ALABAMA PUBLIC ADJUSTER
LICENSING EXAM 2026/2027 |
QUESTIONS, CORRECT ANSWERS
& DETAILED RATIONALES | PDF
STUDY GUIDE
1. Which statement accurately describes Alabama's current
position regarding public adjusters?
A. Alabama requires all public adjusters to obtain a separate
public-adjuster license.
B. Alabama recognizes public adjusters but does not require
examination.
C. Alabama licenses public adjusters only for property claims.
D. Alabama does not license or recognize public adjusters.
Rationale: The Alabama Department of Insurance specifically
states that Alabama does not license or recognize public
adjusters. Candidates should distinguish this from Alabama's
licensing of independent adjusters.
2. Which type of adjuster is specifically licensed by Alabama?
A. Public adjuster only
B. Independent adjuster
C. Consumer adjuster
D. Policyholder adjuster
,Rationale: Alabama provides for independent-adjuster licensing
and examinations. A public adjuster works on behalf of a
policyholder, whereas an independent adjuster generally handles
claims independently of the insurer's employee structure.
3. What is the primary purpose of an insurance adjuster?
A. To sell insurance policies
B. To establish insurance premiums
C. To investigate and evaluate insurance claims
D. To determine an insurer's annual profit
Rationale: Adjusters investigate losses, evaluate coverage and
damages, document facts, and assist in determining the amount
payable under the applicable policy. Premium setting and policy
sales are separate insurance functions.
4. Which Alabama agency administers insurance licensing
and regulation?
A. Alabama Department of Revenue
B. Alabama Secretary of State
C. Alabama Department of Labor
D. Alabama Department of Insurance
Rationale: The Alabama Department of Insurance administers
statutes and regulations governing producers, adjusters, and
other insurance licensees in Alabama.
5. Which examination category is identified by the Alabama
Department of Insurance for adjusters?
,A. Public Adjuster Examination
B. Consumer Adjuster Examination
C. Independent Adjuster Examination
D. Policyholder Representative Examination
Rationale: Alabama's examination materials identify
independent-adjuster examinations. The Department's current
examination information lists an Independent Adjuster Exam and
an associated examination fee.
6. What is the purpose of an insurance policy's declarations
section?
A. To establish criminal penalties
B. To provide the insurer's corporate history
C. To identify important policy information such as the
insured, coverage, limits, and policy period
D. To establish the adjuster's license requirements
Rationale: The declarations page summarizes key policy-specific
information. It commonly identifies the named insured, covered
property, limits of insurance, deductibles, policy period, and
applicable premiums.
7. Which principle requires an insured to have a legitimate
financial or other recognized interest in the subject of
insurance?
A. Indemnity
B. Subrogation
C. Insurable interest
D. Contribution
, Rationale: An insurable interest exists when the insured would
experience a recognized financial loss or other legally recognized
loss if the insured property or subject were damaged or
destroyed.
8. The principle of indemnity generally means that insurance
should:
A. Allow the insured to profit from a loss
B. Guarantee replacement with brand-new property in every case
C. Restore the insured financially to approximately the
position occupied before the covered loss, subject to the
policy
D. Pay every loss regardless of cause
Rationale: Indemnity is intended to compensate for covered loss
rather than create a financial gain. The actual application
depends on policy provisions, valuation rules, deductibles, limits,
and exclusions.
9. What is a deductible?
A. The insurer's profit on a claim
B. The maximum amount an insurer may collect
C. The amount of a covered loss that the insured is
responsible for under the policy
D. The commission paid to an adjuster
Rationale: A deductible is generally subtracted from the covered
amount of loss before the insurer's payment is calculated, subject
to the specific policy language.
LICENSING EXAM 2026/2027 |
QUESTIONS, CORRECT ANSWERS
& DETAILED RATIONALES | PDF
STUDY GUIDE
1. Which statement accurately describes Alabama's current
position regarding public adjusters?
A. Alabama requires all public adjusters to obtain a separate
public-adjuster license.
B. Alabama recognizes public adjusters but does not require
examination.
C. Alabama licenses public adjusters only for property claims.
D. Alabama does not license or recognize public adjusters.
Rationale: The Alabama Department of Insurance specifically
states that Alabama does not license or recognize public
adjusters. Candidates should distinguish this from Alabama's
licensing of independent adjusters.
2. Which type of adjuster is specifically licensed by Alabama?
A. Public adjuster only
B. Independent adjuster
C. Consumer adjuster
D. Policyholder adjuster
,Rationale: Alabama provides for independent-adjuster licensing
and examinations. A public adjuster works on behalf of a
policyholder, whereas an independent adjuster generally handles
claims independently of the insurer's employee structure.
3. What is the primary purpose of an insurance adjuster?
A. To sell insurance policies
B. To establish insurance premiums
C. To investigate and evaluate insurance claims
D. To determine an insurer's annual profit
Rationale: Adjusters investigate losses, evaluate coverage and
damages, document facts, and assist in determining the amount
payable under the applicable policy. Premium setting and policy
sales are separate insurance functions.
4. Which Alabama agency administers insurance licensing
and regulation?
A. Alabama Department of Revenue
B. Alabama Secretary of State
C. Alabama Department of Labor
D. Alabama Department of Insurance
Rationale: The Alabama Department of Insurance administers
statutes and regulations governing producers, adjusters, and
other insurance licensees in Alabama.
5. Which examination category is identified by the Alabama
Department of Insurance for adjusters?
,A. Public Adjuster Examination
B. Consumer Adjuster Examination
C. Independent Adjuster Examination
D. Policyholder Representative Examination
Rationale: Alabama's examination materials identify
independent-adjuster examinations. The Department's current
examination information lists an Independent Adjuster Exam and
an associated examination fee.
6. What is the purpose of an insurance policy's declarations
section?
A. To establish criminal penalties
B. To provide the insurer's corporate history
C. To identify important policy information such as the
insured, coverage, limits, and policy period
D. To establish the adjuster's license requirements
Rationale: The declarations page summarizes key policy-specific
information. It commonly identifies the named insured, covered
property, limits of insurance, deductibles, policy period, and
applicable premiums.
7. Which principle requires an insured to have a legitimate
financial or other recognized interest in the subject of
insurance?
A. Indemnity
B. Subrogation
C. Insurable interest
D. Contribution
, Rationale: An insurable interest exists when the insured would
experience a recognized financial loss or other legally recognized
loss if the insured property or subject were damaged or
destroyed.
8. The principle of indemnity generally means that insurance
should:
A. Allow the insured to profit from a loss
B. Guarantee replacement with brand-new property in every case
C. Restore the insured financially to approximately the
position occupied before the covered loss, subject to the
policy
D. Pay every loss regardless of cause
Rationale: Indemnity is intended to compensate for covered loss
rather than create a financial gain. The actual application
depends on policy provisions, valuation rules, deductibles, limits,
and exclusions.
9. What is a deductible?
A. The insurer's profit on a claim
B. The maximum amount an insurer may collect
C. The amount of a covered loss that the insured is
responsible for under the policy
D. The commission paid to an adjuster
Rationale: A deductible is generally subtracted from the covered
amount of loss before the insurer's payment is calculated, subject
to the specific policy language.
