Alberta Insurance Adjuster Licensing
Exam Questions And Correct Answers
(Verified Answers) Plus Rationales 2026
Q&A| Instant Download Pdf
1. Which of the following best describes the principle of indemnity in
insurance?
A. The insurer pays more than the loss amount to the insured
B. The insured cannot profit from a loss
C. Insurance is mandatory for all property owners
D. Premiums are fixed regardless of risk
Answer: B
Rationale: The principle of indemnity ensures that the insured is restored to
the same financial position as before the loss, without profit.
2. What is a deductible in an insurance policy?
A. The amount the insurer pays before coverage applies
B. The amount subtracted from the premium
C. The amount the insured pays out of pocket before the insurer pays
D. The total coverage limit
Answer: C
Rationale: A deductible is the portion of the loss that the insured must pay
before the insurance coverage applies.
3. Which of the following is an example of a peril in property insurance?
A. Earthquake
B. Fire
,C. Flood
D. All of the above
Answer: D
Rationale: Perils are causes of loss covered under a policy. Fire, flood, and
earthquake are all common perils.
4. In automobile insurance, what does liability coverage protect against?
A. Damage to your own vehicle
B. Injuries or property damage you cause to others
C. Theft of your vehicle
D. Damage caused by natural disasters
Answer: B
Rationale: Liability coverage pays for bodily injury or property damage that
the insured causes to third parties.
5. What is the purpose of subrogation in insurance?
A. To prevent insureds from collecting more than the loss
B. To allow the insurer to recover payments from a third party responsible for
the loss
C. To reduce the premium cost
D. To extend policy coverage
Answer: B
Rationale: Subrogation allows the insurer to step into the shoes of the
insured to recover payments from the party responsible for the loss.
6. Which of the following is NOT a duty of an insurance adjuster?
A. Investigate claims
B. Negotiate settlements
C. Determine policy premiums
D. Document evidence
,Answer: C
Rationale: Determining policy premiums is the role of underwriting, not
claims adjusting.
7. What is the “insurable interest” in insurance?
A. The insured must benefit financially from the existence of the insured
property
B. The insured can profit from a loss
C. The insurer’s investment in the policy
D. The market value of the property
Answer: A
Rationale: Insurable interest means the policyholder must stand to suffer a
financial loss if the insured event occurs.
8. Which type of insurance policy is designed to cover multiple types of
property under one contract?
A. Specific policy
B. Blanket policy
C. Named peril policy
D. Liability policy
Answer: B
Rationale: A blanket policy provides coverage for multiple properties or
locations under a single policy limit.
9. In property insurance, which of the following is an example of a
“named peril” policy?
A. All risk policy
B. Fire insurance that covers only fire
C. Comprehensive liability
D. Homeowner’s personal liability
, Answer: B
Rationale: Named peril policies cover only the perils explicitly listed in the
contract.
10. When an adjuster is evaluating a claim, which document is most
important to verify coverage?
A. The claim form
B. The insurance policy
C. The insured’s financial statements
D. Police reports
Answer: B
Rationale: The policy defines the terms, conditions, limits, and exclusions,
which are critical to determining coverage.
11. Which of the following losses is typically excluded under standard
property insurance policies?
A. Fire damage
B. Theft
C. Earthquake
D. Vandalism
Answer: C
Rationale: Standard policies often exclude earthquake damage unless
specifically endorsed.
12. What is actual cash value (ACV)?
A. Replacement cost without depreciation
B. Replacement cost minus depreciation
C. Full replacement cost regardless of age
D. Market value plus improvements
Exam Questions And Correct Answers
(Verified Answers) Plus Rationales 2026
Q&A| Instant Download Pdf
1. Which of the following best describes the principle of indemnity in
insurance?
A. The insurer pays more than the loss amount to the insured
B. The insured cannot profit from a loss
C. Insurance is mandatory for all property owners
D. Premiums are fixed regardless of risk
Answer: B
Rationale: The principle of indemnity ensures that the insured is restored to
the same financial position as before the loss, without profit.
2. What is a deductible in an insurance policy?
A. The amount the insurer pays before coverage applies
B. The amount subtracted from the premium
C. The amount the insured pays out of pocket before the insurer pays
D. The total coverage limit
Answer: C
Rationale: A deductible is the portion of the loss that the insured must pay
before the insurance coverage applies.
3. Which of the following is an example of a peril in property insurance?
A. Earthquake
B. Fire
,C. Flood
D. All of the above
Answer: D
Rationale: Perils are causes of loss covered under a policy. Fire, flood, and
earthquake are all common perils.
4. In automobile insurance, what does liability coverage protect against?
A. Damage to your own vehicle
B. Injuries or property damage you cause to others
C. Theft of your vehicle
D. Damage caused by natural disasters
Answer: B
Rationale: Liability coverage pays for bodily injury or property damage that
the insured causes to third parties.
5. What is the purpose of subrogation in insurance?
A. To prevent insureds from collecting more than the loss
B. To allow the insurer to recover payments from a third party responsible for
the loss
C. To reduce the premium cost
D. To extend policy coverage
Answer: B
Rationale: Subrogation allows the insurer to step into the shoes of the
insured to recover payments from the party responsible for the loss.
6. Which of the following is NOT a duty of an insurance adjuster?
A. Investigate claims
B. Negotiate settlements
C. Determine policy premiums
D. Document evidence
,Answer: C
Rationale: Determining policy premiums is the role of underwriting, not
claims adjusting.
7. What is the “insurable interest” in insurance?
A. The insured must benefit financially from the existence of the insured
property
B. The insured can profit from a loss
C. The insurer’s investment in the policy
D. The market value of the property
Answer: A
Rationale: Insurable interest means the policyholder must stand to suffer a
financial loss if the insured event occurs.
8. Which type of insurance policy is designed to cover multiple types of
property under one contract?
A. Specific policy
B. Blanket policy
C. Named peril policy
D. Liability policy
Answer: B
Rationale: A blanket policy provides coverage for multiple properties or
locations under a single policy limit.
9. In property insurance, which of the following is an example of a
“named peril” policy?
A. All risk policy
B. Fire insurance that covers only fire
C. Comprehensive liability
D. Homeowner’s personal liability
, Answer: B
Rationale: Named peril policies cover only the perils explicitly listed in the
contract.
10. When an adjuster is evaluating a claim, which document is most
important to verify coverage?
A. The claim form
B. The insurance policy
C. The insured’s financial statements
D. Police reports
Answer: B
Rationale: The policy defines the terms, conditions, limits, and exclusions,
which are critical to determining coverage.
11. Which of the following losses is typically excluded under standard
property insurance policies?
A. Fire damage
B. Theft
C. Earthquake
D. Vandalism
Answer: C
Rationale: Standard policies often exclude earthquake damage unless
specifically endorsed.
12. What is actual cash value (ACV)?
A. Replacement cost without depreciation
B. Replacement cost minus depreciation
C. Full replacement cost regardless of age
D. Market value plus improvements
