TheoryInsurance Adjuster Practice Questions
Free Insurance Adjuster practice questions with answers and plain-English explanations. Browse the PDF, video and online mock test.
Insurance Adjuster Questions
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Q1What is the term for the initial report a policyholder makes to begin a claim?
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✓ Correct answer: First Notice of Loss
First Notice of Loss (FNOL) is the policyholder's initial report that triggers the claims process and starts applicable timelines for adjuster contact.
Q2Under most property policies, an insured's duty after a loss includes all of the following EXCEPT:
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✓ Correct answer: Determining the policy's coverage limits before reporting
Deciding coverage and limits is the adjuster's task. The insured's duties are notice, mitigation, protection of property, and cooperation.
Q3An adjuster sends a reservation of rights letter primarily to:
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✓ Correct answer: Investigate while preserving the right to later deny coverage
A reservation of rights notifies the insured that the insurer is investigating but may dispute coverage, preventing an unintended waiver of policy defenses.
Q4A 'proof of loss' is best described as:
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✓ Correct answer: A sworn statement of the amount and cause of loss
A proof of loss is a formal, usually sworn document in which the insured states the amount claimed and supporting facts; many policies require it within a set period.
Q5The MAIN purpose of a claim investigation is to:
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✓ Correct answer: Determine coverage, cause, and the value of the loss
Investigation gathers facts so the adjuster can decide whether coverage applies, what caused the loss, and the proper amount to pay.
Q6Setting a claim 'reserve' means the insurer:
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✓ Correct answer: Estimates and sets aside funds for the expected ultimate cost of the claim
A reserve is the insurer's good-faith estimate of the total amount it expects to pay on a claim, set aside on its financial statements.
Q7Subrogation allows an insurer that has paid a claim to:
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✓ Correct answer: Pursue recovery from the party legally responsible for the loss
After paying the insured, the insurer 'steps into the shoes' of the insured to recover from the at-fault third party, preventing double recovery.
Q8When an insurer takes title to damaged property after paying a total loss, the recovered property is called:
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✓ Correct answer: Salvage
Salvage is damaged property the insurer takes ownership of after settling; its sale proceeds offset the claim cost.
Q9Thorough, contemporaneous claim file documentation primarily serves to:
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✓ Correct answer: Support the adjuster's decisions and demonstrate good-faith handling
Good documentation records the basis for each decision, supports fair handling, and protects against bad-faith allegations.
Q10An independent adjuster differs from a staff (company) adjuster in that the independent adjuster:
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✓ Correct answer: Is hired on a contract basis by insurers rather than being an employee
Independent adjusters contract with one or more insurers to handle claims, whereas staff adjusters are direct employees of a single insurer.
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