Virginia Insurance Adjuster Licensing
Examination Questions And Correct
Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant
Download Pdf
1. A first-party property claim involves a dispute between which of the
following parties?
A. An insured and a third-party claimant
B. An insurer and its own policyholder
C. A reinsurer and a primary carrier
D. An agent and a broker
B. An insurer and its own policyholder
*Rationale: A first-party claim arises directly between the insured and the
insurer under the terms of the insured's own policy. The other options
describe third-party claims, reinsurance relationships, or agency
disputes. *
2. Under the Virginia Administrative Code, an adjuster who fails to renew a
license before its expiration date may reinstate the license without re-
examination within what maximum time frame?
A. 30 days
B. 60 days
C. 90 days
D. 1 year
D. 1 year
*Rationale: Virginia law allows for reinstatement of a lapsed license
within one year of expiration without requiring a new examination,
, provided all delinquent fees and penalties are paid. After one year, re-
examination is typically required. *
3. Which of the following is a primary element of a valid insurance contract?
A. Adhesion
B. Utmost good faith
C. Indemnity
D. Subrogation
B. Utmost good faith
*Rationale: Utmost good faith, or uberrimae fidei, is a foundational
principle requiring both parties to disclose all material facts. While
adhesion, indemnity, and subrogation are characteristics or doctrines,
utmost good faith is a primary element necessary for contract validity. *
4. An adjuster is handling a claim where the insured deliberately
misrepresented the condition of a roof on the application. The insurer
discovers this two years after the policy was issued. Under Virginia law,
what action may the insurer take?
A. Deny the claim based solely on the misrepresentation
B. Rescind the policy only if the misrepresentation was material and
fraudulent
C. Automatically cancel the policy without refund
D. Reduce the claim payment by 50%
B. Rescind the policy only if the misrepresentation was material and
fraudulent
*Rationale: Virginia law permits rescission or claim denial only if the
misrepresentation was both material and made with actual intent to
deceive, regardless of the policy's incontestability period in many
contexts. *
5. In the context of claims adjusting, what does the term "reserve" refer to?
A. An estimate of the amount an insurer expects to pay for a claim
B. A cash fund held by the state for unclaimed benefits
C. The premium paid by the policyholder for coverage
, D. The deductible amount subtracted from a loss payment
A. An estimate of the amount an insurer expects to pay for a claim
*Rationale: A reserve is a liability established on the insurer's books
representing the estimated ultimate cost of settling a claim, covering both
losses and associated expenses. It is not a physical fund, premium, or
deductible. *
6. When investigating a residential fire loss, which step should an adjuster take
immediately upon arrival at the scene?
A. Interview the insured in detail
B. Secure the premises and preserve evidence
C. Contact the local fire department for their report
D. Issue an advance payment to the insured
B. Secure the premises and preserve evidence
*Rationale: The primary and immediate duty is to secure the scene to
prevent further damage and preserve all evidence, including the cause
and origin. This precedes interviews, reports, and payments. *
7. Under the Virginia Property and Casualty Insurance Guaranty Association
Act, which type of claim is typically NOT covered?
A. Workers' compensation claims
B. Auto liability claims
C. Claims against a solvent insurer
D. Property claims for homeowners
C. Claims against a solvent insurer
*Rationale: The Guaranty Association only steps in to cover claims against
insurers that have become insolvent. It does not handle claims against
insurers that are financially solvent and able to pay. *
8. A policy includes an "actual cash value" (ACV) provision. How is ACV most
commonly calculated?
A. Replacement cost minus physical depreciation
B. The original purchase price of the item
C. The cost to repair the item with new materials
, D. The market value of the item at the time of sale
A. Replacement cost minus physical depreciation
*Rationale: Actual cash value is standardly defined as replacement cost
less depreciation, considering age, wear, and obsolescence. It is not
original price, repair cost, or market sale price, though market value can
be a factor. *
9. The principle of "subrogation" allows an insurer to do which of the
following?
A. Deny a claim if the insured fails to cooperate
B. Sue a third party who caused the loss, after paying the insured
C. Assign the policy to another party without consent
D. Reduce the premium after a loss-free year
B. Sue a third party who caused the loss, after paying the insured
*Rationale: Subrogation permits the insurer to "step into the shoes" of
the insured to recover the claim amount from a liable third party,
preventing the insured from double recovery and recovering the insurer's
payout. *
10.An independent adjuster in Virginia is classified as what type of insurance
professional?
A. An employee of the insurer
B. A public adjuster representing the insured
C. A self-employed contractor representing the insurer
D. A state-appointed official
C. A self-employed contractor representing the insurer
*Rationale: An independent adjuster is an independent contractor hired
by an insurer to handle claims on its behalf, distinguishing them from staff
adjusters (employees) and public adjusters (representing insureds). *
11.In handling a liability claim, an adjuster receives a demand letter from a
claimant's attorney. The best initial response is to:
A. Immediately accept the demand to avoid litigation
B. Forward the demand to the insurer's claims department and file the
Examination Questions And Correct
Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant
Download Pdf
1. A first-party property claim involves a dispute between which of the
following parties?
A. An insured and a third-party claimant
B. An insurer and its own policyholder
C. A reinsurer and a primary carrier
D. An agent and a broker
B. An insurer and its own policyholder
*Rationale: A first-party claim arises directly between the insured and the
insurer under the terms of the insured's own policy. The other options
describe third-party claims, reinsurance relationships, or agency
disputes. *
2. Under the Virginia Administrative Code, an adjuster who fails to renew a
license before its expiration date may reinstate the license without re-
examination within what maximum time frame?
A. 30 days
B. 60 days
C. 90 days
D. 1 year
D. 1 year
*Rationale: Virginia law allows for reinstatement of a lapsed license
within one year of expiration without requiring a new examination,
, provided all delinquent fees and penalties are paid. After one year, re-
examination is typically required. *
3. Which of the following is a primary element of a valid insurance contract?
A. Adhesion
B. Utmost good faith
C. Indemnity
D. Subrogation
B. Utmost good faith
*Rationale: Utmost good faith, or uberrimae fidei, is a foundational
principle requiring both parties to disclose all material facts. While
adhesion, indemnity, and subrogation are characteristics or doctrines,
utmost good faith is a primary element necessary for contract validity. *
4. An adjuster is handling a claim where the insured deliberately
misrepresented the condition of a roof on the application. The insurer
discovers this two years after the policy was issued. Under Virginia law,
what action may the insurer take?
A. Deny the claim based solely on the misrepresentation
B. Rescind the policy only if the misrepresentation was material and
fraudulent
C. Automatically cancel the policy without refund
D. Reduce the claim payment by 50%
B. Rescind the policy only if the misrepresentation was material and
fraudulent
*Rationale: Virginia law permits rescission or claim denial only if the
misrepresentation was both material and made with actual intent to
deceive, regardless of the policy's incontestability period in many
contexts. *
5. In the context of claims adjusting, what does the term "reserve" refer to?
A. An estimate of the amount an insurer expects to pay for a claim
B. A cash fund held by the state for unclaimed benefits
C. The premium paid by the policyholder for coverage
, D. The deductible amount subtracted from a loss payment
A. An estimate of the amount an insurer expects to pay for a claim
*Rationale: A reserve is a liability established on the insurer's books
representing the estimated ultimate cost of settling a claim, covering both
losses and associated expenses. It is not a physical fund, premium, or
deductible. *
6. When investigating a residential fire loss, which step should an adjuster take
immediately upon arrival at the scene?
A. Interview the insured in detail
B. Secure the premises and preserve evidence
C. Contact the local fire department for their report
D. Issue an advance payment to the insured
B. Secure the premises and preserve evidence
*Rationale: The primary and immediate duty is to secure the scene to
prevent further damage and preserve all evidence, including the cause
and origin. This precedes interviews, reports, and payments. *
7. Under the Virginia Property and Casualty Insurance Guaranty Association
Act, which type of claim is typically NOT covered?
A. Workers' compensation claims
B. Auto liability claims
C. Claims against a solvent insurer
D. Property claims for homeowners
C. Claims against a solvent insurer
*Rationale: The Guaranty Association only steps in to cover claims against
insurers that have become insolvent. It does not handle claims against
insurers that are financially solvent and able to pay. *
8. A policy includes an "actual cash value" (ACV) provision. How is ACV most
commonly calculated?
A. Replacement cost minus physical depreciation
B. The original purchase price of the item
C. The cost to repair the item with new materials
, D. The market value of the item at the time of sale
A. Replacement cost minus physical depreciation
*Rationale: Actual cash value is standardly defined as replacement cost
less depreciation, considering age, wear, and obsolescence. It is not
original price, repair cost, or market sale price, though market value can
be a factor. *
9. The principle of "subrogation" allows an insurer to do which of the
following?
A. Deny a claim if the insured fails to cooperate
B. Sue a third party who caused the loss, after paying the insured
C. Assign the policy to another party without consent
D. Reduce the premium after a loss-free year
B. Sue a third party who caused the loss, after paying the insured
*Rationale: Subrogation permits the insurer to "step into the shoes" of
the insured to recover the claim amount from a liable third party,
preventing the insured from double recovery and recovering the insurer's
payout. *
10.An independent adjuster in Virginia is classified as what type of insurance
professional?
A. An employee of the insurer
B. A public adjuster representing the insured
C. A self-employed contractor representing the insurer
D. A state-appointed official
C. A self-employed contractor representing the insurer
*Rationale: An independent adjuster is an independent contractor hired
by an insurer to handle claims on its behalf, distinguishing them from staff
adjusters (employees) and public adjusters (representing insureds). *
11.In handling a liability claim, an adjuster receives a demand letter from a
claimant's attorney. The best initial response is to:
A. Immediately accept the demand to avoid litigation
B. Forward the demand to the insurer's claims department and file the
