TEXAS ALL-LINES ADJUSTER EXAM – 100
PRACTICE QUESTIONS & ANSWERS (2026
Edition)
(Correct answers marked with )
SECTION 1 — GENERAL INSURANCE CONCEPTS
1. Which term refers to the uncertainty or chance of loss?
A. Hazard
B. Peril
C. Risk
D. Exposure
2. A peril is best defined as:
A. Anything that increases the chance of loss
B. A cause of loss
C. A reduction in value
D. The uncertainty of loss
3. A hazard that arises from an individual’s habits, behaviors, or attitudes is called:
A. Physical hazard
B. Moral hazard
C. Morale hazard
D. Environmental hazard
4. Which type of hazard results from carelessness or indifference?
A. Physical
B. Moral
C. Morale
D. Legal
5. An insurable interest must exist at which time for property insurance?
A. At policy renewal
B. When claim is filed
, C. At time of loss
D. At first premium payment
6. The transfer of legal rights from one party to another is known as:
A. Arbitration
B. Waiver
C. Subrogation
D. Indemnity
7. Indemnity means the insured should be restored to:
A. Better financial position
B. Same financial position as before loss
C. Any level they choose
D. Highest financial position
8. A written modification to an insurance policy is called:
A. Binder
B. Endorsement
C. Schedule
D. Waiver
9. What is the purpose of coinsurance?
A. Prevent over-insurance
B. Encourage fraud prevention
C. Reduce settlement costs
D. Improve public policy
10. Exposure is best defined as:
A. Condition likely to cause a loss
B. Insured property value
C. Probability of death
D. Amount paid for claim
SECTION 2 — POLICY STRUCTURE
11. Which section identifies who is insured, what is insured, and limits?
A. Conditions
B. Declarations
, C. Insuring Agreement
D. Exclusions
12. The insurer's promise to pay is found in which section?
A. Exclusions
B. Definitions
C. Insuring Agreement
D. Conditions
13. Which section describes responsibilities of the insured and insurer?
A. Insuring agreement
B. Declarations
C. Conditions
D. Exclusions
14. Exclusions are used to:
A. Increase coverage
B. Remove coverage
C. Modify deductibles
D. Waive obligations
15. Definitions in a policy exist to:
A. Clarify key terms
B. Remove ambiguity
C. Expand coverage
D. Exclude perils
SECTION 3 — TEXAS INSURANCE REGULATION
16. Which entity regulates adjusters in Texas?
A. NAIC
B. TDI — Texas Department of Insurance
C. FEMA
D. Federal Insurance Bureau
17. Texas adjuster licenses must be renewed every:
A. 1 year
B. 2 years
, C. 3 years
D. 5 years
18. How many CE hours are required for renewal in Texas?
A. 12
B. 18
C. 24
D. 30
19. Texas ethics CE requirement is:
A. 1 hour
B. 2 hours
C. 3 hours
D. 6 hours
20. Texas adjusters must notify TDI of address changes within:
A. 5 days
B. 10 days
C. 20 days
D. 30 days
SECTION 4 — CLAIMS HANDLING
21. The first duty of an adjuster on a claim is:
A. Investigate
B. Review settlement
C. Acknowledge claim
D. Hire experts
22. To deny a claim, the insurer must:
A. Cite policy language
B. Provide oral explanation
C. Wait 6 months
D. Ask for premium receipts
23. A reservation of rights letter:
A. Fully denies a claim
B. Confirms partial payment
PRACTICE QUESTIONS & ANSWERS (2026
Edition)
(Correct answers marked with )
SECTION 1 — GENERAL INSURANCE CONCEPTS
1. Which term refers to the uncertainty or chance of loss?
A. Hazard
B. Peril
C. Risk
D. Exposure
2. A peril is best defined as:
A. Anything that increases the chance of loss
B. A cause of loss
C. A reduction in value
D. The uncertainty of loss
3. A hazard that arises from an individual’s habits, behaviors, or attitudes is called:
A. Physical hazard
B. Moral hazard
C. Morale hazard
D. Environmental hazard
4. Which type of hazard results from carelessness or indifference?
A. Physical
B. Moral
C. Morale
D. Legal
5. An insurable interest must exist at which time for property insurance?
A. At policy renewal
B. When claim is filed
, C. At time of loss
D. At first premium payment
6. The transfer of legal rights from one party to another is known as:
A. Arbitration
B. Waiver
C. Subrogation
D. Indemnity
7. Indemnity means the insured should be restored to:
A. Better financial position
B. Same financial position as before loss
C. Any level they choose
D. Highest financial position
8. A written modification to an insurance policy is called:
A. Binder
B. Endorsement
C. Schedule
D. Waiver
9. What is the purpose of coinsurance?
A. Prevent over-insurance
B. Encourage fraud prevention
C. Reduce settlement costs
D. Improve public policy
10. Exposure is best defined as:
A. Condition likely to cause a loss
B. Insured property value
C. Probability of death
D. Amount paid for claim
SECTION 2 — POLICY STRUCTURE
11. Which section identifies who is insured, what is insured, and limits?
A. Conditions
B. Declarations
, C. Insuring Agreement
D. Exclusions
12. The insurer's promise to pay is found in which section?
A. Exclusions
B. Definitions
C. Insuring Agreement
D. Conditions
13. Which section describes responsibilities of the insured and insurer?
A. Insuring agreement
B. Declarations
C. Conditions
D. Exclusions
14. Exclusions are used to:
A. Increase coverage
B. Remove coverage
C. Modify deductibles
D. Waive obligations
15. Definitions in a policy exist to:
A. Clarify key terms
B. Remove ambiguity
C. Expand coverage
D. Exclude perils
SECTION 3 — TEXAS INSURANCE REGULATION
16. Which entity regulates adjusters in Texas?
A. NAIC
B. TDI — Texas Department of Insurance
C. FEMA
D. Federal Insurance Bureau
17. Texas adjuster licenses must be renewed every:
A. 1 year
B. 2 years
, C. 3 years
D. 5 years
18. How many CE hours are required for renewal in Texas?
A. 12
B. 18
C. 24
D. 30
19. Texas ethics CE requirement is:
A. 1 hour
B. 2 hours
C. 3 hours
D. 6 hours
20. Texas adjusters must notify TDI of address changes within:
A. 5 days
B. 10 days
C. 20 days
D. 30 days
SECTION 4 — CLAIMS HANDLING
21. The first duty of an adjuster on a claim is:
A. Investigate
B. Review settlement
C. Acknowledge claim
D. Hire experts
22. To deny a claim, the insurer must:
A. Cite policy language
B. Provide oral explanation
C. Wait 6 months
D. Ask for premium receipts
23. A reservation of rights letter:
A. Fully denies a claim
B. Confirms partial payment
