ADJUSTER PRO - INSURANCE COMPREHENSIVE
EXAM PAPER TEST BANK FULL SOLUTION
UPDATED 2026 WITH 100% CORRECT
ANSWERS
◉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: Answer: 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. Answer: reservation of rights
◉Which of the following is TRUE for tort law? Answer:
◉A pre-defined monetary portion of an insurance claim paid by a
policyholder is a: Answer: 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? Answer: she will receive
$1,200 for indemnification: the amount it would take to replace the
damaged television.
◉appraisal Answer: 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.
◉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? Answer: 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? Answer: 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? Answer:
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. Answer:
◉Which of the following statements applies to actual cash value?
Answer: Actual cash value generally reflects the fair market value of an
item.
◉franchise deductible Answer: 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? Answer: 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? Answer: Conditions
EXAM PAPER TEST BANK FULL SOLUTION
UPDATED 2026 WITH 100% CORRECT
ANSWERS
◉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: Answer: 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. Answer: reservation of rights
◉Which of the following is TRUE for tort law? Answer:
◉A pre-defined monetary portion of an insurance claim paid by a
policyholder is a: Answer: 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? Answer: she will receive
$1,200 for indemnification: the amount it would take to replace the
damaged television.
◉appraisal Answer: 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.
◉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? Answer: 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? Answer: 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? Answer:
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. Answer:
◉Which of the following statements applies to actual cash value?
Answer: Actual cash value generally reflects the fair market value of an
item.
◉franchise deductible Answer: 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? Answer: 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? Answer: Conditions
