North Carolina Adjuster License Practice Exam Questions with Answers 2024 GRADED A+, Exams of Public Policy

Download North Carolina Adjuster License Practice Exam Questions with Answers 2024 GRADED A+ and more Exams Public Policy in PDF only on Docsity! North Carolina Adjuster License Practice Exam Questions with Answers 2024 GRADED A+ Manny is purchasing a Commercial Property policy with a Business Income form included. Manny can select from any of the following as a method to provide coverage, while avoiding the coinsurance requirement, EXCEPT: - SOLUTION The maximum monthly limit of indemnity optional coverage The traditional definition of actual cash value (ACV) is: - SOLUTION Replacement cost minus depreciation Sam and Dan are working to clean out the gutters around the roof on Sam's house. Sam and Dan are standing at the top of separate ladders that are propped against the side of Sam's house, when Dan's ladder begins to wobble and ultimately falls into Sam's ladder. Both men and their ladders crash to the ground. Whose injuries will be covered by Sam's Homeowners policy under Coverage E - Personal Liability? - SOLUTION Only Dan's injuries would be covered Torts that can be covered by insurance policies include all of the following, EXCEPT: - SOLUTION Intentional torts purposely committed to cause harm to another. The insured has a $1,000,000 personal umbrella policy with a $5,000 retention limit. For a $7,000 liability loss not covered under the insured's personal auto policy, but covered under the umbrella policy, the insurance company would pay: - SOLUTION $2,000 All of the following is considered an "insured" under a CGL policy, EXCEPT: - SOLUTION Lawyers of the named insured What specific type of liability policy gives an owner protection against liability claims arising out of the acts of its independent contractors? - SOLUTION Owners and Contractors Protective Liability Policy. Which of the following would be eligible for coverage under a Businessowners policy? - SOLUTION A small retail store Which of the following is NOT a correct statement in determining the cost of a "comparable automobile" when a physical damage loss has a occurred? - SOLUTION The cost of a comparable automobile as determined by a computerized automobile valuation service that produces statistically valid fair market values within the United States market All of the following statements are TRUE of North Carolina automobile liability policies, EXCEPT - SOLUTION If the insured carries limits greater than the minimum financial responsibility limits required by state law, they are not required to carry Uninsured/Underinsured Motorists coverage. The basic limit for Coverage F -- Medical Payments of the standard Homeowners forms is: - SOLUTION $1,000 per person Oliver Dogwood was in an auto accident which destroyed his car. While investigating the accident, Adjuster Doright found that Mr. Dogwood paid $1,000 for the vehicle. After checking with others he found the same vehicle with an asking price of $1,700, a retail price of $2,150 and a dealer price of $1,750. What amount will Mr. Dogwood receive? - SOLUTION $2,150 When a claims representative is collecting information from a third-party claimant, which of the following is the information that should be obtained first? - SOLUTION The nature and extent of the injuries or property damage claimed. The Business Auto uses Symbol 7 to cover "specifically described autos" identified in the declarations. An auto acquired during the policy period will only be covered: - SOLUTION If the insured insures all of their vehicles with the company or it replaces a covered auto.. What coverage under the BOP automatically applies if a customer slips and falls on the named insured's premises, regardless of legal liability? - SOLUTION Medical expense coverage When an insurer is called upon to defend a suit under a CGL policy, the amount that can be paid for the defense costs is: - SOLUTION Not limited Under a standard HO-3, the limit for Coverage C -- Personal Property for a one or two-family dwelling: - SOLUTION Is set at 50% of Coverage A Which of the following flood zones show a "flood depth" instead of a "base flood elevation" on a FIRM? - SOLUTION AO North Carolina law stipulates that buildings located within the state that are covered under a Fire policy and suffer a total loss, the insurance company: - SOLUTION Is not liable to pay amounts beyond the actual cash value of the insured property at the time of the loss or damage Which of the following is generally not considered to be a legal defense against claims of negligence? - SOLUTION The loss to the plaintiff was caused intentionally by the defendant. . All of the following are true regarding the "Write Your Own" program of the NFIP, EXCEPT: - SOLUTION Insurers are required to participate in the program How are death benefits calculated for an employee who has died as a result of a work related incident? - SOLUTION 66 2/3% of the employee's average weekly wage for 500 weeks Sharon's North Carolina home is covered under a Homeowner's policy with a "Refrigerated Property Coverage" endorsement attached. She stores large amounts of expensive meats in her freezer at any given time. One morning, she doesn't hear the low hum of her freezer motor. When she opens her freezer door, she finds that the freezer is no longer cold and all of her meat has spoiled. Sharon collects her receipts and finds that the price of the spoiled meat totals $658 and she submits a claim for this loss. How much will her insurer pay? - SOLUTION $500 Which of the following terms does NOT apply to workers compensation coverage in North Carolina? - SOLUTION Temporary sick leave with benefits Coverage D - Loss of Use on the Homeowners forms provides coverage for "Civil Authority Prohibits Use" for: - SOLUTION No more than two weeks All of the following statements are TRUE of the terms used in the standard workers' compensation policy, EXCEPT: - SOLUTION "State" means any state of the United States, the District of Columbia, and all territories and possessions. Under the comprehensive coverage of a Business Auto policy, which of the following would not be a covered loss? - SOLUTION After sliding on an icy pavement, a driver hits a guard rail. The Insurance Information & Privacy Protection Act (IIPPA) requires insurers to conform to all of the following standards, EXCEPT: - SOLUTION Give reasonable notice for policy renewal and other policy changes.. The Section I Additional Coverage of the standard Businessowners policy provides coverage for "Debris Removal". Which of the following statements best describes the limit for this coverage? - SOLUTION The total limit may be up to 25% of the policy limit for the loss payable with the deductible included, plus up to an additional $25,000 if the policy limits are exhausted When would the Personal Auto policy respond to a loss with an all-terrain three-wheeled vehicle? - SOLUTION When used in an emergency situation Sarah is shopping at a grocery store and wants to purchase a bottle of juice. The aisle is marked off with a rope awaiting the clerk to clean up a previously broken bottle and spill on the floor. Sarah moves the rope to get the item and slips and falls on the floor, cutting her face on the scattered glass. Which of the following would be the defense that the insurance company would most likely use in this situation? - SOLUTION Assumption of risk and contributory negligence on the part of the customer All of the following are excluded under the 1943 Standard Fire policy, EXCEPT: - SOLUTION The theft of property after it had been removed from the insured premises to protect it from further loss.. Which of the following statements is NOT TRUE regarding the "period of restoration" for Business Income and Extra Expense coverage? - SOLUTION The period of restoration ends when the policy period ends Fidelity bonds are used to cover: - SOLUTION Employee dishonesty Violating a cease and desist order issued by the North Carolina Commissioner after finding a violation of the Unfair Practices will result in a a monetary fine of: - SOLUTION A sum of not less than $1,000 nor more than $5,000 for each violation A licensee, for the second time, does not maintain records of insurance transactions as prescribed by the North Carolina Commissioner. He/she will: - SOLUTION Have their license suspended or revoked for a one year period Which of the following endorsements can be attached to the Business Auto policy to extend coverage to individuals such as the owner of the business who does not carry personal auto insurance? - SOLUTION Drive Other Car endorsement Under the "Money Orders and Counterfeit Money" insuring agreement of a standard Commercial Crime form, all would be covered, EXCEPT: - SOLUTION Taking a forged check from a customer in exchange for merchandise.. Which of the following statements is TRUE regarding nonwaiver agreements and reservation of rights letters? - SOLUTION 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: - SOLUTION 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: - SOLUTION 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? - SOLUTION $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 application for coverage requires a 30-day waiting period before coverage applies. . What is an administrator's bond? - SOLUTION 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? - SOLUTION 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? - SOLUTION October 7th A blanket employee dishonesty bond will: - SOLUTION Does not name the individuals. Under what circumstances does an insurer allow the transfer of an insured's rights and duties under a Commercial Package Policy without the permission of the insurer? - SOLUTION When the named insured dies An insured has purchased a DP-3 policy to cover his dwelling that is valued at a replacement cost of $100,000. He insures it for $60,000 and later suffers a $30,000 fire loss. Which of the following amounts will be paid by the policy (if no deductible form is attached)? - SOLUTION $22,500 The insuring agreements of an Equipment Breakdown policy, provides coverage for: - SOLUTION First party coverages and property damage to property of others If the insured, covered under a Homeowners policy, suffers the loss of an article that is part of a pair or set. All of the following are options for the insurer to settle the loss, EXCEPT: - SOLUTION Pay for the replacement cost of the entire pair or set When someone dies without a will, their assets will be handled by a court appointed: - SOLUTION Administrator. Emily owns a home that she has covered under a Homeowners policy. Because Emily lives alone, she had to leave her home and stay with her parents for the past six months while she recovers from major surgery. Except for the day-to-day items that Emily needs while she stays at her parents' home, all of her other belongings are still located in her home. Which of the following best describes the condition of Emily's home? - SOLUTION Unoccupied The insured carries a yacht policy. One of the crew members is injured while performing a work related task. What coverage must be added under the policy that would respond to cover the crew member's injuries? - SOLUTION Jones Act In most states, which of the following most accurately describes an "admitted insurer"? - SOLUTION An insurer that can transact insurance in the state under a certificate of authority The wording of the Standard Fire policy is so vague that many insurers have to rely on __________ to take a position on the acceptance or denial of a claim. - SOLUTION Case law Under the North Carolina personal automobile policy, the number of days an insured has to report a newly acquired vehicle to the insurer is: - SOLUTION 30 days The additional coverage of the Commercial Property cause of loss forms known as the "Limited Coverage for Fungus, Wet Rot, Dry Rot, and Bacteria" provides: - SOLUTION $15,000 coverage for all occurrences within a 12-month period The broad and special dwelling forms (DP-2 and DP-3) will provide replacement cost coverage for buildings if the amount of insurance written on the building is at least: - SOLUTION 80% of the full replacement cost at the time of the loss Under a Businessowners policy, the "Hired and Nonowned Auto Liability" endorsement would cover: - SOLUTION Vehicles borrowed by the insured Which of the following coverage endorsements under commercial crime and bonding would cover an ATM machine? - SOLUTION Automated Teller Machine Coverage Which part of an insurance policy sets the rules of conduct, duties, and obligations of the insured and insurer under the terms of the insurance contract? - SOLUTION Conditions The condition "Legal Action Against Us" in a CGL policy requires the insured to: - SOLUTION Comply with all of the terms of the policy Which of the following is NOT one of the three main (general) coverages of the Building & Personal Property coverage form? - SOLUTION Property damage liability coverage A typical boatowners policy includes all of the following coverages EXCEPT: - SOLUTION When used to carry cargo for others for a fee The Coverage C - Uninsured Motorists coverage of a standard, unendorsed Personal Automobile policy applies to all of the following, EXCEPT: - SOLUTION Property damage sustained by the insured vehicle by an uninsured vehicle Which of the following is not a subject for supplementary payments under a CGL policy? - SOLUTION Expenses for first aid at the time of an accident. Which of these statements best describes "the law of agency?" - SOLUTION A relationship in which someone is authorized by contract to represent another party.. In connection with the bonding business which of the following statements is NOT true? - SOLUTION A surety bond protects the principal from sustaining a loss. The North Carolina Insurance Code has established a penalty for willfully making false statements in a financial statement. The violator is considered: - SOLUTION Guilty of a Class I felony and can be subject to a fine of not less than $2,000, nor more than $10,000 To be eligible for coverage under a standardized Dwelling policy, the insured must not allow more than _______ boarders to live on the premises. - SOLUTION 5 Jeff has his 1974 Pontiac Firebird Trans-Am SD-455 covered under a standardized personal automobile policy. He has had a full restoration done to both the interior and exterior of his muscle car and he can't wait to show it off. When Jeff's buddy Dale sees the car, he challenges Jeff to race against him in his 1971 Chevy Camaro SS350. Jeff accepts the challenge and the two men set a date for the following week. The following week, many people find out about the race and come out to watch on race day. Shortly after the race begins, Jeff loses control of his car when a tire blows out and he swerves into the crowd of people watching the race, injuring several. He is sued for bodily injury. Which of the following statements best describes how Part A of Jeff's personal auto policy will cover the costs to defend the claims against Jeff? - SOLUTION The insurer will not defend against the claim because it is not covered under the policy Coverage for all reasonable expenses incurred by an insured in order to continue as nearly as practicable the normal operation of his/her business after a loss is: - SOLUTION Extra Expense Coverage. All of the following statements are TRUE about Workers Compensation benefits, EXCEPT: - SOLUTION Waiting periods apply to medical and disability benefits. All of the following are exceptions to the workers' compensation exclusive remedy, EXCEPT: - SOLUTION An on-the-job injury caused by worker fatigue from working an excessive number of over-time hours.. Under a Business Auto policy, which coverage symbol indicates that a car is subject to mandatory no-fault insurance as required by state law? - SOLUTION 5 Philip has several vehicles that are all covered under Personal Automobile policies. He has several acres of land with a barn and chicken coup on the property. To drive around on the acreage, Philip has a very old truck that is not licensed or insured. One afternoon, Philip is driving out to check on his cows when he hits a rut and his head slams down on the steering wheel, injuring him severely. How will Part B - Medical Payments provide coverage for Philip's injuries? - SOLUTION Bodily injury sustained while occupying an uninsured auto owned by the insured is excluded under Part B, therefore no coverage would apply An insured who would like to cover an employee while driving their own car on company time would need which of the following endorsements? - SOLUTION Employees as Insureds endorsement Under the "Emergency Program" in all states except Alaska and Hawaii, the National Flood Insurance Program will insure a single-family residence for up to: - SOLUTION $35,000. Which of the following statements is true about the Standard Fire Policy? - SOLUTION Standard Fire Policy is no longer used in its original format Which of the following Commercial Property cause of loss forms include the additional coverage for "Fungus, Wet Rot, Dry Rot, and Bacterial"? - SOLUTION The basic, broad, and special cause of loss forms.. Homeowners policies cover all of the following, EXCEPT: - SOLUTION A 2-family dwelling occupied by tenants who are renting the covered premises from the named insured.. Alec goes to an amusement park and rides a roller coaster that was designed to flip the riders upside down. Alec is taller than the average person so when the roller coaster flips, he hits his head on the safety bar. After receiving medical care, Alec files a claim against the amusement park, seeking payment for his medical bills, pain and suffering. What defense against negligence would the amusement park most likely use to deny this claim? - SOLUTION Assumption of Risk The insured's business is covered under a jewelers block policy. The owner's wife decides to wear an expensive piece of jewelry to a party that is for sale by the business. In case of a loss, how will the insurer handle the claim? - SOLUTION Deny the claim because of an exclusion.