Texas All Lines Adjuster Exam 2025 –
2026 Full Prep Guide with Questions,
Answers & Explanations
The insured has filed a claim under the "Business Income Department Properties -
Broad Form" because the primary buyer of products and services from the business has
filed for bankruptcy under this form the primary buyers business would be known as -
correct answerA recipient location
recipient location - correct answerBusinesses who support insured by being the primary
buyer for their products
HO-3 (special form) - correct answercovers the dwelling and other structures on a risk-
of-direct-physical loss basis. All direct physical losses are covered except those losses
specifically excluded. Personal property is covered on a named perils basis
HO-5 Comprehensive Form - correct answerprovides open perils coverage ("all-risks
coverage") on the dwelling, other structures and personal property.
HO-2 (broad form) - correct answercovers the dwelling, other structures, and personal
property on a named perils basis
HO-4 (contents broad form) - correct answerOnly covers a tenant's personal property on
a named perils basis
The dwelling is insured for 200,000 under DP-2 dwelling policy how much coverage
applies to the barn? - correct answerNothing farm property are not eligible under the
dwelling policy.
A Covered Auto includes those vehicle(s) listed on the Declarations, plus any trailers or
wagons owned by the Named Insured, any newly acquired vehicles, and any vehicle
used as a _________. - correct answerTemporary Substitute Auto
The covered auto is defined in the policy as all of the following EXCEPT:
A) any additional auto acquired in the past 30 days.
B) any auto shown in the declarations.
C) any auto used as a temporary substitute while an insured auto is being repaired.
D) any trailer owned by the insured or spouse. - correct answerAnswer: A
,An additional auto acquired during the policy period is considered a covered auto.
However, some restrictions do apply. For example, if the newly acquired auto is in
addition to any vehicle shown on the declarations, it must be insured within 14 days of
the purchase date. If it replaces one of the cars, the insured does not need to add it
during that policy period.
Coverage F on homeowners policy provides - correct answerMedical payments to
others; pays all necessary medical expenses for up to three years after an accident.
Coverage F: Medical Payments to Others - correct answerDoes not apply to the insured
or members of the insured's household
Not liability coverage and is not base on fault
An insured has taken inventory of his merchandise and discovers a substantial shortage
of valuable stock. He submits a claim to his insurance carrier that provides his coverage
under a Business Owners Policy. What coverage is provided by the BOP? - correct
answerNo coverage would apply, there is no coverage for missing property when there
is no physical evidence to show cause of loss
Arbitration (ADR) - correct answerNeutral third party hears a dispute and makes a
decision both parties have agreed to follow.
Mediation - correct answerA method of settling disputes outside of court by using the
services of a neutral third party, called a mediator. The mediator acts as a
communicating agent between the parties and suggests ways in which the parties can
resolve their dispute. Not binding.
Difference between Arbitration and Meditation? - correct answerMediation is not
binding, Arbitration is.
Mediation-Arbitration - correct answerIf the parties cannot reach a settlement through
mediation, an arbitrator will resolve the dispute.
The building and personal property coverage form provides coverage for outdoor signs -
correct answerWhether attached to the building or not for up to 2,500 if damaged by a
peril insured against.
Building and Personal Property Coverage Form - correct answerCommercial Property
coverage form that covers buildings, the insured's business personal property, and the
personal property of others located at the business premises
Foreseeability Test - correct answerTo determine if the defendant's conduct was the
proximate cause of the plaintiff's injury, the court applies
Foreseeability - correct answerexcludes liability for harms that were sufficiently
unforeseeable at the time of the defendant's tortious conduct.
,Purpose of freight insurance - correct answerCovers shipper fees
Freight Insurance - correct answerindemnifies the ship owner for the loss of earnings if
the goods are damaged or lost and are not delivered. Shipper Fees.
Freight Insurance - correct answerinsures that shipowner will receive payment for
transportation charges.
What perils are covered on the basic form peril of the Homeowners Policy - correct
answerfire, lightning, smoke, windstorm, hurricane, hail, explosion, aircraft and vehicles,
vandalism, riot and civil commotion, theft, and premises liability.
What perils are covered under the broad from Homeowners Policy - correct
answerinclude basic perils plus falling objects; weight of ice, sleet, or snow; freezing
pipes; and some coverage for sudden and accidental water discharge.
Exclusions to Homeowners policy - correct answerearthquakes;
termites, rats;
freezing pipes while your house is unoccupied;
losses if your house is vacant for the number of days specified by your policy;
wear and tear or maintenance; wind or hail damage to trees and shrubs; mold, except
necessary costs to repair or replace property damage caused by a covered water loss;
and water damage resulting from continuous and repeated leakage or seepage.
Landlord's furnishing - correct answerIs not additional coverage and doesn't insurance
the limits of the policy
Power to bind means - correct answerThe principal is bound to the decisions of the
adjuster
RVC (replacement cost value) - correct answerThe cost to replace the property on the
same premises with other property of comparable material and quality used for the
same purpose
DP-3 Special Form - correct answerUnder this Dwelling coverage form: dwelling and
other structures are covered for all direct physical damage (open peril), except for perils
specifically excluded..
In a surety bonding third-party contract, who is the principal? - correct answerthe party
whose performance is guaranteed by the obligor. in a contract between the surety and
the constructor [construction company], the principal is the constructor. in a contract
between the surety and a subcontractor, the principal is the subcontractor (#6, 16)
.
, Surety bond guarantees fulfillment of certain obligations such as - correct
answerpayment of debt, performance and certain duties, meeting contractual
commitments
Twisting - correct answerA form of misrepresentation in which an agent persuades an
insured/owner to cancel, lapse, or switch policies, even when it's to the insured's
disadvantage.
Corercive acts - correct answerProcess whereby the purchaser does not have a choice
and is being forced into a certain buying decision
Part Six - Conditions - correct answersets forth the conditions that apply to the policy,
such as cancellation procedures, subrogation and the insurer's right to inspect the
insured's workplace
Part Five - Premium - correct answerExplains how the cost of the policy is determined
Part Two - Employers Liability - correct answerProvides coverage to the insured for
sums the insured becomes legally obligated to pay under common law because of a
work related injury or occupational disease
ACV (Actual Cash Value) - correct answerreplacement cost minus depreciation
Bid bonds/surety bonds - correct answerto ensure that the successful bidder will accept
the contract once awarded.
Performance Bond - correct answerA contract bond guaranteeing that a contractor's
work will be completed according to plans and specifications.
Completion Bond - correct answerA bond obtained by the contractor or owner, which
guarantees that the project will be completed free of liens.
Labor and materials bond - correct answerGuarantees bills for labor and materials will
be paid to the contractor as they are due.
How the standard Businessowners policy additional coverage of "Collapse" becomes
payable? - correct answerThe collapse must be such that the building cannot be used
as intended.
A public adjuster represents the interest of - correct answerinsured
Which of the following would be covered under a Personal Umbrella policy? - correct
answerAn insured who commits an intentional act of violence to protect his family.
Gerald owns an expensive and rare painting. He has it appraised by an art dealer and
insures it for $50,000 under a Personal Articles Floater. A year later, several other rare
2026 Full Prep Guide with Questions,
Answers & Explanations
The insured has filed a claim under the "Business Income Department Properties -
Broad Form" because the primary buyer of products and services from the business has
filed for bankruptcy under this form the primary buyers business would be known as -
correct answerA recipient location
recipient location - correct answerBusinesses who support insured by being the primary
buyer for their products
HO-3 (special form) - correct answercovers the dwelling and other structures on a risk-
of-direct-physical loss basis. All direct physical losses are covered except those losses
specifically excluded. Personal property is covered on a named perils basis
HO-5 Comprehensive Form - correct answerprovides open perils coverage ("all-risks
coverage") on the dwelling, other structures and personal property.
HO-2 (broad form) - correct answercovers the dwelling, other structures, and personal
property on a named perils basis
HO-4 (contents broad form) - correct answerOnly covers a tenant's personal property on
a named perils basis
The dwelling is insured for 200,000 under DP-2 dwelling policy how much coverage
applies to the barn? - correct answerNothing farm property are not eligible under the
dwelling policy.
A Covered Auto includes those vehicle(s) listed on the Declarations, plus any trailers or
wagons owned by the Named Insured, any newly acquired vehicles, and any vehicle
used as a _________. - correct answerTemporary Substitute Auto
The covered auto is defined in the policy as all of the following EXCEPT:
A) any additional auto acquired in the past 30 days.
B) any auto shown in the declarations.
C) any auto used as a temporary substitute while an insured auto is being repaired.
D) any trailer owned by the insured or spouse. - correct answerAnswer: A
,An additional auto acquired during the policy period is considered a covered auto.
However, some restrictions do apply. For example, if the newly acquired auto is in
addition to any vehicle shown on the declarations, it must be insured within 14 days of
the purchase date. If it replaces one of the cars, the insured does not need to add it
during that policy period.
Coverage F on homeowners policy provides - correct answerMedical payments to
others; pays all necessary medical expenses for up to three years after an accident.
Coverage F: Medical Payments to Others - correct answerDoes not apply to the insured
or members of the insured's household
Not liability coverage and is not base on fault
An insured has taken inventory of his merchandise and discovers a substantial shortage
of valuable stock. He submits a claim to his insurance carrier that provides his coverage
under a Business Owners Policy. What coverage is provided by the BOP? - correct
answerNo coverage would apply, there is no coverage for missing property when there
is no physical evidence to show cause of loss
Arbitration (ADR) - correct answerNeutral third party hears a dispute and makes a
decision both parties have agreed to follow.
Mediation - correct answerA method of settling disputes outside of court by using the
services of a neutral third party, called a mediator. The mediator acts as a
communicating agent between the parties and suggests ways in which the parties can
resolve their dispute. Not binding.
Difference between Arbitration and Meditation? - correct answerMediation is not
binding, Arbitration is.
Mediation-Arbitration - correct answerIf the parties cannot reach a settlement through
mediation, an arbitrator will resolve the dispute.
The building and personal property coverage form provides coverage for outdoor signs -
correct answerWhether attached to the building or not for up to 2,500 if damaged by a
peril insured against.
Building and Personal Property Coverage Form - correct answerCommercial Property
coverage form that covers buildings, the insured's business personal property, and the
personal property of others located at the business premises
Foreseeability Test - correct answerTo determine if the defendant's conduct was the
proximate cause of the plaintiff's injury, the court applies
Foreseeability - correct answerexcludes liability for harms that were sufficiently
unforeseeable at the time of the defendant's tortious conduct.
,Purpose of freight insurance - correct answerCovers shipper fees
Freight Insurance - correct answerindemnifies the ship owner for the loss of earnings if
the goods are damaged or lost and are not delivered. Shipper Fees.
Freight Insurance - correct answerinsures that shipowner will receive payment for
transportation charges.
What perils are covered on the basic form peril of the Homeowners Policy - correct
answerfire, lightning, smoke, windstorm, hurricane, hail, explosion, aircraft and vehicles,
vandalism, riot and civil commotion, theft, and premises liability.
What perils are covered under the broad from Homeowners Policy - correct
answerinclude basic perils plus falling objects; weight of ice, sleet, or snow; freezing
pipes; and some coverage for sudden and accidental water discharge.
Exclusions to Homeowners policy - correct answerearthquakes;
termites, rats;
freezing pipes while your house is unoccupied;
losses if your house is vacant for the number of days specified by your policy;
wear and tear or maintenance; wind or hail damage to trees and shrubs; mold, except
necessary costs to repair or replace property damage caused by a covered water loss;
and water damage resulting from continuous and repeated leakage or seepage.
Landlord's furnishing - correct answerIs not additional coverage and doesn't insurance
the limits of the policy
Power to bind means - correct answerThe principal is bound to the decisions of the
adjuster
RVC (replacement cost value) - correct answerThe cost to replace the property on the
same premises with other property of comparable material and quality used for the
same purpose
DP-3 Special Form - correct answerUnder this Dwelling coverage form: dwelling and
other structures are covered for all direct physical damage (open peril), except for perils
specifically excluded..
In a surety bonding third-party contract, who is the principal? - correct answerthe party
whose performance is guaranteed by the obligor. in a contract between the surety and
the constructor [construction company], the principal is the constructor. in a contract
between the surety and a subcontractor, the principal is the subcontractor (#6, 16)
.
, Surety bond guarantees fulfillment of certain obligations such as - correct
answerpayment of debt, performance and certain duties, meeting contractual
commitments
Twisting - correct answerA form of misrepresentation in which an agent persuades an
insured/owner to cancel, lapse, or switch policies, even when it's to the insured's
disadvantage.
Corercive acts - correct answerProcess whereby the purchaser does not have a choice
and is being forced into a certain buying decision
Part Six - Conditions - correct answersets forth the conditions that apply to the policy,
such as cancellation procedures, subrogation and the insurer's right to inspect the
insured's workplace
Part Five - Premium - correct answerExplains how the cost of the policy is determined
Part Two - Employers Liability - correct answerProvides coverage to the insured for
sums the insured becomes legally obligated to pay under common law because of a
work related injury or occupational disease
ACV (Actual Cash Value) - correct answerreplacement cost minus depreciation
Bid bonds/surety bonds - correct answerto ensure that the successful bidder will accept
the contract once awarded.
Performance Bond - correct answerA contract bond guaranteeing that a contractor's
work will be completed according to plans and specifications.
Completion Bond - correct answerA bond obtained by the contractor or owner, which
guarantees that the project will be completed free of liens.
Labor and materials bond - correct answerGuarantees bills for labor and materials will
be paid to the contractor as they are due.
How the standard Businessowners policy additional coverage of "Collapse" becomes
payable? - correct answerThe collapse must be such that the building cannot be used
as intended.
A public adjuster represents the interest of - correct answerinsured
Which of the following would be covered under a Personal Umbrella policy? - correct
answerAn insured who commits an intentional act of violence to protect his family.
Gerald owns an expensive and rare painting. He has it appraised by an art dealer and
insures it for $50,000 under a Personal Articles Floater. A year later, several other rare
