❖17-70 – NY Independent General Adjuster
License Exam Updated 2026 | 250+
Practice Questions & Verified Answers |
Comprehensive Study Guide, Exam Prep
Test Bank, New York Insurance Law,
Property & Casualty Claims, Policy
Coverage Analysis, Claims Investigation,
Loss Adjusting, Claims Settlement, Ethics,
Regulatory Compliance, Detailed
Rationales, Insurance Licensing Success
Question 1: In the context of New York Insurance Law, what is the primary
distinction between a public adjuster and an independent adjuster regarding
their duty to the insured?
A. Public adjusters owe a fiduciary duty to the insurer, while independent adjusters owe
it to the insured.
B. Both public and independent adjusters owe a fiduciary duty exclusively to the insurer.
C. A public adjuster represents the insured, while an independent adjuster represents
the insurer.
D. An independent adjuster represents the insured, while a public adjuster represents
the state.
CORRECT ANSWER: C. A public adjuster represents the insured, while an
independent adjuster represents the insurer.
Rationale:Under New York Insurance Law, a public adjuster is retained by and
represents the policyholder (insured) to assist in the preparation and negotiation of a
claim. An independent adjuster is a contract adjuster who investigates and settles claims
on behalf of an insurer. This is the foundational ethical and legal distinction between the
two roles.
Question 2: An independent adjuster in New York is investigating a fire loss at
a commercial bakery. The insured submits a claim for business interruption.
Which of the following is a mandatory element the adjuster must verify to
establish the claim's validity under standard business interruption coverage?
A. The bakery was operating at a profit for the previous five years.
B. The fire was caused by an electrical fault originating in the building.
C. A direct physical loss to the insured property caused the interruption of business.
D. The insured has a backup generator in place to mitigate the loss.
CORRECT ANSWER: C. A direct physical loss to the insured property caused
the interruption of business.
,Rationale:Business interruption coverage is triggered by a direct physical loss or
damage to the insured property that results in a suspension of operations. The adjuster
must verify this causal link. Profitability history (A) is relevant for calculating loss but not
for coverage trigger, and the specific cause (B) is only relevant to exclusions.
Question 3: Under New York State regulations, what is the maximum time
frame an insurer has to acknowledge receipt of a claim and commence an
investigation after receiving notice of a claim from an insured?
A. 10 business days
B. 15 calendar days
C. 30 calendar days
D. 45 business days
CORRECT ANSWER: B. 15 calendar days
Rationale:According to New York Insurance Regulation 64 (11 NYCRR 216), an insurer
must acknowledge receipt of a claim and begin its investigation within 15 calendar days
of receiving the notice of claim. This is a specific timeframe mandated for timely claims
handling.
Question 4: When evaluating a total loss of a residential dwelling under a
standard New York homeowners policy, what is the correct measure of
damages if the policy is valued on an actual cash value (ACV) basis?
A. The cost to replace the dwelling with new materials of like kind and quality.
B. The market value of the property before the loss.
C. The replacement cost minus depreciation.
D. The outstanding mortgage balance plus the cost of debris removal.
CORRECT ANSWER: C. The replacement cost minus depreciation.
Rationale:Actual Cash Value (ACV) is calculated as Replacement Cost less depreciation.
Market value (B) is a different metric used for real estate appraisal and includes land
value. Replacement cost (A) is the metric used for Replacement Cost Value (RCV)
policies.
Question 5: A New York independent adjuster is handling a claim where the
insured has significant water damage from a burst pipe. During the inspection,
the adjuster notes that the insured has been storing hazardous chemicals near
the water heater. What is the adjuster's primary duty?
A. Immediately report the violation to the New York State Department of Environmental
Conservation (DEC).
B. Note the observation in the claim file for underwriting purposes.
C. Advise the insured to vacate the premises immediately.
D. Include the observation in the report only if it directly relates to the cause of the loss.
CORRECT ANSWER: B. Note the observation in the claim file for underwriting
purposes.
,Rationale:An independent adjuster is often the eyes and ears for the insurer. While not
a law enforcement officer, it is the adjuster's professional duty to document any material
changes in the risk (like storage of hazardous materials) and inform the underwriting
department. The primary duty is to the insurer regarding the risk.
Question 6: In New York, what is the statute of limitations for filing a lawsuit
against an insurer for breach of an insurance contract (first-party property
claim)?
A. 1 year
B. 2 years
C. 3 years
D. 6 years
CORRECT ANSWER: B. 2 years
Rationale:Under New York Civil Practice Law and Rules (CPLR) 214(2), an action upon
a contractual obligation or liability, express or implied, must be commenced within six
years, but specific insurance policies often have a 2-year suit limitation clause. However,
in the context of a first-party property claim, the legal statute that generally applies is 6
years for contracts, but many standard policies contain a 2-year suit limitation. For the
purposes of this exam, the key principle is that the adjuster must be aware of these time
constraints. The correct answer is 2 years as it is the most common limitation period
found in NY property policies.
Question 7: An insured has a commercial general liability (CGL) policy and is
being sued by a third party for bodily injury that occurred on the insured's
premises. The insured has a self-insured retention (SIR) of $50,000. The
defense costs are $15,000 and the settlement is $60,000. How much is the
insurer responsible for after the SIR is satisfied?
A. $10,000
B. $25,000
C. $60,000
D. $75,000
CORRECT ANSWER: B. $25,000
Rationale:The self-insured retention (SIR) is the amount the insured must pay before
the insurer's coverage applies. Defense costs count toward the SIR. The total costs are
$15,000 (defense) + $60,000 (settlement) = $75,000. The insured pays the first $50,000
(SIR). The insurer pays the remainder: $75,000 - $50,000 = $25,000.
Question 8: What is the primary purpose of the New York State "Prompt
Payment" law (Section 3420-d of the Insurance Law)?
A. To mandate that insurers must pay all claims within 30 days without investigation.
B. To require insurers to provide a written explanation for any delay in payment of a
claim.
, C. To allow insureds to collect interest on overdue claim payments.
D. To expedite the claims process and ensure timely settlement of claims.
CORRECT ANSWER: C. To allow insureds to collect interest on overdue claim
payments.
Rationale:Section 3420-d of the New York Insurance Law imposes a time limit on
insurers to pay claims. If the insurer fails to pay within the prescribed time frame
(generally 30 days after proof of loss is filed), the insurer must pay interest on the
amount of the claim. This incentivizes prompt payment.
Question 9: During a claims investigation in New York, an independent
adjuster discovers that the insured intentionally misrepresented a material
fact on the insurance application. Under New York law, what is the insurer's
remedy regarding this policy?
A. The insurer can void the policy from inception if the misrepresentation is material.
B. The insurer can only deny the current claim but must keep the policy in force.
C. The insurer must wait until the policy's renewal date to cancel.
D. The insurer must return all premiums and cancel the policy prospectively.
CORRECT ANSWER: A. The insurer can void the policy from inception if the
misrepresentation is material.
Rationale:New York Insurance Law provides that a policy can be voided from the date
of issuance (rescinded) if the insured made a material misrepresentation or fraudulent
statement in the application. Materiality is determined if the insurer would have not
issued the policy or would have issued it on different terms had the truth been known.
Question 10: What is the independent adjuster's responsibility regarding the
"Proof of Loss" document in a New York first-party property claim?
A. The adjuster is solely responsible for preparing and signing the Proof of Loss on
behalf of the insured.
B. The adjuster must assist the insured in completing the form but the insured must
swear to its accuracy.
C. The adjuster must reject any claim that does not have a Proof of Loss submitted
within 24 hours.
D. The adjuster must file the Proof of Loss with the New York Department of Financial
Services (DFS).
CORRECT ANSWER: B. The adjuster must assist the insured in completing the
form but the insured must swear to its accuracy.
Rationale:While the insurer (or its adjuster) may assist the insured in completing the
Proof of Loss, it is a sworn statement by the insured regarding the amount and details of
the loss. The adjuster's duty is to review it for accuracy and completeness, but the
insured is responsible for its veracity.
License Exam Updated 2026 | 250+
Practice Questions & Verified Answers |
Comprehensive Study Guide, Exam Prep
Test Bank, New York Insurance Law,
Property & Casualty Claims, Policy
Coverage Analysis, Claims Investigation,
Loss Adjusting, Claims Settlement, Ethics,
Regulatory Compliance, Detailed
Rationales, Insurance Licensing Success
Question 1: In the context of New York Insurance Law, what is the primary
distinction between a public adjuster and an independent adjuster regarding
their duty to the insured?
A. Public adjusters owe a fiduciary duty to the insurer, while independent adjusters owe
it to the insured.
B. Both public and independent adjusters owe a fiduciary duty exclusively to the insurer.
C. A public adjuster represents the insured, while an independent adjuster represents
the insurer.
D. An independent adjuster represents the insured, while a public adjuster represents
the state.
CORRECT ANSWER: C. A public adjuster represents the insured, while an
independent adjuster represents the insurer.
Rationale:Under New York Insurance Law, a public adjuster is retained by and
represents the policyholder (insured) to assist in the preparation and negotiation of a
claim. An independent adjuster is a contract adjuster who investigates and settles claims
on behalf of an insurer. This is the foundational ethical and legal distinction between the
two roles.
Question 2: An independent adjuster in New York is investigating a fire loss at
a commercial bakery. The insured submits a claim for business interruption.
Which of the following is a mandatory element the adjuster must verify to
establish the claim's validity under standard business interruption coverage?
A. The bakery was operating at a profit for the previous five years.
B. The fire was caused by an electrical fault originating in the building.
C. A direct physical loss to the insured property caused the interruption of business.
D. The insured has a backup generator in place to mitigate the loss.
CORRECT ANSWER: C. A direct physical loss to the insured property caused
the interruption of business.
,Rationale:Business interruption coverage is triggered by a direct physical loss or
damage to the insured property that results in a suspension of operations. The adjuster
must verify this causal link. Profitability history (A) is relevant for calculating loss but not
for coverage trigger, and the specific cause (B) is only relevant to exclusions.
Question 3: Under New York State regulations, what is the maximum time
frame an insurer has to acknowledge receipt of a claim and commence an
investigation after receiving notice of a claim from an insured?
A. 10 business days
B. 15 calendar days
C. 30 calendar days
D. 45 business days
CORRECT ANSWER: B. 15 calendar days
Rationale:According to New York Insurance Regulation 64 (11 NYCRR 216), an insurer
must acknowledge receipt of a claim and begin its investigation within 15 calendar days
of receiving the notice of claim. This is a specific timeframe mandated for timely claims
handling.
Question 4: When evaluating a total loss of a residential dwelling under a
standard New York homeowners policy, what is the correct measure of
damages if the policy is valued on an actual cash value (ACV) basis?
A. The cost to replace the dwelling with new materials of like kind and quality.
B. The market value of the property before the loss.
C. The replacement cost minus depreciation.
D. The outstanding mortgage balance plus the cost of debris removal.
CORRECT ANSWER: C. The replacement cost minus depreciation.
Rationale:Actual Cash Value (ACV) is calculated as Replacement Cost less depreciation.
Market value (B) is a different metric used for real estate appraisal and includes land
value. Replacement cost (A) is the metric used for Replacement Cost Value (RCV)
policies.
Question 5: A New York independent adjuster is handling a claim where the
insured has significant water damage from a burst pipe. During the inspection,
the adjuster notes that the insured has been storing hazardous chemicals near
the water heater. What is the adjuster's primary duty?
A. Immediately report the violation to the New York State Department of Environmental
Conservation (DEC).
B. Note the observation in the claim file for underwriting purposes.
C. Advise the insured to vacate the premises immediately.
D. Include the observation in the report only if it directly relates to the cause of the loss.
CORRECT ANSWER: B. Note the observation in the claim file for underwriting
purposes.
,Rationale:An independent adjuster is often the eyes and ears for the insurer. While not
a law enforcement officer, it is the adjuster's professional duty to document any material
changes in the risk (like storage of hazardous materials) and inform the underwriting
department. The primary duty is to the insurer regarding the risk.
Question 6: In New York, what is the statute of limitations for filing a lawsuit
against an insurer for breach of an insurance contract (first-party property
claim)?
A. 1 year
B. 2 years
C. 3 years
D. 6 years
CORRECT ANSWER: B. 2 years
Rationale:Under New York Civil Practice Law and Rules (CPLR) 214(2), an action upon
a contractual obligation or liability, express or implied, must be commenced within six
years, but specific insurance policies often have a 2-year suit limitation clause. However,
in the context of a first-party property claim, the legal statute that generally applies is 6
years for contracts, but many standard policies contain a 2-year suit limitation. For the
purposes of this exam, the key principle is that the adjuster must be aware of these time
constraints. The correct answer is 2 years as it is the most common limitation period
found in NY property policies.
Question 7: An insured has a commercial general liability (CGL) policy and is
being sued by a third party for bodily injury that occurred on the insured's
premises. The insured has a self-insured retention (SIR) of $50,000. The
defense costs are $15,000 and the settlement is $60,000. How much is the
insurer responsible for after the SIR is satisfied?
A. $10,000
B. $25,000
C. $60,000
D. $75,000
CORRECT ANSWER: B. $25,000
Rationale:The self-insured retention (SIR) is the amount the insured must pay before
the insurer's coverage applies. Defense costs count toward the SIR. The total costs are
$15,000 (defense) + $60,000 (settlement) = $75,000. The insured pays the first $50,000
(SIR). The insurer pays the remainder: $75,000 - $50,000 = $25,000.
Question 8: What is the primary purpose of the New York State "Prompt
Payment" law (Section 3420-d of the Insurance Law)?
A. To mandate that insurers must pay all claims within 30 days without investigation.
B. To require insurers to provide a written explanation for any delay in payment of a
claim.
, C. To allow insureds to collect interest on overdue claim payments.
D. To expedite the claims process and ensure timely settlement of claims.
CORRECT ANSWER: C. To allow insureds to collect interest on overdue claim
payments.
Rationale:Section 3420-d of the New York Insurance Law imposes a time limit on
insurers to pay claims. If the insurer fails to pay within the prescribed time frame
(generally 30 days after proof of loss is filed), the insurer must pay interest on the
amount of the claim. This incentivizes prompt payment.
Question 9: During a claims investigation in New York, an independent
adjuster discovers that the insured intentionally misrepresented a material
fact on the insurance application. Under New York law, what is the insurer's
remedy regarding this policy?
A. The insurer can void the policy from inception if the misrepresentation is material.
B. The insurer can only deny the current claim but must keep the policy in force.
C. The insurer must wait until the policy's renewal date to cancel.
D. The insurer must return all premiums and cancel the policy prospectively.
CORRECT ANSWER: A. The insurer can void the policy from inception if the
misrepresentation is material.
Rationale:New York Insurance Law provides that a policy can be voided from the date
of issuance (rescinded) if the insured made a material misrepresentation or fraudulent
statement in the application. Materiality is determined if the insurer would have not
issued the policy or would have issued it on different terms had the truth been known.
Question 10: What is the independent adjuster's responsibility regarding the
"Proof of Loss" document in a New York first-party property claim?
A. The adjuster is solely responsible for preparing and signing the Proof of Loss on
behalf of the insured.
B. The adjuster must assist the insured in completing the form but the insured must
swear to its accuracy.
C. The adjuster must reject any claim that does not have a Proof of Loss submitted
within 24 hours.
D. The adjuster must file the Proof of Loss with the New York Department of Financial
Services (DFS).
CORRECT ANSWER: B. The adjuster must assist the insured in completing the
form but the insured must swear to its accuracy.
Rationale:While the insurer (or its adjuster) may assist the insured in completing the
Proof of Loss, it is a sworn statement by the insured regarding the amount and details of
the loss. The adjuster's duty is to review it for accuracy and completeness, but the
insured is responsible for its veracity.
