Free Adjuster - All Lines Practice Questions

Sample Practice Questions

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

1. 1A fire policy claim involves direct damage from an identified peril. Which peril is within the core fire coverage described by the NAIC?

   1. A. Lightning striking the insured building
   2. B. Floodwater entering the insured building
   3. C. Earth movement beneath the insured building
   4. D. Burglary of contents from the insured building

   Answer: A

   Explanation: "damage caused by the peril of fire or lightning" Fire coverage includes lightning damage to insured real or personal property. The other perils require different coverage analysis.

   Reference: NAIC Glossary of Insurance Terms — Glossary, Fire

2. 2A loss report mentions faulty wiring, nearby dry brush, absent sprinklers, and the fire that damaged the building. Which item is the peril?

   1. A. The faulty wiring that raised the chance of ignition
   2. B. The dry brush that increased the fire exposure
   3. C. The lack of sprinklers that increased possible damage
   4. D. The fire that directly caused the building damage

   Answer: D

   Explanation: "Peril - the cause of property damage or personal injury" A peril is the damage-causing event; the other facts are circumstances affecting loss probability or severity. "Hazard - circumstance which tends to increase the probability or severity of a loss."

   Reference: NAIC Glossary of Insurance Terms — Glossary, Peril

3. 3Who must hold a Texas adjuster license before investigating a property claim for an insurer?

   1. A. A person acting as an adjuster
   2. B. The insured's attorney
   3. C. A repair estimator only
   4. D. A fact witness

   Answer: A

   Explanation: TIC §4101.051 states that a person "may not act as or represent that the person is an adjuster" unless licensed; therefore the person acting as the adjuster needs the license.

   Reference: Texas Constitution and Statutes — §4101.051

4. 4A driver causes a collision while using her personal car. Which loss belongs under her auto liability coverage?

   1. A. Repairs to her own car after the collision
   2. B. Repairs to the other driver's car after the collision
   3. C. Repairs to her own car after a hailstorm
   4. D. Repairs to her own car after a theft

   Answer: B

   Explanation: "Liability insurance pays to repair or replace the other driver’s car" Auto liability pays for the other driver's property after the insured is at fault; first-party vehicle losses call for physical-damage coverage.

   Reference: Texas Department of Insurance Auto insurance guide — Auto insurance guide, Is auto insurance required?

5. 5A warehouse is destroyed. Which person clearly has an insurable financial interest in that warehouse?

   1. A. A broker hoping to earn a commission on a future sale
   2. B. A lender holding an unpaid mortgage secured by it
   3. C. A contractor who once quoted a repair on the site
   4. D. A former owner who was fully paid at closing

   Answer: B

   Explanation: "Any financial interest a person has in the property or person insured." An unpaid secured mortgage exposes the lender to financial loss if the property is damaged. The other relationships do not establish a current financial stake in the building itself.

   Reference: Texas Department of Insurance Home Insurance Glossary — Home Insurance Glossary, Insurable interest

6. 6What minimum age applies to an individual seeking a Texas adjuster license?

   1. A. 17
   2. B. 18
   3. C. 19
   4. D. 21

   Answer: B

   Explanation: TIC §4101.053 requires that the applicant "is at least 18 years of age"; 18 is therefore the minimum.

   Reference: Texas Constitution and Statutes — §4101.053

7. 7A plumbing company uses its van for service calls, and the van causes an accident. Which coverage line addresses liability from that business vehicle?

   1. A. Businessowners property coverage
   2. B. Personal auto liability coverage
   3. C. Commercial auto liability coverage
   4. D. Commercial crime coverage

   Answer: C

   Explanation: "Commercial auto insurance includes liability and property damage protection for cars, trucks and vans that you use for business." The van is used for business, which places its auto liability exposure in commercial auto rather than a personal or property/crime line.

   Reference: Texas Department of Insurance Commercial property insurance guide — Commercial property insurance guide, Auto coverage

8. 8A covered property loss is $12,000, with a $2,000 deductible and no other applicable limit. What amount is payable by the insurer?

   1. A. $2,000
   2. B. $12,000
   3. C. $10,000
   4. D. $14,000

   Answer: C

   Explanation: "The amount the insured must pay in a loss before any payment is due from the company." The insured bears $2,000 before insurer payment, leaving $10,000 of the $12,000 covered loss.

   Reference: Texas Department of Insurance Home Insurance Glossary — Home Insurance Glossary, Deductible

9. 9Which personal qualification must a Texas adjuster applicant demonstrate?

   1. A. Two years of claims work
   2. B. Texas property ownership
   3. C. Trustworthiness
   4. D. Carrier appointment

   Answer: C

   Explanation: TIC §4101.053 expressly requires that the applicant "is trustworthy"; trustworthiness is the listed personal qualification.

   Reference: Texas Constitution and Statutes — §4101.053

10. 10A thief takes a homeowner's sofa and clothing from the residence. Which homeowners coverage part addresses those items?

    1. A. Dwelling coverage for the residence building
    2. B. Other structures coverage for detached buildings
    3. C. Personal liability coverage for third-party injury
    4. D. Personal property coverage for household belongings

    Answer: D

    Explanation: "Personal property coverage pays if your furniture, clothing, and other things you own are stolen, damaged, or destroyed." The stolen sofa and clothing are household belongings; they are not a building or a liability claim.

    Reference: Texas Department of Insurance Home insurance guide — Home insurance guide, Types of home insurance coverages