Free CAPP Loss Adjustment Manual (LAM) exam Practice Questions

Sample Practice Questions

Try these 10 sample questions from the CAPP Loss Adjustment Manual (LAM) exam practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

1. 1Unless otherwise specified, and assuming the delay is not due to the insured’s failure to provide information, from what point does the LAM say simple interest is paid on an unpaid net indemnity?

   1. A. From the 61st day after the insured first gives notice of damage or loss to the AIP
   2. B. From the 61st day after the insured signs, dates, and submits the properly completed claim
   3. C. From the 61st day after the adjuster completes the final inspection of the loss unit
   4. D. From the 61st day after the calendar date for the end of the insurance period

   Answer: B

   Explanation: The LAM (Subparagraph 2A(4)) states that "simple interest will be paid from the 61st day on the net indemnity after the insured signs, dates, and submits the properly completed claim". The notice date, inspection date, and end of the insurance period are other claim milestones, but none of them starts the interest clock.

   Reference: Loss Adjustment Manual (LAM) Standards Handbook, FCIC-25010 (01-2026) — Part 1, Paragraph 2, Subparagraph 2A(4), page 5

2. 2A unit’s claim was completed using a Certification Form. Per the LAM, the 61st day for paying interest on this claim is counted from which signature date?

   1. A. The insured’s signature date on the production worksheet
   2. B. The agent’s signature date on the notice of loss form
   3. C. The adjuster or approving officer’s signature date
   4. D. The insured’s signature date on the Certification Form

   Answer: C

   Explanation: The LAM (Subparagraph 2A(5)) lists situations "on which interest should be paid from the 61st day of the adjuster or approving officer’s signature date rather than the insured’s signature date." The first listed situation is: "Certification Form has been used on the unit;". The insured’s signature on the worksheet or on the Certification Form does not start the clock in this situation.

   Reference: Loss Adjustment Manual (LAM) Standards Handbook, FCIC-25010 (01-2026) — Part 1, Paragraph 2, Subparagraph 2A(5), page 5

3. 3Before any loss adjustment or contract service can begin, the LAM requires the AIP to verify that the insured, and which other persons, are eligible for insurance?

   1. A. All persons holding an interest of 20 percent or more in the entity
   2. B. All persons holding an interest of 25 percent or more in the entity
   3. C. All persons holding an interest of 35 percent or more in the entity
   4. D. All persons holding an interest of 10 percent or more in the entity

   Answer: D

   Explanation: The LAM (Subparagraph 2A(3)) directs the AIP to "verify that the insured and all who have an interest of ten percent (10%) or more are eligible for insurance and the entity is legal." The 20, 25, and 35 percent figures are real LAM thresholds from other rules (the 20 percent replant minimum, the 25 percent tillage limit, and the 35 percent first-crop payment), not the eligibility threshold.

   Reference: Loss Adjustment Manual (LAM) Standards Handbook, FCIC-25010 (01-2026) — Part 1, Paragraph 2, Subparagraph 2A(3), page 5

4. 4Apart from taking notices of loss or as otherwise specified in the handbook, when may a sales agent perform loss adjustment duties under the LAM?

   1. A. Only outside the agent’s selling and servicing area as described in the SRA
   2. B. Only when no contracted adjuster can inspect the loss within 72 hours
   3. C. Only when the insured consents in writing to the agent’s assignment
   4. D. Only on claims the AIP has already classified as no indemnity due

   Answer: A

   Explanation: The LAM (Subparagraph 2B) states that sales agents, local agency employees, or sales representatives "cannot perform loss adjustment duties unless outside of their selling and servicing area as described in the SRA." Adjuster shortages, insured consent, and the expected claim outcome do not create an exception.

   Reference: Loss Adjustment Manual (LAM) Standards Handbook, FCIC-25010 (01-2026) — Part 1, Paragraph 2, Subparagraph 2B, page 6

5. 5During an indemnity inspection, an insured asks whether to carry a damaged crop to harvest or plant another crop. What does the LAM require the adjuster to do?

   1. A. Recommend whichever option is expected to minimize the indemnity due
   2. B. Explain the policy options without advising which option to choose
   3. C. Recommend whichever option is expected to maximize the insured’s payment
   4. D. Refer the question to the sales agent who services the insured’s policy

   Answer: B

   Explanation: The LAM (Subparagraph 2B(13)) tells the adjuster to "explain what the insured’s options are under the terms and conditions of the policy, but in no way provide advice or suggestions that could affect the insured’s decision concerning these options". Steering the insured in either direction, or handing the question to the agent, does not meet this requirement.

   Reference: Loss Adjustment Manual (LAM) Standards Handbook, FCIC-25010 (01-2026) — Part 1, Paragraph 2, Subparagraph 2B(13), page 8

6. 6An insured asks the adjuster which herbicide and tillage program to use on the farm next season. According to the LAM, how must the adjuster respond?

   1. A. Give a recommendation based on the adjuster’s own field observations
   2. B. Refer the insured to the AIP’s underwriting staff for a recommendation
   3. C. Advise the insured to consult with an agricultural expert on the matter
   4. D. Describe the practices that other insured producers in the area followed

   Answer: C

   Explanation: The LAM (Subparagraph 2B(14)) bars adjusters from advising on the insured’s farming operation and states: "If the insured solicits the adjuster’s advice, the adjuster must advise the insured to consult with an agricultural expert." Giving the adjuster’s own advice, sending the insured to underwriting, or describing neighbors’ practices are not the prescribed response.

   Reference: Loss Adjustment Manual (LAM) Standards Handbook, FCIC-25010 (01-2026) — Part 1, Paragraph 2, Subparagraph 2B(14), page 8

7. 7An adjuster is releasing insured acreage so the insured can put it to another use. Unless the procedures specify otherwise, what kind of consent must the adjuster give?

   1. A. Verbal consent, with the date noted later in the claim file
   2. B. Verbal consent, confirmed afterward by the insured’s agent
   3. C. Consent recorded only in the AIP’s electronic claims system
   4. D. Written consent provided by the adjuster to the insured

   Answer: D

   Explanation: The LAM (Subparagraph 2B(21)) states: "Adjusters must provide written consent (not verbal consent, unless specified otherwise in these procedures) to the insured when the adjuster is releasing acreage to:" destroy it, put it to another use, replant it, or abandon it. Verbal consent, agent confirmation, or an internal system entry alone does not satisfy the rule.

   Reference: Loss Adjustment Manual (LAM) Standards Handbook, FCIC-25010 (01-2026) — Part 1, Paragraph 2, Subparagraph 2B(21), page 9

8. 8Before finalizing a claim, an adjuster checks acreage insurability. Absent an exception, which history requirement does the LAM cite for the acreage on which the insured crop is planted?

   1. A. A crop was planted and harvested or insured on it in one of the three previous crop years
   2. B. A crop was planted and harvested or insured on it in one of the two previous crop years
   3. C. A crop was planted and harvested or insured on it in each of the three previous crop years
   4. D. A crop was planted and harvested or insured on it in one of the five previous crop years

   Answer: A

   Explanation: The LAM (Subparagraph 2B(22)) gives this example: "one of the insurability requirements of acreage is that the acreage upon which the insured crop is planted has had a crop planted and harvested or insured in one of the three previous CYs", unless an exception in the CIH applies. Two years, five years, or every one of the three years are not the stated test.

   Reference: Loss Adjustment Manual (LAM) Standards Handbook, FCIC-25010 (01-2026) — Part 1, Paragraph 2, Subparagraph 2B(22), page 9

9. 9A claims reviewer finds an error on a claim for indemnity form before the form is processed for payment. Which correction method does the LAM prescribe for the reviewer?

   1. A. Erase the error, write the correction, have the insured initial it, and explain it in the Narrative
   2. B. Line through the error, write the correction, initial and date it, and explain it on a Special Report
   3. C. Void the form, prepare a new claim, have both parties sign it, and keep the void form in the file
   4. D. Line through the error, write the correction, have the agent initial it, and log it in the system

   Answer: B

   Explanation: Under Subparagraph 2B(24)(b), the reviewer will "line through the incorrect information and replace with the correct information;", initial and date the change, and "document on an attached Special Report the reason why the correction/change was needed." Erasing, voiding and re-preparing the claim, or having the agent initial the change are not the prescribed method.

   Reference: Loss Adjustment Manual (LAM) Standards Handbook, FCIC-25010 (01-2026) — Part 1, Paragraph 2, Subparagraph 2B(24)(b)(i), page 9

10. 10An adjuster photographs crop conditions to support a claim, but the camera cannot record GPS coordinates. What must each photo contain instead?

    1. A. A handwritten caption with the field number, unit number, and legal description
    2. B. The insured or the insured’s representative standing in the photographed field
    3. C. An identifiable object in the background that shows where it was taken
    4. D. A date and time stamp generated by the camera when the photo was taken

    Answer: C

    Explanation: The LAM (Subparagraph 2B(25)(a)) states that "if GPS coordinates cannot be obtained due to the limitations of the camera being used, each photo must contain an identifiable object in the background to show where the picture was taken (e.g., buildings, tree grove, etc.);". Including the insured in the picture is only something the adjuster should attempt, and a caption or time stamp does not show the location.

    Reference: Loss Adjustment Manual (LAM) Standards Handbook, FCIC-25010 (01-2026) — Part 1, Paragraph 2, Subparagraph 2B(25)(a), page 10