FL 6-20 Claims Adjuster UPDATED
ACTUAL Exam Questions and CORRECT
Answers
What is Insurance? - CORRECT ANSWER - Financial tool that protects individuals and
organizations from unforeseen and extraordinary financial losses by transferring risk to another
party.
What is the Principle of Indemnity? - CORRECT ANSWER - Restoration of approximate
previous financial condition; no more, no less.
What is a Premium? - CORRECT ANSWER - A fee that the insured pays in exchange for
insurance coverage.
What is a Reserve? - CORRECT ANSWER - A pool of collected premiums that the
insurer sets aside to pay claims.
Legal Contract - CORRECT ANSWER -
Insurance Policy - CORRECT ANSWER - A contract to provide financial protection for a
fee.
Four Requirements of a Legal Contract - CORRECT ANSWER - 1. Agreement (i.e. Offer
and Acceptance)
2. Consideration
3. Competent Parties
4. Legal purpose
Termination of Offer - CORRECT ANSWER - Offer may be terminated by:
1. Revocation by offeror
, 2. Rejection by offeree
3. Time lapse
4. Termination by operation of law:
a. Either party does or becomes disabled
b. Performance of contract becomes illegal after offer
c. Subject matter is destroyed
Six Special Characteristics of Insurance Contracts - CORRECT ANSWER - 1. Personal
2. Adhesion
3. Utmost Hood Faith
4. Aleatory
5. Unilateral
6. Conditional
Personal Contract - CORRECT ANSWER - 1. It protects the policyholder from financial
losses.
2. It does not protect property from becoming damaged.
3. Coverage follows the person, not the property.
Contract of Adhesion - CORRECT ANSWER - 1. The insurer is responsible for the terms
of the contract.
2. The insured has no say in the wording.
3. Courts favor the insured in the event of an ambiguity.
4. The contract should be interpreted as a reasonable person would interpret it.
Utmost Good Faith - CORRECT ANSWER - 1. Applicants are expected to be completely
honest about the risk to the insurer.
2. The insurer must rely on the applicants not to conceal or misrepresent pertinent facts.
ACTUAL Exam Questions and CORRECT
Answers
What is Insurance? - CORRECT ANSWER - Financial tool that protects individuals and
organizations from unforeseen and extraordinary financial losses by transferring risk to another
party.
What is the Principle of Indemnity? - CORRECT ANSWER - Restoration of approximate
previous financial condition; no more, no less.
What is a Premium? - CORRECT ANSWER - A fee that the insured pays in exchange for
insurance coverage.
What is a Reserve? - CORRECT ANSWER - A pool of collected premiums that the
insurer sets aside to pay claims.
Legal Contract - CORRECT ANSWER -
Insurance Policy - CORRECT ANSWER - A contract to provide financial protection for a
fee.
Four Requirements of a Legal Contract - CORRECT ANSWER - 1. Agreement (i.e. Offer
and Acceptance)
2. Consideration
3. Competent Parties
4. Legal purpose
Termination of Offer - CORRECT ANSWER - Offer may be terminated by:
1. Revocation by offeror
, 2. Rejection by offeree
3. Time lapse
4. Termination by operation of law:
a. Either party does or becomes disabled
b. Performance of contract becomes illegal after offer
c. Subject matter is destroyed
Six Special Characteristics of Insurance Contracts - CORRECT ANSWER - 1. Personal
2. Adhesion
3. Utmost Hood Faith
4. Aleatory
5. Unilateral
6. Conditional
Personal Contract - CORRECT ANSWER - 1. It protects the policyholder from financial
losses.
2. It does not protect property from becoming damaged.
3. Coverage follows the person, not the property.
Contract of Adhesion - CORRECT ANSWER - 1. The insurer is responsible for the terms
of the contract.
2. The insured has no say in the wording.
3. Courts favor the insured in the event of an ambiguity.
4. The contract should be interpreted as a reasonable person would interpret it.
Utmost Good Faith - CORRECT ANSWER - 1. Applicants are expected to be completely
honest about the risk to the insurer.
2. The insurer must rely on the applicants not to conceal or misrepresent pertinent facts.
