North Carolina Adjuster Practice Exam

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How much of the damages will be covered by Jane's DP-1 policy after a fire causes $32,000 in damage?

$4,000
$8,000
$16,000
$12,000

The correct answer is: $8,000

To determine how much of the damages will be covered by Jane's DP-1 policy after a fire causes $32,000 in damage, it’s important to understand the specifics of a DP-1 policy, which is a type of dwelling policy in North Carolina. The DP-1 policy generally provides coverage on a named perils basis for specific types of damage, and the payout is limited to the terms set forth in the policy. Assuming Jane's DP-1 policy has specified coverage limits or deductibles, the $8,000 coverage could reflect the application of a deductible or a limit specified in the policy. For example, if the policy includes a deductible of $24,000 on fire damage or only covers a certain percentage of the damages, after applying these factors, Jane may potentially receive $8,000. This amount serves as the covered portion after accounting for the specifics of policy details such as those limitations. Understanding how different policies operate under various scenarios will help in accurately determining what is covered in specific damage situations like Jane's.