Alabama Public Adjuster Exam Practice Test
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1. A public adjuster primarily represents:
A. The insurance company
B. The state insurance department
C. The policyholder
D. The court system
Answer: C. The policyholder
Rationale: A public adjuster is hired by the insured to evaluate and
negotiate insurance claims on their behalf, not to represent insurers or
regulators.
2. Which of the following is the main duty of a public adjuster?
A. Underwriting insurance policies
B. Investigating and settling claims for insurers
, C. Assisting policyholders with claim preparation and settlement
D. Regulating insurance companies
Answer: C. Assisting policyholders with claim preparation and
settlement
Rationale: Public adjusters help policyholders document losses,
prepare claims, and negotiate settlements with insurers.
3. A public adjuster contract must generally be:
A. Verbal only
B. Oral or implied
C. In writing
D. Approved by the insurer
Answer: C. In writing
Rationale: Most jurisdictions, including Alabama, require written
contracts to ensure transparency and enforceability.
4. A public adjuster is most likely to be hired after:
A. A policy is purchased
B. A loss or damage occurs
, C. A premium is paid
D. A policy is renewed
Answer: B. A loss or damage occurs
Rationale: Public adjusters are typically engaged after a covered loss
to assist with claim handling.
5. Which entity regulates public adjusters in Alabama?
A. IRS
B. Alabama Department of Insurance
C. FEMA
D. Federal Reserve
Answer: B. Alabama Department of Insurance
Rationale: State insurance departments regulate licensing and
conduct of adjusters.
6. A public adjuster fee is usually based on:
A. A fixed salary
B. A percentage of the claim settlement
C. Government reimbursement
D. Hourly state mandate
, Answer: B. A percentage of the claim settlement
Rationale: Public adjusters typically earn a percentage of the final
settlement amount.
7. Which of the following is considered unethical for a public
adjuster?
A. Documenting damages
B. Advising the insured
C. Misrepresenting claim values
D. Negotiating with insurers
Answer: C. Misrepresenting claim values
Rationale: Misrepresentation is fraudulent and violates professional
ethics and licensing laws.
8. A license to act as a public adjuster is issued by:
A. Federal courts
B. Insurance carriers
C. State insurance regulators
D. Local governments
Questions With Correct Answers (Verified
Answers) Plus Rationales 2026 Q&A | Instant
Download Pdf
1. A public adjuster primarily represents:
A. The insurance company
B. The state insurance department
C. The policyholder
D. The court system
Answer: C. The policyholder
Rationale: A public adjuster is hired by the insured to evaluate and
negotiate insurance claims on their behalf, not to represent insurers or
regulators.
2. Which of the following is the main duty of a public adjuster?
A. Underwriting insurance policies
B. Investigating and settling claims for insurers
, C. Assisting policyholders with claim preparation and settlement
D. Regulating insurance companies
Answer: C. Assisting policyholders with claim preparation and
settlement
Rationale: Public adjusters help policyholders document losses,
prepare claims, and negotiate settlements with insurers.
3. A public adjuster contract must generally be:
A. Verbal only
B. Oral or implied
C. In writing
D. Approved by the insurer
Answer: C. In writing
Rationale: Most jurisdictions, including Alabama, require written
contracts to ensure transparency and enforceability.
4. A public adjuster is most likely to be hired after:
A. A policy is purchased
B. A loss or damage occurs
, C. A premium is paid
D. A policy is renewed
Answer: B. A loss or damage occurs
Rationale: Public adjusters are typically engaged after a covered loss
to assist with claim handling.
5. Which entity regulates public adjusters in Alabama?
A. IRS
B. Alabama Department of Insurance
C. FEMA
D. Federal Reserve
Answer: B. Alabama Department of Insurance
Rationale: State insurance departments regulate licensing and
conduct of adjusters.
6. A public adjuster fee is usually based on:
A. A fixed salary
B. A percentage of the claim settlement
C. Government reimbursement
D. Hourly state mandate
, Answer: B. A percentage of the claim settlement
Rationale: Public adjusters typically earn a percentage of the final
settlement amount.
7. Which of the following is considered unethical for a public
adjuster?
A. Documenting damages
B. Advising the insured
C. Misrepresenting claim values
D. Negotiating with insurers
Answer: C. Misrepresenting claim values
Rationale: Misrepresentation is fraudulent and violates professional
ethics and licensing laws.
8. A license to act as a public adjuster is issued by:
A. Federal courts
B. Insurance carriers
C. State insurance regulators
D. Local governments
