INSCO-PUBADJ14 CO PUBLIC ADJUSTER EXAM 100 QUESTIONS AND ANSWERS
Question 1: What is the primary role of a public adjuster?
A. Represent the insurance company
B. Represent the insured
C. Represent the general contractor
D. Represent the state insurance department
CORRECT ANSWER: B. Represent the insured
Rationale: A public adjuster is licensed to exclusively represent and advocate for the
policyholder in preparing, negotiating, and settling property insurance claims.
Question 2: Who does an independent adjuster represent?
A. The insured
B. The insurance company
C. The public adjuster
D. The state government
CORRECT ANSWER: B. Represent the insurance company
Rationale: Independent adjusters are contracted by insurance carriers to investigate and settle
claims on behalf of the insurer.
Question 3: In Colorado, what is the statutory limit on the fee a public adjuster can charge for a
standard property claim?
A. 5%
B. 10%
C. 20%
D. There is no statutory limit
CORRECT ANSWER: B. 10%
,Rationale: Colorado law generally limits the compensation of a public adjuster to 10% of the
insurance settlement for standard property claims.
Question 4: What is a public adjuster's fiduciary duty?
A. To maximize the insurance company's profit
B. To act in the best financial and legal interest of the insured
C. To ensure the contractor makes a profit
D. To minimize the payout regardless of the policy
CORRECT ANSWER: B. To act in the best financial and legal interest of the insured
Rationale: A fiduciary duty requires the public adjuster to act with utmost good faith, loyalty,
and care toward the policyholder.
Question 5: Which document outlines the specific limits, deductibles, and premium for a policy?
A. Insuring Agreement
B. Conditions
C. Declarations Page
D. Exclusions
CORRECT ANSWER: C. Declarations Page
Rationale: The Declarations page summarizes the key financial and identifying details of the
policy, including limits, deductibles, and covered property.
Question 6: Which part of the insurance policy outlines the insurer's promise to pay?
A. Insuring Agreement
B. Conditions
C. Definitions
D. Exclusions
CORRECT ANSWER: A. Insuring Agreement
,Rationale: The Insuring Agreement contains the insurer's core promise to indemnify the insured
for covered losses.
Question 7: What does the "Conditions" section of a policy detail?
A. Specific perils covered
B. Duties and obligations of both the insured and the insurer
C. Property that is not covered
D. The definition of terms
CORRECT ANSWER: B. Duties and obligations of both the insured and the insurer
Rationale: Conditions outline the rules of the policy, such as how to file a claim, proof of loss
requirements, and duties after a loss.
Question 8: In a standard HO-3 policy, what coverage is typically provided for the dwelling?
A. Named Perils
B. Broad Perils
C. Open Perils (Special Form)
D. Restricted Perils
CORRECT ANSWER: C. Open Perils (Special Form)
Rationale: The HO-3 policy provides Open Perils (or Special Form) coverage for the dwelling,
meaning it covers all perils except those specifically excluded.
Question 9: How are personal property coverages typically written in an HO-3 policy?
A. Open Perils
B. Broad Perils (Named Perils)
C. Comprehensive Perils
D. Excluded Perils
CORRECT ANSWER: B. Broad Perils (Named Perils)
, Rationale: Personal property in an HO-3 policy is typically covered on a Broad Named Perils
basis (Coverage C).
Question 10: What is the standard limit for "Other Structures" coverage in relation to the
dwelling limit?
A. 5%
B. 10%
C. 20%
D. 50%
CORRECT ANSWER: B. 10%
Rationale: Coverage B (Other Structures) is typically set at 10% of the Coverage A (Dwelling)
limit.
Question 11: What is the standard limit for Personal Property (Coverage C) in relation to the
dwelling limit?
A. 10%
B. 25%
C. 50%
D. 80%
CORRECT ANSWER: C. 50%
Rationale: Coverage C (Personal Property) is typically set at 50% of the Coverage A (Dwelling)
limit.
Question 12: What is the standard limit for Loss of Use (Coverage D) in relation to the dwelling
limit?
A. 10%
B. 20%
C. 30%
Question 1: What is the primary role of a public adjuster?
A. Represent the insurance company
B. Represent the insured
C. Represent the general contractor
D. Represent the state insurance department
CORRECT ANSWER: B. Represent the insured
Rationale: A public adjuster is licensed to exclusively represent and advocate for the
policyholder in preparing, negotiating, and settling property insurance claims.
Question 2: Who does an independent adjuster represent?
A. The insured
B. The insurance company
C. The public adjuster
D. The state government
CORRECT ANSWER: B. Represent the insurance company
Rationale: Independent adjusters are contracted by insurance carriers to investigate and settle
claims on behalf of the insurer.
Question 3: In Colorado, what is the statutory limit on the fee a public adjuster can charge for a
standard property claim?
A. 5%
B. 10%
C. 20%
D. There is no statutory limit
CORRECT ANSWER: B. 10%
,Rationale: Colorado law generally limits the compensation of a public adjuster to 10% of the
insurance settlement for standard property claims.
Question 4: What is a public adjuster's fiduciary duty?
A. To maximize the insurance company's profit
B. To act in the best financial and legal interest of the insured
C. To ensure the contractor makes a profit
D. To minimize the payout regardless of the policy
CORRECT ANSWER: B. To act in the best financial and legal interest of the insured
Rationale: A fiduciary duty requires the public adjuster to act with utmost good faith, loyalty,
and care toward the policyholder.
Question 5: Which document outlines the specific limits, deductibles, and premium for a policy?
A. Insuring Agreement
B. Conditions
C. Declarations Page
D. Exclusions
CORRECT ANSWER: C. Declarations Page
Rationale: The Declarations page summarizes the key financial and identifying details of the
policy, including limits, deductibles, and covered property.
Question 6: Which part of the insurance policy outlines the insurer's promise to pay?
A. Insuring Agreement
B. Conditions
C. Definitions
D. Exclusions
CORRECT ANSWER: A. Insuring Agreement
,Rationale: The Insuring Agreement contains the insurer's core promise to indemnify the insured
for covered losses.
Question 7: What does the "Conditions" section of a policy detail?
A. Specific perils covered
B. Duties and obligations of both the insured and the insurer
C. Property that is not covered
D. The definition of terms
CORRECT ANSWER: B. Duties and obligations of both the insured and the insurer
Rationale: Conditions outline the rules of the policy, such as how to file a claim, proof of loss
requirements, and duties after a loss.
Question 8: In a standard HO-3 policy, what coverage is typically provided for the dwelling?
A. Named Perils
B. Broad Perils
C. Open Perils (Special Form)
D. Restricted Perils
CORRECT ANSWER: C. Open Perils (Special Form)
Rationale: The HO-3 policy provides Open Perils (or Special Form) coverage for the dwelling,
meaning it covers all perils except those specifically excluded.
Question 9: How are personal property coverages typically written in an HO-3 policy?
A. Open Perils
B. Broad Perils (Named Perils)
C. Comprehensive Perils
D. Excluded Perils
CORRECT ANSWER: B. Broad Perils (Named Perils)
, Rationale: Personal property in an HO-3 policy is typically covered on a Broad Named Perils
basis (Coverage C).
Question 10: What is the standard limit for "Other Structures" coverage in relation to the
dwelling limit?
A. 5%
B. 10%
C. 20%
D. 50%
CORRECT ANSWER: B. 10%
Rationale: Coverage B (Other Structures) is typically set at 10% of the Coverage A (Dwelling)
limit.
Question 11: What is the standard limit for Personal Property (Coverage C) in relation to the
dwelling limit?
A. 10%
B. 25%
C. 50%
D. 80%
CORRECT ANSWER: C. 50%
Rationale: Coverage C (Personal Property) is typically set at 50% of the Coverage A (Dwelling)
limit.
Question 12: What is the standard limit for Loss of Use (Coverage D) in relation to the dwelling
limit?
A. 10%
B. 20%
C. 30%
