Challenging Chapters: Alabama P&C, WC, & Crop
Adjuster Pre-Licensing Exam LATEST Test and Exam
question and answers latest update 2026 RATED A+
XYZ Computer's production building for circuit boards is struck by lightning, which results in a fire that burns down the entire
facility. XYZ Computer cannot continue the production of computers until the facility is rebuilt. Which insurance coverage might
indemnify XYZ Computer for lost revenue until a new facility is built? - CORRECT ANSWERS Business Interruption
Which of the following statements is TRUE about Coverage C under a DP-2 or DP-3? - CORRECT ANSWERS Rowboats
and canoes are covered, but only while on the premises.
Barbara is preparing to negotiate an auto claim on behalf of XYZ Insurance. She knows the circumstances of the loss and has
completed the investigation and evaluation. What other piece of information must Barbara know before entering into
negotiation with the claimant? - CORRECT ANSWERS The maximum amount XYZ Insurance will pay for the claim
Under which circumstances may an insurer cancel a policy with sufficient notice? - CORRECT ANSWERS If the
policyholder misrepresents facts to obtain a policy
When Jane is involved in an accident in Alabama, she immediately calls her insurer and files a claim. Her insurer is required by
law to do all of the following EXCEPT: - CORRECT ANSWERS refrain from paying or denying the claim until the
claimant submits proof of loss forms.
HIPAA was enacted by the US Congress in _________. - CORRECT ANSWERS 1996
In Alabama, the employers of which of the following employees do not need to purchase Workers' Compensation insurance for
them? - CORRECT ANSWERS Farm laborers
A lightning strike sparks a fire on the ground of Blake's property, causing damage to several trees and shrubs in the process.
Assuming Blake carries a $120,000 DP-2 on his home with a Trees, Shrubs, and Other Plants endorsement, what is the
maximum Blake can receive for his 15 damaged plants? - CORRECT ANSWERS $6,000- Lightning is a covered peril and
damaged plants are covered at $500 per plant up to 5% of Coverage A limit
All of the following people are exempt from adjuster licensing in Alabama, EXCEPT: - CORRECT ANSWERS out-of-
state adjusters who are licensed in their home state.
, An overhead projector is taken to a conference room at a local hotel for a week. Sometime during the week, the projector falls
off its stand and is destroyed. Assuming it is a covered loss, what commercial property coverage might cover the projector? -
CORRECT ANSWERS Property Off-Premises
When Sally slips and falls at XYZ Furniture, she injures her back and incurs $145,000 in covered medical expenses. Assuming XYZ
Furniture carries a CGL policy with a General Aggregate of $400,000, and a Per Occurrence limit of $100,000, what will the new
limits be after paying this claim? - CORRECT ANSWERS General Aggregate: $300,000; Per Occurrence: $100,000
Lori's property was damaged in a recent flood. The damages to her home and detached garage came to $80,000 and $15,000,
respectively. Lori has a Dwelling Form flood policy with $100,000 limit. How much indemnification can Lori expect to receive for
the damage to her garage? - CORRECT ANSWERS $10,000
The NCCI (National Council on Compensation Insurance): - CORRECT ANSWERS is a rating bureau that develops the
guidelines for setting workers' compensation premiums that are used by most states.
Frank found a "favorable lease" for his business two years ago at $10/sq.ft. per year. He ended up leasing a 20,000 sq.ft. space
for 6 years to lock in that yearly lease of $200,000. Yesterday, Frank's business was struck by lightning and burned to the
ground, forcing him to lease a new building. Unfortunately the going rate now is $15/sq.ft. and Frank still needs 20,000 sq.ft. of
space. How much could Frank's Leasehold Interest Coverage pay for the additional costs of leasing a new space for the
remaining 4 years? - CORRECT ANSWERS $400,000
Which of the following is NOT a universal commercial property policy exclusion? - CORRECT ANSWERS Lightning
Acme Construction is in charge of building a new subdivision in the city, and hires Jim's Masonry to lay the foundations. As part
of the deal, Jim's Masonry is required to purchase Owners & Contractors Protective Liability to protect Acme Construction in
the event Jim makes a mistake that results in a liability claim. Who will end up paying the premiums for this additional policy? -
CORRECT ANSWERS Jim's Masonry
Cyril recently purchased a small machining shop. When asked on his commercial property insurance application about how the
property will be heated in the winter, he replies "central heat," when in fact it will be heated by a wood stove. Under which
condition could the insurer deny coverage? - CORRECT ANSWERS Concealment, Misrepresentation, and Fraud
Thomas runs a computer repair shop. One morning he arrives to find the front glass window broken and a number of his
customers' computers stolen. Thomas' Legal Liability Coverage Form would pay for: - CORRECT ANSWERS his clients'
computers.
Adjuster Pre-Licensing Exam LATEST Test and Exam
question and answers latest update 2026 RATED A+
XYZ Computer's production building for circuit boards is struck by lightning, which results in a fire that burns down the entire
facility. XYZ Computer cannot continue the production of computers until the facility is rebuilt. Which insurance coverage might
indemnify XYZ Computer for lost revenue until a new facility is built? - CORRECT ANSWERS Business Interruption
Which of the following statements is TRUE about Coverage C under a DP-2 or DP-3? - CORRECT ANSWERS Rowboats
and canoes are covered, but only while on the premises.
Barbara is preparing to negotiate an auto claim on behalf of XYZ Insurance. She knows the circumstances of the loss and has
completed the investigation and evaluation. What other piece of information must Barbara know before entering into
negotiation with the claimant? - CORRECT ANSWERS The maximum amount XYZ Insurance will pay for the claim
Under which circumstances may an insurer cancel a policy with sufficient notice? - CORRECT ANSWERS If the
policyholder misrepresents facts to obtain a policy
When Jane is involved in an accident in Alabama, she immediately calls her insurer and files a claim. Her insurer is required by
law to do all of the following EXCEPT: - CORRECT ANSWERS refrain from paying or denying the claim until the
claimant submits proof of loss forms.
HIPAA was enacted by the US Congress in _________. - CORRECT ANSWERS 1996
In Alabama, the employers of which of the following employees do not need to purchase Workers' Compensation insurance for
them? - CORRECT ANSWERS Farm laborers
A lightning strike sparks a fire on the ground of Blake's property, causing damage to several trees and shrubs in the process.
Assuming Blake carries a $120,000 DP-2 on his home with a Trees, Shrubs, and Other Plants endorsement, what is the
maximum Blake can receive for his 15 damaged plants? - CORRECT ANSWERS $6,000- Lightning is a covered peril and
damaged plants are covered at $500 per plant up to 5% of Coverage A limit
All of the following people are exempt from adjuster licensing in Alabama, EXCEPT: - CORRECT ANSWERS out-of-
state adjusters who are licensed in their home state.
, An overhead projector is taken to a conference room at a local hotel for a week. Sometime during the week, the projector falls
off its stand and is destroyed. Assuming it is a covered loss, what commercial property coverage might cover the projector? -
CORRECT ANSWERS Property Off-Premises
When Sally slips and falls at XYZ Furniture, she injures her back and incurs $145,000 in covered medical expenses. Assuming XYZ
Furniture carries a CGL policy with a General Aggregate of $400,000, and a Per Occurrence limit of $100,000, what will the new
limits be after paying this claim? - CORRECT ANSWERS General Aggregate: $300,000; Per Occurrence: $100,000
Lori's property was damaged in a recent flood. The damages to her home and detached garage came to $80,000 and $15,000,
respectively. Lori has a Dwelling Form flood policy with $100,000 limit. How much indemnification can Lori expect to receive for
the damage to her garage? - CORRECT ANSWERS $10,000
The NCCI (National Council on Compensation Insurance): - CORRECT ANSWERS is a rating bureau that develops the
guidelines for setting workers' compensation premiums that are used by most states.
Frank found a "favorable lease" for his business two years ago at $10/sq.ft. per year. He ended up leasing a 20,000 sq.ft. space
for 6 years to lock in that yearly lease of $200,000. Yesterday, Frank's business was struck by lightning and burned to the
ground, forcing him to lease a new building. Unfortunately the going rate now is $15/sq.ft. and Frank still needs 20,000 sq.ft. of
space. How much could Frank's Leasehold Interest Coverage pay for the additional costs of leasing a new space for the
remaining 4 years? - CORRECT ANSWERS $400,000
Which of the following is NOT a universal commercial property policy exclusion? - CORRECT ANSWERS Lightning
Acme Construction is in charge of building a new subdivision in the city, and hires Jim's Masonry to lay the foundations. As part
of the deal, Jim's Masonry is required to purchase Owners & Contractors Protective Liability to protect Acme Construction in
the event Jim makes a mistake that results in a liability claim. Who will end up paying the premiums for this additional policy? -
CORRECT ANSWERS Jim's Masonry
Cyril recently purchased a small machining shop. When asked on his commercial property insurance application about how the
property will be heated in the winter, he replies "central heat," when in fact it will be heated by a wood stove. Under which
condition could the insurer deny coverage? - CORRECT ANSWERS Concealment, Misrepresentation, and Fraud
Thomas runs a computer repair shop. One morning he arrives to find the front glass window broken and a number of his
customers' computers stolen. Thomas' Legal Liability Coverage Form would pay for: - CORRECT ANSWERS his clients'
computers.
