Indiana Independent Adjuster Exam questions
and Correct Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant Download Pdf
1. An independent insurance adjuster is best described as an
individual who
A. Works exclusively for one insurance company
B. Is employed directly by the policyholder
C. Contracts with insurers to investigate and adjust claims
D. Represents the state insurance department
Answer: C
Independent adjusters are third-party professionals hired by insurers on
a contractual basis.
2. In Indiana, the authority that regulates insurance adjusters is the
A. Indiana Department of Financial Institutions
B. National Association of Insurance Commissioners
C. Secretary of State
D. Indiana Department of Insurance
Answer: D
The Indiana Department of Insurance oversees licensing and regulation
of adjusters.
3. Which of the following BEST defines “fiduciary duty” as it applies
to an adjuster?
A. Duty to maximize profits for the insurer
, B. Duty to follow company policy only
C. Duty to act in good faith and in the best interest of the
principal
D. Duty to represent the claimant
Answer: C
Adjusters must act honestly, ethically, and in good faith for the party
they represent.
4. An adjuster who knowingly misrepresents policy provisions may
be guilty of
A. Negligence
B. Breach of warranty
C. Unfair claims practice
D. Reinsurance fraud
Answer: C
Misrepresentation of policy terms is classified as an unfair claims
settlement practice.
5. Which insurance policy principle requires the insured to disclose
all material facts?
A. Indemnity
B. Proximate cause
C. Subrogation
D. Utmost good faith
Answer: D
Utmost good faith obligates both parties to be honest and disclose
relevant facts.
, 6. The primary purpose of insurance is to
A. Create profit for insurers
B. Eliminate all risk
C. Indemnify against financial loss
D. Encourage litigation
Answer: C
Insurance is designed to restore the insured to their pre-loss financial
condition.
7. Actual Cash Value (ACV) is generally calculated as
A. Replacement cost minus deductible
B. Market value at time of purchase
C. Replacement cost minus depreciation
D. Original cost plus inflation
Answer: C
ACV accounts for wear, tear, and age through depreciation.
8. Replacement Cost coverage differs from ACV because it
A. Pays only partial losses
B. Excludes depreciation
C. Pays the cost to replace property without deducting
depreciation
D. Is only available for commercial risks
Answer: C
Replacement cost coverage reimburses the full cost to replace damaged
property.
, 9. Which of the following is an example of a named peril?
A. All accidental losses
B. Any sudden and accidental damage
C. Fire specifically listed in the policy
D. Loss excluded unless endorsed
Answer: C
Named peril policies cover only perils specifically listed.
10. An adjuster’s first responsibility upon receiving a claim
assignment is to
A. Issue payment
B. Deny the claim
C. Review the policy and coverage
D. Contact legal counsel
Answer: C
Coverage must be confirmed before investigation or settlement.
11. Which element is necessary to establish negligence?
A. Loss only
B. Duty, breach, causation, and damages
C. Contractual obligation
D. Criminal intent
Answer: B
All four elements must be present for negligence to exist.
and Correct Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant Download Pdf
1. An independent insurance adjuster is best described as an
individual who
A. Works exclusively for one insurance company
B. Is employed directly by the policyholder
C. Contracts with insurers to investigate and adjust claims
D. Represents the state insurance department
Answer: C
Independent adjusters are third-party professionals hired by insurers on
a contractual basis.
2. In Indiana, the authority that regulates insurance adjusters is the
A. Indiana Department of Financial Institutions
B. National Association of Insurance Commissioners
C. Secretary of State
D. Indiana Department of Insurance
Answer: D
The Indiana Department of Insurance oversees licensing and regulation
of adjusters.
3. Which of the following BEST defines “fiduciary duty” as it applies
to an adjuster?
A. Duty to maximize profits for the insurer
, B. Duty to follow company policy only
C. Duty to act in good faith and in the best interest of the
principal
D. Duty to represent the claimant
Answer: C
Adjusters must act honestly, ethically, and in good faith for the party
they represent.
4. An adjuster who knowingly misrepresents policy provisions may
be guilty of
A. Negligence
B. Breach of warranty
C. Unfair claims practice
D. Reinsurance fraud
Answer: C
Misrepresentation of policy terms is classified as an unfair claims
settlement practice.
5. Which insurance policy principle requires the insured to disclose
all material facts?
A. Indemnity
B. Proximate cause
C. Subrogation
D. Utmost good faith
Answer: D
Utmost good faith obligates both parties to be honest and disclose
relevant facts.
, 6. The primary purpose of insurance is to
A. Create profit for insurers
B. Eliminate all risk
C. Indemnify against financial loss
D. Encourage litigation
Answer: C
Insurance is designed to restore the insured to their pre-loss financial
condition.
7. Actual Cash Value (ACV) is generally calculated as
A. Replacement cost minus deductible
B. Market value at time of purchase
C. Replacement cost minus depreciation
D. Original cost plus inflation
Answer: C
ACV accounts for wear, tear, and age through depreciation.
8. Replacement Cost coverage differs from ACV because it
A. Pays only partial losses
B. Excludes depreciation
C. Pays the cost to replace property without deducting
depreciation
D. Is only available for commercial risks
Answer: C
Replacement cost coverage reimburses the full cost to replace damaged
property.
, 9. Which of the following is an example of a named peril?
A. All accidental losses
B. Any sudden and accidental damage
C. Fire specifically listed in the policy
D. Loss excluded unless endorsed
Answer: C
Named peril policies cover only perils specifically listed.
10. An adjuster’s first responsibility upon receiving a claim
assignment is to
A. Issue payment
B. Deny the claim
C. Review the policy and coverage
D. Contact legal counsel
Answer: C
Coverage must be confirmed before investigation or settlement.
11. Which element is necessary to establish negligence?
A. Loss only
B. Duty, breach, causation, and damages
C. Contractual obligation
D. Criminal intent
Answer: B
All four elements must be present for negligence to exist.
