Idaho Adjuster Exam questions and Correct
Answers (Verified Answers) Plus Rationales
2026 Q&A | Instant Download Pdf
1. What is the primary role of an insurance adjuster?
A. Sell insurance policies
B. Investigate and settle claims
C. Underwrite policies
D. Audit financial statements
Rationale: Adjusters investigate claims, determine coverage, and
negotiate settlements.
2. Which type of insurance covers damages to someone else’s
property for which the insured is legally liable?
A. Life insurance
B. Health insurance
C. Liability insurance
D. Property insurance
Rationale: Liability insurance protects against legal responsibility for
damage to others’ property or injury.
3. An insurance policyholder intentionally provides false information
on a claim. This is considered:
A. Waiver
B. Assignment
,C. Fraud
D. Subrogation
Rationale: Fraud occurs when someone intentionally deceives to obtain
benefits.
4. What is the term for the amount the insured must pay out-of-
pocket before the insurance policy pays?
A. Premium
B. Policy limit
C. Deductible
D. Coinsurance
Rationale: The deductible is the portion of a loss that the insured must
pay before coverage applies.
5. Which coverage pays for the insured’s medical expenses after an
auto accident, regardless of fault?
A. Collision
B. Personal injury protection (PIP)
C. Liability
D. Comprehensive
Rationale: PIP covers medical expenses and sometimes lost wages,
regardless of who caused the accident.
6. Subrogation allows an insurance company to:
A. Deny claims without investigation
B. Recover payments from a third party responsible for the loss
,C. Increase premiums arbitrarily
D. Cancel a policy
Rationale: Subrogation enables insurers to pursue third parties to
recover claim costs.
7. What type of policy is written for a specific period and terminates
automatically at the end of that period?
A. Permanent
B. Term
C. Whole life
D. Universal
Rationale: Term policies provide coverage for a fixed period with no
cash value.
8. Which of the following is a hazard?
A. The policyholder
B. A condition that increases the likelihood of a loss
C. A policy limit
D. The insurance company
Rationale: Hazards increase the probability or severity of a loss.
9. An adjuster must report all claim activity to:
A. The insured only
B. The state insurance commissioner
C. The insurance company
D. The agent who sold the policy
, Rationale: Adjusters report to the insurer to document the claim process
and decisions.
10. In property insurance, replacement cost coverage:
A. Pays the original purchase price minus depreciation
B. Pays the full cost to repair or replace the damaged property
without depreciation
C. Pays only for partial losses
D. Is the same as actual cash value
Rationale: Replacement cost coverage reimburses the insured for the
full cost of replacing damaged property.
11. Which of the following best describes “actual cash value” (ACV)?
A. Cost to replace an item without considering depreciation
B. Replacement cost minus depreciation
C. The market value of the insurance company
D. Policy limit
Rationale: ACV accounts for depreciation, paying less than replacement
cost.
12. What is the purpose of an insurance deductible?
A. Reduce claim settlement amounts
B. Discourage small claims and share risk with the insured
C. Increase coverage
D. Reduce premiums to zero
Answers (Verified Answers) Plus Rationales
2026 Q&A | Instant Download Pdf
1. What is the primary role of an insurance adjuster?
A. Sell insurance policies
B. Investigate and settle claims
C. Underwrite policies
D. Audit financial statements
Rationale: Adjusters investigate claims, determine coverage, and
negotiate settlements.
2. Which type of insurance covers damages to someone else’s
property for which the insured is legally liable?
A. Life insurance
B. Health insurance
C. Liability insurance
D. Property insurance
Rationale: Liability insurance protects against legal responsibility for
damage to others’ property or injury.
3. An insurance policyholder intentionally provides false information
on a claim. This is considered:
A. Waiver
B. Assignment
,C. Fraud
D. Subrogation
Rationale: Fraud occurs when someone intentionally deceives to obtain
benefits.
4. What is the term for the amount the insured must pay out-of-
pocket before the insurance policy pays?
A. Premium
B. Policy limit
C. Deductible
D. Coinsurance
Rationale: The deductible is the portion of a loss that the insured must
pay before coverage applies.
5. Which coverage pays for the insured’s medical expenses after an
auto accident, regardless of fault?
A. Collision
B. Personal injury protection (PIP)
C. Liability
D. Comprehensive
Rationale: PIP covers medical expenses and sometimes lost wages,
regardless of who caused the accident.
6. Subrogation allows an insurance company to:
A. Deny claims without investigation
B. Recover payments from a third party responsible for the loss
,C. Increase premiums arbitrarily
D. Cancel a policy
Rationale: Subrogation enables insurers to pursue third parties to
recover claim costs.
7. What type of policy is written for a specific period and terminates
automatically at the end of that period?
A. Permanent
B. Term
C. Whole life
D. Universal
Rationale: Term policies provide coverage for a fixed period with no
cash value.
8. Which of the following is a hazard?
A. The policyholder
B. A condition that increases the likelihood of a loss
C. A policy limit
D. The insurance company
Rationale: Hazards increase the probability or severity of a loss.
9. An adjuster must report all claim activity to:
A. The insured only
B. The state insurance commissioner
C. The insurance company
D. The agent who sold the policy
, Rationale: Adjusters report to the insurer to document the claim process
and decisions.
10. In property insurance, replacement cost coverage:
A. Pays the original purchase price minus depreciation
B. Pays the full cost to repair or replace the damaged property
without depreciation
C. Pays only for partial losses
D. Is the same as actual cash value
Rationale: Replacement cost coverage reimburses the insured for the
full cost of replacing damaged property.
11. Which of the following best describes “actual cash value” (ACV)?
A. Cost to replace an item without considering depreciation
B. Replacement cost minus depreciation
C. The market value of the insurance company
D. Policy limit
Rationale: ACV accounts for depreciation, paying less than replacement
cost.
12. What is the purpose of an insurance deductible?
A. Reduce claim settlement amounts
B. Discourage small claims and share risk with the insured
C. Increase coverage
D. Reduce premiums to zero
