Michigan Public Adjuster Licensing
Exam Questions and Correct
Answers with Detailed Rationales |
2026/2027 Edition | Exam Prep
Study Guide PDF
1. What is the primary role of a Michigan public adjuster?
A. To represent an insurance company in settling claims
B. To sell insurance policies to consumers
C. To represent an insured in connection with an insurance claim
D. To determine insurance company underwriting guidelines
Answer: C. To represent an insured in connection with an
insurance claim
Rationale: Michigan distinguishes between an “adjuster for the
insured,” commonly called a public adjuster, and an insurance
adjuster who represents an insurer. A public adjuster is licensed
to contract with and represent an insured who has suffered a
covered loss. The public adjuster’s role is therefore centered on
the insured’s claim rather than the insurer’s interests.
2. Which Michigan department is responsible for regulating
insurance licensing, including public adjusters?
A. Michigan Department of Treasury
B. Michigan Department of Insurance and Financial Services
,C. Michigan Department of Labor and Economic Opportunity
D. Michigan Department of State
Answer: B. Michigan Department of Insurance and Financial
Services
Rationale: The Michigan Department of Insurance and Financial
Services (DIFS) administers insurance licensing and regulatory
functions in Michigan. Public adjusters must comply with
applicable Michigan insurance laws and DIFS licensing
requirements.
3. Which type of losses may a Michigan adjuster for the
insured adjust?
A. Workers’ compensation losses only
B. Fire and other covered hazard losses
C. Only health insurance claims
D. Only life insurance claims
Answer: B. Fire and other covered hazard losses
Rationale: Michigan identifies an adjuster for the insured as an
individual licensed to contract with and represent insureds who
have suffered losses covered by insurance for fire and other
hazards. Michigan specifically states that an adjuster for the
insured may not adjust workers’ compensation losses.
4. Before providing adjusting services to a client, what must a
Michigan public adjuster generally have?
A. An oral agreement with the insured
B. A written contract using a form approved by the Director
,C. A verbal authorization from the insurer
D. A court order
Answer: B. A written contract using a form approved by the
Director
Rationale: Michigan law requires an adjuster for an insured to
contract in writing with the insured or the insured’s authorized
representative before providing services. The contract must use a
form approved by the Director of DIFS.
5. Under Michigan requirements, may a public adjuster freely
rewrite the state-approved residential public adjusting
contract?
A. Yes, without restriction
B. Yes, if the insured agrees
C. No, the approved form generally cannot be altered except as
permitted
D. Yes, if the insurer approves it
Answer: C. No, the approved form generally cannot be altered
except as permitted
Rationale: Michigan DIFS states that public adjusters must use
approved contracts. The residential public adjusting contract
itself cannot be altered; permitted additions are limited to
information necessary to complete the form and certain
compliant alternative fee-agreement provisions.
, 6. What is the maximum total fee a Michigan residential public
adjuster may collect under the approved residential public
adjusting contract?
A. 5% of the settlement
B. 8% of the settlement
C. 10% of amounts paid in settlement of the applicable loss
D. 20% of the settlement
Answer: C. 10% of amounts paid in settlement of the
applicable loss
Rationale: Michigan’s residential public adjusting contract permits
fee arrangements chosen by the parties, but the total amount paid
to the public adjuster cannot exceed 10% of amounts paid by the
insurer in settlement of the loss for the authorized coverages.
7. A public adjuster’s contract covers only building and
contents coverage. The insurer later pays $20,000 for building
damage and $5,000 for loss of use. On which amount may the
adjuster base the contractual fee?
A. $25,000
B. $20,000
C. $5,000
D. Any amount the adjuster chooses
Answer: B. $20,000
Rationale: Michigan DIFS explains that a public adjuster may
charge only on payments made under coverages marked in the
contract. If the contract authorizes adjusting services for building
and contents but not loss of use, payments for loss of use cannot
be included in the fee calculation.
Exam Questions and Correct
Answers with Detailed Rationales |
2026/2027 Edition | Exam Prep
Study Guide PDF
1. What is the primary role of a Michigan public adjuster?
A. To represent an insurance company in settling claims
B. To sell insurance policies to consumers
C. To represent an insured in connection with an insurance claim
D. To determine insurance company underwriting guidelines
Answer: C. To represent an insured in connection with an
insurance claim
Rationale: Michigan distinguishes between an “adjuster for the
insured,” commonly called a public adjuster, and an insurance
adjuster who represents an insurer. A public adjuster is licensed
to contract with and represent an insured who has suffered a
covered loss. The public adjuster’s role is therefore centered on
the insured’s claim rather than the insurer’s interests.
2. Which Michigan department is responsible for regulating
insurance licensing, including public adjusters?
A. Michigan Department of Treasury
B. Michigan Department of Insurance and Financial Services
,C. Michigan Department of Labor and Economic Opportunity
D. Michigan Department of State
Answer: B. Michigan Department of Insurance and Financial
Services
Rationale: The Michigan Department of Insurance and Financial
Services (DIFS) administers insurance licensing and regulatory
functions in Michigan. Public adjusters must comply with
applicable Michigan insurance laws and DIFS licensing
requirements.
3. Which type of losses may a Michigan adjuster for the
insured adjust?
A. Workers’ compensation losses only
B. Fire and other covered hazard losses
C. Only health insurance claims
D. Only life insurance claims
Answer: B. Fire and other covered hazard losses
Rationale: Michigan identifies an adjuster for the insured as an
individual licensed to contract with and represent insureds who
have suffered losses covered by insurance for fire and other
hazards. Michigan specifically states that an adjuster for the
insured may not adjust workers’ compensation losses.
4. Before providing adjusting services to a client, what must a
Michigan public adjuster generally have?
A. An oral agreement with the insured
B. A written contract using a form approved by the Director
,C. A verbal authorization from the insurer
D. A court order
Answer: B. A written contract using a form approved by the
Director
Rationale: Michigan law requires an adjuster for an insured to
contract in writing with the insured or the insured’s authorized
representative before providing services. The contract must use a
form approved by the Director of DIFS.
5. Under Michigan requirements, may a public adjuster freely
rewrite the state-approved residential public adjusting
contract?
A. Yes, without restriction
B. Yes, if the insured agrees
C. No, the approved form generally cannot be altered except as
permitted
D. Yes, if the insurer approves it
Answer: C. No, the approved form generally cannot be altered
except as permitted
Rationale: Michigan DIFS states that public adjusters must use
approved contracts. The residential public adjusting contract
itself cannot be altered; permitted additions are limited to
information necessary to complete the form and certain
compliant alternative fee-agreement provisions.
, 6. What is the maximum total fee a Michigan residential public
adjuster may collect under the approved residential public
adjusting contract?
A. 5% of the settlement
B. 8% of the settlement
C. 10% of amounts paid in settlement of the applicable loss
D. 20% of the settlement
Answer: C. 10% of amounts paid in settlement of the
applicable loss
Rationale: Michigan’s residential public adjusting contract permits
fee arrangements chosen by the parties, but the total amount paid
to the public adjuster cannot exceed 10% of amounts paid by the
insurer in settlement of the loss for the authorized coverages.
7. A public adjuster’s contract covers only building and
contents coverage. The insurer later pays $20,000 for building
damage and $5,000 for loss of use. On which amount may the
adjuster base the contractual fee?
A. $25,000
B. $20,000
C. $5,000
D. Any amount the adjuster chooses
Answer: B. $20,000
Rationale: Michigan DIFS explains that a public adjuster may
charge only on payments made under coverages marked in the
contract. If the contract authorizes adjusting services for building
and contents but not loss of use, payments for loss of use cannot
be included in the fee calculation.
