Free South Carolina Claims Adjuster Practice Exam Online

Correct answer: B. The insurer's right, after paying a claim, to step into the insured's shoes and pursue recovery from the at-fault third party

Correct. Subrogation is the legal principle allowing an insurer, after indemnifying its insured for a covered loss, to pursue recovery of that payment from the third party responsible for causing the loss, effectively standing in the insured's place.

• A: Incorrect. Bad faith litigation is a separate legal concept concerning how the insurer handled the claim, not subrogation.
• C: Incorrect. Actual cash value calculation is a valuation method, unrelated to the subrogation recovery process.
• D: Incorrect. Reassigning a claim file to a different adjuster is an internal claims-handling administrative action, not subrogation.

Correct answer: B. A minimum $20,000 surety bond or irrevocable letter of credit

Correct. S.C. Code Ann. § 38-92-100 requires a public adjuster to secure evidence of financial responsibility, in the form of a minimum $20,000 surety bond or an irrevocable letter of credit, before licensure and for the duration of the license.

• A: Incorrect. $5,000 understates South Carolina's statutory minimum for public adjusters.
• C: Incorrect. Unlike Chapter 91 insurance adjusters (who have no bonding requirement), public adjusters under Chapter 92 are specifically required to maintain financial responsibility.
• D: Incorrect. South Carolina does not require a cash deposit of this kind; the statute authorizes a surety bond or irrevocable letter of credit, not a direct cash deposit with the director.

Correct answer: B. 30 days' notice of termination

Correct. Under S.C. Code Ann. § 38-92-100, a public adjuster's bond or letter of credit continues in force until terminated, and termination requires 30 days' notice; the bond or letter also terminates automatically upon impairment.

• A: Incorrect. The bond cannot simply lapse without advance notice; § 38-92-100 requires an affirmative notice period before termination takes effect.
• C: Incorrect. South Carolina does not require newspaper publication of bond termination notice; the requirement is a defined notice period, not public notice by publication.
• D: Incorrect. Immediate termination at the surety's mere request is not permitted; the statute requires the 30-day notice period to run first.

Correct answer: B. South Carolina requires both company/independent adjusters adjusting losses on behalf of an insurer (Title 38, Chapter 91) and public adjusters representing insureds (Title 38, Chapter 92) to be separately licensed

Correct. South Carolina licenses two distinct adjuster categories: insurance adjusters who adjust losses on behalf of an insurer or self-insurer under Title 38, Chapter 91 (S.C. Code Ann. § 38-91-20), and public adjusters who represent insureds under Title 38, Chapter 92 (§ 38-92-20). This is a broader licensing scope than states that license public adjusters only.

• A: Incorrect. South Carolina is not a public-adjuster-only state like Colorado or Missouri. S.C. Code Ann. § 38-91-20 separately requires individuals and business entities adjusting losses for an insurer or self-insurer to be licensed as insurance adjusters, in addition to the public adjuster licensing requirement in Chapter 92.
• C: Incorrect. There is no dollar-value threshold that triggers the licensing requirement; the requirement applies based on the adjuster's role, not the size of the claim.
• D: Incorrect. South Carolina does impose licensing requirements on adjusters; both the insurance adjuster and public adjuster chapters were substantially rewritten and re-enacted by Act 209 (S.196), effective May 19, 2026.

Correct answer: C. Until the close of business on the fifth business day after signing

Correct. S.C. Code Ann. § 38-92-130 gives the insured until the close of business on the fifth business day after signing the contract to rescind it by providing written notice (mailed, emailed, or delivered) to the public adjuster.

• A: Incorrect. 24 hours is shorter than South Carolina's statutory rescission window.
• B: Incorrect. 72 hours is the rescission period used in some other states (such as Colorado), not South Carolina's public adjuster contract rescission period.
• D: Incorrect. 30 calendar days significantly overstates South Carolina's rescission period, which is measured in business days, not weeks.