ALABAMA ADJUSTER UPDATED STUDY GUIDE QUESTIONS
AND ANSWERS GRADED A+
✔✔Actual cash value is always most beneficial to a policyholder . - ✔✔Which of the
following statements regarding actual cash value is FALSE ?
✔✔$ 0 - ✔✔Roxanne runs a red light and totals Ben's car in a t - bone collision .
Roxanne's auto policy includes liability coverage with limits of 50/100/25 and Collision
coverage with a deductible of $ 500 . Ben's car is worth $ 1,800 at the time of the
accident , and he files a claim against Roxanne's liability insurance . Bearing in mind
that liability coverage doesn't have a deductible , how much will Roxanne have to pay
out - of - pocket for the damages she caused ?
✔✔Under replacement cost valuation , insurers may safeguard the principle of
indemnity by requiring policyholders to replace insured items before making full
reparations . When offering replacement - ✔✔Which of the following statements applies
to replacement cost valuation ?
✔✔holds a person liable for his actions regardless of how much care he demonstrates .
- ✔✔Strict liability :
✔✔The insurer pays $ 100,000 ; the aggregate limit is now $ 200,000 ; and ABC
Masonry must pay $ 50,000 . - ✔✔ABC Masonry , Inc. has an aggregate liability policy
with limits of 100,,000 . One day , an accident at a construction site leads to $
150,000 in damage to public property . Assuming the cause of loss is covered under
ABC Masonry's liability policy , how will this claim be paid ?
✔✔A man slips inside a grocery store and injures himself . - ✔✔Which of the following
incidents would a liability insurance policy cover ?
✔✔general damages - ✔✔Ricky was watching a baseball game at XYZ Stadium , when
the railing on which he was leaning gave way and he fell two stories . As a result of his
fall , Ricky broke his back and is now paralyzed from the waist down . Ricky sued the
owners of XYZ Stadium and was awarded $ 150,000 to cover his medical bills and $ 2.5
million in because of the permanent nature of his injury .
✔✔special damages - ✔✔Tim is the plaintiff in a case involving an auto accident . To
recover monies he feels are due him , Tim produces documents to prove he had to pay
over $ 55,000 in medical bills . If the court were to award Tim $ 55,000 , the damages
would be classified as :
✔✔implied authority . - ✔✔William is wearing an ABC Insurance jacket and has an ABC
Insurance sign over his rented office . The walk - in customer could reasonably believe
that he has the authority to write an insurance contract because of his :
, ✔✔An insurer that employs an insurance adjuster to investigate damage claims . - ✔✔A
fiduciary agent must regularly report to the principal . Which of the following is the BEST
example of a principal in the context of insurance ?
✔✔It is transferred through a written contract . - ✔✔How is the power to bind transferred
to an adjuster ?
✔✔An open line of communication - ✔✔An adjuster has a duty to provide which of the
following to the claimant ?
✔✔it is important to investigate for fraud . - ✔✔If a claimant has a history of similar
claims , that could mean :
✔✔The adjuster - ✔✔Who is responsible for maintaining the claim file during the claim
process ?
✔✔The premium - ✔✔Which of the following factors holds the LEAST relevance when
an adjuster is evaluating an insurance claim ?
✔✔Their fees are split by all parties involved in the dispute . - ✔✔How are mediators
paid ?
✔✔Mediation - ✔✔Cindy and her insurer cannot reach an agreement for her property
claim , and have gone back and forth for weeks without coming within $ 10,000 of each
other . At this point , since both believe they are offering a fair settlement , a third party
is needed to help facilitate the negotiation . Both parties still want to retain their ability to
" walk - away " if they cannot reach an agreement . What is the next best step for Cindy
and her insurer ?
✔✔move to dispute resolution . - ✔✔When the dollar amount difference between an
adjuster and a claimant is very large , the adjuster should :
✔✔Reviewing video footage with the claimant that contradicts the claimant's position -
✔✔Which of the following activities could be a useful negotiation technique ?
✔✔Over - confident or arrogant - ✔✔Having a positive attitude can help an adjuster
during negotiations . Which of the following aspects of an adjuster's attitude can hinder
negotiations ?
✔✔Policy X will pay $ 50,000 and Policy Z will pay $ 12,000 - ✔✔Jim has two policies
that cover the same risk , but they respond differently : Policy X is primary and Policy Z
is excess . Policy X has a limit of $ 50,000 and Policy Z has a limit of $ 25,000 . When
Jim suffers an insured loss totaling $ 62,000 , how will each policy respond ?
AND ANSWERS GRADED A+
✔✔Actual cash value is always most beneficial to a policyholder . - ✔✔Which of the
following statements regarding actual cash value is FALSE ?
✔✔$ 0 - ✔✔Roxanne runs a red light and totals Ben's car in a t - bone collision .
Roxanne's auto policy includes liability coverage with limits of 50/100/25 and Collision
coverage with a deductible of $ 500 . Ben's car is worth $ 1,800 at the time of the
accident , and he files a claim against Roxanne's liability insurance . Bearing in mind
that liability coverage doesn't have a deductible , how much will Roxanne have to pay
out - of - pocket for the damages she caused ?
✔✔Under replacement cost valuation , insurers may safeguard the principle of
indemnity by requiring policyholders to replace insured items before making full
reparations . When offering replacement - ✔✔Which of the following statements applies
to replacement cost valuation ?
✔✔holds a person liable for his actions regardless of how much care he demonstrates .
- ✔✔Strict liability :
✔✔The insurer pays $ 100,000 ; the aggregate limit is now $ 200,000 ; and ABC
Masonry must pay $ 50,000 . - ✔✔ABC Masonry , Inc. has an aggregate liability policy
with limits of 100,,000 . One day , an accident at a construction site leads to $
150,000 in damage to public property . Assuming the cause of loss is covered under
ABC Masonry's liability policy , how will this claim be paid ?
✔✔A man slips inside a grocery store and injures himself . - ✔✔Which of the following
incidents would a liability insurance policy cover ?
✔✔general damages - ✔✔Ricky was watching a baseball game at XYZ Stadium , when
the railing on which he was leaning gave way and he fell two stories . As a result of his
fall , Ricky broke his back and is now paralyzed from the waist down . Ricky sued the
owners of XYZ Stadium and was awarded $ 150,000 to cover his medical bills and $ 2.5
million in because of the permanent nature of his injury .
✔✔special damages - ✔✔Tim is the plaintiff in a case involving an auto accident . To
recover monies he feels are due him , Tim produces documents to prove he had to pay
over $ 55,000 in medical bills . If the court were to award Tim $ 55,000 , the damages
would be classified as :
✔✔implied authority . - ✔✔William is wearing an ABC Insurance jacket and has an ABC
Insurance sign over his rented office . The walk - in customer could reasonably believe
that he has the authority to write an insurance contract because of his :
, ✔✔An insurer that employs an insurance adjuster to investigate damage claims . - ✔✔A
fiduciary agent must regularly report to the principal . Which of the following is the BEST
example of a principal in the context of insurance ?
✔✔It is transferred through a written contract . - ✔✔How is the power to bind transferred
to an adjuster ?
✔✔An open line of communication - ✔✔An adjuster has a duty to provide which of the
following to the claimant ?
✔✔it is important to investigate for fraud . - ✔✔If a claimant has a history of similar
claims , that could mean :
✔✔The adjuster - ✔✔Who is responsible for maintaining the claim file during the claim
process ?
✔✔The premium - ✔✔Which of the following factors holds the LEAST relevance when
an adjuster is evaluating an insurance claim ?
✔✔Their fees are split by all parties involved in the dispute . - ✔✔How are mediators
paid ?
✔✔Mediation - ✔✔Cindy and her insurer cannot reach an agreement for her property
claim , and have gone back and forth for weeks without coming within $ 10,000 of each
other . At this point , since both believe they are offering a fair settlement , a third party
is needed to help facilitate the negotiation . Both parties still want to retain their ability to
" walk - away " if they cannot reach an agreement . What is the next best step for Cindy
and her insurer ?
✔✔move to dispute resolution . - ✔✔When the dollar amount difference between an
adjuster and a claimant is very large , the adjuster should :
✔✔Reviewing video footage with the claimant that contradicts the claimant's position -
✔✔Which of the following activities could be a useful negotiation technique ?
✔✔Over - confident or arrogant - ✔✔Having a positive attitude can help an adjuster
during negotiations . Which of the following aspects of an adjuster's attitude can hinder
negotiations ?
✔✔Policy X will pay $ 50,000 and Policy Z will pay $ 12,000 - ✔✔Jim has two policies
that cover the same risk , but they respond differently : Policy X is primary and Policy Z
is excess . Policy X has a limit of $ 50,000 and Policy Z has a limit of $ 25,000 . When
Jim suffers an insured loss totaling $ 62,000 , how will each policy respond ?
