Alabama Insurance Adjuster
Final Test Review
(Questions & Solutions)
2025
1
, Question 1 (Multiple Choice)
Question: In Insurance Fundamentals, which of the following best
describes the principle of subrogation ?
Options:
A. The insurer’s right to pursue a third party that caused an insurance
loss to the insured.
B. The insured's right to recover losses directly from the insurer.
C. The contractual obligation to pay premiums on time.
D. The process of reversing a policy cancellation decision.
ANS: A
Rationale: Subrogation allows an insurer to seek recovery of amounts
paid on a claim by pursuing the party legally liable for the loss, thereby
preventing the insured from recovering twice for the same loss.
---
Question 2 (Fill-in-the-Blank)
Question: In the context of insurance claims, the __________ clause
requires an insured to notify the insurer promptly when a loss occurs,
thereby facilitating timely investigation.
ANS: loss notice
Rationale: The loss notice clause is essential for initiating the claims
process in a timely manner. It ensures that the insurer has the
opportunity to investigate the claim promptly and efficiently.
---
Question 3 (True/False)
Question: True or False: The requirement of an insurable interest
2
, prevents policyholders from profiting from insurance contracts and limits
exposure to fraud.
ANS: True
Rationale: Insurable interest ensures that a policyholder stands to
suffer a genuine loss in the event of damage or injury, which deters
fraudulent claims and prevents financial gain from a loss event.
---
Question 4 (Multiple Response)
Question: Which of the following are primary responsibilities of an
insurance adjuster? (Select all that apply.)
Options:
- A. Conducting detailed investigations of claims.
- B. Negotiating settlements with claimants and third parties.
- C. Fabricating incident details to justify claim denials.
- D. Preserving evidence relevant to the claim.
- E. Reviewing policy language to interpret coverage.
ANS: A, B, D, E
Rationale: A qualified adjuster must conduct thorough investigations,
negotiate fairly, preserve evidence, and interpret policy language to
assess claims accurately. Fabrication of details is unethical and illegal.
---
Question 5 (Multiple Choice)
Question: Which type of policy is characterized by covering all perils
except those specifically excluded, and is mainly used in commercial
property insurance?
Options:
A. Named Perils Policy
3
Final Test Review
(Questions & Solutions)
2025
1
, Question 1 (Multiple Choice)
Question: In Insurance Fundamentals, which of the following best
describes the principle of subrogation ?
Options:
A. The insurer’s right to pursue a third party that caused an insurance
loss to the insured.
B. The insured's right to recover losses directly from the insurer.
C. The contractual obligation to pay premiums on time.
D. The process of reversing a policy cancellation decision.
ANS: A
Rationale: Subrogation allows an insurer to seek recovery of amounts
paid on a claim by pursuing the party legally liable for the loss, thereby
preventing the insured from recovering twice for the same loss.
---
Question 2 (Fill-in-the-Blank)
Question: In the context of insurance claims, the __________ clause
requires an insured to notify the insurer promptly when a loss occurs,
thereby facilitating timely investigation.
ANS: loss notice
Rationale: The loss notice clause is essential for initiating the claims
process in a timely manner. It ensures that the insurer has the
opportunity to investigate the claim promptly and efficiently.
---
Question 3 (True/False)
Question: True or False: The requirement of an insurable interest
2
, prevents policyholders from profiting from insurance contracts and limits
exposure to fraud.
ANS: True
Rationale: Insurable interest ensures that a policyholder stands to
suffer a genuine loss in the event of damage or injury, which deters
fraudulent claims and prevents financial gain from a loss event.
---
Question 4 (Multiple Response)
Question: Which of the following are primary responsibilities of an
insurance adjuster? (Select all that apply.)
Options:
- A. Conducting detailed investigations of claims.
- B. Negotiating settlements with claimants and third parties.
- C. Fabricating incident details to justify claim denials.
- D. Preserving evidence relevant to the claim.
- E. Reviewing policy language to interpret coverage.
ANS: A, B, D, E
Rationale: A qualified adjuster must conduct thorough investigations,
negotiate fairly, preserve evidence, and interpret policy language to
assess claims accurately. Fabrication of details is unethical and illegal.
---
Question 5 (Multiple Choice)
Question: Which type of policy is characterized by covering all perils
except those specifically excluded, and is mainly used in commercial
property insurance?
Options:
A. Named Perils Policy
3
