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North Carolina Public Adjuster Practice Exam

20 exam-style questions drawn from the same bank as our full North Carolina Public Adjuster course (North Carolina Public Adjuster — Exam Prep). Answer all 20, then grade yourself — most state exams require 70% to pass. Explanations for every question are part of the full course.

1. Why is a large manufacturer not written on a BOP?
Large manufacturers simply cannot buy property insurance of any kind in the standard admitted market and must use surplus linesThe BOP program restricts eligibility by size, class, and hazard level; large or high-hazard operations belong on a commercial packageThe businessowners program flatly excludes all manufacturing machinery from covered property, so no plant of any kind can be written on itState insurance law reserves the businessowners policy exclusively for retail-class businesses and bars any manufacturer from it
2. When an insured business drives a hired auto and an accident occurs, the BAP's other insurance rule makes its coverage:
Primary over the vehicle owner's policyShared equally with the owner's policy from dollar oneExcess over the vehicle owner's policyVoid if the owner carries any insurance
3. Which statement correctly distinguishes a partial release from an advance payment?
Both discharge a stated portion of the claim in exchange for considerationA partial release keeps the claim open, while an advance payment closes itA partial release permanently ends a stated portion; an advance ends nothingNeither is enforceable unless the mortgagee also signs the same document
4. Which causes-of-loss form lists the fewest perils?
Broad (CP 10 20)Basic (CP 10 10)Special (CP 10 30)The BPP (CP 00 10)
5. The Scheduled Personal Property endorsement (ISO HO 04 61) provides:
A blanket increase in the overall Coverage C limit that raises every category at onceCoverage for business personal property kept on the residence premises for the insured's tradeAgreed-value, open-peril coverage on listed valuables that overrides Coverage C theft sub-limitsReplacement cost settlement on all household personal property, scheduled or unscheduled alike
6. Which method does NOT reflect how ACV is typically established for a total-loss auto?
Valuation-service reports comparing comparable local vehicles adjusted for mileage, options, and conditionStraight-line depreciation of replacement cost over the vehicle's useful lifeAppraisal under the policy when negotiation failsGuidebook values and dealer quotations
7. A tenant installed custom shelving and lighting it cannot legally remove from the leased space. Under the CP 00 10, these tenant's improvements and betterments are covered as:
Part of the tenant's Business Personal PropertyBuilding property of the landlord onlyPersonal Property of OthersThey are not covered under any CP 00 10 coverage
8. A statutory "total loss formula" declares a vehicle a total loss when:
Repair cost alone exceeds the original sticker priceThe airbags deployed during the loss eventThe vehicle is more than ten years old at the time of lossRepair cost plus salvage value equals or exceeds the vehicle's ACV
9. Under the Business Income coverage form (CP 00 30), the period of restoration begins:
Immediately at the moment the direct physical loss or damage to the property occursOnly once any civil authority order restricting access to the premises is finally liftedAfter a stated waiting period, commonly 72 hours, following the direct lossOnly after the insured files a complete and signed proof of loss with the carrier
10. An insured refuses a properly demanded examination under oath because he finds it intrusive. The usual consequence is:
None, because the examination is discovery available only inside a lawsuitA reduction of the claim by the insurer's cost of the aborted proceedingA material breach of a policy condition that can defeat the claim entirelyA delay in payment while the insurer investigates by some other route
11. On the business auto policy declarations, covered auto symbol 1 designates:
Any autoNon-owned autos onlySpecifically described autosOwned autos only
12. The carrier and the insured agree the SUV is a total loss but cannot agree on its value. Which Part D mechanism resolves the dispute over amount of loss?
The public-or-livery exclusion — it bars coverage while the SUV is used as a livery vehicle and caps the amount the carrier owesThe no-abandonment clause — it bars the insured from abandoning the wreck to the carrier and thereby fixes the value in disputeThe appraisal clause — each party appoints an appraiser, the appraisers select an umpire, and any two agreeing bind as to amountThe betterment clause — it splits the valuation difference evenly between the parties and averages their two figures automatically
13. With split limits of 100/300/50 (thousands), three people are injured in one accident with damages of 120, 80, and 60, plus 40 in property damage. Part A pays:
100 + 100 + 100 for injury and 50 for property damage260 total for injury and nothing for property damage120 + 80 + 60 for injury and 40 for property damage100 + 80 + 60 for injury and 40 for property damage
14. Which statement gives the estimating method hierarchy correctly?
Square foot to settle, line item for magnitude, unit cost for setting reservesSquare foot for magnitude, unit cost for repetitive work, line item to settleLine item for magnitude, square foot for repetitive work, unit cost to settleUnit cost for magnitude, line item for repetitive work, square foot to settle
15. Reserving is described as a solvency obligation because:
Reserves must equal the policy limit until coverage has been confirmedReserves fix the maximum amount the carrier may pay out on the claimRegulators require carriers to hold adequate reserves against known claimsReserves are deposited with a state guaranty fund pending settlement
16. Before contra proferentem can be applied to a disputed provision, the party seeking coverage must first establish that:
The provision appears in an endorsement rather than the base formThe policy was issued more than one year earlierThe provision is reasonably susceptible to more than one meaningThe insurer acted in bad faith during the claim
17. Before scoping any condominium claim, which three documents should be obtained?
The association budget, the reserve study, and the master policyThe unit deed, the closing statement, and the certificate of insuranceThe master policy, the governing documents, and the HO-6 with endorsementsThe appraisal district record, the mortgage note, and the HO-6
18. A manufactured-home policy's built-in transportation/removal coverage pays:
Transit damage occurring anywhere within the policy territory, with no time or distance limit at allThe cost to move the home when endangered by a covered peril, for a modest built-in amount for up to 30 daysCollision and upset damage to the home that is sustained during a permanent, pre-planned relocation to a new siteThe full cost of any voluntary move to a brand-new home site at any point the owner chooses during the term
19. Why does additional living expense require tracking from day one in a wide area catastrophe?
Because displacement costs are excluded until the dwelling is condemnedBecause housing is scarce and costly, so the loss of use limit is consumed fastBecause a carrier may not advance any living expense before settlementBecause the loss of use limit is automatically increased after a disaster
20. Which of the following correctly lists the four elements required for an insurance policy to be an enforceable contract?
Offer and acceptance, consideration, competent parties, legal purposeOffer and acceptance, consideration, notarized signatures, policy deliveryCompetent parties, legal purpose, written form, agent countersignatureConsideration, legal purpose, insurable interest, premium payment

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