TEXAS ALL LINES ADJUSTER EXAM
With Actual Questions & Verified
Answers,Plus Rationales/Expert
Verified For Guaranteed Pass
2025/2026 /Latest Update/Instant
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1. What is the primary purpose of an insurance adjuster?
A) To sell insurance policies
B) To investigate and settle claims
C) To underwrite insurance policies
D) To market insurance products
Answer: B) To investigate and settle claims
Rationale: An insurance adjuster's primary role is to assess the validity of claims, determine
the extent of the insurer's liability, and negotiate settlements.
2. Which of the following is a common exclusion in a homeowners insurance policy?
A) Fire damage
B) Theft
C) Flood damage
D) Windstorm damage
Answer: C) Flood damage
Rationale: Most standard homeowners policies exclude coverage for flood damage;
separate flood insurance is typically required.
3. What does ACV stand for in insurance terms?
A) Actual Claim Value
B) Actual Cash Value
,C) Adjusted Claim Value
D) Adjusted Cash Value
Answer: B) Actual Cash Value
Rationale: ACV is a method of valuation that considers the replacement cost minus
depreciation.
4. In Texas, what is the minimum number of hours required for pre-licensing education for
an All Lines Adjuster license?
A) 20 hours
B) 40 hours
C) 60 hours
D) 80 hours
Answer: B) 40 hours
Rationale: Texas requires 40 hours of pre-licensing education for an All Lines Adjuster
license.
5. What is subrogation in insurance?
A) The process of renewing a policy
B) The insurer's right to recover costs from a third party
C) The adjustment of policy premiums
D) The cancellation of a policy
Answer: B) The insurer's right to recover costs from a third party
Rationale: Subrogation allows insurers to recover the amount paid to the insured from the
responsible third party.
6. Which of the following is considered a peril in insurance?
A) Theft
B) Wear and tear
C) Negligence
D) All of the above
Answer: A) Theft
Rationale: A peril is a specific risk or cause of loss covered by an insurance policy, such as
theft, fire, or vandalism.
,7. What is the purpose of underwriting in insurance?
A) To settle claims
B) To assess and evaluate risk
C) To market insurance products
D) To adjust policy premiums
Answer: B) To assess and evaluate risk
Rationale: Underwriting involves evaluating the risk of insuring a person or asset and
determining the terms and conditions of the insurance policy.
8. Which of the following is a characteristic of a binder in insurance?
A) It is a temporary insurance contract
B) It is a permanent insurance policy
C) It is used to cancel a policy
D) It is a type of insurance claim
Answer: A) It is a temporary insurance contract
Rationale: A binder provides temporary coverage until a formal policy is issued.
9. What does RCV stand for in insurance terms?
A) Replacement Cost Value
B) Real Cash Value
C) Replacement Claim Value
D) Real Coverage Value
Answer: A) Replacement Cost Value
Rationale: RCV refers to the cost to replace damaged property with new property of like
kind and quality, without depreciation.
10. In Texas, what is the maximum time an adjuster can work under a temporary license?
A) 30 days
B) 60 days
C) 90 days
D) 180 days
Answer: C) 90 days
Rationale: Texas allows an adjuster to work under a temporary license for up to 90 days
while awaiting the results of the licensing exam.
, 11. What is the purpose of a claims adjuster?
A) To sell insurance policies
B) To investigate and settle claims
C) To underwrite insurance policies
D) To market insurance products
Answer: B) To investigate and settle claims
Rationale: A claims adjuster's primary role is to assess the validity of claims, determine the
extent of the insurer's liability, and negotiate settlements.
12. Which of the following is an example of a moral hazard?
A) A homeowner leaving a door unlocked
B) A driver speeding
C) A person intentionally causing a loss to collect insurance
D) A business not maintaining equipment
Answer: C) A person intentionally causing a loss to collect insurance
Rationale: A moral hazard refers to a situation where the insured has an incentive to cause a
loss because they will benefit from the insurance payout.
13. What is the primary purpose of an insurance policy?
A) To provide financial protection against losses
B) To generate profit for the insurer
C) To comply with legal requirements
D) To promote insurance products
Answer: A) To provide financial protection against losses
Rationale: The main purpose of an insurance policy is to offer financial protection to the
insured against specified risks.
14. What is the term for the amount an insured must pay out-of-pocket before insurance
coverage kicks in?
A) Premium
B) Deductible
C) Co-payment
D) Coinsurance
With Actual Questions & Verified
Answers,Plus Rationales/Expert
Verified For Guaranteed Pass
2025/2026 /Latest Update/Instant
Download Pdf
1. What is the primary purpose of an insurance adjuster?
A) To sell insurance policies
B) To investigate and settle claims
C) To underwrite insurance policies
D) To market insurance products
Answer: B) To investigate and settle claims
Rationale: An insurance adjuster's primary role is to assess the validity of claims, determine
the extent of the insurer's liability, and negotiate settlements.
2. Which of the following is a common exclusion in a homeowners insurance policy?
A) Fire damage
B) Theft
C) Flood damage
D) Windstorm damage
Answer: C) Flood damage
Rationale: Most standard homeowners policies exclude coverage for flood damage;
separate flood insurance is typically required.
3. What does ACV stand for in insurance terms?
A) Actual Claim Value
B) Actual Cash Value
,C) Adjusted Claim Value
D) Adjusted Cash Value
Answer: B) Actual Cash Value
Rationale: ACV is a method of valuation that considers the replacement cost minus
depreciation.
4. In Texas, what is the minimum number of hours required for pre-licensing education for
an All Lines Adjuster license?
A) 20 hours
B) 40 hours
C) 60 hours
D) 80 hours
Answer: B) 40 hours
Rationale: Texas requires 40 hours of pre-licensing education for an All Lines Adjuster
license.
5. What is subrogation in insurance?
A) The process of renewing a policy
B) The insurer's right to recover costs from a third party
C) The adjustment of policy premiums
D) The cancellation of a policy
Answer: B) The insurer's right to recover costs from a third party
Rationale: Subrogation allows insurers to recover the amount paid to the insured from the
responsible third party.
6. Which of the following is considered a peril in insurance?
A) Theft
B) Wear and tear
C) Negligence
D) All of the above
Answer: A) Theft
Rationale: A peril is a specific risk or cause of loss covered by an insurance policy, such as
theft, fire, or vandalism.
,7. What is the purpose of underwriting in insurance?
A) To settle claims
B) To assess and evaluate risk
C) To market insurance products
D) To adjust policy premiums
Answer: B) To assess and evaluate risk
Rationale: Underwriting involves evaluating the risk of insuring a person or asset and
determining the terms and conditions of the insurance policy.
8. Which of the following is a characteristic of a binder in insurance?
A) It is a temporary insurance contract
B) It is a permanent insurance policy
C) It is used to cancel a policy
D) It is a type of insurance claim
Answer: A) It is a temporary insurance contract
Rationale: A binder provides temporary coverage until a formal policy is issued.
9. What does RCV stand for in insurance terms?
A) Replacement Cost Value
B) Real Cash Value
C) Replacement Claim Value
D) Real Coverage Value
Answer: A) Replacement Cost Value
Rationale: RCV refers to the cost to replace damaged property with new property of like
kind and quality, without depreciation.
10. In Texas, what is the maximum time an adjuster can work under a temporary license?
A) 30 days
B) 60 days
C) 90 days
D) 180 days
Answer: C) 90 days
Rationale: Texas allows an adjuster to work under a temporary license for up to 90 days
while awaiting the results of the licensing exam.
, 11. What is the purpose of a claims adjuster?
A) To sell insurance policies
B) To investigate and settle claims
C) To underwrite insurance policies
D) To market insurance products
Answer: B) To investigate and settle claims
Rationale: A claims adjuster's primary role is to assess the validity of claims, determine the
extent of the insurer's liability, and negotiate settlements.
12. Which of the following is an example of a moral hazard?
A) A homeowner leaving a door unlocked
B) A driver speeding
C) A person intentionally causing a loss to collect insurance
D) A business not maintaining equipment
Answer: C) A person intentionally causing a loss to collect insurance
Rationale: A moral hazard refers to a situation where the insured has an incentive to cause a
loss because they will benefit from the insurance payout.
13. What is the primary purpose of an insurance policy?
A) To provide financial protection against losses
B) To generate profit for the insurer
C) To comply with legal requirements
D) To promote insurance products
Answer: A) To provide financial protection against losses
Rationale: The main purpose of an insurance policy is to offer financial protection to the
insured against specified risks.
14. What is the term for the amount an insured must pay out-of-pocket before insurance
coverage kicks in?
A) Premium
B) Deductible
C) Co-payment
D) Coinsurance
