Michigan Claims Adjuster Test Questions and Correct Answers

Michigan Claims Adjuster Test Questions and
Correct Answers
Insurance

Financial tool that protects individuals & organizations from unforseen and extraordinary

losses by transferring risk to another party

Principle of Indemnity

When a loss occurs the insured should be restored to his approximate financial condition

before loss. No better, no worse.

Indemnification

Reimbursement for a loss, which leaves the claimant in the same financial position that she

was in before the loss

Four requirements of a legally binding contract

1. Agreement

2. Consideration

3. Competent Parties

4. Legal Purpose

Agreement

One of the four requirements of a legally binding contract. All parties involved must agree to

the terms of the contract. Can also refer to a binder, which is the preliminary substance of a

contract.

Consideration

, One of the four requirements of a legally binding contract. All parties must bring something

of value to the contract.

Competence

One of the four qualifications of a legally binding contract. All parties must be competent,

with the necessary legal and mental capacity.

Legal Purpose

One of the four qualification of a legally binding contract. The purpose of the contract must

be legal.

Terms of terminating an offer

1. Revocation by offerer

2. Rejection by offerer

3. Time lapse

4. Termination by operation of law

Six Characteristics of Insurance Contracts

1. Personal

2. Adhesion

3. Utmost Good Faith

4. Aleatory

5. Unilateral

6. Conditional

Adhesion