AZ adjusterpro exam Questions and
Answers Graded A+
covered by other insurance (boiler and machinery) - Correct answer-windstorm or
hail
explosion
fire or combustion explosion
internal furnace explosion
social insurance - Correct answer-non profit, mandatory participation, benefits
prescribed by the law, designed to meet general needs of the public, gov. has
monopoly
Private Insurers - Correct answer-sells insurance based on consumer preferences,
offers a wide variety of insurance products, typically exists to benefit a group or
profit, insured party voluntarily participates
Stock Insurance Companies - Correct answer-always for profit, usually publicly-
traded, stockholders provide capital and participate in profits or losses, non-
participating insurers: no dividends go to policyholders
,Mutual Insurance Companies - Correct answer-owned by policyholders (no
shareholders), policyholders elect board of directors
participating insurers: policyholders participate in dividends
Reciprocal Insurers - Correct answer-a group of people or organizations that insure
each other, unincorporated, non-profit, operated by attorney-in-fact, members pay
into individual accounts, cost of claims shared by the whole group
Surplus Lines - Correct answer-people can get surplus lines when they are denied
coverage by standard insurers for multiple reasons
Surplus (Excess) Lines Insurance - Correct answer-is a last resort, is not available
in the standard market and must meet certain conditions
Blanket coverage vs. specific limits - Correct answer-Blanket coverage "blankets"
more than one property, type of property, or coverage under a single limit. Specific
limits are limits that apply to one specific type of property
Estoppel - Correct answer-A legal principle that prohibits a party from asserting a
claim or right that is inconsistent with that party's past statement or conduct on
which another party has detrimentally relied. A estoppel is a type of implied waiver
,6 Qualifications of Insurable Risk - Correct answer-1.) Adequate Premiums 2.)
Definable Risk 3.) Unexpected Losses 4.) Substantial losses 5.) Exclusions 6.) Law
of Large Numbers
Adequate Premiums - Correct answer-Insurance must be able to cover claims with
premium incomes
Exclusions - Correct answer-The insurer must exclude coverage for large-scale
disasters and catastrophic events
Proximate cause - Correct answer-when there is a unbroken chain of events
between an occurrence and a loss, then that occurrence is the proximate cause of
the loss.
original occurrence - Correct answer-causes damage that leads to more damage
meaning- that the original occurrence is the proximate cause of the loss
First party claim - Correct answer-a claim made by the policyholder on her own
policy
Third party claim - Correct answer-a claim made by anyone other than the
policyholder
5 steps to the claims process - Correct answer-1. Claimant contacts insurer and
files the claim
, 2. The insurer acknowledges the claim and requests all items necessary to prove
the loss
3. The adjuster investigates the claim and determines whether it is valid
4. If the claim is valid, the adjuster evaluates the claim
5. Insurer accepts or rejects the claim
Vicarious Liability - Correct answer-the transfer of negligence from one party to
another
4 elements of negligence - Correct answer-1. defendant has legal duty to act or not
act in a prescribed matter
2. defendant failed to act accordingly (breach of duty)
3. plaintiff suffered actual loss or injury due to defendants action/inaction
4. loss of injury to plaintiff was a direct result of breach of duty of the defendant
3 Degrees of Liability - Correct answer-1.)Full Liability - The insured party is
100% at fault for damages to a third party.
2.)Partial Liability - the insured party is only partially at fault or shares fault with a
third party.
Answers Graded A+
covered by other insurance (boiler and machinery) - Correct answer-windstorm or
hail
explosion
fire or combustion explosion
internal furnace explosion
social insurance - Correct answer-non profit, mandatory participation, benefits
prescribed by the law, designed to meet general needs of the public, gov. has
monopoly
Private Insurers - Correct answer-sells insurance based on consumer preferences,
offers a wide variety of insurance products, typically exists to benefit a group or
profit, insured party voluntarily participates
Stock Insurance Companies - Correct answer-always for profit, usually publicly-
traded, stockholders provide capital and participate in profits or losses, non-
participating insurers: no dividends go to policyholders
,Mutual Insurance Companies - Correct answer-owned by policyholders (no
shareholders), policyholders elect board of directors
participating insurers: policyholders participate in dividends
Reciprocal Insurers - Correct answer-a group of people or organizations that insure
each other, unincorporated, non-profit, operated by attorney-in-fact, members pay
into individual accounts, cost of claims shared by the whole group
Surplus Lines - Correct answer-people can get surplus lines when they are denied
coverage by standard insurers for multiple reasons
Surplus (Excess) Lines Insurance - Correct answer-is a last resort, is not available
in the standard market and must meet certain conditions
Blanket coverage vs. specific limits - Correct answer-Blanket coverage "blankets"
more than one property, type of property, or coverage under a single limit. Specific
limits are limits that apply to one specific type of property
Estoppel - Correct answer-A legal principle that prohibits a party from asserting a
claim or right that is inconsistent with that party's past statement or conduct on
which another party has detrimentally relied. A estoppel is a type of implied waiver
,6 Qualifications of Insurable Risk - Correct answer-1.) Adequate Premiums 2.)
Definable Risk 3.) Unexpected Losses 4.) Substantial losses 5.) Exclusions 6.) Law
of Large Numbers
Adequate Premiums - Correct answer-Insurance must be able to cover claims with
premium incomes
Exclusions - Correct answer-The insurer must exclude coverage for large-scale
disasters and catastrophic events
Proximate cause - Correct answer-when there is a unbroken chain of events
between an occurrence and a loss, then that occurrence is the proximate cause of
the loss.
original occurrence - Correct answer-causes damage that leads to more damage
meaning- that the original occurrence is the proximate cause of the loss
First party claim - Correct answer-a claim made by the policyholder on her own
policy
Third party claim - Correct answer-a claim made by anyone other than the
policyholder
5 steps to the claims process - Correct answer-1. Claimant contacts insurer and
files the claim
, 2. The insurer acknowledges the claim and requests all items necessary to prove
the loss
3. The adjuster investigates the claim and determines whether it is valid
4. If the claim is valid, the adjuster evaluates the claim
5. Insurer accepts or rejects the claim
Vicarious Liability - Correct answer-the transfer of negligence from one party to
another
4 elements of negligence - Correct answer-1. defendant has legal duty to act or not
act in a prescribed matter
2. defendant failed to act accordingly (breach of duty)
3. plaintiff suffered actual loss or injury due to defendants action/inaction
4. loss of injury to plaintiff was a direct result of breach of duty of the defendant
3 Degrees of Liability - Correct answer-1.)Full Liability - The insured party is
100% at fault for damages to a third party.
2.)Partial Liability - the insured party is only partially at fault or shares fault with a
third party.
