ALABAMA ADJUSTER UPDATED TEST PAPER QUESTIONS
AND ANSWERS GRADED A+
✔✔the ring is a pure risk - ✔✔Steve has just purchased a wedding ring for his new
bride. If something were to happen to the ring, he'd be out a lot of money, so he
purchases an insurance policy. He is able to do this because:
✔✔risk - ✔✔when an insurer issues an insurance policy, the actual item, person, or
organization that is being insured is called the:
✔✔Risk Rentention - ✔✔six stars development company has just purchased several
large properties in Las Vegas. As a result of this large purchase They are a little short
on money and decide to save money by not purchasing insurance on their new
properties. Six stars is practicing:
✔✔risk reduction . - ✔✔Jared hopes to purchase a new insurance policy for his car , but
he has an extremely poor driving record . The insurance company decides to issue
Jared an insurance policy , but charges him a premium much higher than the average
driver . The insurance company is practicing :
✔✔Risk equality - ✔✔Which of the following is NOT a risk management technique ?
✔✔Temporary coverage for an insurance applicant until the policy is issued - ✔✔What
is a binder ?
✔✔Estoppel protects the insured party from an insurer who initially approves coverage ,
but then later denies coverage after the insured pays for repairs . - ✔✔Which of the
following statements about the principle of estoppel is TRUE ?
✔✔binder - ✔✔When Sally applies for an auto policy , her agent issues her a ______ so
that she can benefit from insurance protection while he underwrites the policy .
✔✔representations . - ✔✔The factual statements of the insured upon which an
insurance policy is based are called :
✔✔It is the result of an unconscious behavior - ✔✔Which of the following statement
about a moral hazard is FALSE ?
✔✔morale hazard - ✔✔Lucy has insurance on an expensive necklace she likes to wear
to work every day . After work , she takes it off and leaves it in her car's cupholder so
she can put it back on in the morning on her way to work . Lucy's behavior would be
considered a :
, ✔✔The roads present a physical condition that increases the chance of a loss . -
✔✔Adam has a treacherous drive to work every day . Not only does he have to drive
down the pothole - strewn access road to the highway , but he also must traverse
several icy bridges on the way to work . Why does the insurance company call these
hazards " physical hazards " ?
✔✔indirect loss . - ✔✔As Jonathan was driving through an intersection , another driver
ran a red light and crashed into the side of Jonathan's car , which caused significant
physical damage to both vehicles . Jonathan must now rent a car while his is being
repaired . The rental car expense would be considered a / an :
✔✔an indirect loss . - ✔✔Driving home after a 14 - hour shift , Sam falls asleep home ,
causing extensive damage to the East wall and at the wheel and plows into Sandra's
roof . As a result , Sandra and her family must move into a hotel until the repairs are
completed The cost of staying in a hotel is :
✔✔Flora will file a first - party claim for the damage to her car , and Cam will file a third -
party claim for the damage to his billboard . - ✔✔Flora is driving in the rain when she
skids off the road and slams into Cam's billboard , totaling her car and causing $ 2,000
in damage to the billboard Flora has an auto policy with ABC Insurance , and both Cam
and Flora submit claims against this policy for their damages . Which of the following is
TRUE ?
✔✔$ 2,000 - ✔✔James is walking down the street when Andrea , an uninsured motorist
, strikes him with her car . James suffers $ 12,000 in injuries from the accident . He has
personal injury protection of $ 10,000 from his own automobile insurance policy , which
immediately pays him the full amount . By accepting $ 10,000 from his own insurance
company , James has waived the right to sue Andrea for more than ________for
personal injury .
✔✔A woman files an insurance claim when she is injured by an employee at a local bar
. - ✔✔Which of the following is most likely a third party claim ?
✔✔$ 1,900 - ✔✔Kevin has a homeowners policy with replacement cost valuation and a
coverage limit of $ 90,000 for his personal property . Three years ago , Kevin purchased
a sofa and loveseat for $ 1,000 and $ 500 respectively . Both pieces of furniture
depreciate at $ 100 per year . A house fire damaged many of Kevin's belongings ,
including the sofa and loveseat , which now cost $ 1,200 and $ 700 to purchase today .
Ignoring any deductibles , how much will Kevin's insurer give him for the damaged sofa
and loveseat ?
✔✔Actual cash value is always most beneficial to a policyholder . - ✔✔Which of the
following statements regarding actual cash value is FALSE ?
AND ANSWERS GRADED A+
✔✔the ring is a pure risk - ✔✔Steve has just purchased a wedding ring for his new
bride. If something were to happen to the ring, he'd be out a lot of money, so he
purchases an insurance policy. He is able to do this because:
✔✔risk - ✔✔when an insurer issues an insurance policy, the actual item, person, or
organization that is being insured is called the:
✔✔Risk Rentention - ✔✔six stars development company has just purchased several
large properties in Las Vegas. As a result of this large purchase They are a little short
on money and decide to save money by not purchasing insurance on their new
properties. Six stars is practicing:
✔✔risk reduction . - ✔✔Jared hopes to purchase a new insurance policy for his car , but
he has an extremely poor driving record . The insurance company decides to issue
Jared an insurance policy , but charges him a premium much higher than the average
driver . The insurance company is practicing :
✔✔Risk equality - ✔✔Which of the following is NOT a risk management technique ?
✔✔Temporary coverage for an insurance applicant until the policy is issued - ✔✔What
is a binder ?
✔✔Estoppel protects the insured party from an insurer who initially approves coverage ,
but then later denies coverage after the insured pays for repairs . - ✔✔Which of the
following statements about the principle of estoppel is TRUE ?
✔✔binder - ✔✔When Sally applies for an auto policy , her agent issues her a ______ so
that she can benefit from insurance protection while he underwrites the policy .
✔✔representations . - ✔✔The factual statements of the insured upon which an
insurance policy is based are called :
✔✔It is the result of an unconscious behavior - ✔✔Which of the following statement
about a moral hazard is FALSE ?
✔✔morale hazard - ✔✔Lucy has insurance on an expensive necklace she likes to wear
to work every day . After work , she takes it off and leaves it in her car's cupholder so
she can put it back on in the morning on her way to work . Lucy's behavior would be
considered a :
, ✔✔The roads present a physical condition that increases the chance of a loss . -
✔✔Adam has a treacherous drive to work every day . Not only does he have to drive
down the pothole - strewn access road to the highway , but he also must traverse
several icy bridges on the way to work . Why does the insurance company call these
hazards " physical hazards " ?
✔✔indirect loss . - ✔✔As Jonathan was driving through an intersection , another driver
ran a red light and crashed into the side of Jonathan's car , which caused significant
physical damage to both vehicles . Jonathan must now rent a car while his is being
repaired . The rental car expense would be considered a / an :
✔✔an indirect loss . - ✔✔Driving home after a 14 - hour shift , Sam falls asleep home ,
causing extensive damage to the East wall and at the wheel and plows into Sandra's
roof . As a result , Sandra and her family must move into a hotel until the repairs are
completed The cost of staying in a hotel is :
✔✔Flora will file a first - party claim for the damage to her car , and Cam will file a third -
party claim for the damage to his billboard . - ✔✔Flora is driving in the rain when she
skids off the road and slams into Cam's billboard , totaling her car and causing $ 2,000
in damage to the billboard Flora has an auto policy with ABC Insurance , and both Cam
and Flora submit claims against this policy for their damages . Which of the following is
TRUE ?
✔✔$ 2,000 - ✔✔James is walking down the street when Andrea , an uninsured motorist
, strikes him with her car . James suffers $ 12,000 in injuries from the accident . He has
personal injury protection of $ 10,000 from his own automobile insurance policy , which
immediately pays him the full amount . By accepting $ 10,000 from his own insurance
company , James has waived the right to sue Andrea for more than ________for
personal injury .
✔✔A woman files an insurance claim when she is injured by an employee at a local bar
. - ✔✔Which of the following is most likely a third party claim ?
✔✔$ 1,900 - ✔✔Kevin has a homeowners policy with replacement cost valuation and a
coverage limit of $ 90,000 for his personal property . Three years ago , Kevin purchased
a sofa and loveseat for $ 1,000 and $ 500 respectively . Both pieces of furniture
depreciate at $ 100 per year . A house fire damaged many of Kevin's belongings ,
including the sofa and loveseat , which now cost $ 1,200 and $ 700 to purchase today .
Ignoring any deductibles , how much will Kevin's insurer give him for the damaged sofa
and loveseat ?
✔✔Actual cash value is always most beneficial to a policyholder . - ✔✔Which of the
following statements regarding actual cash value is FALSE ?
