CLAIMS ADJUSTER EXAM STUDY GUIDE | QUESTIONS &
ANSWERS | NEW 2026/2027 UPDATE | GRADED A+| 100% CORRECT
(VERIFIED SOLUTIONS)
Accumulated Depreciation -
ANSWER
The total decrease in an item's value over a period of time. Formula: (Annual Depreciation x Number
of years used)
Actual Cash Value (ACV) -
ANSWER
A valuation method used by insurers to reflect an item's current market value right before being
damaged or destroyed. Formula: (Replacement cost - Accumulated Depreciation)
Adhesion -
ANSWER
One of the characteristics of an insurance contract. Means that one party (the insurer) sets the
terms, and the other (the insured) can 'take it or leave it.'
Adjusted Gross Revenue (Crop Insurance) -
ANSWER
Narrowest (and least expensive) form of Crop Revenue Insurance. Insures farm revenue as a whole
instead of individual crops. Guarantees a percentage of the insured farm's average revenue.
Adjuster -
ANSWER
An agent who, for compensation, processes insurance claims. Can represent either the insured or
the insurer.
Adjuster - Emergency -
ANSWER
Adjusters who are temporarily licensed by the insurance commissioner to handle claims during
catastrophes or emergencies that produce an overwhelming number of claims in a short period of
time.
,Adjuster-Independent -
ANSWER
Self-employed adjusters who contract with multiple insurers at the same time. Paid on a commission
or fee-plus-expenses basis for each claim. Also called:Fee Adjuster, Bureau Adjuster
Adjuster-Public -
ANSWER
An adjuster who is hired to represent the claimant and help determine a fair indemnification.
Usually specializes in appraisals and negotiation. Paid commision, usually a percentage of final
settlement.
Adjuster-Staff -
ANSWER
Salaried employee of one insurance company who can work locally, regionally, or nationally. Also
called: Company Adjuster
Advance Payment Settlement -
ANSWER
A settlement option that lets the insurer offer some financial relief to the claimant before the claim
has been fully settled. The insurer makes advance payments to the claimant, which are then
subtracted from the final settlement amount. Often used when a claimant suffers bodily injury and is
unable to work.
Agency Authority -
ANSWER
The Agent's authority to act on behalf of someone else, usually an insurer. This authority is derived
from the agent's contract with the insurer.
Agency Authority - express -
ANSWER
Authority that is expressly given to the agent in writing. Allows agent to act on behalf of the
principal.
,Agency Authority - implied -
ANSWER
Authority that an agent possesses by implication of his behavior, regardless of whether this
authority is expressly granted in writing.
Agency Authority - apparent -
ANSWER
Authority that an agent possesses based on the appearance of representing an insurer.
Agent -
ANSWER
Someone who has received authority from an insurer to sell or service insurance policies.
Aggregate Limit -
ANSWER
A type of policy limit found in some health, liability, and property damage policies. It represents the
total amount the insurer will pay for all losses (as opposed to an occurrence limit, which denotes the
total amount the insurer will pay per occurrence).
Agreement -
ANSWER
One of the four requirements of a legally binding contract. All parties involved must agree to the
terms of the contract. Can also refer to a binder, which is the preliminary substance of a contract.
Agricultural Producer -
ANSWER
A business that grows, harvests, and sells crops for profit.
Aleatory -
ANSWER
A characteristic of insurance contracts. Aleatory means "depending on an unknown future
event." An insurance contract will only pay IF and WHEN covered damages occur. Neither party
knows how much the contract will end up paying when they enter into the contract.
, ANSWER
-
ANSWER
In liability cases, the defendant's response to a complaint. There are three possible
ANSWER
s: 1)
accept complaint and pay for damages, 2) deny the complaint, or 3) accept the complaint with a
right to insert evidence into the case.
Annual Depreciation -
ANSWER
An item's Replacement cost divided by the number of years in its expected lifespan.
Appraisal -
ANSWER
A negotiation method which allows the claimant and the insurer each to select an appraiser.
The two appraisers in turn select an Umpire. The appraisers then work together to determine a
settlement amount. If they cannot agree, the Umpire steps in. Agreement by any two of the
three is binding.
Arbitration -
ANSWER
A negotiation method in which the opposing parties each submit their evidence to a
mutuallyagreed-
upon and neutral third party, called an arbitrator. The arbitrator reviews the positions of
each opposing side, and makes a final and legally binding decision.
Arbitrator -
ANSWER
The mutually-agreed-upon and neutral third party in an arbitration who reviews the positions of
ANSWERS | NEW 2026/2027 UPDATE | GRADED A+| 100% CORRECT
(VERIFIED SOLUTIONS)
Accumulated Depreciation -
ANSWER
The total decrease in an item's value over a period of time. Formula: (Annual Depreciation x Number
of years used)
Actual Cash Value (ACV) -
ANSWER
A valuation method used by insurers to reflect an item's current market value right before being
damaged or destroyed. Formula: (Replacement cost - Accumulated Depreciation)
Adhesion -
ANSWER
One of the characteristics of an insurance contract. Means that one party (the insurer) sets the
terms, and the other (the insured) can 'take it or leave it.'
Adjusted Gross Revenue (Crop Insurance) -
ANSWER
Narrowest (and least expensive) form of Crop Revenue Insurance. Insures farm revenue as a whole
instead of individual crops. Guarantees a percentage of the insured farm's average revenue.
Adjuster -
ANSWER
An agent who, for compensation, processes insurance claims. Can represent either the insured or
the insurer.
Adjuster - Emergency -
ANSWER
Adjusters who are temporarily licensed by the insurance commissioner to handle claims during
catastrophes or emergencies that produce an overwhelming number of claims in a short period of
time.
,Adjuster-Independent -
ANSWER
Self-employed adjusters who contract with multiple insurers at the same time. Paid on a commission
or fee-plus-expenses basis for each claim. Also called:Fee Adjuster, Bureau Adjuster
Adjuster-Public -
ANSWER
An adjuster who is hired to represent the claimant and help determine a fair indemnification.
Usually specializes in appraisals and negotiation. Paid commision, usually a percentage of final
settlement.
Adjuster-Staff -
ANSWER
Salaried employee of one insurance company who can work locally, regionally, or nationally. Also
called: Company Adjuster
Advance Payment Settlement -
ANSWER
A settlement option that lets the insurer offer some financial relief to the claimant before the claim
has been fully settled. The insurer makes advance payments to the claimant, which are then
subtracted from the final settlement amount. Often used when a claimant suffers bodily injury and is
unable to work.
Agency Authority -
ANSWER
The Agent's authority to act on behalf of someone else, usually an insurer. This authority is derived
from the agent's contract with the insurer.
Agency Authority - express -
ANSWER
Authority that is expressly given to the agent in writing. Allows agent to act on behalf of the
principal.
,Agency Authority - implied -
ANSWER
Authority that an agent possesses by implication of his behavior, regardless of whether this
authority is expressly granted in writing.
Agency Authority - apparent -
ANSWER
Authority that an agent possesses based on the appearance of representing an insurer.
Agent -
ANSWER
Someone who has received authority from an insurer to sell or service insurance policies.
Aggregate Limit -
ANSWER
A type of policy limit found in some health, liability, and property damage policies. It represents the
total amount the insurer will pay for all losses (as opposed to an occurrence limit, which denotes the
total amount the insurer will pay per occurrence).
Agreement -
ANSWER
One of the four requirements of a legally binding contract. All parties involved must agree to the
terms of the contract. Can also refer to a binder, which is the preliminary substance of a contract.
Agricultural Producer -
ANSWER
A business that grows, harvests, and sells crops for profit.
Aleatory -
ANSWER
A characteristic of insurance contracts. Aleatory means "depending on an unknown future
event." An insurance contract will only pay IF and WHEN covered damages occur. Neither party
knows how much the contract will end up paying when they enter into the contract.
, ANSWER
-
ANSWER
In liability cases, the defendant's response to a complaint. There are three possible
ANSWER
s: 1)
accept complaint and pay for damages, 2) deny the complaint, or 3) accept the complaint with a
right to insert evidence into the case.
Annual Depreciation -
ANSWER
An item's Replacement cost divided by the number of years in its expected lifespan.
Appraisal -
ANSWER
A negotiation method which allows the claimant and the insurer each to select an appraiser.
The two appraisers in turn select an Umpire. The appraisers then work together to determine a
settlement amount. If they cannot agree, the Umpire steps in. Agreement by any two of the
three is binding.
Arbitration -
ANSWER
A negotiation method in which the opposing parties each submit their evidence to a
mutuallyagreed-
upon and neutral third party, called an arbitrator. The arbitrator reviews the positions of
each opposing side, and makes a final and legally binding decision.
Arbitrator -
ANSWER
The mutually-agreed-upon and neutral third party in an arbitration who reviews the positions of
