AE21 INSURANCE ADJUSTER LICENSE
STUDY GUIDE 2026 TEST PAPER
QUESTIONS AND SOLUTIONS GRADED A+
●● what is a premium
Answer: a scheduled amount to be paid for an insurance policy.
●● What are premiums used for
Answer: premiums are collected into a "pool" or "reserve to pay out
claimants when needed.
●● how can insurance companies afford to pay for an individuals
catastrophic loss?
Answer: the insurer collects premiums from all policy holders and uses
them to pay out the claims of a few.
●● what is Indemnity
Answer: payment for damages, that is not more or less than the amount
caused by the damage.
●● principle of idemnity
Answer: insurance will pay no more or less than the actual financial loss
suffered
,●● indemnification may also include
Answer: repairs to property
reimbursement for additional living expenses
rental cars and hotels
costs directly associated with a loss
●● 4 Parts of Legal Contract
Answer: 1. Agreement
2. Consideration
3. Competent Parties
4. Legal Purpose
●● legal contract - agreement
Answer: mutual intent by offeror and offeree
●● six special characteristics of insurance contracts
Answer: 1. Personal
2. adhesion
3. utmost good faith
4. aleatory
5. unilateral
,6. conditional
●● what kind of contract is an insurance policy?
Answer: Personal contract
●● what is a contract of adhesion
Answer: the insured must accept the entire contract with all of its terms
and conditions
●● Utmost Good Faith
Answer: An obligation to act in complete honesty and to disclose all
relevant facts.
●● Aleatory Contract
Answer: a contract where the values exchanged may not be equal but
depend on an uncertain event
●● Unilateral Contract
Answer: insurance agrees that they must pay in event of a claim. the
insured can stop paying premiums at any point.
only the insurer has promised to perform an action.
●● Conditional Contract
, Answer: A type of an agreement in which both parties must perform
certain duties and follow rules of conduct to make the contract
enforceable.
●● Acronym for the four sections of an Insurance policy
Answer: DICE
D - declarations page
I - Insuring Agreement
C- Conditions
E - Exclusions
●● Decelerations section
Answer: Always the first section - establishes the following
Names of both parties
Policy number
Location and description of insured item
Dates of the policy
Amount and limit of coverage
Deductible
Premium
●● Definitions section
STUDY GUIDE 2026 TEST PAPER
QUESTIONS AND SOLUTIONS GRADED A+
●● what is a premium
Answer: a scheduled amount to be paid for an insurance policy.
●● What are premiums used for
Answer: premiums are collected into a "pool" or "reserve to pay out
claimants when needed.
●● how can insurance companies afford to pay for an individuals
catastrophic loss?
Answer: the insurer collects premiums from all policy holders and uses
them to pay out the claims of a few.
●● what is Indemnity
Answer: payment for damages, that is not more or less than the amount
caused by the damage.
●● principle of idemnity
Answer: insurance will pay no more or less than the actual financial loss
suffered
,●● indemnification may also include
Answer: repairs to property
reimbursement for additional living expenses
rental cars and hotels
costs directly associated with a loss
●● 4 Parts of Legal Contract
Answer: 1. Agreement
2. Consideration
3. Competent Parties
4. Legal Purpose
●● legal contract - agreement
Answer: mutual intent by offeror and offeree
●● six special characteristics of insurance contracts
Answer: 1. Personal
2. adhesion
3. utmost good faith
4. aleatory
5. unilateral
,6. conditional
●● what kind of contract is an insurance policy?
Answer: Personal contract
●● what is a contract of adhesion
Answer: the insured must accept the entire contract with all of its terms
and conditions
●● Utmost Good Faith
Answer: An obligation to act in complete honesty and to disclose all
relevant facts.
●● Aleatory Contract
Answer: a contract where the values exchanged may not be equal but
depend on an uncertain event
●● Unilateral Contract
Answer: insurance agrees that they must pay in event of a claim. the
insured can stop paying premiums at any point.
only the insurer has promised to perform an action.
●● Conditional Contract
, Answer: A type of an agreement in which both parties must perform
certain duties and follow rules of conduct to make the contract
enforceable.
●● Acronym for the four sections of an Insurance policy
Answer: DICE
D - declarations page
I - Insuring Agreement
C- Conditions
E - Exclusions
●● Decelerations section
Answer: Always the first section - establishes the following
Names of both parties
Policy number
Location and description of insured item
Dates of the policy
Amount and limit of coverage
Deductible
Premium
●● Definitions section
