South Carolina AllLines Adjuster Exam
200 Practice Questions with Verified Answers and
Rationales
Complete Exam Preparation Guide 2026
Question 1
Which of the following best describes an insurance adjuster's primary duty?
A) Sell insurance policies
B) Investigate and settle claims
C) Set premiums for policyholders
D) Draft insurance legislation
Answer: B) Investigate and settle claims
Rationale: An adjuster's main role is to investigate claims, determine coverage, and facilitate
settlements.
Question 2
Under South Carolina Code § 384710(A), who must be licensed as an adjuster in South Carolina?
A) Only independent contractors
B) Any individual adjusting losses for an insurer licensed to do business in the state
C) Only public adjusters
D) Only outofstate adjusters
,Answer: B) Any individual adjusting losses for an insurer licensed to do business in the state
Rationale: S.C. Code § 384710(A) requires every individual commonly called an adjuster adjusting losses
for an insurer licensed to do business in South Carolina to be licensed.
Question 3
Which South Carolina agency regulates insurance adjusters?
A) South Carolina Department of Commerce
B) South Carolina Department of Insurance (SCDOI)
C) South Carolina Attorney General's Office
D) South Carolina Department of Revenue
Answer: B) South Carolina Department of Insurance (SCDOI)
Rationale: The South Carolina Department of Insurance regulates insurance adjusters. The Director of
Insurance has authority over adjuster licensing, examinations, and disciplinary actions un der Title 38,
Chapter 47.
Question 4
What chapter of the South Carolina Code of Laws governs insurance adjusters?
A) Title 38, Chapter 45
B) Title 38, Chapter 47
C) Title 38, Chapter 49
D) Title 38, Chapter 51
Answer: B) Title 38, Chapter 47
,Rationale: Title 38, Chapter 47 of the South Carolina Code of Laws details definitions and mandates for
insurance adjusters, including licensing requirements, qualifications, and conduct standards.
Question 5
In a standard homeowners policy, which peril is usually covered under a basic form?
A) Flood
B) Fire
C) Earthquake
D) War
Answer: B) Fire
Rationale: Basic homeowners policies typically cover fire, lightning, and internal explosion, but not
floods or earthquakes.
Question 6
The principle of indemnity ensures that:
A) The insured can profit from a loss
B) Premiums are refunded after a claim
C) The insured is restored to the same financial position as before the loss
D) Claims are paid in cash only
Answer: C) The insured is restored to the same financial position as before the loss
, Rationale: Indemnity prevents the insured from profiting from a loss; compensation restores prior
financial status.
Question 7
What is the purpose of the deductible in an insurance policy?
A) Increase the coverage limit
B) Reduce small claims and share risk with the insured
C) Ensure faster claim payment
D) Increase the insurer's liability
Answer: B) Reduce small claims and share risk with the insured
Rationale: Deductibles discourage minor claims and make the insured bear part of the loss.
Question 8
Which of the following is an example of a moral hazard?
A) Slippery roads causing an accident
B) Intentionally inflating a claim
C) A tree falling during a storm
D) Earthquake damage
Answer: B) Intentionally inflating a claim
Rationale: Moral hazard involves dishonest or risky behavior by the insured that increases the likelihood
of a loss.
200 Practice Questions with Verified Answers and
Rationales
Complete Exam Preparation Guide 2026
Question 1
Which of the following best describes an insurance adjuster's primary duty?
A) Sell insurance policies
B) Investigate and settle claims
C) Set premiums for policyholders
D) Draft insurance legislation
Answer: B) Investigate and settle claims
Rationale: An adjuster's main role is to investigate claims, determine coverage, and facilitate
settlements.
Question 2
Under South Carolina Code § 384710(A), who must be licensed as an adjuster in South Carolina?
A) Only independent contractors
B) Any individual adjusting losses for an insurer licensed to do business in the state
C) Only public adjusters
D) Only outofstate adjusters
,Answer: B) Any individual adjusting losses for an insurer licensed to do business in the state
Rationale: S.C. Code § 384710(A) requires every individual commonly called an adjuster adjusting losses
for an insurer licensed to do business in South Carolina to be licensed.
Question 3
Which South Carolina agency regulates insurance adjusters?
A) South Carolina Department of Commerce
B) South Carolina Department of Insurance (SCDOI)
C) South Carolina Attorney General's Office
D) South Carolina Department of Revenue
Answer: B) South Carolina Department of Insurance (SCDOI)
Rationale: The South Carolina Department of Insurance regulates insurance adjusters. The Director of
Insurance has authority over adjuster licensing, examinations, and disciplinary actions un der Title 38,
Chapter 47.
Question 4
What chapter of the South Carolina Code of Laws governs insurance adjusters?
A) Title 38, Chapter 45
B) Title 38, Chapter 47
C) Title 38, Chapter 49
D) Title 38, Chapter 51
Answer: B) Title 38, Chapter 47
,Rationale: Title 38, Chapter 47 of the South Carolina Code of Laws details definitions and mandates for
insurance adjusters, including licensing requirements, qualifications, and conduct standards.
Question 5
In a standard homeowners policy, which peril is usually covered under a basic form?
A) Flood
B) Fire
C) Earthquake
D) War
Answer: B) Fire
Rationale: Basic homeowners policies typically cover fire, lightning, and internal explosion, but not
floods or earthquakes.
Question 6
The principle of indemnity ensures that:
A) The insured can profit from a loss
B) Premiums are refunded after a claim
C) The insured is restored to the same financial position as before the loss
D) Claims are paid in cash only
Answer: C) The insured is restored to the same financial position as before the loss
, Rationale: Indemnity prevents the insured from profiting from a loss; compensation restores prior
financial status.
Question 7
What is the purpose of the deductible in an insurance policy?
A) Increase the coverage limit
B) Reduce small claims and share risk with the insured
C) Ensure faster claim payment
D) Increase the insurer's liability
Answer: B) Reduce small claims and share risk with the insured
Rationale: Deductibles discourage minor claims and make the insured bear part of the loss.
Question 8
Which of the following is an example of a moral hazard?
A) Slippery roads causing an accident
B) Intentionally inflating a claim
C) A tree falling during a storm
D) Earthquake damage
Answer: B) Intentionally inflating a claim
Rationale: Moral hazard involves dishonest or risky behavior by the insured that increases the likelihood
of a loss.
