Adjuster Pro - Insurance adjuster
test| 154 QUESTIONS(WELL
ANSWERED)|
Course
Claims Adjuster
1. What is the primary purpose of an insurance adjuster after a loss is reported?
A. To deny as many claims as possible
B. To determine liability, evaluate damages, and settle claims fairly according to the policy
C. To sell additional insurance products
D. To represent only the insurance company's legal interests
Answer: B
Explanation:
An insurance adjuster's main responsibility is to investigate the facts surrounding a claim,
determine whether coverage applies, assess the extent of damages, establish liability when
applicable, and recommend or negotiate a fair settlement based on the insurance policy. Ethical
adjusters must remain objective and comply with applicable laws and regulations.
2. Which principle requires the insured to return the insurer to approximately the same
financial position they occupied before the loss?
A. Contribution
B. Indemnity
C. Salvage
D. Estoppel
Answer: B. Indemnity
Explanation:
The principle of indemnity prevents the insured from profiting from a covered loss. Insurance is
intended to compensate for actual financial loss—not create financial gain. Most property and
casualty insurance policies are built upon this principle.
3. An adjuster discovers that a homeowner intentionally set fire to their own house to
collect insurance proceeds. What should the adjuster do?
A. Immediately pay the claim
B. Ignore the evidence
,C. Document findings, notify the Special Investigation Unit (SIU), and continue the
investigation according to company procedures
D. Accuse the insured without evidence
Answer: C
Explanation:
Suspected fraud should be carefully documented and referred to the insurer's Special
Investigation Unit (SIU). The adjuster should remain impartial, avoid making accusations,
preserve evidence, and follow established investigative procedures while complying with legal
requirements.
4. Which document generally defines what losses are covered, excluded, and subject to
deductibles?
A. Repair estimate
B. Insurance policy
C. Police report
D. Mortgage agreement
Answer: B. Insurance policy
Explanation:
The insurance policy is the binding legal contract between the insurer and the insured. It
specifies covered perils, exclusions, conditions, deductibles, policy limits, endorsements, and the
responsibilities of both parties during the claims process.
5. During a property inspection, the adjuster notices additional damage that the
policyholder failed to mention. What is the most appropriate action?
A. Ignore the damage
B. Include the newly discovered damage if it appears related to the covered loss and investigate
further
C. Close the claim immediately
D. Automatically deny the claim
Answer: B
Explanation:
Adjusters should conduct thorough inspections and document all observable damage. If
additional damage may be related to the covered event, it should be investigated and evaluated
under the policy. Decisions should be based on evidence rather than assumptions.
,6. Which term refers to the amount the insured must pay before insurance benefits apply?
A. Premium
B. Deductible
C. Endorsement
D. Liability limit
Answer: B. Deductible
Explanation:
A deductible is the portion of a covered loss the insured agrees to pay before the insurer
contributes. For example, if a covered loss is $8,000 and the deductible is $1,000, the insurer
generally pays $7,000, assuming no other limitations apply.
7. A vehicle is declared a total loss. Which factor is typically most important in determining
whether it should be totaled?
A. Vehicle color
B. Whether repair costs plus salvage value exceed applicable valuation thresholds or actual cash
value under state law and company guidelines
C. Owner's personal preference alone
D. Tire brand
Answer: B
Explanation:
Insurers compare repair costs, salvage value, the vehicle's actual cash value (ACV), and
applicable state total-loss regulations. If repairing the vehicle is not economically reasonable or
exceeds legal thresholds, it is generally declared a total loss.
8. What is subrogation?
A. The insured pays two deductibles.
B. The insurer's legal right to recover money from the responsible third party after paying a
covered claim.
C. Cancellation of the insurance policy.
D. A type of deductible waiver.
Answer: B
, Explanation:
Subrogation allows the insurer to pursue the party responsible for causing the loss after
compensating the insured. If successful, the insurer may recover claim payments and, in many
cases, reimburse the insured's deductible according to applicable laws and company practices.
9. Which communication practice best reflects professional claims handling?
A. Avoid returning phone calls.
B. Promise payment before completing the investigation.
C. Keep claimants informed, explain the claims process clearly, document communications, and
respond promptly.
D. Refuse to answer policy questions.
Answer: C
Explanation:
Effective communication builds trust and helps ensure compliance with fair claims handling
standards. Adjusters should provide timely updates, explain coverage decisions, answer
reasonable questions, maintain accurate claim notes, and communicate respectfully with all
parties.
10. After inspecting a roof damaged during a windstorm, an adjuster determines that some
deterioration existed before the storm. How should the adjuster evaluate the claim?
A. Pay for all roof damage regardless of cause.
B. Deny the entire claim automatically.
C. Separate storm-related covered damage from pre-existing wear and tear, applying policy
provisions accordingly.
D. Base the decision solely on the homeowner's opinion.
Answer: C
Explanation:
Insurance generally covers sudden accidental damage caused by covered perils, not normal wear
and tear, deterioration, or maintenance issues. The adjuster must distinguish between pre-existing
conditions and storm-related damage using inspections, documentation, expert opinions when
necessary, and the applicable policy language before determining the covered amount.
11. Which of the following best describes Actual Cash Value (ACV)?
A. The original purchase price of the property
B. The cost to replace the property with no deduction for depreciation
test| 154 QUESTIONS(WELL
ANSWERED)|
Course
Claims Adjuster
1. What is the primary purpose of an insurance adjuster after a loss is reported?
A. To deny as many claims as possible
B. To determine liability, evaluate damages, and settle claims fairly according to the policy
C. To sell additional insurance products
D. To represent only the insurance company's legal interests
Answer: B
Explanation:
An insurance adjuster's main responsibility is to investigate the facts surrounding a claim,
determine whether coverage applies, assess the extent of damages, establish liability when
applicable, and recommend or negotiate a fair settlement based on the insurance policy. Ethical
adjusters must remain objective and comply with applicable laws and regulations.
2. Which principle requires the insured to return the insurer to approximately the same
financial position they occupied before the loss?
A. Contribution
B. Indemnity
C. Salvage
D. Estoppel
Answer: B. Indemnity
Explanation:
The principle of indemnity prevents the insured from profiting from a covered loss. Insurance is
intended to compensate for actual financial loss—not create financial gain. Most property and
casualty insurance policies are built upon this principle.
3. An adjuster discovers that a homeowner intentionally set fire to their own house to
collect insurance proceeds. What should the adjuster do?
A. Immediately pay the claim
B. Ignore the evidence
,C. Document findings, notify the Special Investigation Unit (SIU), and continue the
investigation according to company procedures
D. Accuse the insured without evidence
Answer: C
Explanation:
Suspected fraud should be carefully documented and referred to the insurer's Special
Investigation Unit (SIU). The adjuster should remain impartial, avoid making accusations,
preserve evidence, and follow established investigative procedures while complying with legal
requirements.
4. Which document generally defines what losses are covered, excluded, and subject to
deductibles?
A. Repair estimate
B. Insurance policy
C. Police report
D. Mortgage agreement
Answer: B. Insurance policy
Explanation:
The insurance policy is the binding legal contract between the insurer and the insured. It
specifies covered perils, exclusions, conditions, deductibles, policy limits, endorsements, and the
responsibilities of both parties during the claims process.
5. During a property inspection, the adjuster notices additional damage that the
policyholder failed to mention. What is the most appropriate action?
A. Ignore the damage
B. Include the newly discovered damage if it appears related to the covered loss and investigate
further
C. Close the claim immediately
D. Automatically deny the claim
Answer: B
Explanation:
Adjusters should conduct thorough inspections and document all observable damage. If
additional damage may be related to the covered event, it should be investigated and evaluated
under the policy. Decisions should be based on evidence rather than assumptions.
,6. Which term refers to the amount the insured must pay before insurance benefits apply?
A. Premium
B. Deductible
C. Endorsement
D. Liability limit
Answer: B. Deductible
Explanation:
A deductible is the portion of a covered loss the insured agrees to pay before the insurer
contributes. For example, if a covered loss is $8,000 and the deductible is $1,000, the insurer
generally pays $7,000, assuming no other limitations apply.
7. A vehicle is declared a total loss. Which factor is typically most important in determining
whether it should be totaled?
A. Vehicle color
B. Whether repair costs plus salvage value exceed applicable valuation thresholds or actual cash
value under state law and company guidelines
C. Owner's personal preference alone
D. Tire brand
Answer: B
Explanation:
Insurers compare repair costs, salvage value, the vehicle's actual cash value (ACV), and
applicable state total-loss regulations. If repairing the vehicle is not economically reasonable or
exceeds legal thresholds, it is generally declared a total loss.
8. What is subrogation?
A. The insured pays two deductibles.
B. The insurer's legal right to recover money from the responsible third party after paying a
covered claim.
C. Cancellation of the insurance policy.
D. A type of deductible waiver.
Answer: B
, Explanation:
Subrogation allows the insurer to pursue the party responsible for causing the loss after
compensating the insured. If successful, the insurer may recover claim payments and, in many
cases, reimburse the insured's deductible according to applicable laws and company practices.
9. Which communication practice best reflects professional claims handling?
A. Avoid returning phone calls.
B. Promise payment before completing the investigation.
C. Keep claimants informed, explain the claims process clearly, document communications, and
respond promptly.
D. Refuse to answer policy questions.
Answer: C
Explanation:
Effective communication builds trust and helps ensure compliance with fair claims handling
standards. Adjusters should provide timely updates, explain coverage decisions, answer
reasonable questions, maintain accurate claim notes, and communicate respectfully with all
parties.
10. After inspecting a roof damaged during a windstorm, an adjuster determines that some
deterioration existed before the storm. How should the adjuster evaluate the claim?
A. Pay for all roof damage regardless of cause.
B. Deny the entire claim automatically.
C. Separate storm-related covered damage from pre-existing wear and tear, applying policy
provisions accordingly.
D. Base the decision solely on the homeowner's opinion.
Answer: C
Explanation:
Insurance generally covers sudden accidental damage caused by covered perils, not normal wear
and tear, deterioration, or maintenance issues. The adjuster must distinguish between pre-existing
conditions and storm-related damage using inspections, documentation, expert opinions when
necessary, and the applicable policy language before determining the covered amount.
11. Which of the following best describes Actual Cash Value (ACV)?
A. The original purchase price of the property
B. The cost to replace the property with no deduction for depreciation
