NC ADJUSTER LICENSE EXAM AND PRACTICE EXAM

NC ADJUSTER LICENSE EXAM AND PRACTICE EXAM

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CORRECT DETAILED ANSWERS (VERIFIED ANSWERS)

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Which of the following statements is TRUE regarding nonwaiver agreements and reservation of rights letters? - ANSWER- The are used only with first-party claimants to protect the rights of insureds and insurers.

All of the following are reasons that an adjuster should keep very detailed log

notes, EXCEPT: - ANSWER- To produce notes that will support a fraudulent

denial of claims.

All of the following are excluded under the Commercial Building and Personal

Property form, EXCEPT: - ANSWER- Furniture and fixtures

An insured carries property insurance with a limit of $25,000 and an 80% coinsurance requirement. The covered building, however, is worth $40,000. How much would she collect in the event of a total loss? - ANSWER- $25,000.

A guest on vacation deposits cash and traveler's checks in the hotel safe deposit box located behind the front desk. When the guest attempts to retrieve them, the box is empty. What coverage is required to cover this loss for the hotel? - ANSWER- Guests property

Public adjusters: - ANSWER- Adjust first-party property loss claims.

The custom farming endorsement is usually attached to a farmowners policy when

receipts exceed: - ANSWER- $5,000 1 / 4

Which of the following statements is correct regarding pollution coverage under the special cause of loss form of a Commercial Property policy? - ANSWER- It is excluded unless it was caused by a covered peril

With respects to insurers writing auto coverage in the North Carolina, which of the following is true regarding the North Carolina Motor Vehicle Reinsurance Facility? - ANSWER- All insurance companies writing auto coverage must participate in this program

Underground gasoline tanks on an insured's property leak damaging the property next door. Which policy would pay for clean up? - ANSWER- Pollution Liability endorsement

The insured is liable for $500,000 in damages for a personal injury claim that is covered under the insured's primary liability policy. The primary liability policy has a $300,000 limit per occurrence. The insured also has a $1 million Umbrella policy with a $3,000 self-insured retention limit. How would this claim likely be settled? - ANSWER- The primary policy would pay $300,000 and the Umbrella policy would pay $200,000

A customer has eaten seafood in a restaurant and became very ill while still in the restaurant. What type of CGL claim is this? - ANSWER- Products Liability

All of the following statements are true regarding a Personal Umbrella policy,

EXCEPT: - ANSWER- The policy can be written as a monoline policy

Which of the following would be considered "economic losses" that could result in compensatory damages being awarded in a negligence case? - ANSWER- Medical expense and lost wages 2 / 4

Farm liability coverages include each of the following, EXCEPT: - ANSWER-

Professional liability

Which of the following statements about the Standard Fire Policy is correct?

• A covered fire must be hostile, not friendly.

II. Lightning includes artificially generated electrical current. - ANSWER- I only

Gavin operates a small manufacturing plant and is covered under a Commercial Property Business Income form. Under which of the following scenarios will Gavin be covered? - ANSWER- His loss of profit while out of business as a result of a fire loss

The retroactive date on a claims-made CGL form specifies: - ANSWER- That

losses occurring before the date will not be covered by the policy.

A leased vehicle is considered to be a covered auto under the personal auto policy

(PAP) if it is a private passenger auto leased for at least: - ANSWER- 6

consecutive months

An insured's boat is struck by another boat. He and his family are injured. His boat sinks because of the damage. An investigation determines that the party that caused the accident is not insured. If the insured carries a watercraft policy, what coverages would apply? - ANSWER- Uninsured boater's coverage and hull insurance

Mark is injured at work in a state that provides a TTD benefit at 66 2/3%, the state minimum is $40 and the state maximum is $540. The waiting period is 3 days and the retroactive period is 15 days. Which of the following is Mark's TTD benefit if he earns $20 per hour and usually works a 40-hour week. Mark is injured on July 3 / 4

14th and does not return to work until September 3rd. Which of the following is the amount of TTD benefit he would have received? - ANSWER- $3,809.50.

Mr. Vickers lives close to a river that has, on occasion, flooded. On Friday morning he is watching the weather station and notes that there is a flood warning in his area. He calls his agent and asks the agent to bind flood coverage immediately. Which of the following is true? - ANSWER- The application for coverage requires a 30-day waiting period before coverage applies. .

What is an administrator's bond? - ANSWER- A bond required by the court of the administrator of the estate of the deceased

Section II of the Business Auto policy provides the details of the insurer's "duty to defend" the insured in a lawsuit. This duty is more broad than the insurer's responsibility to pay any damages for which the insured is liable. Which of the following describes this broadened duty on the BAP? - ANSWER- The BAP "duty to defend" extends to providing a defense against fraudulent claims. .

Spencer is covered under a standard Personal Automobile policy with a policy inception date of October 15th. Additionally, the policy will expire on October 15th of the current year. Spencer contacts his agent on October 7th and asks to have an new endorsement added to his policy. The agent agrees, adds the coverage the same day, and informs Spencer that there will be an additional premium of $20 per month charged. When will the adjustment of premium be effective for Spencer? - ANSWER- October 7th

A blanket employee dishonesty bond will: - ANSWER- Does not name the

individuals.

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