ADJUSTER PRO EXAM/ ADJUSTER PRO-
PRACTICE REAL EXAM 400 QUESTIONS
AND CORRECT ANSWERS
GUARANTEED A+
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
PRACTICE REAL EXAM 400 QUESTIONS
AND CORRECT ANSWERS
GUARANTEED A+
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
