ADJUSTER PRO- INSURANCE ADJUSTER TEST REAL
EXAM 250+ QUESTIONS AND CORRECT ANSWERS|
AGRADE
Greg plays trombone in his school band during football games. During a rally song in
the stands one day, Greg annoys one of the opposing team's fans, who grabs his
$400 trombone and hurls it down the bleachers, completely destroying it. Greg's
insurance pays him $400 to replace the trombone, but then the opposing team's
coach also offers to replace the instrument, at whatever the cost. So Greg orders a
new $3,200 trombone and has the opposing team's athletic department absorb the
cost. Which principle has Greg violated? - ANSWER: The Principle of Indemnity
The fee paid by the insured in exchange for an insurance policy is called a: -
ANSWER: Premium
Which of the following best describes a Fraternal Benefit Society? - ANSWER: A. A
fraternal benefit society is a for-profit provider of insurance.
B. A fraternal benefit society is a social organization based around common interests
and beliefs.
C. A fraternal benefit society uses investors' money to pay claims.
Fraternal Benefit Societies are non-profit, mutual aid organizations that engage
primarily in charitable activities. They offer their members insurance against death,
disease, and disability.
D. A fraternal benefit society pays dividends to its stockholders.
Answer: B
Bobby just purchased an insurance policy for his home from XYZ Insurance. Which of
the following would be a reason this policy may not be legally binding? - ANSWER: A.
Bobby is only 19 years old.
B. Bobby paid his first premium when he and his agent agreed on a policy, but he is
waiting for the policy documents to be prepared so he can sign them.
C. Bobby has an outstanding warrant for selling marijuana.
A contract is only legally binding if both parties are competent. If Bobby is not
mentally competent, he cannot enter into a contract.
D. Bobby has been diagnosed as mentally incompetent.
Answer: D
In a __________, only one party is legally obligated to perform. - ANSWER: A.
contract of adhesion
B. unilateral contract
C. conditional contract
That is incorrect. In a unilateral contract, only one party is legally obligated to
perform.
D. contract of utmost good faith
,Answer: B. Unilateral contract
Mark incurred $8,000 damage to his car in an accident. He received $8,000 from his
insurance company and $4,000 from the other driver. By receiving a profit from the
loss, Mark could be in violation of: - ANSWER: A. the principle of profit and loss.
B. the principle of financial status.
C. the principle of financial restoration.
D. the principle of indemnity.
Answer: D
In which section of an insurance policy might you find the following statement?
"'We, us, and our' refers to ABC Insurance company." - ANSWER: A. Exclusions
B. Definitions
C. Declarations
D. Conditions
Answer: B
Which of the following is NOT a characteristic of insurance contracts? - ANSWER: A.
Aleatory
B. Universal
C. Conditional
D. Unilateral
Answer: B
Which of the following is NOT a requirement for a legally binding contract? -
ANSWER: A. There must be a legal purpose.
B. There must be mutual consent.
C. It must be a notarized document.
D. Both parties must bring something of value.
Answer: C
Xavier owns a small insurance company. Recently the company won a bid to insure a
new housing development in Omaha, NE. His company can handle any claims that
arise, but if a series of tornados were to tear through the area and destroy the entire
development, Xavier's company would suffer financially. Which type of insurer could
help Xavier's company protect itself the most from this potential loss? - ANSWER: A.
A re-insurer
B. A stock insurer
C. A reciprocal insurance group
D. A fraternal benefits society
Answer: A
,Which of the following would you find in the Conditions section of an insurance
policy? - ANSWER: A. Causes of loss that are not covered
B. The insured's duty after a loss
C. Policy limits
D. The meaning of certain important words in the contract
Answer: B
Which section of an insurance policy is designed to OMIT certain risks from
coverage? - ANSWER: A. Coverage Forms
B. Insuring Agreement
C. Definitions
D. Exclusions
Answer: D
SureTrust Insurance was founded and operates in Texas. In Texas, SureTrust is
considered: - ANSWER: A. a domestic insurer.
B. a state insurer.
C. an alien insurer.
D. a foreign insurer.
Answer: A
Frank purchases an automobile policy from publicly-traded XYZ Insurance. He pays
regular monthly premiums, and also purchases stock in XYZ and receives dividends
when the company turns a profit. From which type of company has Frank purchased
insurance? - ANSWER: A. Stock insurer
B. Mutual insurer
C. Re-Insurer
D. Reciprocal insurer
Answer: A
A "hazard" is defined as: - ANSWER: A. an insured item.
B. something that increases the chance of a loss.
C. the likelihood of experiencing a loss.
D. an unexpected event that causes loss.
Answer: B
When Louise goes online and fills out phony applications with XYZ Auto Insurance in
order to print the temporary insurance cards and sell them for a profit on the black
market, she is: - ANSWER: A. using a Ponzi Scheme.
B. using a regular business practice.
C. committing soft fraud.
, D. committing hard fraud.
Answer: D
Which of the following situations does NOT involve an insurable risk? - ANSWER: A.
Melody just bought a gas station and convenience store.
B. Dale just bought 30 shares of a hot new startup company online.
C. Hank just bought a new outboard motor for his fishing boat.
D. Christine just bought her husband an expensive new watch.
Answer: B
Dr. Nelson routinely schedules her patients for lab tests that they don't need so she
can charge their insurers for more money. - ANSWER: A. operating within the letter
of the law, if not its intent.
B. committing a tortfeasor.
C. committing subrogation.
D. committing health insurance fraud.
Answer: D
Six Stars Development Company has just purchased several large properties in Las
Vegas. As a result of this large purchase, they are a little short on money and decide
to save money by not purchasing insurance on their new properties. Six Stars is
practicing: - ANSWER: A. risk retention.
B. risk reduction.
C. risk transference.
D. risk avoidance.
Answer: A
Six Stars Development Company has just been offered a great deal on ten large
properties in Las Vegas. The economy in Las Vegas has been declining recently, but
the CEO of Six Stars expects it to recover soon. This could be an exceptional
opportunity for Six Stars, but it's also pretty risky. Ultimately, the Six Stars executive
team decides not to purchase the properties. This is an example of: - ANSWER: A.
risk avoidance.
B. risk retention.
C. risk transference.
D. risk reduction.
Answer: A
Which of the following is a hazard? - ANSWER: A. Lightning
B. A driver's tendency to text while driving
C. A skiing accident
D. Vandalism
EXAM 250+ QUESTIONS AND CORRECT ANSWERS|
AGRADE
Greg plays trombone in his school band during football games. During a rally song in
the stands one day, Greg annoys one of the opposing team's fans, who grabs his
$400 trombone and hurls it down the bleachers, completely destroying it. Greg's
insurance pays him $400 to replace the trombone, but then the opposing team's
coach also offers to replace the instrument, at whatever the cost. So Greg orders a
new $3,200 trombone and has the opposing team's athletic department absorb the
cost. Which principle has Greg violated? - ANSWER: The Principle of Indemnity
The fee paid by the insured in exchange for an insurance policy is called a: -
ANSWER: Premium
Which of the following best describes a Fraternal Benefit Society? - ANSWER: A. A
fraternal benefit society is a for-profit provider of insurance.
B. A fraternal benefit society is a social organization based around common interests
and beliefs.
C. A fraternal benefit society uses investors' money to pay claims.
Fraternal Benefit Societies are non-profit, mutual aid organizations that engage
primarily in charitable activities. They offer their members insurance against death,
disease, and disability.
D. A fraternal benefit society pays dividends to its stockholders.
Answer: B
Bobby just purchased an insurance policy for his home from XYZ Insurance. Which of
the following would be a reason this policy may not be legally binding? - ANSWER: A.
Bobby is only 19 years old.
B. Bobby paid his first premium when he and his agent agreed on a policy, but he is
waiting for the policy documents to be prepared so he can sign them.
C. Bobby has an outstanding warrant for selling marijuana.
A contract is only legally binding if both parties are competent. If Bobby is not
mentally competent, he cannot enter into a contract.
D. Bobby has been diagnosed as mentally incompetent.
Answer: D
In a __________, only one party is legally obligated to perform. - ANSWER: A.
contract of adhesion
B. unilateral contract
C. conditional contract
That is incorrect. In a unilateral contract, only one party is legally obligated to
perform.
D. contract of utmost good faith
,Answer: B. Unilateral contract
Mark incurred $8,000 damage to his car in an accident. He received $8,000 from his
insurance company and $4,000 from the other driver. By receiving a profit from the
loss, Mark could be in violation of: - ANSWER: A. the principle of profit and loss.
B. the principle of financial status.
C. the principle of financial restoration.
D. the principle of indemnity.
Answer: D
In which section of an insurance policy might you find the following statement?
"'We, us, and our' refers to ABC Insurance company." - ANSWER: A. Exclusions
B. Definitions
C. Declarations
D. Conditions
Answer: B
Which of the following is NOT a characteristic of insurance contracts? - ANSWER: A.
Aleatory
B. Universal
C. Conditional
D. Unilateral
Answer: B
Which of the following is NOT a requirement for a legally binding contract? -
ANSWER: A. There must be a legal purpose.
B. There must be mutual consent.
C. It must be a notarized document.
D. Both parties must bring something of value.
Answer: C
Xavier owns a small insurance company. Recently the company won a bid to insure a
new housing development in Omaha, NE. His company can handle any claims that
arise, but if a series of tornados were to tear through the area and destroy the entire
development, Xavier's company would suffer financially. Which type of insurer could
help Xavier's company protect itself the most from this potential loss? - ANSWER: A.
A re-insurer
B. A stock insurer
C. A reciprocal insurance group
D. A fraternal benefits society
Answer: A
,Which of the following would you find in the Conditions section of an insurance
policy? - ANSWER: A. Causes of loss that are not covered
B. The insured's duty after a loss
C. Policy limits
D. The meaning of certain important words in the contract
Answer: B
Which section of an insurance policy is designed to OMIT certain risks from
coverage? - ANSWER: A. Coverage Forms
B. Insuring Agreement
C. Definitions
D. Exclusions
Answer: D
SureTrust Insurance was founded and operates in Texas. In Texas, SureTrust is
considered: - ANSWER: A. a domestic insurer.
B. a state insurer.
C. an alien insurer.
D. a foreign insurer.
Answer: A
Frank purchases an automobile policy from publicly-traded XYZ Insurance. He pays
regular monthly premiums, and also purchases stock in XYZ and receives dividends
when the company turns a profit. From which type of company has Frank purchased
insurance? - ANSWER: A. Stock insurer
B. Mutual insurer
C. Re-Insurer
D. Reciprocal insurer
Answer: A
A "hazard" is defined as: - ANSWER: A. an insured item.
B. something that increases the chance of a loss.
C. the likelihood of experiencing a loss.
D. an unexpected event that causes loss.
Answer: B
When Louise goes online and fills out phony applications with XYZ Auto Insurance in
order to print the temporary insurance cards and sell them for a profit on the black
market, she is: - ANSWER: A. using a Ponzi Scheme.
B. using a regular business practice.
C. committing soft fraud.
, D. committing hard fraud.
Answer: D
Which of the following situations does NOT involve an insurable risk? - ANSWER: A.
Melody just bought a gas station and convenience store.
B. Dale just bought 30 shares of a hot new startup company online.
C. Hank just bought a new outboard motor for his fishing boat.
D. Christine just bought her husband an expensive new watch.
Answer: B
Dr. Nelson routinely schedules her patients for lab tests that they don't need so she
can charge their insurers for more money. - ANSWER: A. operating within the letter
of the law, if not its intent.
B. committing a tortfeasor.
C. committing subrogation.
D. committing health insurance fraud.
Answer: D
Six Stars Development Company has just purchased several large properties in Las
Vegas. As a result of this large purchase, they are a little short on money and decide
to save money by not purchasing insurance on their new properties. Six Stars is
practicing: - ANSWER: A. risk retention.
B. risk reduction.
C. risk transference.
D. risk avoidance.
Answer: A
Six Stars Development Company has just been offered a great deal on ten large
properties in Las Vegas. The economy in Las Vegas has been declining recently, but
the CEO of Six Stars expects it to recover soon. This could be an exceptional
opportunity for Six Stars, but it's also pretty risky. Ultimately, the Six Stars executive
team decides not to purchase the properties. This is an example of: - ANSWER: A.
risk avoidance.
B. risk retention.
C. risk transference.
D. risk reduction.
Answer: A
Which of the following is a hazard? - ANSWER: A. Lightning
B. A driver's tendency to text while driving
C. A skiing accident
D. Vandalism
