Texas All-Lines Adjuster Exam | Questions and
Answers & Rationales | 2025/2026 | Latest Update |
Instant Download !!
1. The primary purpose of an insurance adjuster is to:
a. Recommend policy changes
b. Represent the insured in all disputes
c. Investigate, evaluate, and settle claims (Correct)
d. Issue new insurance contracts
Rationale: Adjusters handle claim resolution according to policy terms, not
underwriting or sales.
2. Under Texas law, an adjuster must renew their license:
a. Every year
b. Every 3 years
c. Every 2 years (Correct)
d. Only when instructed by TDI
Rationale: Texas Department of Insurance requires biennial renewal with CE
completion.
3. What is the required continuing education for Texas adjusters?
a. 12 hours
b. 24 hours including 2 hours ethics (Correct)
,c. 36 hours
d. No CE requirement
Rationale: Texas requires 24 CE hours, including 2 hours of ethics, every 2 years.
4. What is indemnity in insurance?
a. Guarantee of profit
b. Putting the insured back to pre-loss condition (Correct)
c. Increasing coverage after loss
d. Paying more than the loss
Rationale: Indemnity prevents gain or loss, restoring the insured to their previous
financial condition.
5. Subrogation allows an insurer to:
a. Pay the insured twice
b. Recover from a negligent third party (Correct)
c. Cancel the policy
d. Ignore liability laws
Rationale: Subrogation transfers recovery rights to the insurer after paying the
insured.
6. A material fact is one that:
a. Only the agent needs
b. Affects the acceptance of the risk (Correct)
c. Is optional for underwriting
d. Is unrelated to coverage
,Rationale: Material facts influence the insurer’s decision regarding coverage.
7. The adjuster’s first step in the claims process is to:
a. Submit final report
b. Evaluate damages
c. Contact the insured (Correct)
d. Close the file
Rationale: Timely contact establishes expectations and begins investigation.
8. What is actual cash value (ACV)?
a. Replacement cost minus depreciation (Correct)
b. Market value
c. Assessed value
d. Replacement cost only
Rationale: ACV accounts for depreciation based on age and condition.
9. Replacement cost coverage pays:
a. Market value
b. Original purchase price
c. Cost to replace with new like-kind item (Correct)
d. Depreciated value
Rationale: RCV does not subtract depreciation.
10. Which act regulates fair claim handling in Texas?
, a. Gramm-Leach-Bliley Act
b. Texas Insurance Code §541 and §542 (Correct)
c. Civil Rights Act
d. OSHA
Rationale: These sections govern unfair settlement practices and prompt payment of
claims.
11. The adjuster must acknowledge a claim within:
a. 7 days
b. 15 days (Correct)
c. 20 days
d. 30 days
Rationale: Texas Prompt Payment of Claims Act requires acknowledgment within 15
days.
12. An adjuster must maintain records for:
a. 6 months
b. 1 year
c. 2 years (Correct)
d. 5 years
Rationale: Texas law requires keeping adjuster files for at least 2 years.
13. What is proximate cause?
a. The last event in a series
b. The direct, efficient cause of the loss (Correct)
Answers & Rationales | 2025/2026 | Latest Update |
Instant Download !!
1. The primary purpose of an insurance adjuster is to:
a. Recommend policy changes
b. Represent the insured in all disputes
c. Investigate, evaluate, and settle claims (Correct)
d. Issue new insurance contracts
Rationale: Adjusters handle claim resolution according to policy terms, not
underwriting or sales.
2. Under Texas law, an adjuster must renew their license:
a. Every year
b. Every 3 years
c. Every 2 years (Correct)
d. Only when instructed by TDI
Rationale: Texas Department of Insurance requires biennial renewal with CE
completion.
3. What is the required continuing education for Texas adjusters?
a. 12 hours
b. 24 hours including 2 hours ethics (Correct)
,c. 36 hours
d. No CE requirement
Rationale: Texas requires 24 CE hours, including 2 hours of ethics, every 2 years.
4. What is indemnity in insurance?
a. Guarantee of profit
b. Putting the insured back to pre-loss condition (Correct)
c. Increasing coverage after loss
d. Paying more than the loss
Rationale: Indemnity prevents gain or loss, restoring the insured to their previous
financial condition.
5. Subrogation allows an insurer to:
a. Pay the insured twice
b. Recover from a negligent third party (Correct)
c. Cancel the policy
d. Ignore liability laws
Rationale: Subrogation transfers recovery rights to the insurer after paying the
insured.
6. A material fact is one that:
a. Only the agent needs
b. Affects the acceptance of the risk (Correct)
c. Is optional for underwriting
d. Is unrelated to coverage
,Rationale: Material facts influence the insurer’s decision regarding coverage.
7. The adjuster’s first step in the claims process is to:
a. Submit final report
b. Evaluate damages
c. Contact the insured (Correct)
d. Close the file
Rationale: Timely contact establishes expectations and begins investigation.
8. What is actual cash value (ACV)?
a. Replacement cost minus depreciation (Correct)
b. Market value
c. Assessed value
d. Replacement cost only
Rationale: ACV accounts for depreciation based on age and condition.
9. Replacement cost coverage pays:
a. Market value
b. Original purchase price
c. Cost to replace with new like-kind item (Correct)
d. Depreciated value
Rationale: RCV does not subtract depreciation.
10. Which act regulates fair claim handling in Texas?
, a. Gramm-Leach-Bliley Act
b. Texas Insurance Code §541 and §542 (Correct)
c. Civil Rights Act
d. OSHA
Rationale: These sections govern unfair settlement practices and prompt payment of
claims.
11. The adjuster must acknowledge a claim within:
a. 7 days
b. 15 days (Correct)
c. 20 days
d. 30 days
Rationale: Texas Prompt Payment of Claims Act requires acknowledgment within 15
days.
12. An adjuster must maintain records for:
a. 6 months
b. 1 year
c. 2 years (Correct)
d. 5 years
Rationale: Texas law requires keeping adjuster files for at least 2 years.
13. What is proximate cause?
a. The last event in a series
b. The direct, efficient cause of the loss (Correct)
