North Carolina Insurance Adjuster Practice Test

Answer choices

1. A. Failure to invoke appraisal automatically.
2. B. Failure to obtain a police citation in every claim.
3. C. Failure to pay replacement cost, even though coverage has not been determined.
4. D. Failure to acknowledge and act reasonably promptly upon communications with respect to claims.

Wrong-answer review

• A. Failure to invoke appraisal automatically.: Appraisal is a dispute mechanism, not a substitute for communication standards.
• B. Failure to obtain a police citation in every claim.: There is no universal requirement to obtain a citation for all claims.
• C. Failure to pay replacement cost, even though coverage has not been determined.: The stated problem is communication handling, not valuation.

Answer choices

1. A. Ignore vehicle condition because only driver speed can create liability.
2. B. Pay immediately because mechanical failure eliminates negligence — assuming vehicle condition and maintenance history can be ignored once a collision has occurred.
3. C. Deny immediately because any mechanical failure voids commercial auto liability.
4. D. Preserve and analyze the maintenance evidence and obtain a competent mechanical inspection to determine the failure and any negligence.

Answer choices

1. A. Deny without reading the endorsement because all basement water is excluded — assuming any basement water loss falls under the water-backup endorsement without establishing the actual source and applying its separate limit.
2. B. Pay under Personal Liability because the pump malfunctioned.
3. C. Treat the loss as ordinary flood solely because water entered the basement.
4. D. Apply the water-backup endorsement because NCDOI describes this loss as not covered by the base homeowners policy but available by endorsement.

Answer choices

1. A. Pay the base policy's entire Coverage C limit without checking the schedule.
2. B. Ignore the endorsement because the base form always controls over later policy changes.
3. C. Read the endorsement with the base policy because the endorsement modifies the original terms for the scheduled item.
4. D. Treat the watch as uninsured because jewelry can never be covered by homeowners insurance.

Answer choices

1. A. That the adjuster purchases a North Carolina homeowners policy.
2. B. Nothing; any out-of-state adjuster may work indefinitely after any storm — treating a job title, insurer instruction, prior license, or different license class as sufficient North Carolina authority for the adjuster act described.
3. C. That the emergency-adjuster conditions in G.S. 58-33-70 and the Commissioner's permission/notice process are satisfied.
4. D. Only that the adjuster has a driver's license.

Answer choices

1. A. It is a coverage exclusion that makes the entire $18,000 loss uninsured.
2. B. It is the portion of the covered loss retained by the insured, leaving $16,000 payable by the insurer.
3. C. It is a policy limit that caps all future claims at $2,000.
4. D. It is an amount the insurer pays separately to the insured before repairs begin.

Answer choices

1. A. Increase the policy limit to match total payments after the fact — assuming a conclusory claim decision is adequate even when the facts and specific policy provision supporting it have not been communicated.
2. B. A closing summary that reconciles coverage, valuation, every payment, remaining obligations, and any salvage or subrogation status.
3. C. Delete prior estimates to prevent confusion.
4. D. Only a one-word notation 'closed.'

Answer choices

1. A. Collision, because the hailstones physically struck the vehicle — treating fault or the fact of physical contact as dispositive of first-party collision coverage before the Part D grant, deductible, and exclusions are applied.
2. B. Liability, because weather is legally responsible for the dents.
3. C. Other-than-collision, because hail is expressly listed as a comprehensive cause of loss.
4. D. Uninsured Motorist, because no insured driver caused the damage.

Answer choices

1. A. Use the umbrella limit because the loss is large.
2. B. Pay the building limit first and treat stock as CGL — treating the commercial package as a single undifferentiated limit rather than matching each loss to its property, time-element, crime, or liability part.
3. C. Inventory and value each damaged category under the coverage part and limit that actually insures it.
4. D. Combine all damage under whichever single limit is highest.

Answer choices

1. A. A second deductible equal to the depreciation withheld.
2. B. The recoverable depreciation/additional RCV amount under the policy, limited by the covered replacement cost actually incurred and other terms.
3. C. An automatic payment up to the full policy limit regardless of actual covered cost — assuming a selected dollar figure controls even when the issued valuation provision and supporting documentation require a different settlement method.
4. D. Conversion of the claim to ACV because repairs were completed.