N.C. CLAIMS ADJUSTER EXAM

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N.C. CLAIMS ADJUSTER EXAM

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -100 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation

Question 1: Certificate Of Authority

Answer:

When authorized by the state and become known as an Admitted or Authorized company.

Question 2: Exclusions

Answer:

These list what perils are not covered. Exclusions tend to be those things considered uninsurable.

Question 3: After Market Parts

Answer:

An after market part is any part made by a non original manufacturer.Question 4: Agent, Adjuster or Insurer's Representative shall:

Answer:

• Identify himself or herself and his or her occupation; and
• Provide his or her National Producer Number and the Department's website address and phone

number for verification of licensure status when requested to show proof of licensure.

Question 5: Responsibilities of Agents and Companies

Answer:

• Agents deal with their clients in a fiduciary capacity. A fiduciary relationship develops when an

individual places trust in someone else to perform certain duties or actions. This is particularly true in the insurance business when an agent accepts money from the client to purchase or pay for a policy. The agent who diverts this money for their own use will be guilty of theft or embezzlement. Agents who perform their duties in an acceptable manner are not liable for contracts entered into on behalf of their principal. An agent can, however, be held personally liable for certain contracts when:

• The agent has breached their authority,
• The agent represents an incompetent principal,
• The agent commits a civil tort or a crime.

2. An agent's duties to the principal (insurance company) include:

• Loyalty,
• Obedience,
• Use of reasonable care,
• Accurate accounting,
• Communication of information held by the agent to the company.
• Even without intent, it is possible for an agent to make an error or an omission through negligence or

lack of knowledge.

Question 6: Perils

Answer:

Are the actual cause of loss such as a fire, theft, wind, hail, etc.

Question 7: Policy Form/Number

Answer:

Identifies the type of coverage purchased (policy form) and the policy number for the particular policy purchased by the insured.

Question 8: Brokers and representatives

Answer:

They "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, the individual must have a valid agent's license and post a bond of not less than $15,000 in favor of the State of North Carolina.

Question 9: Change of Name

Answer:

Must be communicated to the Commissioner within 30 days.

Question 10: Standard Fire Policy - SFP

Answer:

This policy was the first property insurance policy that was standardized by law. Named Peril policy insuring against direct losses caused by fire, lightning and removal of property to protect it from further damage and Proximate Cause meaning an unbroken chain of events leading from "cause" to "effect".

Question 11: Property Insurance - Direct Loss

Answer:

Actual monetary loss caused by the physical damage to or destruction of tangible property.

Question 12: Change of Residency

Answer:

Must be communicated to the Commissioner within 10 business days.

Question 13: Spread of Risk (Geographic Dispersion)

Answer:

Also 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.

Question 14: Misrepresentation

Answer:

Simply, this is a lie regarding material information.

Question 15: Disclosure Authorization Form

Answer:

Grants permission for the insurance company to obtain and/or release specified non-public information.The maximum effective time period for this authorization in property and casualty insurance is 12 months.

Question 16: Agents

Answer:

Representatives 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.

Question 17: Law of Large Numbers (Law of Averages)

Answer:

Mathematical principle that makes it possible to predict future losses based upon prior experience.

Question 18: Commissioner of Insurance responsibilities

Answer:

• Assure that insurance laws are adhered to by all parties. The Commissioner or his/her Deputy has

the power to issue subpoenas and/or administer oaths. To assure adherence to the law, the Commissioner may institute civil actions or criminal prosecutions through the Attorney General.

• Monitor the financial stability of admitted companies through the review of their annual financial

statements.

• Provide assurances that companies and agents are competent to conduct the business of insurance.
• Regulate unfair trade and claims practices.
• Approve both rates and forms for insurance marketed in this State. The Department will make

available for public inspection the rates and deviations for residential and non-fleet (personal) automobile coverage. 6. All examinations or investigations may be conducted by the Commissioner personally or by someone appointed by the Commissioner. Any examination and/or hearing must be preceded by at least 10 days prior to written notice to all parties. 7. The Commissioner may suspend an agent's or adjuster's license prior to a hearing if the Commissioner believes such action is necessary to protect the publish health, safety or welfare. Revocation of authority can only be done after a hearing or conviction in court of violating insurance laws.

Question 19: Occurrence Date

Answer:

Date of which the loss occurred

Question 20: Open peril (All Risk)

Answer:

Will insure against all perils unless they are specifically excluded from the coverage. Therefore, the burden of proof lies with the insurer to demonstrate that the loss was caused by an excluded peril.Special means Open peril.

Question 21: Identification of parties involved

Answer:

The 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).