COLORADO ADJUSTER LICENSING EXAM
QUESTIONS AND CORRECT ANSWERS (VERIFIED
ANSWERS) Q&A 2026 |INSTANT DOWNLOAD PDF
1. What is the primary role of an insurance adjuster?
A. Sell insurance policies
B. Investigate and settle insurance claims
C. Set insurance premiums
D. Underwrite insurance applications
Rationale: Adjusters evaluate claims, determine coverage, and
negotiate settlements.
Correct Answer: B. Investigate and settle insurance claims
2. Which document outlines the terms of coverage in an
insurance contract?
A. Claim report
B. Policy
C. Loss notice
D. Appraisal report
Rationale: The insurance policy is the legal contract between
insurer and insured.
Correct Answer: B. Policy
,3. What does “indemnity” mean in insurance?
A. Profit from a claim
B. Restoration to prior financial condition
C. Punitive damages
D. Insurance premium refund
Rationale: Indemnity restores the insured to the financial
position before loss.
Correct Answer: B. Restoration to prior financial condition
4. Which principle requires both parties to act honestly in
insurance contracts?
A. Subrogation
B. Utmost good faith
C. Contribution
D. Insurable interest
Rationale: Insurance relies on full disclosure and honesty.
Correct Answer: B. Utmost good faith
5. What is subrogation?
A. The insured waives rights to claim
B. Insurer takes over insured’s legal rights against a third party
C. A method of calculating premiums
D. Payment of deductible
,Rationale: Subrogation allows insurers to recover costs from
responsible third parties.
Correct Answer: B. Insurer takes over insured’s legal rights
against a third party
6. What is a deductible?
A. Amount paid by insurer before policy starts
B. Amount insured agrees to pay before insurer pays
C. Refund from insurer
D. Administrative fee charged by state
Rationale: Deductible is the insured’s share of loss.
Correct Answer: B. Amount insured agrees to pay before
insurer pays
7. Which type of insurance covers liability for injuries to
others?
A. Property insurance
B. Liability insurance
C. Life insurance
D. Health insurance
Rationale: Liability insurance protects against legal
responsibility for injury or damage.
Correct Answer: B. Liability insurance
, 8. What is a peril in insurance terms?
A. A person insured
B. A cause of loss
C. A premium penalty
D. A type of policy
Rationale: Peril is the actual cause of loss (fire, theft, etc.).
Correct Answer: B. A cause of loss
9. What is an exclusion in an insurance policy?
A. Covered loss
B. Risk not covered by policy
C. Deductible clause
D. Premium discount
Rationale: Exclusions specify what is not covered.
Correct Answer: B. Risk not covered by policy
10. What does “proximate cause” refer to?
A. First insurance claim filed
B. Direct cause of a loss
C. Secondary damage
D. Policy expiration date
Rationale: It is the main cause that sets other events in motion.
Correct Answer: B. Direct cause of a loss
QUESTIONS AND CORRECT ANSWERS (VERIFIED
ANSWERS) Q&A 2026 |INSTANT DOWNLOAD PDF
1. What is the primary role of an insurance adjuster?
A. Sell insurance policies
B. Investigate and settle insurance claims
C. Set insurance premiums
D. Underwrite insurance applications
Rationale: Adjusters evaluate claims, determine coverage, and
negotiate settlements.
Correct Answer: B. Investigate and settle insurance claims
2. Which document outlines the terms of coverage in an
insurance contract?
A. Claim report
B. Policy
C. Loss notice
D. Appraisal report
Rationale: The insurance policy is the legal contract between
insurer and insured.
Correct Answer: B. Policy
,3. What does “indemnity” mean in insurance?
A. Profit from a claim
B. Restoration to prior financial condition
C. Punitive damages
D. Insurance premium refund
Rationale: Indemnity restores the insured to the financial
position before loss.
Correct Answer: B. Restoration to prior financial condition
4. Which principle requires both parties to act honestly in
insurance contracts?
A. Subrogation
B. Utmost good faith
C. Contribution
D. Insurable interest
Rationale: Insurance relies on full disclosure and honesty.
Correct Answer: B. Utmost good faith
5. What is subrogation?
A. The insured waives rights to claim
B. Insurer takes over insured’s legal rights against a third party
C. A method of calculating premiums
D. Payment of deductible
,Rationale: Subrogation allows insurers to recover costs from
responsible third parties.
Correct Answer: B. Insurer takes over insured’s legal rights
against a third party
6. What is a deductible?
A. Amount paid by insurer before policy starts
B. Amount insured agrees to pay before insurer pays
C. Refund from insurer
D. Administrative fee charged by state
Rationale: Deductible is the insured’s share of loss.
Correct Answer: B. Amount insured agrees to pay before
insurer pays
7. Which type of insurance covers liability for injuries to
others?
A. Property insurance
B. Liability insurance
C. Life insurance
D. Health insurance
Rationale: Liability insurance protects against legal
responsibility for injury or damage.
Correct Answer: B. Liability insurance
, 8. What is a peril in insurance terms?
A. A person insured
B. A cause of loss
C. A premium penalty
D. A type of policy
Rationale: Peril is the actual cause of loss (fire, theft, etc.).
Correct Answer: B. A cause of loss
9. What is an exclusion in an insurance policy?
A. Covered loss
B. Risk not covered by policy
C. Deductible clause
D. Premium discount
Rationale: Exclusions specify what is not covered.
Correct Answer: B. Risk not covered by policy
10. What does “proximate cause” refer to?
A. First insurance claim filed
B. Direct cause of a loss
C. Secondary damage
D. Policy expiration date
Rationale: It is the main cause that sets other events in motion.
Correct Answer: B. Direct cause of a loss
