AZ Adjusterpro Exam – Questions With Verifiable
Answers
Covered by other insurance (boiler and machinery) Correct
Answer - windstorm or hail
explosion
fire or combustion explosion
internal furnace explosion
Social insurance Correct Answer - non profit, mandatory
participation, benefits prescribed by the law, designed to meet
general needs of the public, gov. has monopoly
Private Insurers Correct Answer - sells insurance based on
consumer preferences, offers a wide variety of insurance products,
typically exists to benefit a group or profit, insured party voluntarily
participates
Stock Insurance Companies Correct Answer - always for profit,
usually publicly-traded, stockholders provide capital and participate
in profits or losses, non-participating insurers: no dividends go to
policyholders
Mutual Insurance Companies Correct Answer - owned by
policyholders (no shareholders), policyholders elect board of
directors
participating insurers: policyholders participate in dividends
Reciprocal Insurers Correct Answer - a group of people or
organizations that insure each other, unincorporated, non-profit,
operated by attorney-in-fact, members pay into individual accounts,
cost of claims shared by the whole group
,Surplus Lines Correct Answer - people can get surplus lines
when they are denied coverage by standard insurers for multiple
reasons
Surplus (Excess) Lines Insurance Correct Answer - is a last
resort, is not available in the standard market and must meet certain
conditions
Blanket coverage vs. specific limits Correct Answer - Blanket
coverage "blankets" more than one property, type of property, or
coverage under a single limit. Specific limits are limits that apply to
one specific type of property
Estoppel Correct Answer - A legal principle that prohibits a
party from asserting a claim or right that is inconsistent with that
party's past statement or conduct on which another party has
detrimentally relied. A estoppel is a type of implied waiver
6 Qualifications of Insurable Risk Correct Answer - 1.)
Adequate Premiums 2.) Definable Risk 3.) Unexpected Losses 4.)
Substantial losses 5.) Exclusions 6.) Law of Large Numbers
Adequate Premiums Correct Answer - Insurance must be able
to cover claims with premium incomes
Exclusions Correct Answer - The insurer must exclude
coverage for large-scale disasters and catastrophic events
Proximate cause Correct Answer - when there is a unbroken
chain of events between an occurrence and a loss, then that
occurrence is the proximate cause of the loss.
, Original occurrence Correct Answer - causes damage that
leads to more damage meaning- that the original occurrence is the
proximate cause of the loss
First party claim Correct Answer - a claim made by the
policyholder on her own policy
Third party claim Correct Answer - a claim made by anyone
other than the policyholder
5 steps to the claims process Correct Answer - 1. Claimant
contacts insurer and files the claim
2. The insurer acknowledges the claim and requests all items
necessary to prove the loss
3. The adjuster investigates the claim and determines whether it is
valid
4. If the claim is valid, the adjuster evaluates the claim
5. Insurer accepts or rejects the claim
Vicarious Liability Correct Answer - the transfer of negligence
from one party to another
4 elements of negligence Correct Answer - 1. defendant has
legal duty to act or not act in a prescribed matter
2. defendant failed to act accordingly (breach of duty)
3. plaintiff suffered actual loss or injury due to defendants
action/inaction
4. loss of injury to plaintiff was a direct result of breach of duty of
the defendant
3 Degrees of Liability Correct Answer - 1.)Full Liability - The
insured party is 100% at fault for damages to a third party.
2.)Partial Liability - the insured party is only partially at fault or
shares fault with a third party.
Answers
Covered by other insurance (boiler and machinery) Correct
Answer - windstorm or hail
explosion
fire or combustion explosion
internal furnace explosion
Social insurance Correct Answer - non profit, mandatory
participation, benefits prescribed by the law, designed to meet
general needs of the public, gov. has monopoly
Private Insurers Correct Answer - sells insurance based on
consumer preferences, offers a wide variety of insurance products,
typically exists to benefit a group or profit, insured party voluntarily
participates
Stock Insurance Companies Correct Answer - always for profit,
usually publicly-traded, stockholders provide capital and participate
in profits or losses, non-participating insurers: no dividends go to
policyholders
Mutual Insurance Companies Correct Answer - owned by
policyholders (no shareholders), policyholders elect board of
directors
participating insurers: policyholders participate in dividends
Reciprocal Insurers Correct Answer - a group of people or
organizations that insure each other, unincorporated, non-profit,
operated by attorney-in-fact, members pay into individual accounts,
cost of claims shared by the whole group
,Surplus Lines Correct Answer - people can get surplus lines
when they are denied coverage by standard insurers for multiple
reasons
Surplus (Excess) Lines Insurance Correct Answer - is a last
resort, is not available in the standard market and must meet certain
conditions
Blanket coverage vs. specific limits Correct Answer - Blanket
coverage "blankets" more than one property, type of property, or
coverage under a single limit. Specific limits are limits that apply to
one specific type of property
Estoppel Correct Answer - A legal principle that prohibits a
party from asserting a claim or right that is inconsistent with that
party's past statement or conduct on which another party has
detrimentally relied. A estoppel is a type of implied waiver
6 Qualifications of Insurable Risk Correct Answer - 1.)
Adequate Premiums 2.) Definable Risk 3.) Unexpected Losses 4.)
Substantial losses 5.) Exclusions 6.) Law of Large Numbers
Adequate Premiums Correct Answer - Insurance must be able
to cover claims with premium incomes
Exclusions Correct Answer - The insurer must exclude
coverage for large-scale disasters and catastrophic events
Proximate cause Correct Answer - when there is a unbroken
chain of events between an occurrence and a loss, then that
occurrence is the proximate cause of the loss.
, Original occurrence Correct Answer - causes damage that
leads to more damage meaning- that the original occurrence is the
proximate cause of the loss
First party claim Correct Answer - a claim made by the
policyholder on her own policy
Third party claim Correct Answer - a claim made by anyone
other than the policyholder
5 steps to the claims process Correct Answer - 1. Claimant
contacts insurer and files the claim
2. The insurer acknowledges the claim and requests all items
necessary to prove the loss
3. The adjuster investigates the claim and determines whether it is
valid
4. If the claim is valid, the adjuster evaluates the claim
5. Insurer accepts or rejects the claim
Vicarious Liability Correct Answer - the transfer of negligence
from one party to another
4 elements of negligence Correct Answer - 1. defendant has
legal duty to act or not act in a prescribed matter
2. defendant failed to act accordingly (breach of duty)
3. plaintiff suffered actual loss or injury due to defendants
action/inaction
4. loss of injury to plaintiff was a direct result of breach of duty of
the defendant
3 Degrees of Liability Correct Answer - 1.)Full Liability - The
insured party is 100% at fault for damages to a third party.
2.)Partial Liability - the insured party is only partially at fault or
shares fault with a third party.
