Alabama Adjuster’s License Exam Prep 2025–
2026 | 200 Practice Questions with Verified
Answers & Rationales, Comprehensive Study
Guide, Insurance Adjuster Test Bank, and
Licensing Review Materials
1. What is the primary role of an insurance adjuster?
o A) To sell insurance policies
o B) To evaluate claims and determine the amount payable
o C) To underwrite insurance applications
o D) To provide legal advice
Correct Answer: B
Rationale: The primary role of an insurance adjuster is to evaluate claims
and determine the amount of compensation an insured party is entitled to
based on policy coverage.
2. Which type of adjuster is typically employed directly by an insurance
company?
o A) Independent adjuster
o B) Staff adjuster
o C) Public adjuster
o D) Special adjuster
Correct Answer: B
Rationale: Staff adjusters are employees of the insurance company and
handle claims on behalf of the insurer.
3. What is the primary purpose of the claims adjuster's investigation?
o A) To deny claims
o B) To gather facts and assess the validity of the claim
o C) To sell additional coverage
o D) To prepare legal documents
Correct Answer: B
Rationale: The primary purpose of the adjuster’s investigation is to gather
facts to assess the validity and value of the claim.
,4. Which of the following describes a public adjuster?
o A) Works for the insurance company
o B) Represents the policyholder in negotiating claims
o C) Works on contingency for the insurer
o D) Is a government employee
Correct Answer: B
Rationale: A public adjuster is employed by the policyholder and
represents their interests in negotiations with the insurance company.
5. What is the role of the Alabama Department of Insurance in relation to
adjusters?
o A) To sell insurance products
o B) To regulate and license adjusters
o C) To provide legal representation
o D) To handle claims
Correct Answer: B
Rationale: The Alabama Department of Insurance regulates the
insurance industry, including the licensing of adjusters.
6. What is required to obtain an Alabama Adjuster's License?
o A) A college degree
o B) Experience in insurance sales
o C) Passing the state licensing examination
o D) A background in law
Correct Answer: C
Rationale: Candidates must pass the state licensing examination to
obtain an Alabama Adjuster's License.
7. What document outlines the duties and responsibilities of an insurance
adjuster?
o A) The policyholder's contract
o B) The adjuster's code of ethics
o C) The insurance application
, o D) The state regulations
Correct Answer: B
Rationale: The adjuster's code of ethics outlines their professional duties
and responsibilities.
8. Which of the following is NOT a type of insurance adjuster?
o A) Independent adjuster
o B) Staff adjuster
o C) Public adjuster
o D) Commercial adjuster
Correct Answer: D
Rationale: The term "commercial adjuster" is not an officially recognized
category of insurance adjusters.
9. What is the significance of the adjuster's report?
o A) It is a marketing tool
o B) It documents the findings and recommendations for the claim
o C) It is used for training purposes
o D) It is a legal document for court
Correct Answer: B
Rationale: The adjuster's report documents the findings and provides
recommendations regarding the claim.
10. What should an adjuster do if they suspect fraud during a claim
investigation?
o A) Ignore the signs
o B) Report the suspicion to the insurance company
o C) Confront the policyholder
o D) Deny the claim immediately
Correct Answer: B
Rationale: If fraud is suspected, the adjuster should report their findings
to the insurance company for further investigation.
11. How often must an Alabama adjuster renew their license?
, o A) Every year
o B) Every two years
o C) Every three years
o D) Every five years
Correct Answer: B
Rationale: Alabama adjusters must renew their licenses every two years.
12. What is the main purpose of a claim file?
o A) To store marketing materials
o B) To maintain a record of the claim process and decisions
o C) To provide legal documentation
o D) To track sales performance
Correct Answer: B
Rationale: A claim file serves as a comprehensive record of the claim
process, including all communications and findings.
13. Which of the following is a key responsibility of an adjuster?
o A) Selling insurance policies
o B) Evaluating losses and determining claim settlements
o C) Underwriting insurance applications
o D) Providing legal advice to clients
Correct Answer: B
Rationale: A key responsibility of an adjuster is to evaluate losses and
determine appropriate settlements for claims.
14. What should an adjuster consider when evaluating property damage?
o A) The age of the property
o B) The owner's personal feelings
o C) The extent and cause of the damage
o D) The property’s market value
Correct Answer: C
Rationale: The adjuster must assess the extent and cause of the damage
to determine the appropriate settlement.
2026 | 200 Practice Questions with Verified
Answers & Rationales, Comprehensive Study
Guide, Insurance Adjuster Test Bank, and
Licensing Review Materials
1. What is the primary role of an insurance adjuster?
o A) To sell insurance policies
o B) To evaluate claims and determine the amount payable
o C) To underwrite insurance applications
o D) To provide legal advice
Correct Answer: B
Rationale: The primary role of an insurance adjuster is to evaluate claims
and determine the amount of compensation an insured party is entitled to
based on policy coverage.
2. Which type of adjuster is typically employed directly by an insurance
company?
o A) Independent adjuster
o B) Staff adjuster
o C) Public adjuster
o D) Special adjuster
Correct Answer: B
Rationale: Staff adjusters are employees of the insurance company and
handle claims on behalf of the insurer.
3. What is the primary purpose of the claims adjuster's investigation?
o A) To deny claims
o B) To gather facts and assess the validity of the claim
o C) To sell additional coverage
o D) To prepare legal documents
Correct Answer: B
Rationale: The primary purpose of the adjuster’s investigation is to gather
facts to assess the validity and value of the claim.
,4. Which of the following describes a public adjuster?
o A) Works for the insurance company
o B) Represents the policyholder in negotiating claims
o C) Works on contingency for the insurer
o D) Is a government employee
Correct Answer: B
Rationale: A public adjuster is employed by the policyholder and
represents their interests in negotiations with the insurance company.
5. What is the role of the Alabama Department of Insurance in relation to
adjusters?
o A) To sell insurance products
o B) To regulate and license adjusters
o C) To provide legal representation
o D) To handle claims
Correct Answer: B
Rationale: The Alabama Department of Insurance regulates the
insurance industry, including the licensing of adjusters.
6. What is required to obtain an Alabama Adjuster's License?
o A) A college degree
o B) Experience in insurance sales
o C) Passing the state licensing examination
o D) A background in law
Correct Answer: C
Rationale: Candidates must pass the state licensing examination to
obtain an Alabama Adjuster's License.
7. What document outlines the duties and responsibilities of an insurance
adjuster?
o A) The policyholder's contract
o B) The adjuster's code of ethics
o C) The insurance application
, o D) The state regulations
Correct Answer: B
Rationale: The adjuster's code of ethics outlines their professional duties
and responsibilities.
8. Which of the following is NOT a type of insurance adjuster?
o A) Independent adjuster
o B) Staff adjuster
o C) Public adjuster
o D) Commercial adjuster
Correct Answer: D
Rationale: The term "commercial adjuster" is not an officially recognized
category of insurance adjusters.
9. What is the significance of the adjuster's report?
o A) It is a marketing tool
o B) It documents the findings and recommendations for the claim
o C) It is used for training purposes
o D) It is a legal document for court
Correct Answer: B
Rationale: The adjuster's report documents the findings and provides
recommendations regarding the claim.
10. What should an adjuster do if they suspect fraud during a claim
investigation?
o A) Ignore the signs
o B) Report the suspicion to the insurance company
o C) Confront the policyholder
o D) Deny the claim immediately
Correct Answer: B
Rationale: If fraud is suspected, the adjuster should report their findings
to the insurance company for further investigation.
11. How often must an Alabama adjuster renew their license?
, o A) Every year
o B) Every two years
o C) Every three years
o D) Every five years
Correct Answer: B
Rationale: Alabama adjusters must renew their licenses every two years.
12. What is the main purpose of a claim file?
o A) To store marketing materials
o B) To maintain a record of the claim process and decisions
o C) To provide legal documentation
o D) To track sales performance
Correct Answer: B
Rationale: A claim file serves as a comprehensive record of the claim
process, including all communications and findings.
13. Which of the following is a key responsibility of an adjuster?
o A) Selling insurance policies
o B) Evaluating losses and determining claim settlements
o C) Underwriting insurance applications
o D) Providing legal advice to clients
Correct Answer: B
Rationale: A key responsibility of an adjuster is to evaluate losses and
determine appropriate settlements for claims.
14. What should an adjuster consider when evaluating property damage?
o A) The age of the property
o B) The owner's personal feelings
o C) The extent and cause of the damage
o D) The property’s market value
Correct Answer: C
Rationale: The adjuster must assess the extent and cause of the damage
to determine the appropriate settlement.
