealers within the local market area. Additionally, if the claimant
represents that the vehicle was in better than average condition, the insurer shall
give due consideration to the condition of the claimant's vehicle prior to the
accident. 3. When a motor vehicle is damaged in an amount which equals or exceeds
75 percent of the preaccident actual cash value, an insurer shall "total loss" the
vehicle by paying the claimant the preaccident value and in return, receiving
possession of the legal title for salvage purposes. 4. The insurer will be responsible
for all reasonable towing and storage charges until three days after the owner and
the storage facility are notified in writing that the insurer will no longer reimburse
the owner or storage facility for storage charges. 5. Loss and claims payments shall
be mailed or otherwise delivered within 10 business days after the claim is settled.
After Market Parts - ANSWERAn after market part is any part made by a non original
manufacturer.
Speculative Risk - ANSWERWhen there is a chance of gain as well as a chance of loss.
Insurance is not intended to protect against this type of risk.
Pure Risk - ANSWERWhen there is a chance of loss only.
Insurable Risk - ANSWEROne that an insurance company is willing to accept.
Characteristics of Insurable Risk - ANSWER1. Low probability of loss occurring, 2. Less
than catastrophic results, 3. The loss must be measurable, 4. The loss must be
significant, 5. The loss must be accidental and unintended.
Probability - ANSWERMeasures the chance of an event occurring, it is the measure of
uncertainty (risk).
Law of Large Numbers (Law of Averages) - ANSWERMathematical principle that
makes it possible to predict future losses based upon prior experience.
Spread of Risk (Geographic Dispersion) - ANSWERAlso used to decrease loss
probability. This process involves spreading the company's policies (exposures) over
,a broad geographical area in order to avoid large losses in the vent of a catastrophic
event. An example is a hurricane.
Adverse Selection - ANSWERAdverse selection occurs when insureds with a high risk
of loss attempt to purchase insurance and are successful in obtaining insurance.
Perils - ANSWERAre the actual cause of loss such as a fire, theft, wind, hail, etc.
Hazards - ANSWERIncrease the probability of a peril occurring. Bald tires on an
automobile increase the chance of a wreck happening. The tires are the hazard, the
wreck is the peril.
Property Insurance - ANSWERIndemnified (repays) a person or business with an
interest in the physical integrity of tangible property for its loss or the loss of income
produced by that property.
Casualty Insurance - ANSWERProvides protection to meet the unexpected costs
imposed by law due to acts that have caused bodily injury or property damage to
another individual. Included isn't he field of casualty (liability) insurance are
automobile, crime and surety bonds.
Private or Voluntary Insurance - ANSWERPortion of the insurance industry where
individuals seek coverage to meet recognized needs. These coverages are neither
required nor made available by government. An example would be collision
insurance in a personal automobile insurance policy.
Social Insurance - ANSWERPrograms either required or made available by
government.
Reinsurance - ANSWERFiled of the industry where insurers sell portions of their
individual contracts of insurance to other companies. This activity helps with the
spread of risk and/or improves cash positions by lowering reserve requirements for
these contracts. Insurance companies also purchase reinsurance to protect
themselves in case of catastrophic losses.
Capital Stock Companies - ANSWERProprietary companies that are in business to
make a profit for their stockholders. These companies are owned by stockholders
who retain management responsibility through the selection of a Board of Directors.
Profits are paid to the stockholders in the form of a commercial stock dividend that
is fully taxable to the stockholder.
Mutual Insurance Companies - ANSWERAre owned by their policyholders. Each
policyholder "owns" a part of the company equal to their proportionate share of the
company's total insurance in force. The policyholders select a board of directors who
appoint officers to be in charge of the company's daily operations. Operating
surpluses of these companies may be returned to their policyholders in the form of a
, non-taxable policy dividend. The dividend is non-taxable because it is a return of
premium (the company charged too much).
Reciprocal (Assessment) Companies - ANSWERAre non-incorporated associations of
individuals or businesses (subscribers) who engage in cooperative insurance. Each
policyholder is insured by all other policyholders and each policyholder insures the
others as coverage is exchanged on a reciprocal basis. Two important facts to
remember about reciprocals are: 1. Managed by Attorney-in-Fact (not necessarily a
lawyer), 2. The Attorney-in-Fact can assess the policyholders for additional premiums
if underwriting losses jeopardize financial solvency.
Domestic Companies - ANSWERCompanies organized in this state.
Foreign Companies - ANSWEROrganized in another state.
Alien Companies - ANSWEROrganized in another country.
Certificate Of Authority - ANSWERWhen authorized by the state and become known
as an Admitted or Authorized company.
Non-Admitted or non-authorized companies - ANSWERFor basic understanding,
property, casualty and personal lines insurance agents are not permitted to
represent or place insurance with non-admitted companies.
Independent Agency System - ANSWERSystem in which an agent may represent
more than one insurance company in the marketing of property and liability
insurance products. Independent agents own the business and they retain all rights
to the accounts they have placed with a company.
Direct Writers - ANSWERUse captive or exclusive agents or employees in the sale of
property and liability insurance products. Agents or employees can only represent
that particular insurance company.
Agents - ANSWERRepresentatives of the insurer. Agents must be licensed with the
state to legally conduct insurance transactions. Agents receive their authority to
operate on behalf of the company by the agency contract and by an appointment.
Property Casualty and Personal Lines Agents - ANSWERMay be given "binding"
authority. A binding premium receipt (binder) is temporary evidence that insurance
is in effect without condition.
Binder - ANSWERTemporary evidence that insurance is in effect without condition.
Binders may be written or oral. Oral binders must be replaced by a written binder as
soon as possible. The binder provides coverage until the policy arrives.
Brokers and representatives - ANSWERThey "shop the market" on behalf of their
clients and obtain coverage best fills the client's needs. In order to obtain a broker's
