INSURANCE ADJUSTER EXAM QUESTIONS TEST BANK
QUESTIONS WITH COMPLETE ANSWERS
During a storm, heavy winds cause a tree limb to break and fall onto Paul's
house, causing $6,500 in damage. Paul's insurance company now considers his
house:
A Loss
Which of the following best describes a "risk," according to the insurance
definition?
A potential for financial loss
A lion at a zoo escaped when a zoo employee failed to follow protocol. The lion
injured a zoo patron. In court, the injured patron's lawyer could invoke the
doctrine of:
Res Ipsa Loquitur.
Which of the following best defines the doctrine of Res Ipsa Loquitur?
The circumstances of the injury make it obvious that the defendant is negligent; no proof
is needed.
Nina's home is located in a high crime neighborhood. One day, she comes home
from work to find that her garage door had been spray-painted with graffiti. Nina's
insurer would consider the act of vandalism to Nina's garage a:
Peril
An economic device used to protect against the risk of realizing unforeseen and
extraordinary financial loss is called:
A Peril
Anytown Pediatrics has been having a hard time finding medical malpractice
insurance. The premiums are extraordinarily high, and they get higher every year.
Finally, fed up with the cost of insurance, the directors decide to form their own
insurance company, which will serve only Anytown Pediatrics. This way, any
profits generated by the insurer will come back to Anytown Pediatrics. What kind
of insurance company would this be?
,Captive insurer
In an insurance contract, exclusions serve all of the following purposes, except:
add coverages that need special treatment.
Sam was tired of the neighbor's trees along the fence line poking through the
fence and dropping leaves in his yard, so he reached across the fence with his
pole saw and cut down the neighbor's tree. Sam's neighbor was upset and sued
him for the damages. Sam is ordered to pay $500 for the tree. Under which
category of damage would this fall?
Compensory Damage
Jackie recently inherited a life-sized marble statue of her great-grandfather. It is
an irreplaceable antique, and it is nearly impossible to determine the ACV. Which
type of policy would best indemnify Jackie in the event that the statue was ever
damaged?
Agreed Value Policy
ABC Consulting has a CGL policy and an Umbrella policy, but the CGL runs from
January 1 to December 31 and the Umbrella policy runs from June 1 to May 31.
This difference in inception and expiration dates creates confusion when settling
claims. This condition is known as:
Nonconcurency
A power surge sparks a small electrical fire in an office building. The electrical
fire triggers the automatic sprinkler system. The water from the sprinklers soaks
the carpets and shorts-out all the computers, causing thousands of dollars in
damage. The office must close for two months during repairs. The sprinklers
soaking the office would be considered:
An occurrence
Sara's vehicle was stolen and her insurer paid her theft claim for the total value of
the car. A week later, the police found Sara's car and returned it to her. Which of
the following statements is true?
The Recovered Property provision states that Sara must notify the insurer and either
return the settlement payment or surrender the vehicle to the insurer.
, As Seth is driving along a country road, a deer jumps out in front of him. This
causes Seth to veer off the road and crash into Cassie's wood fence and a brick
mailbox. As a result of the crash, Seth suffers $3,700 in damage to his sedan and
causes $1,800 in damage to Cassie's property. How much of the damage will be
covered by Seth's liability insurance?
$1800
Which of the following sequences is most likely in the correct chronological
order?
Acknowledge the claim, then open a line of communication with the claimant.
Appraisal is used to decide:
the settlement amount
The adjusters preliminary report would most likely not include:
The settlement amount
Which of the following is least likely to be one of the important questions an
adjuster must answer before entering into the negotiations process?
How much is the insured willing to pay
Sylvia is in the process of building an addition onto her used book store, which is
insured under a commercial property policy. About 40 days into the process, her
mother takes a bad fall and breaks her hip. Seeing that she needs to move closer
to her mom, Sylvia sells the book store. Her Builder's Risk coverage is terminated
because:
Sylvia no longer has insurable interest in the bui;ding
Sarah and a carload of her friends are driving to Vermont for the weekend when
she hits a deer, causing $10,000 in damages to her car and $5,000 in medical bills
for herself and her passengers. Which insurance coverage will pay for the
damages to Sarah's car?
Comprehensive
What document do insurance companies give to claimants when they think
something in the claim is not covered by the policy, but they are not sure yet?
Reservation of rights letter
QUESTIONS WITH COMPLETE ANSWERS
During a storm, heavy winds cause a tree limb to break and fall onto Paul's
house, causing $6,500 in damage. Paul's insurance company now considers his
house:
A Loss
Which of the following best describes a "risk," according to the insurance
definition?
A potential for financial loss
A lion at a zoo escaped when a zoo employee failed to follow protocol. The lion
injured a zoo patron. In court, the injured patron's lawyer could invoke the
doctrine of:
Res Ipsa Loquitur.
Which of the following best defines the doctrine of Res Ipsa Loquitur?
The circumstances of the injury make it obvious that the defendant is negligent; no proof
is needed.
Nina's home is located in a high crime neighborhood. One day, she comes home
from work to find that her garage door had been spray-painted with graffiti. Nina's
insurer would consider the act of vandalism to Nina's garage a:
Peril
An economic device used to protect against the risk of realizing unforeseen and
extraordinary financial loss is called:
A Peril
Anytown Pediatrics has been having a hard time finding medical malpractice
insurance. The premiums are extraordinarily high, and they get higher every year.
Finally, fed up with the cost of insurance, the directors decide to form their own
insurance company, which will serve only Anytown Pediatrics. This way, any
profits generated by the insurer will come back to Anytown Pediatrics. What kind
of insurance company would this be?
,Captive insurer
In an insurance contract, exclusions serve all of the following purposes, except:
add coverages that need special treatment.
Sam was tired of the neighbor's trees along the fence line poking through the
fence and dropping leaves in his yard, so he reached across the fence with his
pole saw and cut down the neighbor's tree. Sam's neighbor was upset and sued
him for the damages. Sam is ordered to pay $500 for the tree. Under which
category of damage would this fall?
Compensory Damage
Jackie recently inherited a life-sized marble statue of her great-grandfather. It is
an irreplaceable antique, and it is nearly impossible to determine the ACV. Which
type of policy would best indemnify Jackie in the event that the statue was ever
damaged?
Agreed Value Policy
ABC Consulting has a CGL policy and an Umbrella policy, but the CGL runs from
January 1 to December 31 and the Umbrella policy runs from June 1 to May 31.
This difference in inception and expiration dates creates confusion when settling
claims. This condition is known as:
Nonconcurency
A power surge sparks a small electrical fire in an office building. The electrical
fire triggers the automatic sprinkler system. The water from the sprinklers soaks
the carpets and shorts-out all the computers, causing thousands of dollars in
damage. The office must close for two months during repairs. The sprinklers
soaking the office would be considered:
An occurrence
Sara's vehicle was stolen and her insurer paid her theft claim for the total value of
the car. A week later, the police found Sara's car and returned it to her. Which of
the following statements is true?
The Recovered Property provision states that Sara must notify the insurer and either
return the settlement payment or surrender the vehicle to the insurer.
, As Seth is driving along a country road, a deer jumps out in front of him. This
causes Seth to veer off the road and crash into Cassie's wood fence and a brick
mailbox. As a result of the crash, Seth suffers $3,700 in damage to his sedan and
causes $1,800 in damage to Cassie's property. How much of the damage will be
covered by Seth's liability insurance?
$1800
Which of the following sequences is most likely in the correct chronological
order?
Acknowledge the claim, then open a line of communication with the claimant.
Appraisal is used to decide:
the settlement amount
The adjusters preliminary report would most likely not include:
The settlement amount
Which of the following is least likely to be one of the important questions an
adjuster must answer before entering into the negotiations process?
How much is the insured willing to pay
Sylvia is in the process of building an addition onto her used book store, which is
insured under a commercial property policy. About 40 days into the process, her
mother takes a bad fall and breaks her hip. Seeing that she needs to move closer
to her mom, Sylvia sells the book store. Her Builder's Risk coverage is terminated
because:
Sylvia no longer has insurable interest in the bui;ding
Sarah and a carload of her friends are driving to Vermont for the weekend when
she hits a deer, causing $10,000 in damages to her car and $5,000 in medical bills
for herself and her passengers. Which insurance coverage will pay for the
damages to Sarah's car?
Comprehensive
What document do insurance companies give to claimants when they think
something in the claim is not covered by the policy, but they are not sure yet?
Reservation of rights letter
