alabama insurance adjuster exam Questions and
Answers Grade A+
It must be a notarized document - Answer-Which of the following is NOT a
requirement for a legally binding contract ?
Principle of Indemnity - Answer-Greg plays trombone in his school band during
football games . During a rally song in the stands one day , Greg annoys one of the
opposing team's fans , who grabs his $ 400 trombone and hurls it down the
bleachers , completely destroying it . Greg's insurance pays him $ 400 to replace
the trombone , but then the opposing team's coach also offers to replace the
instrument , at whatever the cost . So Greg orders a new $ 3,200 trombone and
has the opposing team's athletic department absorb the cost . Which principle has
Greg violated ?
Premium - Answer-The fee paid by the insured in exchange for an insurance policy
is called a :
Unilateral Contract - Answer-In a _________ only one party is legally obligated to
perform
conditions - Answer-In which section of an insurance policy, might you find the
following statement? "Damage to insured property must be reported within 15
days of the damaging occurrence. "
The insuring agreement - Answer-in an insurance policy, the summary of what the
insurer will do in the event of covered loss is called:
foreign - Answer-an insurer that adheres to the law of a state, but is located
outside of that state is called a_____ insurer
A fraternal benefit society is a social organization based around common interests
and beliefs . - Answer-Which of the following best describes a Fraternal Benefit
Society ?
a driver's tendency to text while driving - Answer-which of the following is a
hazard
,sandra's home is in an area of los Angeles that is often hit by earthquakes -
Answer-which of the following is an example of a hazard
High-crime neighborhoods - Answer-an insurance company might consider any of
the following a risk, EXCEPT
the ring is a pure risk - Answer-Steve has just purchased a wedding ring for his
new bride. If something were to happen to the ring, he'd be out a lot of money, so
he purchases an insurance policy. He is able to do this because:
risk - Answer-when an insurer issues an insurance policy, the actual item, person,
or organization that is being insured is called the:
Risk Rentention - Answer-six stars development company has just purchased
several large properties in Las Vegas. As a result of this large purchase They are a
little short on money and decide to save money by not purchasing insurance on
their new properties. Six stars is practicing:
risk reduction . - Answer-Jared hopes to purchase a new insurance policy for his
car , but he has an extremely poor driving record . The insurance company decides
to issue Jared an insurance policy , but charges him a premium much higher than
the average driver . The insurance company is practicing :
Risk equality - Answer-Which of the following is NOT a risk management
technique ?
Temporary coverage for an insurance applicant until the policy is issued - Answer-
What is a binder ?
Estoppel protects the insured party from an insurer who initially approves
coverage , but then later denies coverage after the insured pays for repairs . -
Answer-Which of the following statements about the principle of estoppel is TRUE
?
binder - Answer-When Sally applies for an auto policy , her agent issues her a
______ so that she can benefit from insurance protection while he underwrites
the policy .
, representations . - Answer-The factual statements of the insured upon which an
insurance policy is based are called :
It is the result of an unconscious behavior - Answer-Which of the following
statement about a moral hazard is FALSE ?
morale hazard - Answer-Lucy has insurance on an expensive necklace she likes to
wear to work every day . After work , she takes it off and leaves it in her car's
cupholder so she can put it back on in the morning on her way to work . Lucy's
behavior would be considered a :
The roads present a physical condition that increases the chance of a loss . -
Answer-Adam has a treacherous drive to work every day . Not only does he have
to drive down the pothole - strewn access road to the highway , but he also must
traverse several icy bridges on the way to work . Why does the insurance company
call these hazards " physical hazards " ?
indirect loss . - Answer-As Jonathan was driving through an intersection , another
driver ran a red light and crashed into the side of Jonathan's car , which caused
significant physical damage to both vehicles . Jonathan must now rent a car while
his is being repaired . The rental car expense would be considered a / an :
an indirect loss . - Answer-Driving home after a 14 - hour shift , Sam falls asleep
home , causing extensive damage to the East wall and at the wheel and plows into
Sandra's roof . As a result , Sandra and her family must move into a hotel until the
repairs are completed The cost of staying in a hotel is :
Flora will file a first - party claim for the damage to her car , and Cam will file a
third - party claim for the damage to his billboard . - Answer-Flora is driving in the
rain when she skids off the road and slams into Cam's billboard , totaling her car
and causing $ 2,000 in damage to the billboard Flora has an auto policy with ABC
Insurance , and both Cam and Flora submit claims against this policy for their
damages . Which of the following is TRUE ?
$ 2,000 - Answer-James is walking down the street when Andrea , an uninsured
motorist , strikes him with her car . James suffers $ 12,000 in injuries from the
accident . He has personal injury protection of $ 10,000 from his own automobile
Answers Grade A+
It must be a notarized document - Answer-Which of the following is NOT a
requirement for a legally binding contract ?
Principle of Indemnity - Answer-Greg plays trombone in his school band during
football games . During a rally song in the stands one day , Greg annoys one of the
opposing team's fans , who grabs his $ 400 trombone and hurls it down the
bleachers , completely destroying it . Greg's insurance pays him $ 400 to replace
the trombone , but then the opposing team's coach also offers to replace the
instrument , at whatever the cost . So Greg orders a new $ 3,200 trombone and
has the opposing team's athletic department absorb the cost . Which principle has
Greg violated ?
Premium - Answer-The fee paid by the insured in exchange for an insurance policy
is called a :
Unilateral Contract - Answer-In a _________ only one party is legally obligated to
perform
conditions - Answer-In which section of an insurance policy, might you find the
following statement? "Damage to insured property must be reported within 15
days of the damaging occurrence. "
The insuring agreement - Answer-in an insurance policy, the summary of what the
insurer will do in the event of covered loss is called:
foreign - Answer-an insurer that adheres to the law of a state, but is located
outside of that state is called a_____ insurer
A fraternal benefit society is a social organization based around common interests
and beliefs . - Answer-Which of the following best describes a Fraternal Benefit
Society ?
a driver's tendency to text while driving - Answer-which of the following is a
hazard
,sandra's home is in an area of los Angeles that is often hit by earthquakes -
Answer-which of the following is an example of a hazard
High-crime neighborhoods - Answer-an insurance company might consider any of
the following a risk, EXCEPT
the ring is a pure risk - Answer-Steve has just purchased a wedding ring for his
new bride. If something were to happen to the ring, he'd be out a lot of money, so
he purchases an insurance policy. He is able to do this because:
risk - Answer-when an insurer issues an insurance policy, the actual item, person,
or organization that is being insured is called the:
Risk Rentention - Answer-six stars development company has just purchased
several large properties in Las Vegas. As a result of this large purchase They are a
little short on money and decide to save money by not purchasing insurance on
their new properties. Six stars is practicing:
risk reduction . - Answer-Jared hopes to purchase a new insurance policy for his
car , but he has an extremely poor driving record . The insurance company decides
to issue Jared an insurance policy , but charges him a premium much higher than
the average driver . The insurance company is practicing :
Risk equality - Answer-Which of the following is NOT a risk management
technique ?
Temporary coverage for an insurance applicant until the policy is issued - Answer-
What is a binder ?
Estoppel protects the insured party from an insurer who initially approves
coverage , but then later denies coverage after the insured pays for repairs . -
Answer-Which of the following statements about the principle of estoppel is TRUE
?
binder - Answer-When Sally applies for an auto policy , her agent issues her a
______ so that she can benefit from insurance protection while he underwrites
the policy .
, representations . - Answer-The factual statements of the insured upon which an
insurance policy is based are called :
It is the result of an unconscious behavior - Answer-Which of the following
statement about a moral hazard is FALSE ?
morale hazard - Answer-Lucy has insurance on an expensive necklace she likes to
wear to work every day . After work , she takes it off and leaves it in her car's
cupholder so she can put it back on in the morning on her way to work . Lucy's
behavior would be considered a :
The roads present a physical condition that increases the chance of a loss . -
Answer-Adam has a treacherous drive to work every day . Not only does he have
to drive down the pothole - strewn access road to the highway , but he also must
traverse several icy bridges on the way to work . Why does the insurance company
call these hazards " physical hazards " ?
indirect loss . - Answer-As Jonathan was driving through an intersection , another
driver ran a red light and crashed into the side of Jonathan's car , which caused
significant physical damage to both vehicles . Jonathan must now rent a car while
his is being repaired . The rental car expense would be considered a / an :
an indirect loss . - Answer-Driving home after a 14 - hour shift , Sam falls asleep
home , causing extensive damage to the East wall and at the wheel and plows into
Sandra's roof . As a result , Sandra and her family must move into a hotel until the
repairs are completed The cost of staying in a hotel is :
Flora will file a first - party claim for the damage to her car , and Cam will file a
third - party claim for the damage to his billboard . - Answer-Flora is driving in the
rain when she skids off the road and slams into Cam's billboard , totaling her car
and causing $ 2,000 in damage to the billboard Flora has an auto policy with ABC
Insurance , and both Cam and Flora submit claims against this policy for their
damages . Which of the following is TRUE ?
$ 2,000 - Answer-James is walking down the street when Andrea , an uninsured
motorist , strikes him with her car . James suffers $ 12,000 in injuries from the
accident . He has personal injury protection of $ 10,000 from his own automobile
