New York Adjuster Exam ACTUAL
UPDATED Exam Questions and CORRECT
Answers
Insurance - CORRECT ANSWER A method of handling pure risk, by spreading it over a
large number of similar individuals.
Law of Large Numbers - CORRECT ANSWER Insurers can calculate their probable losses
and establish premium rates that are accurate enough to cover claims, pay operating expenses,
and make a profit.
Principle of Indemnity - CORRECT ANSWER An insured who suffered a loss, should only
be restored to the approximate financial condition that existed prior to the loss, no better and no
worse.
Insurance Interest - CORRECT ANSWER A person must have a lawful, substantial, and
economic interest in the life, health, property, or object being covered under the insurance
contract.
Risk - CORRECT ANSWER The possibility that a loss might occur and is the reason that
people buy insurance.
Pure Risk - CORRECT ANSWER A situation where there is only the possibility of a loss,
there is never the possibility of a profit or financial gain.
Speculative Risk - CORRECT ANSWER A situation where either a profit or loss is possible.
Peril - CORRECT ANSWER Actual cause of a loss, for example, fire, windstorm or hail.
Hazard - CORRECT ANSWER A condition that increases the possibility, of severity of a
loss.
, Moral Hazard - CORRECT ANSWER A condition that increases the probability that a person
will intentionally cause, create, or inflate a loss.
Morale Hazard - CORRECT ANSWER A condition of inattention to, or disregard for one's
own life, health, property, or behavior, that increases the frequency or severity of a loss.
Risk Avoidance - CORRECT ANSWER Avoiding the hazard.
Transfer of Risk - CORRECT ANSWER A person can transfer their risk to an insurance
company, in exchange for paying a premium.
Contract - CORRECT ANSWER An agreement between two or more parties that is
enforceable by law.
C.L.O.C. - CORRECT ANSWER Competent Parties/Capacity to Contract; Legal Purpose;
Offer and Acceptance; Consideration
D.I.C.E. - CORRECT ANSWER Declarations; Insuring Agreement; Conditions; Exclusions
Representation - CORRECT ANSWER Statements made on an application for insurance that
are true to the applicant's best knowledge and belief.
Misrepresentation - CORRECT ANSWER Untrue statements made by the insured or insurer,
usually at the time when an application is made.
Fraud - CORRECT ANSWER An intentional act designed to deceive and induce another
party to part with something of value.
UPDATED Exam Questions and CORRECT
Answers
Insurance - CORRECT ANSWER A method of handling pure risk, by spreading it over a
large number of similar individuals.
Law of Large Numbers - CORRECT ANSWER Insurers can calculate their probable losses
and establish premium rates that are accurate enough to cover claims, pay operating expenses,
and make a profit.
Principle of Indemnity - CORRECT ANSWER An insured who suffered a loss, should only
be restored to the approximate financial condition that existed prior to the loss, no better and no
worse.
Insurance Interest - CORRECT ANSWER A person must have a lawful, substantial, and
economic interest in the life, health, property, or object being covered under the insurance
contract.
Risk - CORRECT ANSWER The possibility that a loss might occur and is the reason that
people buy insurance.
Pure Risk - CORRECT ANSWER A situation where there is only the possibility of a loss,
there is never the possibility of a profit or financial gain.
Speculative Risk - CORRECT ANSWER A situation where either a profit or loss is possible.
Peril - CORRECT ANSWER Actual cause of a loss, for example, fire, windstorm or hail.
Hazard - CORRECT ANSWER A condition that increases the possibility, of severity of a
loss.
, Moral Hazard - CORRECT ANSWER A condition that increases the probability that a person
will intentionally cause, create, or inflate a loss.
Morale Hazard - CORRECT ANSWER A condition of inattention to, or disregard for one's
own life, health, property, or behavior, that increases the frequency or severity of a loss.
Risk Avoidance - CORRECT ANSWER Avoiding the hazard.
Transfer of Risk - CORRECT ANSWER A person can transfer their risk to an insurance
company, in exchange for paying a premium.
Contract - CORRECT ANSWER An agreement between two or more parties that is
enforceable by law.
C.L.O.C. - CORRECT ANSWER Competent Parties/Capacity to Contract; Legal Purpose;
Offer and Acceptance; Consideration
D.I.C.E. - CORRECT ANSWER Declarations; Insuring Agreement; Conditions; Exclusions
Representation - CORRECT ANSWER Statements made on an application for insurance that
are true to the applicant's best knowledge and belief.
Misrepresentation - CORRECT ANSWER Untrue statements made by the insured or insurer,
usually at the time when an application is made.
Fraud - CORRECT ANSWER An intentional act designed to deceive and induce another
party to part with something of value.
