NEVADA INSURANCE ADJUSTER LICENSE EXAM – QUESTIONS
AND ANSWERS | VERIFIED AND WELL DETAILED ANSWERS |
PLUS RATIONALES | GUARANTEED PASS | LATEST EXAM
UPDATE | EXAM PREP | STUDY GUIDE | PRACTICE TEST
1. A policyholder reports hail damage to a residential roof two weeks after a storm. What is
the adjuster’s PRIMARY responsibility during the initial claim investigation?
A. Approve payment immediately to avoid bad faith exposure
B. Determine whether the policy provides coverage for the reported loss
C. Recommend a roofing contractor to the insured
D. Negotiate depreciation before inspecting the property
════════════════════
Correct Answer: B. Determine whether the policy provides coverage for the reported loss
Rationale:
The adjuster’s first responsibility is to verify whether coverage applies under the policy terms,
conditions, exclusions, and endorsements. An adjuster must investigate facts before
authorizing payment. Recommending contractors may create ethical concerns, and
negotiating depreciation before inspection is premature.
════════════════════
2. An adjuster discovers that an insured intentionally exaggerated the value of stolen property
during a theft claim. What should the adjuster do FIRST?
A. Immediately deny the entire claim
B. Refer the matter for possible fraud investigation
C. Pay the undisputed portion and ignore the discrepancy
D. Notify the police directly without documentation
════════════════════
Correct Answer: B. Refer the matter for possible fraud investigation
Rationale:
Suspected fraud should be documented and referred according to company procedures and
state regulations. Immediate denial without investigation may violate claims-handling
standards. Law enforcement involvement typically follows internal fraud review procedures.
,════════════════════
3. Which principle prevents an insured from collecting more than the actual amount of a
covered loss?
A. Waiver
B. Adhesion
C. Indemnity
D. Estoppel
════════════════════
Correct Answer: C. Indemnity
Rationale:
The principle of indemnity restores the insured to approximately the same financial position
occupied before the loss without allowing profit from insurance. Waiver and estoppel involve
legal rights, while adhesion relates to contract interpretation.
════════════════════
4. A claimant slips on spilled liquid inside a grocery store. Which type of insurance policy
would MOST likely respond to the claim?
A. Commercial property insurance
B. Workers’ compensation insurance
C. Inland marine insurance
D. Commercial general liability insurance
════════════════════
Correct Answer: D. Commercial general liability insurance
Rationale:
Commercial general liability coverage commonly applies to bodily injury claims arising from
premises operations. Property insurance covers physical property damage, while workers’
compensation applies to employee injuries.
════════════════════
5. An adjuster handling an automobile collision claim notices conflicting witness statements.
What is the BEST course of action?
A. Accept the insured’s version automatically
B. Deny the claim due to inconsistent testimony
,C. Conduct additional investigation before determining liability
D. Split liability equally between both drivers immediately
════════════════════
Correct Answer: C. Conduct additional investigation before determining liability
Rationale:
Conflicting statements require further investigation such as scene analysis, recorded
statements, photographs, police reports, or expert review. Liability should not be assumed
without adequate supporting evidence.
════════════════════
6. What is the purpose of a deductible in an insurance policy?
A. To eliminate underwriting requirements
B. To reduce small claims frequency and share risk with the insured
C. To increase insurer liability exposure
D. To guarantee replacement cost settlement
════════════════════
Correct Answer: B. To reduce small claims frequency and share risk with the insured
Rationale:
Deductibles encourage insureds to absorb minor losses and help insurers reduce
administrative costs associated with small claims. They also promote responsible risk
management by policyholders.
════════════════════
7. An adjuster receives a claim for flood damage under a standard homeowners policy. How
should the adjuster respond?
A. Confirm whether separate flood coverage exists because flood is generally excluded
B. Automatically approve coverage due to water intrusion
C. Apply earthquake coverage provisions
D. Settle the claim under personal liability coverage
════════════════════
Correct Answer: A. Confirm whether separate flood coverage exists because flood is generally
excluded
, Rationale:
Standard homeowners policies generally exclude flood damage. Coverage may exist through
a separate flood insurance policy. The adjuster must verify policy terms before determining
coverage.
════════════════════
8. Which document outlines the specific protections, exclusions, and duties under an
insurance contract?
A. Declaration page only
B. Loss reserve worksheet
C. Insurance policy
D. Proof of loss form
════════════════════
Correct Answer: C. Insurance policy
Rationale:
The insurance policy contains the insuring agreement, conditions, exclusions, endorsements,
and obligations of both parties. The declarations page summarizes key information but does
not contain all contractual provisions.
════════════════════
9. A claims adjuster intentionally delays communication with an insured to pressure
acceptance of a lower settlement. This practice may constitute:
A. Arbitration
B. Comparative negligence
C. Fair underwriting
D. Bad faith claims handling
════════════════════
Correct Answer: D. Bad faith claims handling
Rationale:
Unreasonable delays or coercive settlement tactics may violate fair claims practices and
expose the insurer to bad faith liability. Adjusters are expected to act promptly and fairly.
════════════════════
AND ANSWERS | VERIFIED AND WELL DETAILED ANSWERS |
PLUS RATIONALES | GUARANTEED PASS | LATEST EXAM
UPDATE | EXAM PREP | STUDY GUIDE | PRACTICE TEST
1. A policyholder reports hail damage to a residential roof two weeks after a storm. What is
the adjuster’s PRIMARY responsibility during the initial claim investigation?
A. Approve payment immediately to avoid bad faith exposure
B. Determine whether the policy provides coverage for the reported loss
C. Recommend a roofing contractor to the insured
D. Negotiate depreciation before inspecting the property
════════════════════
Correct Answer: B. Determine whether the policy provides coverage for the reported loss
Rationale:
The adjuster’s first responsibility is to verify whether coverage applies under the policy terms,
conditions, exclusions, and endorsements. An adjuster must investigate facts before
authorizing payment. Recommending contractors may create ethical concerns, and
negotiating depreciation before inspection is premature.
════════════════════
2. An adjuster discovers that an insured intentionally exaggerated the value of stolen property
during a theft claim. What should the adjuster do FIRST?
A. Immediately deny the entire claim
B. Refer the matter for possible fraud investigation
C. Pay the undisputed portion and ignore the discrepancy
D. Notify the police directly without documentation
════════════════════
Correct Answer: B. Refer the matter for possible fraud investigation
Rationale:
Suspected fraud should be documented and referred according to company procedures and
state regulations. Immediate denial without investigation may violate claims-handling
standards. Law enforcement involvement typically follows internal fraud review procedures.
,════════════════════
3. Which principle prevents an insured from collecting more than the actual amount of a
covered loss?
A. Waiver
B. Adhesion
C. Indemnity
D. Estoppel
════════════════════
Correct Answer: C. Indemnity
Rationale:
The principle of indemnity restores the insured to approximately the same financial position
occupied before the loss without allowing profit from insurance. Waiver and estoppel involve
legal rights, while adhesion relates to contract interpretation.
════════════════════
4. A claimant slips on spilled liquid inside a grocery store. Which type of insurance policy
would MOST likely respond to the claim?
A. Commercial property insurance
B. Workers’ compensation insurance
C. Inland marine insurance
D. Commercial general liability insurance
════════════════════
Correct Answer: D. Commercial general liability insurance
Rationale:
Commercial general liability coverage commonly applies to bodily injury claims arising from
premises operations. Property insurance covers physical property damage, while workers’
compensation applies to employee injuries.
════════════════════
5. An adjuster handling an automobile collision claim notices conflicting witness statements.
What is the BEST course of action?
A. Accept the insured’s version automatically
B. Deny the claim due to inconsistent testimony
,C. Conduct additional investigation before determining liability
D. Split liability equally between both drivers immediately
════════════════════
Correct Answer: C. Conduct additional investigation before determining liability
Rationale:
Conflicting statements require further investigation such as scene analysis, recorded
statements, photographs, police reports, or expert review. Liability should not be assumed
without adequate supporting evidence.
════════════════════
6. What is the purpose of a deductible in an insurance policy?
A. To eliminate underwriting requirements
B. To reduce small claims frequency and share risk with the insured
C. To increase insurer liability exposure
D. To guarantee replacement cost settlement
════════════════════
Correct Answer: B. To reduce small claims frequency and share risk with the insured
Rationale:
Deductibles encourage insureds to absorb minor losses and help insurers reduce
administrative costs associated with small claims. They also promote responsible risk
management by policyholders.
════════════════════
7. An adjuster receives a claim for flood damage under a standard homeowners policy. How
should the adjuster respond?
A. Confirm whether separate flood coverage exists because flood is generally excluded
B. Automatically approve coverage due to water intrusion
C. Apply earthquake coverage provisions
D. Settle the claim under personal liability coverage
════════════════════
Correct Answer: A. Confirm whether separate flood coverage exists because flood is generally
excluded
, Rationale:
Standard homeowners policies generally exclude flood damage. Coverage may exist through
a separate flood insurance policy. The adjuster must verify policy terms before determining
coverage.
════════════════════
8. Which document outlines the specific protections, exclusions, and duties under an
insurance contract?
A. Declaration page only
B. Loss reserve worksheet
C. Insurance policy
D. Proof of loss form
════════════════════
Correct Answer: C. Insurance policy
Rationale:
The insurance policy contains the insuring agreement, conditions, exclusions, endorsements,
and obligations of both parties. The declarations page summarizes key information but does
not contain all contractual provisions.
════════════════════
9. A claims adjuster intentionally delays communication with an insured to pressure
acceptance of a lower settlement. This practice may constitute:
A. Arbitration
B. Comparative negligence
C. Fair underwriting
D. Bad faith claims handling
════════════════════
Correct Answer: D. Bad faith claims handling
Rationale:
Unreasonable delays or coercive settlement tactics may violate fair claims practices and
expose the insurer to bad faith liability. Adjusters are expected to act promptly and fairly.
════════════════════
