Insurance claims adjusting Exam
Questions and Answers Graded A+
Accumulated Depreciation - Correct answer-The total decrease in an item's value
over time.
Formula: Annual depreciation x number of years used (its age)
Acreage Reporting Date - Correct answer-The deadline for providing the insurer
with an acreage report, which is used to determine the amount of coverage needed
and the premium charged for a particular crop.
Actual Cash Value - Correct answer-Often expressed as ACV. A valuation method
used by insurers to reflect an item's current market value right before being
damaged or destroyed. To use the formula, we need estimates for both the
replacement cost and the depreciate on the insured property.
Formula: Replacement cost - Depreciation
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,Because ACV coverage does not pay fully to replace or repair an item, ACV
policies have lower premiums.
Actual Production History - Correct answer-A history of a farmer's crop yields
over a multi-year period, which is used to determine the normal production level of
a farm.
Adhesion - Correct answer-Characteristic of an insurance contract. Means that one
party (the insurer) sets the terms, and the other (the policy holder) can "take it or
leave it."
Adjusted Gross Revenue (Crop Insurance) - Correct answer-Narrowest (and least
expensive) form of Crop Revenue Insurance. Insures farm revenue as a whole
instead of individual crops. Guarantees a percentage of the insured farm's average
revenue.
Adjuster - Correct answer-An agent, who, for compensation, processes insurance
claims. Can represent either the insured or the insurer.
Adjuster- Emergency - Correct answer-Adjuster who are temporarily licensed by
the insurance commissioner to handle claims during catastrophes or emergencies
that can produce an overwhelming number of claims in a short period of time.
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,Adjuster- Independent - Correct answer-Self-employed adjusters who contract with
multiple insurers at the same time. Paid on a commission or fee-plus-expenses
basis for each claim. Also called Fee Adjuster, Bureau Adjuster
Adjuster- Public - Correct answer-An adjuster who is hired to represent the
claimant and help determine a fair indemnification. Usually specializes in
appraisals and negotiation. Paid commission, usually a percentage of a final
settlement.
Adjuster- Staff - Correct answer-Salaried employee of one insurance company who
can work locally, regionally, or nationally. Also called Company Adjuster.
Advance Payment Settlement - Correct answer-A settlement option that lets the
insurer offer some financial relief to the claimant before the claim has been fully
settled. The insurer makes advance payments to the claimant, which are then
subtracted from the final settlement amount. Often used when a claimant suffers
bodily injury and is unable to work.
Agency Authority - Correct answer-The Agent's authority to act on behalf of
someone else, usually an insurer. This authority is derived from the agent's contract
with the insurer.
Agency Authority- express - Correct answer-Authority that is expressly given to
the agent in writing. Allows agent to act on behalf of the principal.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, Agency Authority- implied - Correct answer-Authority that an agent possesses by
implication of behavior, regardless of whether this authority is granted in writing.
Agency Authority- apparent - Correct answer-Authority that an agent possesses
based on the appearance of representing the insurer.
Agent - Correct answer-Someone who has received authority from an insurer to
sell or service insurance policies.
Aggregate Limit - Correct answer-A type of policy limit found in some health,
liability, and property damage policies. It represents the total amount the insurer
will pay for all losses (as opposed to an occurrence limit, which denotes the total
amount the insurer will pay per occurrence.)
Agreement - Correct answer-One of the four requirements of a legally binding
contract. All parties involved must agree to the terms of the contract. Can also refer
to a binder, which is the preliminary substance of a contract.
Agricultural Producer - Correct answer-A business that grows, harvests, and sells
crops for profit.
Aleatory - Correct answer-A characteristic of an insurance contract. Means
"depending on an unknown future event." An insurance contract will only pay IF
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
Questions and Answers Graded A+
Accumulated Depreciation - Correct answer-The total decrease in an item's value
over time.
Formula: Annual depreciation x number of years used (its age)
Acreage Reporting Date - Correct answer-The deadline for providing the insurer
with an acreage report, which is used to determine the amount of coverage needed
and the premium charged for a particular crop.
Actual Cash Value - Correct answer-Often expressed as ACV. A valuation method
used by insurers to reflect an item's current market value right before being
damaged or destroyed. To use the formula, we need estimates for both the
replacement cost and the depreciate on the insured property.
Formula: Replacement cost - Depreciation
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,Because ACV coverage does not pay fully to replace or repair an item, ACV
policies have lower premiums.
Actual Production History - Correct answer-A history of a farmer's crop yields
over a multi-year period, which is used to determine the normal production level of
a farm.
Adhesion - Correct answer-Characteristic of an insurance contract. Means that one
party (the insurer) sets the terms, and the other (the policy holder) can "take it or
leave it."
Adjusted Gross Revenue (Crop Insurance) - Correct answer-Narrowest (and least
expensive) form of Crop Revenue Insurance. Insures farm revenue as a whole
instead of individual crops. Guarantees a percentage of the insured farm's average
revenue.
Adjuster - Correct answer-An agent, who, for compensation, processes insurance
claims. Can represent either the insured or the insurer.
Adjuster- Emergency - Correct answer-Adjuster who are temporarily licensed by
the insurance commissioner to handle claims during catastrophes or emergencies
that can produce an overwhelming number of claims in a short period of time.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,Adjuster- Independent - Correct answer-Self-employed adjusters who contract with
multiple insurers at the same time. Paid on a commission or fee-plus-expenses
basis for each claim. Also called Fee Adjuster, Bureau Adjuster
Adjuster- Public - Correct answer-An adjuster who is hired to represent the
claimant and help determine a fair indemnification. Usually specializes in
appraisals and negotiation. Paid commission, usually a percentage of a final
settlement.
Adjuster- Staff - Correct answer-Salaried employee of one insurance company who
can work locally, regionally, or nationally. Also called Company Adjuster.
Advance Payment Settlement - Correct answer-A settlement option that lets the
insurer offer some financial relief to the claimant before the claim has been fully
settled. The insurer makes advance payments to the claimant, which are then
subtracted from the final settlement amount. Often used when a claimant suffers
bodily injury and is unable to work.
Agency Authority - Correct answer-The Agent's authority to act on behalf of
someone else, usually an insurer. This authority is derived from the agent's contract
with the insurer.
Agency Authority- express - Correct answer-Authority that is expressly given to
the agent in writing. Allows agent to act on behalf of the principal.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, Agency Authority- implied - Correct answer-Authority that an agent possesses by
implication of behavior, regardless of whether this authority is granted in writing.
Agency Authority- apparent - Correct answer-Authority that an agent possesses
based on the appearance of representing the insurer.
Agent - Correct answer-Someone who has received authority from an insurer to
sell or service insurance policies.
Aggregate Limit - Correct answer-A type of policy limit found in some health,
liability, and property damage policies. It represents the total amount the insurer
will pay for all losses (as opposed to an occurrence limit, which denotes the total
amount the insurer will pay per occurrence.)
Agreement - Correct answer-One of the four requirements of a legally binding
contract. All parties involved must agree to the terms of the contract. Can also refer
to a binder, which is the preliminary substance of a contract.
Agricultural Producer - Correct answer-A business that grows, harvests, and sells
crops for profit.
Aleatory - Correct answer-A characteristic of an insurance contract. Means
"depending on an unknown future event." An insurance contract will only pay IF
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
