Claims Adjuster Exam 1 Questions and Correct
Answers
Adjusters Authority
An agent's authority can bind.
● What the agent says or does can bind the insurer
Agent's Responsibilities
1. Adhere to or follow the contract
2. Use reasonable judgment and care at all times
3. Provide all necessary information and documentation to the insurer
Express Authority
Authority that is directly granted to the agent in writing via the agent's contract
Agents usually have express authority to:
● Sell policies
● Collect premiums
● Issue binders
● Offer discounts (such as multi-policy discounts)
● Cancel insurance
Implied Authority
Reasonable for public to believe, not expressly granted in writing
Because an agent portrays himself as a representative of the insurer, anything the agent says
or does is implied to be the action of the insurer.
● Portraying oneself as a representative
, ● Wearing a name tag with company logo
● Handing out company business cards
● Words and actions that go "hand-in-hand" with express authority and are usual in order to
perform an agent's duties
Apparent Authority
another form of indirect authority
when the agent does something to rep the insurer AND the insurer goes along with it.
MEANING even if the agent does something he wasn't supposed to do, the insurer will still
be accountable for his actions IF they don't say or do anything about it.
If an adjuster issues payment to a claimant for more than the claimant actually lost—such as
classifying something of greater value when in reality it was of lesser value—the insurer still
issues the check for the consumer.
The adjuster appears to have the authority because the check was issued.
This was a mistake but the insurer typically won't make the consumer pay back the money
simply because of an agent's mistake.
The Four Types of Sales Agents:
1. Independent Insurance Sales Agent:The Independent Sales Agent is self-employed and
able to represent and offer insurance products from more than one company at the same time.
2. Exclusive Agent: Also called " Captive Agent " He is paid on a commissioned basis. He
represents one insurer at a time and provides quotes and policies from only that company.
3. General Agent: The General Agent also works for only one company. He trains and
supervises the Exclusive Agents for that company.
Answers
Adjusters Authority
An agent's authority can bind.
● What the agent says or does can bind the insurer
Agent's Responsibilities
1. Adhere to or follow the contract
2. Use reasonable judgment and care at all times
3. Provide all necessary information and documentation to the insurer
Express Authority
Authority that is directly granted to the agent in writing via the agent's contract
Agents usually have express authority to:
● Sell policies
● Collect premiums
● Issue binders
● Offer discounts (such as multi-policy discounts)
● Cancel insurance
Implied Authority
Reasonable for public to believe, not expressly granted in writing
Because an agent portrays himself as a representative of the insurer, anything the agent says
or does is implied to be the action of the insurer.
● Portraying oneself as a representative
, ● Wearing a name tag with company logo
● Handing out company business cards
● Words and actions that go "hand-in-hand" with express authority and are usual in order to
perform an agent's duties
Apparent Authority
another form of indirect authority
when the agent does something to rep the insurer AND the insurer goes along with it.
MEANING even if the agent does something he wasn't supposed to do, the insurer will still
be accountable for his actions IF they don't say or do anything about it.
If an adjuster issues payment to a claimant for more than the claimant actually lost—such as
classifying something of greater value when in reality it was of lesser value—the insurer still
issues the check for the consumer.
The adjuster appears to have the authority because the check was issued.
This was a mistake but the insurer typically won't make the consumer pay back the money
simply because of an agent's mistake.
The Four Types of Sales Agents:
1. Independent Insurance Sales Agent:The Independent Sales Agent is self-employed and
able to represent and offer insurance products from more than one company at the same time.
2. Exclusive Agent: Also called " Captive Agent " He is paid on a commissioned basis. He
represents one insurer at a time and provides quotes and policies from only that company.
3. General Agent: The General Agent also works for only one company. He trains and
supervises the Exclusive Agents for that company.
