New Jersey Public Adjuster Licensing
Examination Questions And Correct
Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant
Download Pdf
1. A public adjuster in New Jersey enters into a contract with an insured to
represent them for a fire loss. The insured later revokes the contract within
the statutory three-day cancellation period. Which of the following actions
is legally required of the public adjuster under New Jersey regulations?
A. The public adjuster must retain the contract and continue representation
unless a court orders termination.
B. The public adjuster must return all documents and materials provided by
the insured but may keep any retainer fee already paid.
C. The public adjuster must immediately cease all work, return any fees
paid, and return all documents and property received from the insured.
D. The public adjuster may continue to negotiate with the insurer on behalf
of the insured until the insurer acknowledges the revocation.
Answer: C
*Rationale: Under New Jersey Administrative Code 11:17-3.2, if an insured
cancels a public adjuster contract within the three-day statutory cooling-
off period, the public adjuster must refund all fees and return any
documents or property received. Continuing work or retaining fees is
prohibited. *
2. Which of the following best defines the fiduciary duty a public adjuster
owes to their client in New Jersey?
A. To act in a manner that maximizes the public adjuster's own commission
by securing the highest possible settlement.
, B. To subordinate the client's interests to the public adjuster's professional
judgment when the client is uncooperative.
C. To exercise the highest degree of loyalty, good faith, and undivided
service to the client, placing the client's interests above the adjuster's own.
D. To disclose all confidential client information to the insurer to expedite
the claim settlement process.
Answer: C
*Rationale: Fiduciary duty requires the public adjuster to place the client's
interests above their own, maintaining utmost good faith and loyalty. This
standard is established in common law and reinforced by New Jersey's
regulatory framework, distinguishing it from a mere contractual or agency
relationship. *
3. A New Jersey public adjuster is preparing a proof of loss for a homeowner's
claim. Under standard fire insurance policies and New Jersey law, within
what timeframe must the insured submit a sworn proof of loss after the
insurer requests it?
A. 30 days
B. 60 days
C. 90 days
D. 120 days
Answer: B
*Rationale: Standard New Jersey fire insurance policies, as per the
statutory conditions, typically require a sworn proof of loss to be
submitted within 60 days of the insurer's request. This is a critical policy
condition that the public adjuster must ensure their client meets to avoid
forfeiture of the claim. *
4. When a public adjuster in New Jersey receives a settlement draft from an
insurer made payable to the insured and the mortgagee, what is the proper
procedure?
A. The public adjuster can endorse the draft on behalf of the insured if they
have a power of attorney.
B. The public adjuster must ensure the draft is properly endorsed by the
, insured and the mortgagee before any funds are distributed.
C. The public adjuster can immediately deposit the draft into their trust
account and disburse funds as they deem appropriate.
D. The public adjuster can deduct their fee directly from the draft and
forward the remaining balance to the insured.
Answer: B
*Rationale: A check made jointly to the insured and the mortgagee
requires both parties' endorsements. The public adjuster cannot endorse,
deposit, or deduct fees from the draft without proper endorsements, as
they do not have a legal interest in the funds and must handle all client
funds with care. *
5. Which of the following actions constitutes an unfair trade practice
specifically prohibited under New Jersey's Insurance Fraud Prevention Act?
A. Failing to return a client's phone call within 24 hours.
B. Knowingly presenting a false or fraudulent insurance claim for payment.
C. Charging a fee that exceeds 10% of the total settlement.
D. Advertising services in a newspaper without including the adjuster's
license number.
Answer: B
*Rationale: The New Jersey Insurance Fraud Prevention Act (N.J.S.A.
17:33A-1 et seq.) explicitly prohibits knowingly presenting, or causing to
be presented, any false or fraudulent claim for payment. This is a felony
offense and a severe violation of the public adjuster's ethical and legal
obligations. *
6. A New Jersey public adjuster is hired to represent an insured for a
commercial property loss. The insured asks the adjuster to omit a damaged
piece of equipment from the claim because it was not properly maintained.
What should the adjuster do?
A. Comply with the client's request to maintain the client's trust and
confidentiality.
B. Advise the client that all damages must be included in the claim and that
omitting damages is fraudulent, and refuse to proceed with the omission.
, C. Omit the item from the claim but include it in the adjuster's private notes
for future reference.
D. Report the client's request to the insurance company immediately to
protect the adjuster's license.
Answer: B
*Rationale: The public adjuster must advise the client against any
fraudulent or dishonest conduct. Omitting a known loss from a claim is an
act of fraud. The adjuster must decline to participate in the omission and
may need to withdraw from the representation if the client insists on
proceeding with fraudulent actions. *
7. According to New Jersey regulations, which of the following is a mandatory
requirement for the contents of a public adjuster's written contract?
A. A statement that the adjuster is licensed by the New Jersey Division of
Consumer Affairs.
B. A clear disclosure of the adjuster's fee, expressed as a percentage of the
settlement or as a flat fee, and the basis for calculation.
C. A clause stating that the adjuster is not responsible for any errors in the
estimate.
D. The specific name and address of the insurance company handling the
claim.
Answer: B
*Rationale: New Jersey law requires public adjuster contracts to clearly
state the compensation arrangement, whether it is a percentage of the
recovery or a flat fee. This ensures the insured is fully informed of the cost
of services. Other required elements include the cancellation notice and a
description of services. *
8. A public adjuster in New Jersey is negotiating a settlement with an insurer.
The insurer offers a settlement that the public adjuster believes is fair, but
the client insists on holding out for more money, which the adjuster
believes is unrealistic. What is the adjuster's professional obligation?
A. To unilaterally accept the settlement offer on the client's behalf to save
the client from a poor decision.
Examination Questions And Correct
Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant
Download Pdf
1. A public adjuster in New Jersey enters into a contract with an insured to
represent them for a fire loss. The insured later revokes the contract within
the statutory three-day cancellation period. Which of the following actions
is legally required of the public adjuster under New Jersey regulations?
A. The public adjuster must retain the contract and continue representation
unless a court orders termination.
B. The public adjuster must return all documents and materials provided by
the insured but may keep any retainer fee already paid.
C. The public adjuster must immediately cease all work, return any fees
paid, and return all documents and property received from the insured.
D. The public adjuster may continue to negotiate with the insurer on behalf
of the insured until the insurer acknowledges the revocation.
Answer: C
*Rationale: Under New Jersey Administrative Code 11:17-3.2, if an insured
cancels a public adjuster contract within the three-day statutory cooling-
off period, the public adjuster must refund all fees and return any
documents or property received. Continuing work or retaining fees is
prohibited. *
2. Which of the following best defines the fiduciary duty a public adjuster
owes to their client in New Jersey?
A. To act in a manner that maximizes the public adjuster's own commission
by securing the highest possible settlement.
, B. To subordinate the client's interests to the public adjuster's professional
judgment when the client is uncooperative.
C. To exercise the highest degree of loyalty, good faith, and undivided
service to the client, placing the client's interests above the adjuster's own.
D. To disclose all confidential client information to the insurer to expedite
the claim settlement process.
Answer: C
*Rationale: Fiduciary duty requires the public adjuster to place the client's
interests above their own, maintaining utmost good faith and loyalty. This
standard is established in common law and reinforced by New Jersey's
regulatory framework, distinguishing it from a mere contractual or agency
relationship. *
3. A New Jersey public adjuster is preparing a proof of loss for a homeowner's
claim. Under standard fire insurance policies and New Jersey law, within
what timeframe must the insured submit a sworn proof of loss after the
insurer requests it?
A. 30 days
B. 60 days
C. 90 days
D. 120 days
Answer: B
*Rationale: Standard New Jersey fire insurance policies, as per the
statutory conditions, typically require a sworn proof of loss to be
submitted within 60 days of the insurer's request. This is a critical policy
condition that the public adjuster must ensure their client meets to avoid
forfeiture of the claim. *
4. When a public adjuster in New Jersey receives a settlement draft from an
insurer made payable to the insured and the mortgagee, what is the proper
procedure?
A. The public adjuster can endorse the draft on behalf of the insured if they
have a power of attorney.
B. The public adjuster must ensure the draft is properly endorsed by the
, insured and the mortgagee before any funds are distributed.
C. The public adjuster can immediately deposit the draft into their trust
account and disburse funds as they deem appropriate.
D. The public adjuster can deduct their fee directly from the draft and
forward the remaining balance to the insured.
Answer: B
*Rationale: A check made jointly to the insured and the mortgagee
requires both parties' endorsements. The public adjuster cannot endorse,
deposit, or deduct fees from the draft without proper endorsements, as
they do not have a legal interest in the funds and must handle all client
funds with care. *
5. Which of the following actions constitutes an unfair trade practice
specifically prohibited under New Jersey's Insurance Fraud Prevention Act?
A. Failing to return a client's phone call within 24 hours.
B. Knowingly presenting a false or fraudulent insurance claim for payment.
C. Charging a fee that exceeds 10% of the total settlement.
D. Advertising services in a newspaper without including the adjuster's
license number.
Answer: B
*Rationale: The New Jersey Insurance Fraud Prevention Act (N.J.S.A.
17:33A-1 et seq.) explicitly prohibits knowingly presenting, or causing to
be presented, any false or fraudulent claim for payment. This is a felony
offense and a severe violation of the public adjuster's ethical and legal
obligations. *
6. A New Jersey public adjuster is hired to represent an insured for a
commercial property loss. The insured asks the adjuster to omit a damaged
piece of equipment from the claim because it was not properly maintained.
What should the adjuster do?
A. Comply with the client's request to maintain the client's trust and
confidentiality.
B. Advise the client that all damages must be included in the claim and that
omitting damages is fraudulent, and refuse to proceed with the omission.
, C. Omit the item from the claim but include it in the adjuster's private notes
for future reference.
D. Report the client's request to the insurance company immediately to
protect the adjuster's license.
Answer: B
*Rationale: The public adjuster must advise the client against any
fraudulent or dishonest conduct. Omitting a known loss from a claim is an
act of fraud. The adjuster must decline to participate in the omission and
may need to withdraw from the representation if the client insists on
proceeding with fraudulent actions. *
7. According to New Jersey regulations, which of the following is a mandatory
requirement for the contents of a public adjuster's written contract?
A. A statement that the adjuster is licensed by the New Jersey Division of
Consumer Affairs.
B. A clear disclosure of the adjuster's fee, expressed as a percentage of the
settlement or as a flat fee, and the basis for calculation.
C. A clause stating that the adjuster is not responsible for any errors in the
estimate.
D. The specific name and address of the insurance company handling the
claim.
Answer: B
*Rationale: New Jersey law requires public adjuster contracts to clearly
state the compensation arrangement, whether it is a percentage of the
recovery or a flat fee. This ensures the insured is fully informed of the cost
of services. Other required elements include the cancellation notice and a
description of services. *
8. A public adjuster in New Jersey is negotiating a settlement with an insurer.
The insurer offers a settlement that the public adjuster believes is fair, but
the client insists on holding out for more money, which the adjuster
believes is unrealistic. What is the adjuster's professional obligation?
A. To unilaterally accept the settlement offer on the client's behalf to save
the client from a poor decision.
