Free Property/Casualty Adjuster Practice Questions

Sample Practice Questions

Try these 10 sample questions from the Property/Casualty Adjuster practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

1. 1A warehouse owner asks an adjuster to describe the uncertainty that a future fire could cause a loss. Which insurance term describes that uncertainty?

   1. A. Risk
   2. B. Peril
   3. C. Hazard
   4. D. Loss

   Answer: A

   Explanation: "Risk - Uncertainty concerning the possibility of loss by a peril for which insurance is pursued." The possible future loss is the uncertainty itself. A peril is the cause, a hazard increases the chance or severity, and a loss is the damage once it occurs.

   Reference: NAIC Glossary of Insurance Terms — Risk

2. 2A cause of property damage is not specifically listed among a form's covered perils, and no exclusion applies. Which coverage form can address that cause, subject to its other terms?

   1. A. Named-perils property form
   2. B. Basic causes of loss form
   3. C. Broad causes of loss form
   4. D. Open-perils property form

   Answer: D

   Explanation: "The policy will be either a named-perils policy, which will list the types of losses covered, or an all-risk policy, which lists the types of coverages excluded by the policy." The NAIC also describes basic and broad forms as enumerating covered causes and a special form as extending to other direct physical losses except exclusions. An unlisted, nonexcluded cause therefore points to the open-perils approach.

   Reference: NAIC Understanding Your Homeowners or Renter's Policy — The Policy—Insuring Agreement

3. 3An adjuster needs to verify the listed insured premises and the effective policy period before assessing a claim. Which part of the policy supplies that information?

   1. A. Policy application
   2. B. Notice of claim
   3. C. Loss estimate
   4. D. Declarations page

   Answer: D

   Explanation: "The declaration/information page identifies the policy number, the effective dates, the address of the insured property" so the declarations supply the listed premises and term. An application records a request for coverage, notice of claim reports a loss, and a loss estimate values damage; none is the policy section that states these particulars.

   Reference: NAIC Understanding Your Homeowners or Renter's Policy — The Policy—declaration/information page

4. 4A homeowner has dozens of damaged possessions and some surviving purchase records. Which documentation should the adjuster request to identify each damaged or destroyed item?

   1. A. A sworn proof of loss with purchase receipts
   2. B. A preloss appraisal with purchase receipts
   3. C. A depreciation worksheet with purchase receipts
   4. D. A home inventory with available receipts

   Answer: D

   Explanation: "A list of all damaged or destroyed personal property (a home inventory list) and receipts, if you have them" is the NAIC's requested item-by-item evidence. The proof formally states the claim, an appraisal values selected property before loss, and a depreciation worksheet calculates values; none is the insured's loss-specific inventory.

   Reference: NAIC Post-Disaster Claims Guide — Reporting An Insurance Claim—other information or paperwork

5. 5A homeowner seeks one policy providing dwelling, household-contents, and personal-liability coverage. Which product is designed as that package?

   1. A. Dwelling fire insurance
   2. B. Renters insurance
   3. C. Personal umbrella insurance
   4. D. Homeowners insurance

   Answer: D

   Explanation: "Homeowners Insurance - a package policy combining real and personal property coverage with personal liability coverage." Homeowners coverage combines the specified property and liability exposures. Renters coverage does not insure the dwelling, umbrella adds excess liability, and dwelling fire coverage is not the same package.

   Reference: NAIC Glossary of Insurance Terms — Homeowners Insurance

6. 6After a hearing, what may the Rhode Island commissioner do when assistance furnished to a claims adjuster involves an unfair practice?

   1. A. Issue a written order requiring the practice to stop
   2. B. Impose a prison sentence without court action
   3. C. Void every policy handled by the adjuster
   4. D. Transfer the claim to a public adjuster

   Answer: A

   Explanation: The statute requires an order "requiring the discontinuance of that act or practice." This directly requires the improper practice to stop.

   Reference: Title 27 Insurance — R.I. Gen. Laws section 27-10-10

7. 7During a claim review, a windstorm tore shingles from a building. What insurance term describes the windstorm in this account?

   1. A. Direct loss
   2. B. Peril
   3. C. Physical hazard
   4. D. Pure risk

   Answer: B

   Explanation: "Peril - the cause of property damage or personal injury, origin of desire for insurance." The windstorm caused the damage. A hazard would increase susceptibility, risk is uncertainty, and loss is the resulting damage.

   Reference: NAIC Glossary of Insurance Terms — Peril

8. 8In a Rhode Island property-injury action, a claimant has $100,000 in damages and is found 60% negligent. Under the comparative-negligence statute, what damages remain after the fault reduction?

   1. A. $40,000
   2. B. $0
   3. C. $60,000
   4. D. $100,000

   Answer: A

   Explanation: "shall not bar a recovery, but damages shall be diminished by the finder of fact in proportion to the amount of negligence attributable to the person injured," The claimant's 60% fault reduces the $100,000 award by $60,000. Fault above half does not bar recovery under this statute.

   Reference: Rhode Island General Laws § 9-20-4 — R.I. Gen. Laws § 9-20-4

9. 9After a property loss, an adjuster needs to find the insured's contractual duties for reporting and documenting the loss. Which policy section should be checked?

   1. A. General conditions
   2. B. Insuring agreement
   3. C. Exclusions section
   4. D. Declarations page

   Answer: A

   Explanation: "The general conditions section explains what you are expected to do in case of a loss." The conditions set the insured's postloss duties. The insuring agreement states coverage, exclusions remove coverage, and declarations identify policy particulars.

   Reference: NAIC Understanding Your Homeowners or Renter's Policy — The Policy—general conditions section

10. 10A covered storm damages a home's roof and forces the residents to stay in a hotel during repairs. Which item is the resulting indirect loss of use?

    1. A. The additional temporary housing expense
    2. B. The torn roofing materials themselves
    3. C. The broken window glass itself
    4. D. The damaged living-room furniture itself

    Answer: A

    Explanation: "Most homeowners policies also will pay the additional expenses you have if you can’t stay in your home because of damage from a covered disaster." The hotel cost follows from loss of use; the NAIC defines direct loss as "damage to covered real or personal property caused by a covered peril." Roof, window and furniture damage are physical losses.

    Reference: NAIC Post-Disaster Claims Guide — Safe and Sound—additional living expenses