North Carolina Adjuster Practice Exam

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Study for the North Carolina Adjuster Exam with confidence! Our quiz features multiple-choice questions, useful hints, and detailed explanations to ensure you are well-prepared for your upcoming exam.

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How much will BB Mart have to pay out-of-pocket after Andrea's injury if awarded $375,000 with policy limits of $300,000?

0
75,000
300,000
375,000

The correct answer is: 75,000

In this scenario, BB Mart is facing an award of $375,000 for Andrea's injury but has policy limits set at $300,000. This means that the insurance coverage will pay up to the maximum limit of $300,000, and anything exceeding that limit must be covered out-of-pocket by BB Mart. Given that the award exceeds the policy limits, the insurance will only cover the $300,000. Therefore, to determine how much BB Mart has to pay out-of-pocket, you subtract the policy limit from the awarded amount. So, $375,000 (total award) - $300,000 (policy limit) results in an out-of-pocket expense of $75,000 for BB Mart. This illustrates how insurance limits dictate the maximum payout under a policy, leaving the insured responsible for any awarded amounts that exceed those limits.