Delaware Adjuster Licensing Exam
Practice Questions And Correct Answers
(Verified Answers) Plus Rationale 2026
Q&A| Instant Download Pdf
1. Which principle requires an insured to have a financial interest in the
property or person insured at the time of loss?
A. Adhesion
B. Indemnity
C. Insurable Interest
D. Contribution
Answer: C. Insurable Interest
Insurable interest exists when an individual would suffer a financial loss
from damage, destruction, or loss of the insured property or person.
Insurance contracts generally require this interest to prevent wagering.
2. A deductible is best described as:
A. The maximum amount payable under a policy
B. The amount the insured must pay before the insurer pays a covered loss
C. A penalty assessed by the insurer
D. An optional policy endorsement
,Answer: B. The amount the insured must pay before the insurer pays a
covered loss
A deductible shifts part of the loss to the insured and helps reduce small
claims and moral hazard.
3. The primary responsibility of an insurance adjuster is to:
A. Sell insurance policies
B. Underwrite insurance applications
C. Investigate and settle claims
D. Reinsure insurance companies
Answer: C. Investigate and settle claims
Adjusters evaluate coverage, investigate facts, determine liability, assess
damages, and negotiate settlements.
4. Which of the following is a first-party claim?
A. A liability claim filed by a neighbor
B. A claim by the insured under their own policy
C. A lawsuit against the insurer
D. A claim involving subrogation only
Answer: B. A claim by the insured under their own policy
First-party claims involve the insured seeking payment directly from their
own insurer for covered losses.
5. The doctrine of indemnity is intended to:
A. Allow insureds to profit from losses
B. Restore insureds to their approximate financial condition before loss
C. Increase insurer profits
D. Eliminate all deductibles
,Answer: B. Restore insureds to their approximate financial condition
before loss
Indemnity prevents insureds from receiving more than the amount of their
actual covered loss.
6. An adjuster discovers evidence suggesting arson. The adjuster should:
A. Ignore the evidence
B. Pay the claim immediately
C. Conduct further investigation and document findings
D. Destroy suspicious evidence
Answer: C. Conduct further investigation and document findings
Potential fraud indicators require careful investigation, proper
documentation, and compliance with applicable reporting requirements.
7. Which type of adjuster is employed directly by an insurance company?
A. Public adjuster
B. Staff adjuster
C. Independent broker
D. Risk manager
Answer: B. Staff adjuster
Staff adjusters are employees of insurers and handle claims on behalf of
the insurance company.
8. A reservation of rights letter is used to:
A. Cancel coverage automatically
B. Deny a claim immediately
C. Preserve the insurer's coverage defenses while investigating
D. Increase premiums
Answer: C. Preserve the insurer's coverage defenses while investigating
, Reservation of rights letters notify insureds that coverage questions exist
while the insurer continues its investigation.
9. Actual Cash Value is generally calculated as:
A. Replacement Cost minus depreciation
B. Replacement Cost plus depreciation
C. Market value only
D. Purchase price only
Answer: A. Replacement Cost minus depreciation
Actual Cash Value reflects the property's value after accounting for
depreciation due to age and wear.
10. Which insurance contract characteristic means ambiguity is
usually interpreted against the insurer?
A. Aleatory
B. Personal
C. Conditional
D. Contract of Adhesion
Answer: D. Contract of Adhesion
Because insurers draft policy language, ambiguities are often construed in
favor of the insured.
11. Subrogation allows an insurer to:
A. Increase premiums after a loss
B. Recover from responsible third parties after paying a claim
C. Cancel policies without notice
D. Avoid claim investigations
Answer: B. Recover from responsible third parties after paying a claim
Practice Questions And Correct Answers
(Verified Answers) Plus Rationale 2026
Q&A| Instant Download Pdf
1. Which principle requires an insured to have a financial interest in the
property or person insured at the time of loss?
A. Adhesion
B. Indemnity
C. Insurable Interest
D. Contribution
Answer: C. Insurable Interest
Insurable interest exists when an individual would suffer a financial loss
from damage, destruction, or loss of the insured property or person.
Insurance contracts generally require this interest to prevent wagering.
2. A deductible is best described as:
A. The maximum amount payable under a policy
B. The amount the insured must pay before the insurer pays a covered loss
C. A penalty assessed by the insurer
D. An optional policy endorsement
,Answer: B. The amount the insured must pay before the insurer pays a
covered loss
A deductible shifts part of the loss to the insured and helps reduce small
claims and moral hazard.
3. The primary responsibility of an insurance adjuster is to:
A. Sell insurance policies
B. Underwrite insurance applications
C. Investigate and settle claims
D. Reinsure insurance companies
Answer: C. Investigate and settle claims
Adjusters evaluate coverage, investigate facts, determine liability, assess
damages, and negotiate settlements.
4. Which of the following is a first-party claim?
A. A liability claim filed by a neighbor
B. A claim by the insured under their own policy
C. A lawsuit against the insurer
D. A claim involving subrogation only
Answer: B. A claim by the insured under their own policy
First-party claims involve the insured seeking payment directly from their
own insurer for covered losses.
5. The doctrine of indemnity is intended to:
A. Allow insureds to profit from losses
B. Restore insureds to their approximate financial condition before loss
C. Increase insurer profits
D. Eliminate all deductibles
,Answer: B. Restore insureds to their approximate financial condition
before loss
Indemnity prevents insureds from receiving more than the amount of their
actual covered loss.
6. An adjuster discovers evidence suggesting arson. The adjuster should:
A. Ignore the evidence
B. Pay the claim immediately
C. Conduct further investigation and document findings
D. Destroy suspicious evidence
Answer: C. Conduct further investigation and document findings
Potential fraud indicators require careful investigation, proper
documentation, and compliance with applicable reporting requirements.
7. Which type of adjuster is employed directly by an insurance company?
A. Public adjuster
B. Staff adjuster
C. Independent broker
D. Risk manager
Answer: B. Staff adjuster
Staff adjusters are employees of insurers and handle claims on behalf of
the insurance company.
8. A reservation of rights letter is used to:
A. Cancel coverage automatically
B. Deny a claim immediately
C. Preserve the insurer's coverage defenses while investigating
D. Increase premiums
Answer: C. Preserve the insurer's coverage defenses while investigating
, Reservation of rights letters notify insureds that coverage questions exist
while the insurer continues its investigation.
9. Actual Cash Value is generally calculated as:
A. Replacement Cost minus depreciation
B. Replacement Cost plus depreciation
C. Market value only
D. Purchase price only
Answer: A. Replacement Cost minus depreciation
Actual Cash Value reflects the property's value after accounting for
depreciation due to age and wear.
10. Which insurance contract characteristic means ambiguity is
usually interpreted against the insurer?
A. Aleatory
B. Personal
C. Conditional
D. Contract of Adhesion
Answer: D. Contract of Adhesion
Because insurers draft policy language, ambiguities are often construed in
favor of the insured.
11. Subrogation allows an insurer to:
A. Increase premiums after a loss
B. Recover from responsible third parties after paying a claim
C. Cancel policies without notice
D. Avoid claim investigations
Answer: B. Recover from responsible third parties after paying a claim
