1 | P a g e | © copyright 2024/2025 | Grade A+
Insurance Adjusting- LA Questions
and Answers (100% Pass)
Adhesion
✓ Insurance policies are contracts of adhesion, which means that one
party (the insurer) dictates the terms, and the other party (the inured)
simply accepts or rejects them. One implication of this arrangement is
that any ambiguities in the contract will be interpreted in the favor of
the insured; in this case, in favor of Stephen.
During a storm, lightning strikes a tree in Norman's back yard, causing it to fall
on his house and damage his roof. In this case, Norman's fallen tree is
considered:
✓ In this case, Norman's fallen tree would be considered a direct loss.
A(n) ________ is a bilateral statement that must be signed by the policyholder.
It says that the insurer may continue to investigate a claim or defend the
policyholder in court, but that it still keeps its right to deny coverage.
✓ reservation of rights
Which of the following is TRUE for tort law?
Master01 | October, 2024/2025 | Latest update
, 1 | P a g e | © copyright 2024/2025 | Grade A+
✓
A pre-defined monetary portion of an insurance claim paid by a policyholder
is a:
✓ a deductible.
Roxanne bought her 50" TV four years ago for $2,400. During a storm, her
house was struck by lightning and the current fried her TV. The TV depreciates
at $400 per year and a similar TV costs $1,200 today. Assuming Roxanne's
homeowners policy has a replacement cost endorsement for personal
property, how much can she expect to receive in indemnification for her
damaged TV?
✓ she will receive $1,200 for indemnification: the amount it would take to
replace the damaged television.
appraisal
✓ opposing parties each choose an appraiser, and then the two
appraisers decide on a third party, called an umpire. When at least
two of these three representatives agree on a settlement, their decision
is binding.
Master01 | October, 2024/2025 | Latest update
, 1 | P a g e | © copyright 2024/2025 | Grade A+
Sara's home was partially destroyed by a fire and she insists it will cost
$97,000 to repair the damage. However, after completing his investigation,
the adjuster determined the repairs could be done for $65,000. All attempts at
negotiation have failed. Even though it's risky to go to court, why might the
insurer decide to pursue that course of action?
✓ Despite the drawbacks of litigation, the insurer may decide to go to
court to avoid developing a reputation of being a pushover, which
could make future claims more difficult.
What is the main difference between a Full Release Settlement and a No
Release Settlement?
✓ In a Full Release Settlement, the claimant signs a release form giving
up the right to additional indemnification; in a No Release Settlement,
the claimant does not sign a release form.
Which of the following is NOT true of arbitration?
✓ Arbitrators often have more expertise than juries.
n insurer can use a Reservation of Rights letter to let the claimant know that
the adjuster will begin the claim process, but might deny coverage if it
becomes clear that the policy does not apply to the losses, or if the claim
was reported too late.
Master01 | October, 2024/2025 | Latest update
, 1 | P a g e | © copyright 2024/2025 | Grade A+
✓
Which of the following statements applies to actual cash value?
✓ Actual cash value generally reflects the fair market value of an item.
franchise deductible
✓ With a franchise deductible, the policyholder only pays for damages
that are less than his deductible. If the cost of damages equals or
exceeds his deductible, the insurer pays the full amount and the
policyholder pays nothing.
Jack's home is valued at $950,000. How much insurance does he need to
carry on his home in order to be fully insured under a typical insurance
policy?
✓ Jack must carry at least $760,000 (80% of the value of his home) in
insurance in order to be fully insured.
Joe is looking for information in his Standard Fire Policy, relating to policy
cancellation, assignment, and subrogation. In which section would he find
this information?
✓ Conditions
Master01 | October, 2024/2025 | Latest update
Insurance Adjusting- LA Questions
and Answers (100% Pass)
Adhesion
✓ Insurance policies are contracts of adhesion, which means that one
party (the insurer) dictates the terms, and the other party (the inured)
simply accepts or rejects them. One implication of this arrangement is
that any ambiguities in the contract will be interpreted in the favor of
the insured; in this case, in favor of Stephen.
During a storm, lightning strikes a tree in Norman's back yard, causing it to fall
on his house and damage his roof. In this case, Norman's fallen tree is
considered:
✓ In this case, Norman's fallen tree would be considered a direct loss.
A(n) ________ is a bilateral statement that must be signed by the policyholder.
It says that the insurer may continue to investigate a claim or defend the
policyholder in court, but that it still keeps its right to deny coverage.
✓ reservation of rights
Which of the following is TRUE for tort law?
Master01 | October, 2024/2025 | Latest update
, 1 | P a g e | © copyright 2024/2025 | Grade A+
✓
A pre-defined monetary portion of an insurance claim paid by a policyholder
is a:
✓ a deductible.
Roxanne bought her 50" TV four years ago for $2,400. During a storm, her
house was struck by lightning and the current fried her TV. The TV depreciates
at $400 per year and a similar TV costs $1,200 today. Assuming Roxanne's
homeowners policy has a replacement cost endorsement for personal
property, how much can she expect to receive in indemnification for her
damaged TV?
✓ she will receive $1,200 for indemnification: the amount it would take to
replace the damaged television.
appraisal
✓ opposing parties each choose an appraiser, and then the two
appraisers decide on a third party, called an umpire. When at least
two of these three representatives agree on a settlement, their decision
is binding.
Master01 | October, 2024/2025 | Latest update
, 1 | P a g e | © copyright 2024/2025 | Grade A+
Sara's home was partially destroyed by a fire and she insists it will cost
$97,000 to repair the damage. However, after completing his investigation,
the adjuster determined the repairs could be done for $65,000. All attempts at
negotiation have failed. Even though it's risky to go to court, why might the
insurer decide to pursue that course of action?
✓ Despite the drawbacks of litigation, the insurer may decide to go to
court to avoid developing a reputation of being a pushover, which
could make future claims more difficult.
What is the main difference between a Full Release Settlement and a No
Release Settlement?
✓ In a Full Release Settlement, the claimant signs a release form giving
up the right to additional indemnification; in a No Release Settlement,
the claimant does not sign a release form.
Which of the following is NOT true of arbitration?
✓ Arbitrators often have more expertise than juries.
n insurer can use a Reservation of Rights letter to let the claimant know that
the adjuster will begin the claim process, but might deny coverage if it
becomes clear that the policy does not apply to the losses, or if the claim
was reported too late.
Master01 | October, 2024/2025 | Latest update
, 1 | P a g e | © copyright 2024/2025 | Grade A+
✓
Which of the following statements applies to actual cash value?
✓ Actual cash value generally reflects the fair market value of an item.
franchise deductible
✓ With a franchise deductible, the policyholder only pays for damages
that are less than his deductible. If the cost of damages equals or
exceeds his deductible, the insurer pays the full amount and the
policyholder pays nothing.
Jack's home is valued at $950,000. How much insurance does he need to
carry on his home in order to be fully insured under a typical insurance
policy?
✓ Jack must carry at least $760,000 (80% of the value of his home) in
insurance in order to be fully insured.
Joe is looking for information in his Standard Fire Policy, relating to policy
cancellation, assignment, and subrogation. In which section would he find
this information?
✓ Conditions
Master01 | October, 2024/2025 | Latest update
