ARIZONA ADJUSTER FINAL EXAM 2026 ACTUAL
QUESTIONS AND SOLUTIONS RATED A+
✔✔Retroactive Date - ✔✔Insurers will specify a retroactive date which says how far
back an occurrence will be covered.
✔✔Laser Beam endorsement - ✔✔Allows an insurer to exclude specific types of
accidents, products, work, or locations from CGL coverage.
✔✔General Aggregate limit CGL - ✔✔Per occurrence limit.
Personal and advertising injury limit.
Medical Payments limit.
Damages to Premises rented by you.
✔✔Products & completed operations aggregate limit - ✔✔Per occurrence limit.
✔✔CGL Pollution liability coverage- broad vs. Pollution liability limited coverage. -
✔✔Broad form pays for pollution clean-up costs, the limited form does not.
✔✔Professional liability coverage - ✔✔Covers lawsuit and settlement costs when a
claim is made because of alleged wrongful acts.
✔✔EPLI Employment practices liability insurance - ✔✔Provides legal defense for
businesses and pays for damages awarded in court when employees claim violations.
✔✔Business auto: symbols - ✔✔1: Any auto
2:any owned vehicle
3:owned private passenger vehicle; not trucks or busses
4: owned vehicles that are not passenger vehicles
5: Owned autos subject to no-fault insurance
6: Owned autos subject to compulsory uninsured motorist law
7: specifically described autos
8:Hired Autos
9: Non-owned vehicles
19: mobile equipment subject to compulsory auto financial responsibility requirements
✔✔Business auto policies - ✔✔The business auto policy can provide insurance
coverage for cars, trucks, and specialized vehicles such as buses, snowplows, and
maintenance vehicles.
✔✔Owner sustained financial loss from government confiscation: - ✔✔ocean marine-
not covered.
,✔✔General Average - ✔✔This provision in Ocean Marine insurance obligates insurers
of various interests to share the cost of losses associated with a captain's decision to
voluntarily sacrifice a part of the ship or its cargo.
✔✔Cost, Insurance , and freight - ✔✔In Ocean Marine insurance, this term of sale
states that the seller of goods is responsible for damage to the cargo during shipment
✔✔Personal Articles floaters - ✔✔A PAF is used to provide Personal Property Floaters
in a single policy form. It also pays the lesser of: ACV, replacement/repair cost, or the
specified limit of coverage. The insured may also choose to use an agreed value for
covered property.
✔✔Hull coverage - ✔✔Insurance for the aircraft itself.
✔✔Residual Markets (Arizona) - ✔✔Insurers provide valuable protection for their
policyholders. In order to provide this protection and remain solvent though, they need
to charge adequate premiums and manage risk by denying coverage where the
exposure would be too great.
However, people and companies with a lot of risk need insurance just like everyone
else. Like the rest of us, they could never afford to pay the huge out-of-pocket expenses
that insurance protects against.
This is where Residual Markets come into play.
✔✔High Risk (ARIZONA) - ✔✔In order to manage risk effectively, insurers must be able
to deny coverage when the probability of loss is too high, such as when an applicant
has a bad driving record, participates in risky behavior, or owns property that is exposed
to serious hazards.
However, these high-risk individuals and businesses still need insurance coverage,
especially when it is required by law. For example, most states require every driver to
carry a minimum amount of liability coverage, no matter how careful or reckless he
might be.
To solve this problem state law formed Residual Markets, also known as "shared
market," "involuntary market," or "assigned risk" programs, to provide coverage for
these high-risk consumers and properties.
✔✔Coverage for High Risk (Arizona) - ✔✔Residual Markets are state-run or state-
subsidized programs that provide insurance coverage where private insurers will not.
Since they are designed to cover such high amounts of risk, they rely on the backing of
the government, which spreads the cost among all the insurers in the state.
, So, when a Residual Market premium pool is overwhelmed, every insurer licensed in
the state must pay a "penalty" in proportion to the amount of similar policies they issue
in the state. This means that large insurers will pay more into the fund than smaller
insurers.
When private insurers are required to share their pool of premiums with the state's
Residual Markets, they can then pass these costs on to their policyholders.
✔✔Last Resort for Consumers
(Arizona) - ✔✔Residual Market insurance programs are considered a last resort option
for consumers. They are expensive, and they often require applicants to prove that they
have been rejected by a number of private insurers before issuing coverage.
In other words, if an applicant can acquire the policy she needs in the "voluntary
market," she will not be eligible for coverage in the involuntary market. Due to the high-
risk nature of Residual Market policies, coverage is often minimal and very expensive.
✔✔Arizona Auto - ✔✔The Arizona Automobile Insurance Plan was created to help high-
risk drivers of private passenger vehicles obtain the bodily injury and property damage
liability insurance that state law requires but which they are unable to obtain through the
voluntary market. Drivers may also purchase Uninsured Motorist, Medical Payments,
Comprehensive, and Collision coverage through the plan.
The risks that the Arizona Automobile Insurance Plan takes on are shared by all
insurers that sell auto insurance in Arizona. Every automobile liability insurer who does
business in the state is required to participate.
✔✔Western Association of Automobile Insurance Plans (WAAIP) (Arizona) - ✔✔The
WAAIP is a processing center where high-risk consumers submit insurance applications
and are placed with an insurance company that will insure them.
✔✔Time Element Insurance: - ✔✔Covers an indirect loss if it can be proven that it
resulted from a direct loss.
✔✔Additional Coverages - ✔✔Time element insurance
Business interruption insurance
extra expenses
law and ordinance
valuable papers business insurance
Electronic data processing,
Pollutant cleanup and removal.
✔✔Terrorism Insurance Program - ✔✔The "industry-wide aggregate retention" is the
total amount of copayments and deductibles that all insurers are responsible for paying
in a calendar year for covered terrorism losses.
QUESTIONS AND SOLUTIONS RATED A+
✔✔Retroactive Date - ✔✔Insurers will specify a retroactive date which says how far
back an occurrence will be covered.
✔✔Laser Beam endorsement - ✔✔Allows an insurer to exclude specific types of
accidents, products, work, or locations from CGL coverage.
✔✔General Aggregate limit CGL - ✔✔Per occurrence limit.
Personal and advertising injury limit.
Medical Payments limit.
Damages to Premises rented by you.
✔✔Products & completed operations aggregate limit - ✔✔Per occurrence limit.
✔✔CGL Pollution liability coverage- broad vs. Pollution liability limited coverage. -
✔✔Broad form pays for pollution clean-up costs, the limited form does not.
✔✔Professional liability coverage - ✔✔Covers lawsuit and settlement costs when a
claim is made because of alleged wrongful acts.
✔✔EPLI Employment practices liability insurance - ✔✔Provides legal defense for
businesses and pays for damages awarded in court when employees claim violations.
✔✔Business auto: symbols - ✔✔1: Any auto
2:any owned vehicle
3:owned private passenger vehicle; not trucks or busses
4: owned vehicles that are not passenger vehicles
5: Owned autos subject to no-fault insurance
6: Owned autos subject to compulsory uninsured motorist law
7: specifically described autos
8:Hired Autos
9: Non-owned vehicles
19: mobile equipment subject to compulsory auto financial responsibility requirements
✔✔Business auto policies - ✔✔The business auto policy can provide insurance
coverage for cars, trucks, and specialized vehicles such as buses, snowplows, and
maintenance vehicles.
✔✔Owner sustained financial loss from government confiscation: - ✔✔ocean marine-
not covered.
,✔✔General Average - ✔✔This provision in Ocean Marine insurance obligates insurers
of various interests to share the cost of losses associated with a captain's decision to
voluntarily sacrifice a part of the ship or its cargo.
✔✔Cost, Insurance , and freight - ✔✔In Ocean Marine insurance, this term of sale
states that the seller of goods is responsible for damage to the cargo during shipment
✔✔Personal Articles floaters - ✔✔A PAF is used to provide Personal Property Floaters
in a single policy form. It also pays the lesser of: ACV, replacement/repair cost, or the
specified limit of coverage. The insured may also choose to use an agreed value for
covered property.
✔✔Hull coverage - ✔✔Insurance for the aircraft itself.
✔✔Residual Markets (Arizona) - ✔✔Insurers provide valuable protection for their
policyholders. In order to provide this protection and remain solvent though, they need
to charge adequate premiums and manage risk by denying coverage where the
exposure would be too great.
However, people and companies with a lot of risk need insurance just like everyone
else. Like the rest of us, they could never afford to pay the huge out-of-pocket expenses
that insurance protects against.
This is where Residual Markets come into play.
✔✔High Risk (ARIZONA) - ✔✔In order to manage risk effectively, insurers must be able
to deny coverage when the probability of loss is too high, such as when an applicant
has a bad driving record, participates in risky behavior, or owns property that is exposed
to serious hazards.
However, these high-risk individuals and businesses still need insurance coverage,
especially when it is required by law. For example, most states require every driver to
carry a minimum amount of liability coverage, no matter how careful or reckless he
might be.
To solve this problem state law formed Residual Markets, also known as "shared
market," "involuntary market," or "assigned risk" programs, to provide coverage for
these high-risk consumers and properties.
✔✔Coverage for High Risk (Arizona) - ✔✔Residual Markets are state-run or state-
subsidized programs that provide insurance coverage where private insurers will not.
Since they are designed to cover such high amounts of risk, they rely on the backing of
the government, which spreads the cost among all the insurers in the state.
, So, when a Residual Market premium pool is overwhelmed, every insurer licensed in
the state must pay a "penalty" in proportion to the amount of similar policies they issue
in the state. This means that large insurers will pay more into the fund than smaller
insurers.
When private insurers are required to share their pool of premiums with the state's
Residual Markets, they can then pass these costs on to their policyholders.
✔✔Last Resort for Consumers
(Arizona) - ✔✔Residual Market insurance programs are considered a last resort option
for consumers. They are expensive, and they often require applicants to prove that they
have been rejected by a number of private insurers before issuing coverage.
In other words, if an applicant can acquire the policy she needs in the "voluntary
market," she will not be eligible for coverage in the involuntary market. Due to the high-
risk nature of Residual Market policies, coverage is often minimal and very expensive.
✔✔Arizona Auto - ✔✔The Arizona Automobile Insurance Plan was created to help high-
risk drivers of private passenger vehicles obtain the bodily injury and property damage
liability insurance that state law requires but which they are unable to obtain through the
voluntary market. Drivers may also purchase Uninsured Motorist, Medical Payments,
Comprehensive, and Collision coverage through the plan.
The risks that the Arizona Automobile Insurance Plan takes on are shared by all
insurers that sell auto insurance in Arizona. Every automobile liability insurer who does
business in the state is required to participate.
✔✔Western Association of Automobile Insurance Plans (WAAIP) (Arizona) - ✔✔The
WAAIP is a processing center where high-risk consumers submit insurance applications
and are placed with an insurance company that will insure them.
✔✔Time Element Insurance: - ✔✔Covers an indirect loss if it can be proven that it
resulted from a direct loss.
✔✔Additional Coverages - ✔✔Time element insurance
Business interruption insurance
extra expenses
law and ordinance
valuable papers business insurance
Electronic data processing,
Pollutant cleanup and removal.
✔✔Terrorism Insurance Program - ✔✔The "industry-wide aggregate retention" is the
total amount of copayments and deductibles that all insurers are responsible for paying
in a calendar year for covered terrorism losses.
