ALABAMA ADJUSTER PRACTICE EXAM
Questions and Answers Latest Versions
2025 GRADED A+
In which report to the principal would an adjuster include all witness statements and other supporting
evidence, in addition to the total settlement amount?
A. Final report
B. Preliminary report
C. Settlement report
D. Interim report - CORRECT ANSWERS A. Final report
An adjuster who has just taken witness statements for a claim she is currently investigating, but is not yet
ready to close the claim, may submit to the insurer a / an:
A. Preliminary report
B. Witness deposition report
C. Interim report
D. Full report - CORRECT ANSWERS C. Interim report
An adjuster acts as an agent for the insurer. As such, it is essential that the adjuster understand:
A. Her duty to check in daily with the insurance company
B. That her words or actions may bind the insurance company
C. Her duty to profit from every claim investigation
D. That she must always offer a settlement favorable to the claimant - CORRECT ANSWERS B. That
her words or actions may bind the insurance company
,Which of the following does not apply to the adjuster's responsibility of reporting to the principal?
A. The reports should include any pertinent information about investigations the adjuster has performed
B. The reports should be frequent and detailed
C. The reports should include advice on how to get out of paying covered claims
D. The reports should include information that would benefit the principal - CORRECT ANSWERS C.
The reports should include advice on how to get out of paying covered claims
Julie works as an insurance adjuster for XYZ Insurance. While adjusting a claim, she determines that the
claimant is covered by his insurance contract and issues him a settlement check for $5,000. The insured
cashes the check and performs the repairs. Two months later, the insurer reviews the file and realizes
that the claimant's damages were NOT covered by the policy. The insurer demands the settlement
money back. Which of the following best explains why the claimant will most likely not have to return
the money?
A. Subrogation does not allow the insurer to recover payment
B. The settlement payment was a warranty
C. Julie had the power to bind the insurer to her decision to pay the claim
D. Julie issued the settlement based on guarantees provided by the claimant - CORRECT ANSWERS C.
Julie had the power to bind the insurer to her decision to pay the claim
Which item would NOT belong in an adjuster's initial report on a claim?
A. The date that the adjuster first contacts the claimant
B. A list of all known circumstances surrounding the claim
C. The final settlement amount
D. A detailed list of the damages being claimed - CORRECT ANSWERS C. The final settlement amount
Which of these is NOT an essential detail for an adjuster to include in a loss report?
A. The policy limit
,B. The policy deductible
C. The policy number
D. The policy premium - CORRECT ANSWERS D. The policy premium
What are the 3 types of authority? - CORRECT ANSWERS Express authority
implied authority
apparent authority
Define: Express authority - CORRECT ANSWERS Given in writing within the agent's contract
Define: Implied authority - CORRECT ANSWERS Reasonable for public to believe, not expressly
granted in writing
Define: Apparent authority - CORRECT ANSWERS Granted when the insurer does not stop the agent
from acting in a certain way, even when those actions do not adhere to the authority granted in the
contract
William is wearing an ABC Insurance jacket and has an ABC Insurance sign over his rented office. The
walk-in customer could reasonably believe that he has the authority to write an insurance contract
because of his:
A. Apparent authority
B. Express authority
C. Agent authority
D. Implied authority - CORRECT ANSWERS D. Implied authority
After her business suffered damage in a fire, Jane filed a claim with Acme Insurance, which dispatched
Bob to adjust it, even though he was not allowed to adjust commercial claims. He investigated Jane's
losses and submitted his estimate to Acme Insurance, which issued her a settlement check based on that
estimate. Bob had _____ because Acme Insurance accepted his estimate and paid Jane's claim.
A. Agency authority
, B. Apparent authority
C. Express authority
D. Expert authority - CORRECT ANSWERS B. Apparent authority
_____ authority is what the public reasonably believes the agent has, based on the agent's
representations.
A. Contract
B. Apparent
C. Express
D. Impied - CORRECT ANSWERS D. Implied
James signed a contract with XYZ Insurance that enables him to sell insurance policies and collect
premiums on their behalf. What authority has James been granted?
A. Implied authority
B. Full authority
C. Express authority
D. Apparent authority - CORRECT ANSWERS C. Express authority
Don works as an adjuster for ABC Insurance. Which of the following is most likely NOT one of Don's
responsibilities?
A. Represent the insured if a claim goes to court
B. Provide ABC Insurance with complete claim documentation
C. Always use reasonable care and judgment
D. Adhere to the terms of his contract - CORRECT ANSWERS A. Represent the insured if a claim goes
to court
Questions and Answers Latest Versions
2025 GRADED A+
In which report to the principal would an adjuster include all witness statements and other supporting
evidence, in addition to the total settlement amount?
A. Final report
B. Preliminary report
C. Settlement report
D. Interim report - CORRECT ANSWERS A. Final report
An adjuster who has just taken witness statements for a claim she is currently investigating, but is not yet
ready to close the claim, may submit to the insurer a / an:
A. Preliminary report
B. Witness deposition report
C. Interim report
D. Full report - CORRECT ANSWERS C. Interim report
An adjuster acts as an agent for the insurer. As such, it is essential that the adjuster understand:
A. Her duty to check in daily with the insurance company
B. That her words or actions may bind the insurance company
C. Her duty to profit from every claim investigation
D. That she must always offer a settlement favorable to the claimant - CORRECT ANSWERS B. That
her words or actions may bind the insurance company
,Which of the following does not apply to the adjuster's responsibility of reporting to the principal?
A. The reports should include any pertinent information about investigations the adjuster has performed
B. The reports should be frequent and detailed
C. The reports should include advice on how to get out of paying covered claims
D. The reports should include information that would benefit the principal - CORRECT ANSWERS C.
The reports should include advice on how to get out of paying covered claims
Julie works as an insurance adjuster for XYZ Insurance. While adjusting a claim, she determines that the
claimant is covered by his insurance contract and issues him a settlement check for $5,000. The insured
cashes the check and performs the repairs. Two months later, the insurer reviews the file and realizes
that the claimant's damages were NOT covered by the policy. The insurer demands the settlement
money back. Which of the following best explains why the claimant will most likely not have to return
the money?
A. Subrogation does not allow the insurer to recover payment
B. The settlement payment was a warranty
C. Julie had the power to bind the insurer to her decision to pay the claim
D. Julie issued the settlement based on guarantees provided by the claimant - CORRECT ANSWERS C.
Julie had the power to bind the insurer to her decision to pay the claim
Which item would NOT belong in an adjuster's initial report on a claim?
A. The date that the adjuster first contacts the claimant
B. A list of all known circumstances surrounding the claim
C. The final settlement amount
D. A detailed list of the damages being claimed - CORRECT ANSWERS C. The final settlement amount
Which of these is NOT an essential detail for an adjuster to include in a loss report?
A. The policy limit
,B. The policy deductible
C. The policy number
D. The policy premium - CORRECT ANSWERS D. The policy premium
What are the 3 types of authority? - CORRECT ANSWERS Express authority
implied authority
apparent authority
Define: Express authority - CORRECT ANSWERS Given in writing within the agent's contract
Define: Implied authority - CORRECT ANSWERS Reasonable for public to believe, not expressly
granted in writing
Define: Apparent authority - CORRECT ANSWERS Granted when the insurer does not stop the agent
from acting in a certain way, even when those actions do not adhere to the authority granted in the
contract
William is wearing an ABC Insurance jacket and has an ABC Insurance sign over his rented office. The
walk-in customer could reasonably believe that he has the authority to write an insurance contract
because of his:
A. Apparent authority
B. Express authority
C. Agent authority
D. Implied authority - CORRECT ANSWERS D. Implied authority
After her business suffered damage in a fire, Jane filed a claim with Acme Insurance, which dispatched
Bob to adjust it, even though he was not allowed to adjust commercial claims. He investigated Jane's
losses and submitted his estimate to Acme Insurance, which issued her a settlement check based on that
estimate. Bob had _____ because Acme Insurance accepted his estimate and paid Jane's claim.
A. Agency authority
, B. Apparent authority
C. Express authority
D. Expert authority - CORRECT ANSWERS B. Apparent authority
_____ authority is what the public reasonably believes the agent has, based on the agent's
representations.
A. Contract
B. Apparent
C. Express
D. Impied - CORRECT ANSWERS D. Implied
James signed a contract with XYZ Insurance that enables him to sell insurance policies and collect
premiums on their behalf. What authority has James been granted?
A. Implied authority
B. Full authority
C. Express authority
D. Apparent authority - CORRECT ANSWERS C. Express authority
Don works as an adjuster for ABC Insurance. Which of the following is most likely NOT one of Don's
responsibilities?
A. Represent the insured if a claim goes to court
B. Provide ABC Insurance with complete claim documentation
C. Always use reasonable care and judgment
D. Adhere to the terms of his contract - CORRECT ANSWERS A. Represent the insured if a claim goes
to court
