Public Adjuster Licensing Exam
Questions And Correct Answers
(Verified Answers) Plus Rationales 2026
Q&A | Instant Download Pdf
A public adjuster is BEST defined as a person who:
A. Works for the insurance company
B. Represents the insured in negotiating claims
C. Sets insurance premium rates
D. Issues insurance policies
Answer: B. Represents the insured in negotiating claims
Rationale: Public adjusters advocate for policyholders, not insurers.
2.
A homeowner suffers fire damage and hires a public adjuster. The adjuster’s
PRIMARY duty is to:
A. Minimize insurer payout
B. Represent the insured’s claim interests
C. Deny coverage when possible
D. Inspect only without reporting
Answer: B. Represent the insured’s claim interests
Rationale: Public adjusters work solely for the insured’s benefit.
3.
A public adjuster agreement is typically required to be:
A. Oral only
B. Written and signed
,C. Verbal with witness
D. Approved by police
Answer: B. Written and signed
Rationale: Most states require written contracts for validity.
4.
A public adjuster receives compensation based on:
A. Fixed salary from insurer
B. Percentage of insurance claim settlement
C. Government payment
D. Court orders only
Answer: B. Percentage of insurance claim settlement
Rationale: Compensation is typically contingency-based.
5.
A public adjuster must act in the BEST interest of:
A. Insurance company
B. Insured client
C. State regulator
D. Contractor
Answer: B. Insured client
Rationale: Fiduciary duty is owed to the policyholder.
6.
A homeowner signs a contract with a public adjuster but later cancels. Most
states allow cancellation:
A. Never
B. Within a statutory cooling-off period
C. Only with insurer approval
D. Only after claim settlement
Answer: B. Within a statutory cooling-off period
Rationale: Consumer protection laws allow rescission periods.
, 7.
A public adjuster discovers policy exclusions during review. The adjuster should:
A. Hide exclusions
B. Inform the insured honestly
C. Ignore policy terms
D. Alter the policy
Answer: B. Inform the insured honestly
Rationale: Transparency is required in claims representation.
8.
A public adjuster may represent:
A. Only insurance companies
B. Only insured individuals
C. Courts
D. Government agencies
Answer: B. Only insured individuals
Rationale: They cannot represent insurers.
9.
A conflict of interest occurs when a public adjuster:
A. Represents only one client
B. Has competing financial interests
C. Files a claim
D. Reviews policy terms
Answer: B. Has competing financial interests
Rationale: Conflicts impair impartial advocacy.
10.
A public adjuster submits a fraudulent claim. This is:
A. Acceptable negotiation tactic
B. Illegal and license revocable
, C. Standard practice
D. Civil only, not criminal
Answer: B. Illegal and license revocable
Rationale: Fraud violates insurance law.
11.
A client’s insurance claim estimate should be based on:
A. Guesswork
B. Documented loss and evidence
C. Insurer preference
D. Contractor opinion only
Answer: B. Documented loss and evidence
Rationale: Claims require substantiation.
12.
A public adjuster is MOST likely involved after:
A. Policy issuance
B. Loss or damage occurrence
C. Premium payment
D. Renewal notice
Answer: B. Loss or damage occurrence
Rationale: Adjusters handle post-loss claims.
13.
A public adjuster may NOT:
A. Evaluate damages
B. Negotiate with insurer
C. Issue insurance policies
D. Document losses
Answer: C. Issue insurance policies
Rationale: Only insurers issue policies.
14.
Questions And Correct Answers
(Verified Answers) Plus Rationales 2026
Q&A | Instant Download Pdf
A public adjuster is BEST defined as a person who:
A. Works for the insurance company
B. Represents the insured in negotiating claims
C. Sets insurance premium rates
D. Issues insurance policies
Answer: B. Represents the insured in negotiating claims
Rationale: Public adjusters advocate for policyholders, not insurers.
2.
A homeowner suffers fire damage and hires a public adjuster. The adjuster’s
PRIMARY duty is to:
A. Minimize insurer payout
B. Represent the insured’s claim interests
C. Deny coverage when possible
D. Inspect only without reporting
Answer: B. Represent the insured’s claim interests
Rationale: Public adjusters work solely for the insured’s benefit.
3.
A public adjuster agreement is typically required to be:
A. Oral only
B. Written and signed
,C. Verbal with witness
D. Approved by police
Answer: B. Written and signed
Rationale: Most states require written contracts for validity.
4.
A public adjuster receives compensation based on:
A. Fixed salary from insurer
B. Percentage of insurance claim settlement
C. Government payment
D. Court orders only
Answer: B. Percentage of insurance claim settlement
Rationale: Compensation is typically contingency-based.
5.
A public adjuster must act in the BEST interest of:
A. Insurance company
B. Insured client
C. State regulator
D. Contractor
Answer: B. Insured client
Rationale: Fiduciary duty is owed to the policyholder.
6.
A homeowner signs a contract with a public adjuster but later cancels. Most
states allow cancellation:
A. Never
B. Within a statutory cooling-off period
C. Only with insurer approval
D. Only after claim settlement
Answer: B. Within a statutory cooling-off period
Rationale: Consumer protection laws allow rescission periods.
, 7.
A public adjuster discovers policy exclusions during review. The adjuster should:
A. Hide exclusions
B. Inform the insured honestly
C. Ignore policy terms
D. Alter the policy
Answer: B. Inform the insured honestly
Rationale: Transparency is required in claims representation.
8.
A public adjuster may represent:
A. Only insurance companies
B. Only insured individuals
C. Courts
D. Government agencies
Answer: B. Only insured individuals
Rationale: They cannot represent insurers.
9.
A conflict of interest occurs when a public adjuster:
A. Represents only one client
B. Has competing financial interests
C. Files a claim
D. Reviews policy terms
Answer: B. Has competing financial interests
Rationale: Conflicts impair impartial advocacy.
10.
A public adjuster submits a fraudulent claim. This is:
A. Acceptable negotiation tactic
B. Illegal and license revocable
, C. Standard practice
D. Civil only, not criminal
Answer: B. Illegal and license revocable
Rationale: Fraud violates insurance law.
11.
A client’s insurance claim estimate should be based on:
A. Guesswork
B. Documented loss and evidence
C. Insurer preference
D. Contractor opinion only
Answer: B. Documented loss and evidence
Rationale: Claims require substantiation.
12.
A public adjuster is MOST likely involved after:
A. Policy issuance
B. Loss or damage occurrence
C. Premium payment
D. Renewal notice
Answer: B. Loss or damage occurrence
Rationale: Adjusters handle post-loss claims.
13.
A public adjuster may NOT:
A. Evaluate damages
B. Negotiate with insurer
C. Issue insurance policies
D. Document losses
Answer: C. Issue insurance policies
Rationale: Only insurers issue policies.
14.
