CLAIMS ADJUSTER PRACTICE EXAM
QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) PLUS RATIONALES
2026 Q&A | INSTANT DOWNLOAD PDF
1. Which of the following is the primary duty of a claims
adjuster?
A. Sell insurance policies
B. Investigate, evaluate, and settle claims
C. Determine underwriting standards
D. Market new insurance products
Rationale: Adjusters’ core responsibility is to investigate,
evaluate, and settle claims fairly and promptly.
2. The principle of indemnity ensures the insured is:
A. Paid more than the value of the loss
B. Restored to the financial position they were in before the
loss
C. Covered for intentional acts
D. Guaranteed profit on the claim
Rationale: Indemnity prevents financial gain and restores the
insured to pre-loss condition.
,3. Which document begins the claim process?
A. Reservation of rights letter
B. Notice of loss
C. Proof of financial responsibility
D. Underwriting file
Rationale: The insured’s notice of loss officially triggers the
claims process.
4. A reservation of rights letter is sent to:
A. Deny coverage immediately
B. Confirm full coverage
C. Notify the insured that coverage questions exist while the
investigation continues
D. Approve subrogation
Rationale: Reservation of rights protects the insurer while
coverage issues are reviewed.
5. Which method is most commonly used to determine ACV
(Actual Cash Value)?
A. Market value
B. Replacement cost minus depreciation
C. Salvage value minus deductible
D. Stated amount
Rationale: ACV = RC − depreciation is the standard valuation
method.
, 6. Subrogation allows the insurer to:
A. Waive all deductibles
B. Reinsure a risk
C. Recover claim payments from a negligent third party
D. Increase premiums
Rationale: Subrogation transfers the right of recovery to the
insurer after paying the insured.
7. The adjuster’s first step upon receiving a new claim is to:
A. Settle the claim immediately
B. Acknowledge the claim and make contact
C. Request premiums
D. Transfer the file
Rationale: Timely contact is required to begin investigation
and meet regulatory timelines.
8. Which coverage form applies to injuries suffered by
someone not employed by the insured?
A. Workers’ compensation
B. Inland marine
C. General liability
D. Auto physical damage
Rationale: General liability pays for third-party bodily injury or
property damage.
QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) PLUS RATIONALES
2026 Q&A | INSTANT DOWNLOAD PDF
1. Which of the following is the primary duty of a claims
adjuster?
A. Sell insurance policies
B. Investigate, evaluate, and settle claims
C. Determine underwriting standards
D. Market new insurance products
Rationale: Adjusters’ core responsibility is to investigate,
evaluate, and settle claims fairly and promptly.
2. The principle of indemnity ensures the insured is:
A. Paid more than the value of the loss
B. Restored to the financial position they were in before the
loss
C. Covered for intentional acts
D. Guaranteed profit on the claim
Rationale: Indemnity prevents financial gain and restores the
insured to pre-loss condition.
,3. Which document begins the claim process?
A. Reservation of rights letter
B. Notice of loss
C. Proof of financial responsibility
D. Underwriting file
Rationale: The insured’s notice of loss officially triggers the
claims process.
4. A reservation of rights letter is sent to:
A. Deny coverage immediately
B. Confirm full coverage
C. Notify the insured that coverage questions exist while the
investigation continues
D. Approve subrogation
Rationale: Reservation of rights protects the insurer while
coverage issues are reviewed.
5. Which method is most commonly used to determine ACV
(Actual Cash Value)?
A. Market value
B. Replacement cost minus depreciation
C. Salvage value minus deductible
D. Stated amount
Rationale: ACV = RC − depreciation is the standard valuation
method.
, 6. Subrogation allows the insurer to:
A. Waive all deductibles
B. Reinsure a risk
C. Recover claim payments from a negligent third party
D. Increase premiums
Rationale: Subrogation transfers the right of recovery to the
insurer after paying the insured.
7. The adjuster’s first step upon receiving a new claim is to:
A. Settle the claim immediately
B. Acknowledge the claim and make contact
C. Request premiums
D. Transfer the file
Rationale: Timely contact is required to begin investigation
and meet regulatory timelines.
8. Which coverage form applies to injuries suffered by
someone not employed by the insured?
A. Workers’ compensation
B. Inland marine
C. General liability
D. Auto physical damage
Rationale: General liability pays for third-party bodily injury or
property damage.
