Florida 3-20 Public Adjusters State Exam
(Set 1) | 140 Practice Questions with Verified
Answers
Below is a set of 140 multiple-choice questions designed to cover key public adjusting concepts, including
claim types, policy structure, ethics, liability, valuation methods, first-party claims, and Florida insurance
laws, as relevant to the Florida 3-20 Public Adjusters State Exam. Each question includes four answer
choices, the correct answer marked, and a brief explanation.
Question 1
What is the primary role of a public adjuster in the insurance claims process?
A. Represent the insurer in claim settlements
B. Assist policyholders in negotiating a fair settlement
C. Conduct inspections on behalf of contractors
D. Sell insurance policies to clients
Corre ct Answe r: B
Explanation: A public adjuster represents policyholders to ensure fair claim settlements with insurers.
This is distinct from roles like insurers’ adjusters or contractors.
Question 2
Which of the following best defines a first-party claim?
A. A claim filed by a third party against the insured
B. A claim filed by the policyholder against their own insurer
C. A claim involving multiple insurers
D. A claim filed by a contractor for repair costs
Corre ct Answe r: B
Explanation: A first-party claim is made by the policyholder against their own insurance policy for
covered losses. Third-party claims involve liability to others.
,Question 3
Under Florida law, what is the maximum percentage fee a public adjuster can charge for a residential
claim?
A. 10%
B. 20%
C. 25%
D. 30%
Corre ct Answe r: B
Explanation: Florida Statute 626.854 limits public adjusters to a maximum of 20% for residential property
claims. This ensures fair compensation practices.
Question 4
What is a peril in the context of an insurance policy?
A. A condition that increases the likelihood of a loss
B. The actual cause or source of a loss
C. A policy exclusion
D. The premium paid by the insured
Corre ct Answe r: B
Explanation: A peril is the specific event or cause of loss covered by a policy, such as fire or windstorm.
Hazards increase the likelihood of a peril occurring.
Question 5
Which of the following is a key component of an insurance policy’s Declarations page?
A. Detailed claim procedures
B. Insured’s name, coverages, and premiums
C. Exclusions and limitations
D. Underwriting guidelines
Corre ct Answe r: B
Explanation: The Declarations page identifies the insured, coverages, limits, and premiums, serving as a
summary of the policy. Other components appear elsewhere in the policy.
Question 6
,What does the term “proximate cause” refer to in insurance claims?
A. The final event in a chain of loss events
B. The initial event causing an unbroken chain of events leading to a loss
C. A secondary cause of loss not covered by the policy
D. A loss excluded by the policy
Corre ct Answe r: B
Explanation: Proximate cause is the initial event that sets off an unbroken chain of events leading to a
covered loss. It determines coverage eligibility.
Question 7
A public adjuster is approached by a contractor offering a referral fee for new clients. Is this permissible
under Florida law?
A. Yes, if disclosed to the client
B. Yes, if the fee is less than 5%
C. No, it is considered a conflict of interest
D. No, unless approved by the insurer
Corre ct Answe r: C
Explanation: Florida law prohibits public adjusters from accepting referral fees from contractors, as it
creates a conflict of interest and violates ethical standards.
Question 8
What is the purpose of a binder in insurance?
A. To provide permanent coverage
B. To offer temporary coverage until a policy is issued
C. To outline claim denial procedures
D. To serve as a policy endorsement
Corre ct Answe r: B
Explanation: A binder provides temporary insurance coverage until a formal policy is written, ensuring
protection during the underwriting process.
Question 9
Which valuation method calculates the cost to replace property without accounting for depreciation?
A. Actual Cash Value (ACV)
B. Replacement Cost
, C. Agreed Value
D. Market Value
Corre ct Answe r: B
Explanation: Replacement Cost covers the cost to replace property with like kind and quality without
depreciation, unlike ACV, which deducts depreciation.
Question 10
What is a “hazard” in insurance terms?
A. The cause of a loss
B. A condition that increases the likelihood of a loss
C. A policy exclusion
D. The insured’s negligence
Corre ct Answe r: B
Explanation: A hazard is a condition or behavior that increases the probability of a loss, such as poor
maintenance, distinct from the peril itself.
Question 11
Under Florida’s Valued Policy Law, if a home is totally destroyed by a covered peril, what amount is paid?
A. Actual Cash Value
B. Replacement Cost
C. Policy’s face value
D. Market Value
Corre ct Answe r: C
Explanation: Florida’s Valued Policy Law requires insurers to pay the policy’s face value for a total loss
from a covered peril, regardless of ACV or replacement cost.
Question 12
What is a public adjuster prohibited from doing under Florida Statute 626.854?
A. Filing claims for commercial properties
B. Acquiring interest in salvaged property without written consent
C. Charging a flat fee for services
D. Representing multiple policyholders
Corre ct Answe r: B
(Set 1) | 140 Practice Questions with Verified
Answers
Below is a set of 140 multiple-choice questions designed to cover key public adjusting concepts, including
claim types, policy structure, ethics, liability, valuation methods, first-party claims, and Florida insurance
laws, as relevant to the Florida 3-20 Public Adjusters State Exam. Each question includes four answer
choices, the correct answer marked, and a brief explanation.
Question 1
What is the primary role of a public adjuster in the insurance claims process?
A. Represent the insurer in claim settlements
B. Assist policyholders in negotiating a fair settlement
C. Conduct inspections on behalf of contractors
D. Sell insurance policies to clients
Corre ct Answe r: B
Explanation: A public adjuster represents policyholders to ensure fair claim settlements with insurers.
This is distinct from roles like insurers’ adjusters or contractors.
Question 2
Which of the following best defines a first-party claim?
A. A claim filed by a third party against the insured
B. A claim filed by the policyholder against their own insurer
C. A claim involving multiple insurers
D. A claim filed by a contractor for repair costs
Corre ct Answe r: B
Explanation: A first-party claim is made by the policyholder against their own insurance policy for
covered losses. Third-party claims involve liability to others.
,Question 3
Under Florida law, what is the maximum percentage fee a public adjuster can charge for a residential
claim?
A. 10%
B. 20%
C. 25%
D. 30%
Corre ct Answe r: B
Explanation: Florida Statute 626.854 limits public adjusters to a maximum of 20% for residential property
claims. This ensures fair compensation practices.
Question 4
What is a peril in the context of an insurance policy?
A. A condition that increases the likelihood of a loss
B. The actual cause or source of a loss
C. A policy exclusion
D. The premium paid by the insured
Corre ct Answe r: B
Explanation: A peril is the specific event or cause of loss covered by a policy, such as fire or windstorm.
Hazards increase the likelihood of a peril occurring.
Question 5
Which of the following is a key component of an insurance policy’s Declarations page?
A. Detailed claim procedures
B. Insured’s name, coverages, and premiums
C. Exclusions and limitations
D. Underwriting guidelines
Corre ct Answe r: B
Explanation: The Declarations page identifies the insured, coverages, limits, and premiums, serving as a
summary of the policy. Other components appear elsewhere in the policy.
Question 6
,What does the term “proximate cause” refer to in insurance claims?
A. The final event in a chain of loss events
B. The initial event causing an unbroken chain of events leading to a loss
C. A secondary cause of loss not covered by the policy
D. A loss excluded by the policy
Corre ct Answe r: B
Explanation: Proximate cause is the initial event that sets off an unbroken chain of events leading to a
covered loss. It determines coverage eligibility.
Question 7
A public adjuster is approached by a contractor offering a referral fee for new clients. Is this permissible
under Florida law?
A. Yes, if disclosed to the client
B. Yes, if the fee is less than 5%
C. No, it is considered a conflict of interest
D. No, unless approved by the insurer
Corre ct Answe r: C
Explanation: Florida law prohibits public adjusters from accepting referral fees from contractors, as it
creates a conflict of interest and violates ethical standards.
Question 8
What is the purpose of a binder in insurance?
A. To provide permanent coverage
B. To offer temporary coverage until a policy is issued
C. To outline claim denial procedures
D. To serve as a policy endorsement
Corre ct Answe r: B
Explanation: A binder provides temporary insurance coverage until a formal policy is written, ensuring
protection during the underwriting process.
Question 9
Which valuation method calculates the cost to replace property without accounting for depreciation?
A. Actual Cash Value (ACV)
B. Replacement Cost
, C. Agreed Value
D. Market Value
Corre ct Answe r: B
Explanation: Replacement Cost covers the cost to replace property with like kind and quality without
depreciation, unlike ACV, which deducts depreciation.
Question 10
What is a “hazard” in insurance terms?
A. The cause of a loss
B. A condition that increases the likelihood of a loss
C. A policy exclusion
D. The insured’s negligence
Corre ct Answe r: B
Explanation: A hazard is a condition or behavior that increases the probability of a loss, such as poor
maintenance, distinct from the peril itself.
Question 11
Under Florida’s Valued Policy Law, if a home is totally destroyed by a covered peril, what amount is paid?
A. Actual Cash Value
B. Replacement Cost
C. Policy’s face value
D. Market Value
Corre ct Answe r: C
Explanation: Florida’s Valued Policy Law requires insurers to pay the policy’s face value for a total loss
from a covered peril, regardless of ACV or replacement cost.
Question 12
What is a public adjuster prohibited from doing under Florida Statute 626.854?
A. Filing claims for commercial properties
B. Acquiring interest in salvaged property without written consent
C. Charging a flat fee for services
D. Representing multiple policyholders
Corre ct Answe r: B
