January 2026 | Texas 3-20 Public adJusTer
exam PreP – Tdi licensed insurance adJusTer
cerTificaTion | comPleTe PracTice QuesTions
wiTh Verified answers | uPdaTed 2025–2026
ediTion | high-yield sTudy guide for Texas
Public adJusTer licensing, insurance exam
success & Tdi sTaTe comPliance
,Question 1:
Which of the following statements best describes the role of a public adjuster in the
claims process?
A) They represent the insurance company to minimize claims payouts.
B) They assist policyholders in preparing, filing, and negotiating claims with insurance
companies.
C) They work exclusively for the government to ensure compliance with insurance laws.
D) They provide legal representation in court for insurance disputes.
Correct Option: B
Rationale: Public adjusters are specifically trained to help policyholders navigate the
claims process, ensuring they receive a fair settlement based on their policy. Unlike
insurance company adjusters, they advocate for the insured's interests.
Question 2:
Under Texas law, what is the maximum percentage a public adjuster can charge as a fee
for their services?
A) 5%
B) 10%
C) 15%
D) There is no maximum limit.
Correct Option: C
Rationale: Texas law caps the fees that public adjusters can charge at 10% of the total
settlement for residential claims, ensuring that fees remain reasonable and
competitive.
Question 3:
When must a public adjuster provide a written contract to a client?
A) Only if the claim exceeds $25,000.
B) Before any work is performed and before the client signs the contract.
C) Within 10 days of filing the claim.
D) A written contract is not required under Texas law.
Correct Option: B
Rationale: Texas requires public adjusters to provide a written contract before any work
begins. This protects the client’s rights and clarifies the services to be performed and
fees to be charged.
, Question 4:
What is the primary purpose of the Texas Department of Insurance in relation to public
adjusters?
A) To directly settle disputes between policyholders and insurance companies.
B) To license and regulate public adjusters to ensure ethical practices and consumer
protection.
C) To provide free legal aid to policyholders.
D) To oversee the rates set by insurance companies.
Correct Option: B
Rationale: The Texas Department of Insurance oversees the licensing and regulation of
public adjusters, ensuring they adhere to legal and ethical standards to protect
consumers.
Question 5:
What is considered a conflict of interest for a public adjuster?
A) Claiming a fee that exceeds the maximum set by law.
B) Representing both the policyholder and the insurance company in the same claim.
C) Accepting gifts or compensation from a contractor without disclosure.
D) All of the above.
Correct Option: D
Rationale: All listed actions represent conflicts of interest as they compromise the
public adjuster's ability to act in the best interests of the policyholder, which can lead to
ethical and legal violations.
Question 6:
Which of the following is a valid reason for a public adjuster to be denied a license in
Texas?
A) Previous felony conviction related to fraud.
B) Lack of experience in adjusting claims.
C) Disagreement with an insurance company.
D) Poor customer reviews.
Correct Option: A
Rationale: A felony conviction related to fraud can lead to denial of a public adjuster
license, as it indicates a lack of integrity necessary for the profession.
Question 7:
What is the primary statute governing public adjusters in Texas?
exam PreP – Tdi licensed insurance adJusTer
cerTificaTion | comPleTe PracTice QuesTions
wiTh Verified answers | uPdaTed 2025–2026
ediTion | high-yield sTudy guide for Texas
Public adJusTer licensing, insurance exam
success & Tdi sTaTe comPliance
,Question 1:
Which of the following statements best describes the role of a public adjuster in the
claims process?
A) They represent the insurance company to minimize claims payouts.
B) They assist policyholders in preparing, filing, and negotiating claims with insurance
companies.
C) They work exclusively for the government to ensure compliance with insurance laws.
D) They provide legal representation in court for insurance disputes.
Correct Option: B
Rationale: Public adjusters are specifically trained to help policyholders navigate the
claims process, ensuring they receive a fair settlement based on their policy. Unlike
insurance company adjusters, they advocate for the insured's interests.
Question 2:
Under Texas law, what is the maximum percentage a public adjuster can charge as a fee
for their services?
A) 5%
B) 10%
C) 15%
D) There is no maximum limit.
Correct Option: C
Rationale: Texas law caps the fees that public adjusters can charge at 10% of the total
settlement for residential claims, ensuring that fees remain reasonable and
competitive.
Question 3:
When must a public adjuster provide a written contract to a client?
A) Only if the claim exceeds $25,000.
B) Before any work is performed and before the client signs the contract.
C) Within 10 days of filing the claim.
D) A written contract is not required under Texas law.
Correct Option: B
Rationale: Texas requires public adjusters to provide a written contract before any work
begins. This protects the client’s rights and clarifies the services to be performed and
fees to be charged.
, Question 4:
What is the primary purpose of the Texas Department of Insurance in relation to public
adjusters?
A) To directly settle disputes between policyholders and insurance companies.
B) To license and regulate public adjusters to ensure ethical practices and consumer
protection.
C) To provide free legal aid to policyholders.
D) To oversee the rates set by insurance companies.
Correct Option: B
Rationale: The Texas Department of Insurance oversees the licensing and regulation of
public adjusters, ensuring they adhere to legal and ethical standards to protect
consumers.
Question 5:
What is considered a conflict of interest for a public adjuster?
A) Claiming a fee that exceeds the maximum set by law.
B) Representing both the policyholder and the insurance company in the same claim.
C) Accepting gifts or compensation from a contractor without disclosure.
D) All of the above.
Correct Option: D
Rationale: All listed actions represent conflicts of interest as they compromise the
public adjuster's ability to act in the best interests of the policyholder, which can lead to
ethical and legal violations.
Question 6:
Which of the following is a valid reason for a public adjuster to be denied a license in
Texas?
A) Previous felony conviction related to fraud.
B) Lack of experience in adjusting claims.
C) Disagreement with an insurance company.
D) Poor customer reviews.
Correct Option: A
Rationale: A felony conviction related to fraud can lead to denial of a public adjuster
license, as it indicates a lack of integrity necessary for the profession.
Question 7:
What is the primary statute governing public adjusters in Texas?
