ALABAMA ADJUSTER LATEST 2026 EXAM FINAL PAPER
QUESTIONS AND ANSWERS GRADED A+
✔✔Crop Yield Insurance - ✔✔Crop insurance that covers physical losses to actual
crops.
✔✔Damages - General - ✔✔Intangible losses, such as pain and suffering or mental
anguish. See also: "Punitive Damages."
✔✔Damages - Special - ✔✔Tangible, financial losses that can be documented
✔✔Dangerous Instrumentality
Doctrine - ✔✔States that anyone involved in the use of inherently dangerous products
or machines is held 100% liable
for their own damages
✔✔Declaratory Judgement
Action - ✔✔As an alternative dispute resolution before litigation, the court can clarify the
legal relationship and the
rights of both parties: the claimant and the principal. Does NOT decide how to resolve
the case.
✔✔Declarations Page - ✔✔Also called the Dec page. First page of a policy, which
provides a summary of the contract; includes
names of insured, addresses, coverage limits, policy period, etc.
✔✔Declined Coverage - ✔✔Takes place when an insurance company rejects an
application for coverage
✔✔Deductible - ✔✔The amount the policyholder must pay out-of-pocket before the
insurance company will pay the remaining
costs. There are three types: fixed, franchise, and percentage
✔✔Deductible - Fixed - ✔✔One specific, predetermined amount that a policyholder
must pay out-of-pocket before his policy
coverage kicks in
✔✔Deductible - Franchise - ✔✔The policyholder only pays if the total damages come
out to less than his deductible. If the cost of
damages equals or exceeds the deductible, the insurer pays the full amount and the
policyholder pays
nothing
,✔✔Deductible - Percentage - ✔✔A deductible that is calculated as a percentage of the
value of the insured risk
✔✔Defamation - ✔✔Damage to another's name or reputation, whether by libel (which is
in print) or by slander (which is in
speech).
✔✔Default Judgement - ✔✔A judgment entered by the court against a party who fails to
present his case or defense in a civil action.
Most commonly, this applies when the defendant fails to show up and answer the claim
brought against
him, so the court decides in favor of the plaintiff.
✔✔Definitions - ✔✔Page in policy that gives specific limited meaning to terms used in
policy
✔✔Depreciation - ✔✔A decline in value of property caused by wear or loss of
usefulness, usually measured by a specific
formula.
✔✔Diligence and Dispatch - ✔✔An adjuster should act with speed and care in
completing the adjusting process. Failure to settle a claim
in a timely manner can result in disciplinary action by the insurance commissioner,
including a fine or loss
of license
✔✔Disclosure - ✔✔An adjuster must disclose all financial interests in any direct or
indirect aspect of an adjusting transaction.
For example, an adjuster cannot refer a claimant to his brother's auto repair business
without first telling
the claimant that the business is owned by a relative
✔✔Discoverable - ✔✔Capable of being demanded and handed over as evidence in a
court of law; during litigation proceedings,
the adjuster's claims file is discoverable
✔✔DP-1 - ✔✔"Basic Form" of Dwelling Policy. Covers direct physical loss to property
caused by only three perils: fire,
lightning, and internal explosion (coverage for other perils can be added by
endorsement).
✔✔DP-2 - ✔✔"Broad Form" of Dwelling Policy. A named peril policy that covers
everything on the DP-1 Basic from, as
well as 9 Extended Form perils and the Broad Form perils.
, ✔✔DP-3 - ✔✔"Special Form" of Dwelling Policy. Unlike DP-1 and DP-2, DP-3 offers
open-peril coverage for the
property's structures (but named peril for personal property).
✔✔Dwelling Policy (DP) - ✔✔Property coverage for people and businesses who are not
eligible for homeowners insurance or do not
need the extensive coverage of the homeowners policies.
✔✔Electronic Data Processing
(EDP) - ✔✔An endorsement that covers the loss of computer equipment, data systems,
information storage media,
and expenses or lost income related to EDP losses.
✔✔Eligibility - ✔✔Eligibility Requirements are found in some insurance policies. They
identify the conditions that must be
met by the policyholder in order to qualify for coverage under a policy.
✔✔End of Insurance Date - ✔✔The date that crop insurance coverage will end. It is the
earliest of the following: total crop destruction,
harvest of the crop, final adjustment of a loss, abandonment of a crop, or a date
predesignated by crop
type.
✔✔Endorsement(s) - ✔✔An optional provision that can be added to a policy to
increase, reduce, or modify coverage for specific
property types or perils
✔✔Errors and Omissions
(E&O) - ✔✔Liability insurance that indemnifies professionals for errors or oversights on
the part of the insured that
caused harm to their clients
✔✔Estoppel - ✔✔A legal principle that bars a party from asserting something contrary
to what has been implied by his
previous actions or statements. This is a form of "implied waiver"; for example, if the
insurer regularly
accepts late payments, it waives its right to deny coverage due to late payment
✔✔Ethical - ✔✔Adhering to moral laws and to principles of fairness
✔✔Equipment Floater - ✔✔An uncontrolled form that covers heavy machinery and
equipment needed to conduct business.
Protection on this form includes loss by fire, landslide, theft, and other perils to
equipment that is being
QUESTIONS AND ANSWERS GRADED A+
✔✔Crop Yield Insurance - ✔✔Crop insurance that covers physical losses to actual
crops.
✔✔Damages - General - ✔✔Intangible losses, such as pain and suffering or mental
anguish. See also: "Punitive Damages."
✔✔Damages - Special - ✔✔Tangible, financial losses that can be documented
✔✔Dangerous Instrumentality
Doctrine - ✔✔States that anyone involved in the use of inherently dangerous products
or machines is held 100% liable
for their own damages
✔✔Declaratory Judgement
Action - ✔✔As an alternative dispute resolution before litigation, the court can clarify the
legal relationship and the
rights of both parties: the claimant and the principal. Does NOT decide how to resolve
the case.
✔✔Declarations Page - ✔✔Also called the Dec page. First page of a policy, which
provides a summary of the contract; includes
names of insured, addresses, coverage limits, policy period, etc.
✔✔Declined Coverage - ✔✔Takes place when an insurance company rejects an
application for coverage
✔✔Deductible - ✔✔The amount the policyholder must pay out-of-pocket before the
insurance company will pay the remaining
costs. There are three types: fixed, franchise, and percentage
✔✔Deductible - Fixed - ✔✔One specific, predetermined amount that a policyholder
must pay out-of-pocket before his policy
coverage kicks in
✔✔Deductible - Franchise - ✔✔The policyholder only pays if the total damages come
out to less than his deductible. If the cost of
damages equals or exceeds the deductible, the insurer pays the full amount and the
policyholder pays
nothing
,✔✔Deductible - Percentage - ✔✔A deductible that is calculated as a percentage of the
value of the insured risk
✔✔Defamation - ✔✔Damage to another's name or reputation, whether by libel (which is
in print) or by slander (which is in
speech).
✔✔Default Judgement - ✔✔A judgment entered by the court against a party who fails to
present his case or defense in a civil action.
Most commonly, this applies when the defendant fails to show up and answer the claim
brought against
him, so the court decides in favor of the plaintiff.
✔✔Definitions - ✔✔Page in policy that gives specific limited meaning to terms used in
policy
✔✔Depreciation - ✔✔A decline in value of property caused by wear or loss of
usefulness, usually measured by a specific
formula.
✔✔Diligence and Dispatch - ✔✔An adjuster should act with speed and care in
completing the adjusting process. Failure to settle a claim
in a timely manner can result in disciplinary action by the insurance commissioner,
including a fine or loss
of license
✔✔Disclosure - ✔✔An adjuster must disclose all financial interests in any direct or
indirect aspect of an adjusting transaction.
For example, an adjuster cannot refer a claimant to his brother's auto repair business
without first telling
the claimant that the business is owned by a relative
✔✔Discoverable - ✔✔Capable of being demanded and handed over as evidence in a
court of law; during litigation proceedings,
the adjuster's claims file is discoverable
✔✔DP-1 - ✔✔"Basic Form" of Dwelling Policy. Covers direct physical loss to property
caused by only three perils: fire,
lightning, and internal explosion (coverage for other perils can be added by
endorsement).
✔✔DP-2 - ✔✔"Broad Form" of Dwelling Policy. A named peril policy that covers
everything on the DP-1 Basic from, as
well as 9 Extended Form perils and the Broad Form perils.
, ✔✔DP-3 - ✔✔"Special Form" of Dwelling Policy. Unlike DP-1 and DP-2, DP-3 offers
open-peril coverage for the
property's structures (but named peril for personal property).
✔✔Dwelling Policy (DP) - ✔✔Property coverage for people and businesses who are not
eligible for homeowners insurance or do not
need the extensive coverage of the homeowners policies.
✔✔Electronic Data Processing
(EDP) - ✔✔An endorsement that covers the loss of computer equipment, data systems,
information storage media,
and expenses or lost income related to EDP losses.
✔✔Eligibility - ✔✔Eligibility Requirements are found in some insurance policies. They
identify the conditions that must be
met by the policyholder in order to qualify for coverage under a policy.
✔✔End of Insurance Date - ✔✔The date that crop insurance coverage will end. It is the
earliest of the following: total crop destruction,
harvest of the crop, final adjustment of a loss, abandonment of a crop, or a date
predesignated by crop
type.
✔✔Endorsement(s) - ✔✔An optional provision that can be added to a policy to
increase, reduce, or modify coverage for specific
property types or perils
✔✔Errors and Omissions
(E&O) - ✔✔Liability insurance that indemnifies professionals for errors or oversights on
the part of the insured that
caused harm to their clients
✔✔Estoppel - ✔✔A legal principle that bars a party from asserting something contrary
to what has been implied by his
previous actions or statements. This is a form of "implied waiver"; for example, if the
insurer regularly
accepts late payments, it waives its right to deny coverage due to late payment
✔✔Ethical - ✔✔Adhering to moral laws and to principles of fairness
✔✔Equipment Floater - ✔✔An uncontrolled form that covers heavy machinery and
equipment needed to conduct business.
Protection on this form includes loss by fire, landslide, theft, and other perils to
equipment that is being
