Florida Insurance Adjuster Exam
Practice Questions And Correct Answers
(Verified Answers) Plus Rationales
2025|2026 Q&A | Instant Download Pdf
1. What is the primary purpose of an insurance adjuster?
To investigate, evaluate, and settle claims on behalf of an insurance
company.
Rationale: The adjuster's role is to determine the validity of a claim,
assess damages, and facilitate settlement while protecting the
insurer's interests.
2. What type of insurance covers physical damage to a policyholder’s car
after an accident?
Property and Casualty Insurance (Auto Physical Damage).
Rationale: Auto physical damage coverage includes collision and
comprehensive coverage, which pays for damages to the insured
vehicle.
,3. In Florida, what is the minimum personal injury protection (PIP)
coverage required for auto insurance?
$10,000.
Rationale: Florida law requires a minimum of $10,000 PIP to cover
medical expenses and certain lost wages regardless of fault.
4. What does liability coverage in a homeowner’s policy protect against?
Legal responsibility for bodily injury or property damage to others.
Rationale: Liability coverage pays damages if the insured is legally
responsible for injuries or damage caused to others.
5. Which type of policy pays for replacement cost without deduction for
depreciation?
Replacement Cost Policy.
Rationale: Replacement cost coverage reimburses the policyholder
for the full cost of repairing or replacing property without
considering depreciation.
6. What is the purpose of a deductible in an insurance policy?
To require the insured to share in the cost of a loss, reducing small
claims.
Rationale: Deductibles reduce moral hazard and lower premium
costs by having the insured bear part of the loss.
7. Which of the following best describes “insurable interest”?
The financial or other interest a person has in the preservation of the
insured item.
, Rationale: Insurable interest ensures that the insured would suffer a
financial loss if the insured property or life is damaged or lost.
8. What is the role of reinsurance in the insurance industry?
To allow insurers to transfer portions of risk to another insurer.
Rationale: Reinsurance protects insurers from catastrophic losses by
spreading risk across multiple companies.
9. What does “actual cash value” mean in insurance?
Replacement cost minus depreciation.
Rationale: ACV reflects the current value of property based on age,
wear, and tear, not full replacement cost.
10. Which Florida insurance law requires insurers to treat claimants
fairly and promptly?
Florida Unfair Insurance Trade Practices Act.
Rationale: This act ensures that insurers act in good faith, providing
timely and fair claim handling.
11. What is a common reason for a homeowner’s claim to be
denied?
Failure to maintain the property or comply with policy terms.
Rationale: Insurers may deny claims if damage results from neglect
or policy violations.
12. What type of insurance protects businesses from liability for
employee injuries?
, Workers’ Compensation Insurance.
Rationale: Workers’ comp provides medical benefits and wage
replacement to employees injured on the job, protecting employers
from lawsuits.
13. What is subrogation in insurance?
The insurer’s right to pursue a third party that caused a loss to the
insured.
Rationale: Subrogation allows insurers to recover the amount paid to
the insured from the responsible party.
14. Which type of auto insurance covers medical expenses
regardless of fault?
Personal Injury Protection (PIP).
Rationale: PIP provides coverage for medical expenses and lost
wages regardless of who caused the accident, as required in Florida.
15. What does an adjuster do during an investigation of a property
loss?
Inspect the damage, interview witnesses, and collect documentation.
Rationale: Thorough investigation ensures accurate claim evaluation
and fair settlement.
16. What is the difference between occurrence and claims-made
liability policies?
Occurrence policies cover incidents during the policy period, claims-
made policies cover claims reported during the policy period.
Practice Questions And Correct Answers
(Verified Answers) Plus Rationales
2025|2026 Q&A | Instant Download Pdf
1. What is the primary purpose of an insurance adjuster?
To investigate, evaluate, and settle claims on behalf of an insurance
company.
Rationale: The adjuster's role is to determine the validity of a claim,
assess damages, and facilitate settlement while protecting the
insurer's interests.
2. What type of insurance covers physical damage to a policyholder’s car
after an accident?
Property and Casualty Insurance (Auto Physical Damage).
Rationale: Auto physical damage coverage includes collision and
comprehensive coverage, which pays for damages to the insured
vehicle.
,3. In Florida, what is the minimum personal injury protection (PIP)
coverage required for auto insurance?
$10,000.
Rationale: Florida law requires a minimum of $10,000 PIP to cover
medical expenses and certain lost wages regardless of fault.
4. What does liability coverage in a homeowner’s policy protect against?
Legal responsibility for bodily injury or property damage to others.
Rationale: Liability coverage pays damages if the insured is legally
responsible for injuries or damage caused to others.
5. Which type of policy pays for replacement cost without deduction for
depreciation?
Replacement Cost Policy.
Rationale: Replacement cost coverage reimburses the policyholder
for the full cost of repairing or replacing property without
considering depreciation.
6. What is the purpose of a deductible in an insurance policy?
To require the insured to share in the cost of a loss, reducing small
claims.
Rationale: Deductibles reduce moral hazard and lower premium
costs by having the insured bear part of the loss.
7. Which of the following best describes “insurable interest”?
The financial or other interest a person has in the preservation of the
insured item.
, Rationale: Insurable interest ensures that the insured would suffer a
financial loss if the insured property or life is damaged or lost.
8. What is the role of reinsurance in the insurance industry?
To allow insurers to transfer portions of risk to another insurer.
Rationale: Reinsurance protects insurers from catastrophic losses by
spreading risk across multiple companies.
9. What does “actual cash value” mean in insurance?
Replacement cost minus depreciation.
Rationale: ACV reflects the current value of property based on age,
wear, and tear, not full replacement cost.
10. Which Florida insurance law requires insurers to treat claimants
fairly and promptly?
Florida Unfair Insurance Trade Practices Act.
Rationale: This act ensures that insurers act in good faith, providing
timely and fair claim handling.
11. What is a common reason for a homeowner’s claim to be
denied?
Failure to maintain the property or comply with policy terms.
Rationale: Insurers may deny claims if damage results from neglect
or policy violations.
12. What type of insurance protects businesses from liability for
employee injuries?
, Workers’ Compensation Insurance.
Rationale: Workers’ comp provides medical benefits and wage
replacement to employees injured on the job, protecting employers
from lawsuits.
13. What is subrogation in insurance?
The insurer’s right to pursue a third party that caused a loss to the
insured.
Rationale: Subrogation allows insurers to recover the amount paid to
the insured from the responsible party.
14. Which type of auto insurance covers medical expenses
regardless of fault?
Personal Injury Protection (PIP).
Rationale: PIP provides coverage for medical expenses and lost
wages regardless of who caused the accident, as required in Florida.
15. What does an adjuster do during an investigation of a property
loss?
Inspect the damage, interview witnesses, and collect documentation.
Rationale: Thorough investigation ensures accurate claim evaluation
and fair settlement.
16. What is the difference between occurrence and claims-made
liability policies?
Occurrence policies cover incidents during the policy period, claims-
made policies cover claims reported during the policy period.
