NM ADJUSTER PRACTICE EXAMINATION 2026 QUESTIONS
WITH ANSWERS GRADED A+
● Insurer. Answer: The insurance company or professional risk bearer
● Insured. Answer: The persons or business covered by the insurance policy
● Loss. Answer: Any reduction in value, quality or quantity (monetary hardship
● Risk. Answer: The uncertainty or chance of financial loss
● SPECULATIVE RISK VS PURE RISK. Answer: SPECULATIVE RISK offers the chance of
loss as well as the oppurtunity for gain. PURE RISK offers only the chance of loss no gain.
● Peril. Answer: The cause of loss
● Hazard. Answer: Anything that increases the potential or severity of a loss.
● Physical Hazard. Answer: arises from material, structural, or operational features ie:
unsanitary conditions slippery floors
● Moral Hazard. Answer: Arise from a persons value or ethics. Ex: drinking and driving
● Morale Hazard. Answer: A condition of carelessness or indifference that increases the
frequency or severity of loss. Ex: leaving the car running in the morning to warm up.
● insurance policy. Answer: a legal contract between the insured, or purchaser of a policy,
and the insurance company.
● insurance claim. Answer: A demand for payment of any loss that may be covered, in
whole or in part by an insurance company.
● Reinsurance. Answer: A contractual agreement between insurance companies who agree
to share risk.
● Property Insurance. Answer: This type of insurance pays the insured for financial loss on
all types of property including dwellings, dwelling contents and business inventory.
● Casualty Insurance. Answer: This type of insurance covers liability for financial
responsibility to a third party due to damage or injury.
, ● Stock Company. Answer: A company owned by stockholders or shareholders who are
entitled to profits of the company
● Mutual Company. Answer: A company owned by policyholders.
● reciprocal. Answer: An unincorporated group of people who share risk among themselves
for their own benefit.
● Self-Insurer. Answer: Companies or people who are willing to accept the financial risk
associated with loss and not purchase insurance.
● Fraternal Benefit Society. Answer: A socially oriented non profit organization that provides
insurance for its members. They are often a ritual type of organization
● Risk Retention Group (RRG). Answer: Under the 1981 liability risk retention act, the
federal government gave product manufactures more options for insuring against product
liability by allowing them to purchase insurance as a group called purchasing groups. (PGs)
● Government Insurers. Answer: The state and federal government provide many types of
insurance in the form of social programs and mandatory insurance requiresments. Ex: flood
and crop insurance.
● Captive Agent. Answer: Represents only one insurer. Aka exclusive agents
● Independent agent. Answer: May represent more than one company.
● Duties of an Agent. Answer: Solicit insurance on behalf of insurers.
● Brokers. Answer: Always represents the insured, but are compensated by the insurer.
● Consultants. Answer: An insurance professional who does not sell insurance and does not
work on commission, but who receives a fee for their advice and consultation.
● solicitors. Answer: Employees of a licensed agent who is allowed to solicit insurance and
perform other duties to handle the agents business. "Represents the agent"
● Express Authority. Answer: Specific written authority granted in the agents contract or job
description with the company.
● Implied Authority. Answer: The authority that isn't written for an agent, but that agent may
reasonably exercise to preforming their job duties and fiduciary responsibilities with the public.
WITH ANSWERS GRADED A+
● Insurer. Answer: The insurance company or professional risk bearer
● Insured. Answer: The persons or business covered by the insurance policy
● Loss. Answer: Any reduction in value, quality or quantity (monetary hardship
● Risk. Answer: The uncertainty or chance of financial loss
● SPECULATIVE RISK VS PURE RISK. Answer: SPECULATIVE RISK offers the chance of
loss as well as the oppurtunity for gain. PURE RISK offers only the chance of loss no gain.
● Peril. Answer: The cause of loss
● Hazard. Answer: Anything that increases the potential or severity of a loss.
● Physical Hazard. Answer: arises from material, structural, or operational features ie:
unsanitary conditions slippery floors
● Moral Hazard. Answer: Arise from a persons value or ethics. Ex: drinking and driving
● Morale Hazard. Answer: A condition of carelessness or indifference that increases the
frequency or severity of loss. Ex: leaving the car running in the morning to warm up.
● insurance policy. Answer: a legal contract between the insured, or purchaser of a policy,
and the insurance company.
● insurance claim. Answer: A demand for payment of any loss that may be covered, in
whole or in part by an insurance company.
● Reinsurance. Answer: A contractual agreement between insurance companies who agree
to share risk.
● Property Insurance. Answer: This type of insurance pays the insured for financial loss on
all types of property including dwellings, dwelling contents and business inventory.
● Casualty Insurance. Answer: This type of insurance covers liability for financial
responsibility to a third party due to damage or injury.
, ● Stock Company. Answer: A company owned by stockholders or shareholders who are
entitled to profits of the company
● Mutual Company. Answer: A company owned by policyholders.
● reciprocal. Answer: An unincorporated group of people who share risk among themselves
for their own benefit.
● Self-Insurer. Answer: Companies or people who are willing to accept the financial risk
associated with loss and not purchase insurance.
● Fraternal Benefit Society. Answer: A socially oriented non profit organization that provides
insurance for its members. They are often a ritual type of organization
● Risk Retention Group (RRG). Answer: Under the 1981 liability risk retention act, the
federal government gave product manufactures more options for insuring against product
liability by allowing them to purchase insurance as a group called purchasing groups. (PGs)
● Government Insurers. Answer: The state and federal government provide many types of
insurance in the form of social programs and mandatory insurance requiresments. Ex: flood
and crop insurance.
● Captive Agent. Answer: Represents only one insurer. Aka exclusive agents
● Independent agent. Answer: May represent more than one company.
● Duties of an Agent. Answer: Solicit insurance on behalf of insurers.
● Brokers. Answer: Always represents the insured, but are compensated by the insurer.
● Consultants. Answer: An insurance professional who does not sell insurance and does not
work on commission, but who receives a fee for their advice and consultation.
● solicitors. Answer: Employees of a licensed agent who is allowed to solicit insurance and
perform other duties to handle the agents business. "Represents the agent"
● Express Authority. Answer: Specific written authority granted in the agents contract or job
description with the company.
● Implied Authority. Answer: The authority that isn't written for an agent, but that agent may
reasonably exercise to preforming their job duties and fiduciary responsibilities with the public.
