ARKANSAS ADJUSTER UPDATED REVISION EXAM
QUESTIONS AND ANSWERS MARKED A+
✔✔Defamation - ✔✔Damage to another's name or reputation, whether by libel, which is
in print, or by slander, which is in speech.
✔✔Default Judgement - ✔✔Entered by the court against the party who failed to defend
against a claim brought on by another party. In other words, if the person fails to show
up and answer the claim the court will find in favor of the other party.
✔✔Definitions - ✔✔Page in policy that gives specific limited meaning to terms used in
policy.
✔✔Depreciation - ✔✔A decline in value of property caused by wear or loss of
usefulness usually measured by a specific formula.
✔✔Direct Loss - ✔✔Physical harm to tangible property caused by a peril.
✔✔Discoverable - ✔✔Capable of being demanded and handed over as evidence in a
court of law; during litigation proceedings, the adjuster's claims file is discoverable.
✔✔Eligibility - ✔✔Are found in some insurance policies. They identify the conditions that
must be met by the policy holder in order to qualify for coverage under a policy.
✔✔End of Insurance Date - ✔✔The date that crop insurance coverage will end. It is the
earliest of: total crop destruction, harvest of the crop, final adjustment of a loss,
abandonment of a crop, or a date predesignated by the crop type.
✔✔Endorsement(s) - ✔✔An optional provision that can be added to a policy to
increase, reduce, or modify coverage for specific property types or perils.
✔✔Errors and Omissions - ✔✔Liability insurance that indemnified professionals for
errors or oversights on the part of the insured that caused harm to their clients.
✔✔Estoppel - ✔✔A legal principle that bars a party from asserting something contrary
to what has been implied by his previous actions or statements.
✔✔Ethical - ✔✔Adhering to moral laws and to principles of fairness.
✔✔Evaluation - ✔✔Determining the approximate value of damages relevant to a claim
i.e. total of medical bills, costs of repair & replacement of damaged property and the
consideration of the financial provisions of the insurance policy.
,✔✔Exclusions - ✔✔A section of an insurance policy that reduces coverage by listing
specific individuals, property, or perils that are NOT covered by the policy.
✔✔Exposure - ✔✔The extent to which an item is open to damage or loss. More
exposure means a loss is more likely.
✔✔Fair Credit Reporting - ✔✔Federal legislation that gives an applicant for insurance
the right to investigate the reasons his insurance application was denied.
✔✔False Advertising - ✔✔Presenting something in a deceptive or untrue manner to the
consumer; misrepresentations in advertisements.
✔✔Farm - ✔✔A property where a farmer or rancher both resides and conducts
commercial business.
✔✔Farm Liability Coverage Form - ✔✔A form added to a farm insurance policy that
provides coverage for injury and damage to a third party.
✔✔Farm Property Coverage Form - ✔✔A form added to a farm insurance policy that
provides coverage for the dwelling, other structures, farm structures, and both
household and farm personal property.
✔✔Farmer - ✔✔Someone in the business of growing, harvesting, and selling crops for
profit. In Farm insurance, a farmer must reside and do business on the same premises.
✔✔Federal Crop Insurance Act - ✔✔Legislation passed by Congress that established
the Federal crop insurance program.
✔✔Federal Crop Insurance Corporation (FCIC) - ✔✔A government-owned corporation
that manages the Federal crop insurance program.
✔✔Federal Emergency Management Agency (FEMA) - ✔✔A branch of homeland
security that coordinates relief programs when disaster strikes an entire community.
✔✔Fiduciary - ✔✔One of the terms that describes the adjuster's relationship with the
principal (the insurer). As fiduciary Agent, the adjuster acts for the benefit of the
principal, rather than for his own benefit.
✔✔Final planting date - ✔✔The last day to plant crops in order to receive the full
insurance yield and/or revenue guarantee selected.
✔✔First Named Insured - ✔✔The first person or entity named as insured on the
declarations page of a policy.
, ✔✔Floater - ✔✔A term for Inland Marine policies that cover mobile property.
✔✔Flood - ✔✔An overflow of inland or tidal waters; an unusual or rapid accumulation of
runoff or surface waters from any source; mud flows; collapse or subsidence of land
along the shore of a lake or other body of water.
✔✔Flood Insurance - ✔✔Provides relief following flood damage to communities who
participate in the NFIP floodplain management system; covers damages to the building
and its contents.
✔✔Floodplain Management - ✔✔Maps out areas with high risk of flood, so that
communities will avoid building in those areas.
✔✔Fraternal Benefit Societies (Fraternal Associations) - ✔✔Non-profit, mutual aid
organizations that engage primarily in charitable or benevolent activities. They offer their
members insurance against death, disease, and disability.
✔✔Fraud - ✔✔The act of deceiving an insurance company in order to collect more
money than one is legally entitled to.
✔✔Fraud, Hard - ✔✔Deliberately faking or causing an incident in order to collect
money.
✔✔Fraud, Soft - ✔✔Inflating the gravity or the extent of claims in order to receive a
higher indemnification.
✔✔Full and legal purpose - ✔✔One of the four qualifications of a legally binding
contract. The purpose of the contract must be legal (e.g. no contracts for illicit drug
deals).
✔✔Good Faith - ✔✔Acting honestly and fairly, with good intentions and full disclosure.
✔✔Group Risk Income Protection (Crop Insurance) - ✔✔A form of Crop Revenue
Insurance that protects a whole county or area instead of individual farmers.
Automatically indemnified if county income falls below a certain level.
✔✔Hazard, Moral - ✔✔Hazard caused by insured persons deliberately engaging in risky
behavior because they know that insurance will indemnify them for the losses.
✔✔Hazard - ✔✔Anything that increases the chance of loss.
✔✔Hazard morale - ✔✔Unconscious tendency of insured people to engage in riskier
behavior.
QUESTIONS AND ANSWERS MARKED A+
✔✔Defamation - ✔✔Damage to another's name or reputation, whether by libel, which is
in print, or by slander, which is in speech.
✔✔Default Judgement - ✔✔Entered by the court against the party who failed to defend
against a claim brought on by another party. In other words, if the person fails to show
up and answer the claim the court will find in favor of the other party.
✔✔Definitions - ✔✔Page in policy that gives specific limited meaning to terms used in
policy.
✔✔Depreciation - ✔✔A decline in value of property caused by wear or loss of
usefulness usually measured by a specific formula.
✔✔Direct Loss - ✔✔Physical harm to tangible property caused by a peril.
✔✔Discoverable - ✔✔Capable of being demanded and handed over as evidence in a
court of law; during litigation proceedings, the adjuster's claims file is discoverable.
✔✔Eligibility - ✔✔Are found in some insurance policies. They identify the conditions that
must be met by the policy holder in order to qualify for coverage under a policy.
✔✔End of Insurance Date - ✔✔The date that crop insurance coverage will end. It is the
earliest of: total crop destruction, harvest of the crop, final adjustment of a loss,
abandonment of a crop, or a date predesignated by the crop type.
✔✔Endorsement(s) - ✔✔An optional provision that can be added to a policy to
increase, reduce, or modify coverage for specific property types or perils.
✔✔Errors and Omissions - ✔✔Liability insurance that indemnified professionals for
errors or oversights on the part of the insured that caused harm to their clients.
✔✔Estoppel - ✔✔A legal principle that bars a party from asserting something contrary
to what has been implied by his previous actions or statements.
✔✔Ethical - ✔✔Adhering to moral laws and to principles of fairness.
✔✔Evaluation - ✔✔Determining the approximate value of damages relevant to a claim
i.e. total of medical bills, costs of repair & replacement of damaged property and the
consideration of the financial provisions of the insurance policy.
,✔✔Exclusions - ✔✔A section of an insurance policy that reduces coverage by listing
specific individuals, property, or perils that are NOT covered by the policy.
✔✔Exposure - ✔✔The extent to which an item is open to damage or loss. More
exposure means a loss is more likely.
✔✔Fair Credit Reporting - ✔✔Federal legislation that gives an applicant for insurance
the right to investigate the reasons his insurance application was denied.
✔✔False Advertising - ✔✔Presenting something in a deceptive or untrue manner to the
consumer; misrepresentations in advertisements.
✔✔Farm - ✔✔A property where a farmer or rancher both resides and conducts
commercial business.
✔✔Farm Liability Coverage Form - ✔✔A form added to a farm insurance policy that
provides coverage for injury and damage to a third party.
✔✔Farm Property Coverage Form - ✔✔A form added to a farm insurance policy that
provides coverage for the dwelling, other structures, farm structures, and both
household and farm personal property.
✔✔Farmer - ✔✔Someone in the business of growing, harvesting, and selling crops for
profit. In Farm insurance, a farmer must reside and do business on the same premises.
✔✔Federal Crop Insurance Act - ✔✔Legislation passed by Congress that established
the Federal crop insurance program.
✔✔Federal Crop Insurance Corporation (FCIC) - ✔✔A government-owned corporation
that manages the Federal crop insurance program.
✔✔Federal Emergency Management Agency (FEMA) - ✔✔A branch of homeland
security that coordinates relief programs when disaster strikes an entire community.
✔✔Fiduciary - ✔✔One of the terms that describes the adjuster's relationship with the
principal (the insurer). As fiduciary Agent, the adjuster acts for the benefit of the
principal, rather than for his own benefit.
✔✔Final planting date - ✔✔The last day to plant crops in order to receive the full
insurance yield and/or revenue guarantee selected.
✔✔First Named Insured - ✔✔The first person or entity named as insured on the
declarations page of a policy.
, ✔✔Floater - ✔✔A term for Inland Marine policies that cover mobile property.
✔✔Flood - ✔✔An overflow of inland or tidal waters; an unusual or rapid accumulation of
runoff or surface waters from any source; mud flows; collapse or subsidence of land
along the shore of a lake or other body of water.
✔✔Flood Insurance - ✔✔Provides relief following flood damage to communities who
participate in the NFIP floodplain management system; covers damages to the building
and its contents.
✔✔Floodplain Management - ✔✔Maps out areas with high risk of flood, so that
communities will avoid building in those areas.
✔✔Fraternal Benefit Societies (Fraternal Associations) - ✔✔Non-profit, mutual aid
organizations that engage primarily in charitable or benevolent activities. They offer their
members insurance against death, disease, and disability.
✔✔Fraud - ✔✔The act of deceiving an insurance company in order to collect more
money than one is legally entitled to.
✔✔Fraud, Hard - ✔✔Deliberately faking or causing an incident in order to collect
money.
✔✔Fraud, Soft - ✔✔Inflating the gravity or the extent of claims in order to receive a
higher indemnification.
✔✔Full and legal purpose - ✔✔One of the four qualifications of a legally binding
contract. The purpose of the contract must be legal (e.g. no contracts for illicit drug
deals).
✔✔Good Faith - ✔✔Acting honestly and fairly, with good intentions and full disclosure.
✔✔Group Risk Income Protection (Crop Insurance) - ✔✔A form of Crop Revenue
Insurance that protects a whole county or area instead of individual farmers.
Automatically indemnified if county income falls below a certain level.
✔✔Hazard, Moral - ✔✔Hazard caused by insured persons deliberately engaging in risky
behavior because they know that insurance will indemnify them for the losses.
✔✔Hazard - ✔✔Anything that increases the chance of loss.
✔✔Hazard morale - ✔✔Unconscious tendency of insured people to engage in riskier
behavior.
