Adjuster Licensing Exam Review ACTUAL
QUESTIONS AND CORRECT ANSWERS
Subrogation - CORRECT ANSWER County Mutual Insurance Company is attempting
to make Maytag reimburse them for water damages that was caused by a defective valve on
their refrigerator. This process is known as?
Appraisal - CORRECT ANSWER What is the property insurance provision for when
an insurer and an insured have a dispute regarding the amount of damage on a claim?
Material Misrepresentation - CORRECT ANSWER ______ is a significant
misstatement in an application form. If a company had access to the correct information at the
time application, the company might not have agreed to accept the application.
Age, Condition, and Life Expectancy - CORRECT ANSWER As an adjuster, you
should base depreciation on these three factors?
Public Adjuster - CORRECT ANSWER A _____ is a person hired by the
consumer/property owner to settle the claim with the insurance company on their behalf.
(ALE) Additional Living Expenses - CORRECT ANSWER What are extra charges
covered by homeowner's policies over and above the policyholder's normal living expenses?
Occurrence - CORRECT ANSWER What is an event that results in an insured
loss/damages?
(ACV) - Actual Cash Value - CORRECT ANSWER What is the value of your property,
based on the current cost to replace it, minus depreciation
Incurred Expenses - CORRECT ANSWER Expenses that have already been sustained
and that have not yet been paid are known as?
,Declarations Page - Dec Page - CORRECT ANSWER What is the part of the written
insurance policy that states all the policy's specifics, including the name of the policyholder,
the type of property insured, and the limits for the coverage?
Negligence - CORRECT ANSWER What is the failure to use that degree of care which
an ordinary person of reasonable prudence would use under similar circumstances?
Overhead and Profit (O&P)
10% Overhead and 10% Profit - CORRECT ANSWER What is the amount of money
dedicated to a General Contractor's cost of doing business and earning a profit?
Third Party Loss - CORRECT ANSWER What is a situation involving a person other
than an insurer and the insured?
Reserves - CORRECT ANSWER What is the amount representing actual or potential
liabilities kept by an insurer to cover debts to policyholders?
First Party Loss - CORRECT ANSWER This loss involves only the insurer and the
insured?
Liability - CORRECT ANSWER What is the responsibility to another for one's
negligence?
Severity - CORRECT ANSWER ___________ is the size of a loss, the extent of
damages.
Premium - CORRECT ANSWER What is the amount paid by an insured to an
insurance company to obtain or maintain an insurance policy?
Replacement Cost - RC - RCV - CORRECT ANSWER What is the cost to replace
property at current market prices?
,Policy Period - CORRECT ANSWER The period a policy is in force, from the
effective date to the expiration date.
Deductible - CORRECT ANSWER What is the amount the insured must pay in a loss
before any payment is due?
Adverse Selection - CORRECT ANSWER What is the tendency for people with a
greater than average exposure to loss to purchase insurance?
Proximate Cause - CORRECT ANSWER What is defined as the cause that was
responsible for the loss, either directly or indirectly, through that chain of events?
Endorsements - CORRECT ANSWER Documents attached to an insurance policy that
change or modify the policy in some way. In most instances, they broaden coverage.
Binder - CORRECT ANSWER A temporary contract pending issue of the policy, that
is subject to the terms of the contract to be written later.
Principle of Indemnity - CORRECT ANSWER When a loss occurs, an individual
should be restored to the approximate financial condition he or she was in before the loss.
This is known as?
Insurable Interest - CORRECT ANSWER An interest by the insured person in the
value of the subject of insurance, including any legal or financial relationship is what?
Insuring Agreement - CORRECT ANSWER This section of an insurance policy that
describes the coverage provided by the insurer. It may also specify the perils covered by the
policy.
Actuary - Actuarial Department - CORRECT ANSWER This department is responsible
for making rates and determines the rates charged by the insurer.
, Aleatory Contract - CORRECT ANSWER What type of contract exists when the
insurance policy is valid even though there is an unequal exchange? For example, the insured
pays $300 for $300,000 of coverage.
Moral Hazard - CORRECT ANSWER A condition of habits that increases the
probability of a loss from a peril and is typically presented by a dishonest person. For
example, someone intentionally leaving the water running in their bathtub so that the water
will overflow and cause damage to their home.
Proof of Loss - CORRECT ANSWER A formal statement made by the insured to the
insurer regarding a claim, especially in property insurance, so that the insurer may determine
its liability under the policy.
Loss Payee - CORRECT ANSWER The party to whom money or insurance proceeds
is to be paid in the event of loss, such as the lienholder on an automobile or the mortgagee on
real property.
Underwriting - CORRECT ANSWER The process an insurance company uses to
decide whether to accept or reject an application for a policy.
Insurer - CORRECT ANSWER The term that is used to refer to the insurance
company.
Fraud - CORRECT ANSWER What is any intentional lying or misrepresentation by
policyholders in order to inflate a claims payment or receive a claims payment that would
otherwise not be paid?
Exclusion - CORRECT ANSWER What is the provision in an insurance policy that
indicates what is denied coverage?
Insured - CORRECT ANSWER The party to an insurance arrangement whom the
insurer agrees to indemnify for losses, provide benefits for, or render services to.
QUESTIONS AND CORRECT ANSWERS
Subrogation - CORRECT ANSWER County Mutual Insurance Company is attempting
to make Maytag reimburse them for water damages that was caused by a defective valve on
their refrigerator. This process is known as?
Appraisal - CORRECT ANSWER What is the property insurance provision for when
an insurer and an insured have a dispute regarding the amount of damage on a claim?
Material Misrepresentation - CORRECT ANSWER ______ is a significant
misstatement in an application form. If a company had access to the correct information at the
time application, the company might not have agreed to accept the application.
Age, Condition, and Life Expectancy - CORRECT ANSWER As an adjuster, you
should base depreciation on these three factors?
Public Adjuster - CORRECT ANSWER A _____ is a person hired by the
consumer/property owner to settle the claim with the insurance company on their behalf.
(ALE) Additional Living Expenses - CORRECT ANSWER What are extra charges
covered by homeowner's policies over and above the policyholder's normal living expenses?
Occurrence - CORRECT ANSWER What is an event that results in an insured
loss/damages?
(ACV) - Actual Cash Value - CORRECT ANSWER What is the value of your property,
based on the current cost to replace it, minus depreciation
Incurred Expenses - CORRECT ANSWER Expenses that have already been sustained
and that have not yet been paid are known as?
,Declarations Page - Dec Page - CORRECT ANSWER What is the part of the written
insurance policy that states all the policy's specifics, including the name of the policyholder,
the type of property insured, and the limits for the coverage?
Negligence - CORRECT ANSWER What is the failure to use that degree of care which
an ordinary person of reasonable prudence would use under similar circumstances?
Overhead and Profit (O&P)
10% Overhead and 10% Profit - CORRECT ANSWER What is the amount of money
dedicated to a General Contractor's cost of doing business and earning a profit?
Third Party Loss - CORRECT ANSWER What is a situation involving a person other
than an insurer and the insured?
Reserves - CORRECT ANSWER What is the amount representing actual or potential
liabilities kept by an insurer to cover debts to policyholders?
First Party Loss - CORRECT ANSWER This loss involves only the insurer and the
insured?
Liability - CORRECT ANSWER What is the responsibility to another for one's
negligence?
Severity - CORRECT ANSWER ___________ is the size of a loss, the extent of
damages.
Premium - CORRECT ANSWER What is the amount paid by an insured to an
insurance company to obtain or maintain an insurance policy?
Replacement Cost - RC - RCV - CORRECT ANSWER What is the cost to replace
property at current market prices?
,Policy Period - CORRECT ANSWER The period a policy is in force, from the
effective date to the expiration date.
Deductible - CORRECT ANSWER What is the amount the insured must pay in a loss
before any payment is due?
Adverse Selection - CORRECT ANSWER What is the tendency for people with a
greater than average exposure to loss to purchase insurance?
Proximate Cause - CORRECT ANSWER What is defined as the cause that was
responsible for the loss, either directly or indirectly, through that chain of events?
Endorsements - CORRECT ANSWER Documents attached to an insurance policy that
change or modify the policy in some way. In most instances, they broaden coverage.
Binder - CORRECT ANSWER A temporary contract pending issue of the policy, that
is subject to the terms of the contract to be written later.
Principle of Indemnity - CORRECT ANSWER When a loss occurs, an individual
should be restored to the approximate financial condition he or she was in before the loss.
This is known as?
Insurable Interest - CORRECT ANSWER An interest by the insured person in the
value of the subject of insurance, including any legal or financial relationship is what?
Insuring Agreement - CORRECT ANSWER This section of an insurance policy that
describes the coverage provided by the insurer. It may also specify the perils covered by the
policy.
Actuary - Actuarial Department - CORRECT ANSWER This department is responsible
for making rates and determines the rates charged by the insurer.
, Aleatory Contract - CORRECT ANSWER What type of contract exists when the
insurance policy is valid even though there is an unequal exchange? For example, the insured
pays $300 for $300,000 of coverage.
Moral Hazard - CORRECT ANSWER A condition of habits that increases the
probability of a loss from a peril and is typically presented by a dishonest person. For
example, someone intentionally leaving the water running in their bathtub so that the water
will overflow and cause damage to their home.
Proof of Loss - CORRECT ANSWER A formal statement made by the insured to the
insurer regarding a claim, especially in property insurance, so that the insurer may determine
its liability under the policy.
Loss Payee - CORRECT ANSWER The party to whom money or insurance proceeds
is to be paid in the event of loss, such as the lienholder on an automobile or the mortgagee on
real property.
Underwriting - CORRECT ANSWER The process an insurance company uses to
decide whether to accept or reject an application for a policy.
Insurer - CORRECT ANSWER The term that is used to refer to the insurance
company.
Fraud - CORRECT ANSWER What is any intentional lying or misrepresentation by
policyholders in order to inflate a claims payment or receive a claims payment that would
otherwise not be paid?
Exclusion - CORRECT ANSWER What is the provision in an insurance policy that
indicates what is denied coverage?
Insured - CORRECT ANSWER The party to an insurance arrangement whom the
insurer agrees to indemnify for losses, provide benefits for, or render services to.
