FREE Property & Casualty Insurance License Test Claims Process & Adjusting Questions and Answers

Question 1

An insured suffers a covered loss and submits a claim to their insurer.
The insurer, after investigation, determines that the actual cash value (ACV) of the damaged property is $15,000, but the insured is demanding $20,000.
Which of the following is the most appropriate next step for the insurer to take in the claims process?

Accepted Answer

Explain the basis for the ACV calculation and attempt to negotiate a settlement.

Answer

Immediately pay the $20,000 to avoid legal action.

Answer

Deny the claim outright due to the disagreement on value.

Answer

Require the insured to obtain three independent appraisals before further discussion.

Question 2

Which of the following actions by an insured is typically considered a 'duty after loss' required by most property insurance policies?

Accepted Answer

Provide prompt notice of the loss to the insurer or agent.

Answer

Immediately begin repairs to prevent further damage, then notify the insurer.

Answer

Wait for the adjuster to arrive before taking any steps to protect the property.

Answer

Discard damaged property immediately to clear the premises.

Question 3

An independent adjuster is hired by an insurance company to investigate a complex commercial property claim. What is the primary role of this independent adjuster?

Accepted Answer

To evaluate the loss, determine coverage, and recommend a settlement amount to the insurer.

Answer

To represent the insured's interests and advocate for the highest possible settlement.

Answer

To sell new insurance policies to the claimant.

Answer

To provide legal advice to both the insurer and the insured regarding the claim.

Question 4

During the claims investigation, an adjuster discovers evidence that the insured intentionally caused the damage to their property. Which of the following policy provisions or principles would most likely be invoked by the insurer?

Accepted Answer

Concealment or Fraud

Answer

Subrogation

Answer

Appraisal Clause

Answer

Liberalization Clause

Question 5

What is the primary purpose of a 'Proof of Loss' form in the claims process?

Accepted Answer

To provide the insurer with a sworn statement detailing the loss and claimed amount.

Answer

To serve as the initial notification of the loss to the insurer.

Answer

To authorize the insurer to begin repairs on the damaged property.

Answer

To transfer ownership of the damaged property to the insurer for salvage.

Question 6

After a hurricane, a claims adjuster is assessing damage to multiple homes in a devastated area. One of the homes has extensive roof damage, but the homeowner also claims damage to personal belongings due to a pre-existing leak that was not repaired. The policy explicitly excludes damage caused by neglect. How should the adjuster handle the claim for the personal belongings?

Accepted Answer

Approve the roof damage, but deny the personal belongings claim based on the neglect exclusion.

Answer

Approve all claimed damage, as the hurricane was a major event.

Answer

Deny the entire claim because of the pre-existing condition.

Answer

Recommend that the homeowner repair the pre-existing leak first, then resubmit the claim for personal belongings.