1 | P a g e | © copyright 2024/2025 | Grade A+
Insurance Adjusting Questions and
Answers (100% Pass)
The difference between surety bonds and insurance contracts is
✓ surety bonds do not constitute a transfer of risk.
Subrogation Clause
✓ This clause is used when the insurer has paid a covered claim on
behalf of the insured that is caused by another party. The insurance
company is entitled to the insured's right of recovery from the negligent
party. This clause is sometimes called "Transfer of Right of Recovery
Against Others to Us."
Cause of Loss Forms
✓ State the perils that are to be insured against.
Actual cash value
✓ The cost of replacement less depreciation.
Loss Evaluation Methods
Master01 | October, 2024/2025 | Latest update
, 1 | P a g e | © copyright 2024/2025 | Grade A+
✓ Actual cash value
Replacement cost
Functional replacement cost
Market value
Agreed value
Stated amount
Valued policy
Coinsurance/Loss Settlement Clause
✓ In property insurance: is a method of requiring the insured to carry
enough insurance to cover at least 80% of the replacement cost value
of the property at the time of the loss. Less than 80% coverage will
mean lower claim payments.
Standard mortgage clause (mortgagee rights)
✓ Protects the interest of the financial institution against loss to real
property caused by perils insured against.
Liability Losses
Master01 | October, 2024/2025 | Latest update
, 1 | P a g e | © copyright 2024/2025 | Grade A+
✓ Third party losses
Types of Liability Policies
✓ Personal auto policies ▪
Commercial auto policies ▪
General liability policies ▪
Professional liability policies ▪ Umbrella policies ▪ Personal liability (including
boats and yachts)
Loss payable clause
✓ Similar to the mortgagee clause but applies to chattel or movable
personal property on which the insured has a loan.
Constructive Total Loss
✓ Occurs when the cost to repair damaged property exceeds the value
of the property after repairs have been made.
Compensatory Damages
✓ Damages caused to a third party by the insured as a result of his/her
negligence. Two types: special and general.
Master01 | October, 2024/2025 | Latest update
, 1 | P a g e | © copyright 2024/2025 | Grade A+
Special Damages
✓ Economic losses resulting directly from a loss and include medical
expenses etc.
General Damages
✓ Pain and suffering and disfigurement, and life-altering issues such as
loss of mobility and loss of consortium not readily defined by actual
incurred expenses that are directly caused by a covered loss.
Defenses Against Negligence
✓ Contributory Negligence
Comparative Negligence
Assumption of Risk
Intervening Cause
Statute of Limitationsh
Master01 | October, 2024/2025 | Latest update
Insurance Adjusting Questions and
Answers (100% Pass)
The difference between surety bonds and insurance contracts is
✓ surety bonds do not constitute a transfer of risk.
Subrogation Clause
✓ This clause is used when the insurer has paid a covered claim on
behalf of the insured that is caused by another party. The insurance
company is entitled to the insured's right of recovery from the negligent
party. This clause is sometimes called "Transfer of Right of Recovery
Against Others to Us."
Cause of Loss Forms
✓ State the perils that are to be insured against.
Actual cash value
✓ The cost of replacement less depreciation.
Loss Evaluation Methods
Master01 | October, 2024/2025 | Latest update
, 1 | P a g e | © copyright 2024/2025 | Grade A+
✓ Actual cash value
Replacement cost
Functional replacement cost
Market value
Agreed value
Stated amount
Valued policy
Coinsurance/Loss Settlement Clause
✓ In property insurance: is a method of requiring the insured to carry
enough insurance to cover at least 80% of the replacement cost value
of the property at the time of the loss. Less than 80% coverage will
mean lower claim payments.
Standard mortgage clause (mortgagee rights)
✓ Protects the interest of the financial institution against loss to real
property caused by perils insured against.
Liability Losses
Master01 | October, 2024/2025 | Latest update
, 1 | P a g e | © copyright 2024/2025 | Grade A+
✓ Third party losses
Types of Liability Policies
✓ Personal auto policies ▪
Commercial auto policies ▪
General liability policies ▪
Professional liability policies ▪ Umbrella policies ▪ Personal liability (including
boats and yachts)
Loss payable clause
✓ Similar to the mortgagee clause but applies to chattel or movable
personal property on which the insured has a loan.
Constructive Total Loss
✓ Occurs when the cost to repair damaged property exceeds the value
of the property after repairs have been made.
Compensatory Damages
✓ Damages caused to a third party by the insured as a result of his/her
negligence. Two types: special and general.
Master01 | October, 2024/2025 | Latest update
, 1 | P a g e | © copyright 2024/2025 | Grade A+
Special Damages
✓ Economic losses resulting directly from a loss and include medical
expenses etc.
General Damages
✓ Pain and suffering and disfigurement, and life-altering issues such as
loss of mobility and loss of consortium not readily defined by actual
incurred expenses that are directly caused by a covered loss.
Defenses Against Negligence
✓ Contributory Negligence
Comparative Negligence
Assumption of Risk
Intervening Cause
Statute of Limitationsh
Master01 | October, 2024/2025 | Latest update
