Alabama Adjusters License Exam Questions and
Answers (verified answers) 361 Questions
Accident Insurance – correct answer ✅Covers expenses associated with a covered
accident and can extend to ambulance and emergency room
expenses, intensive care, and hospital costs. Accident insurance also provides for
loss of income, and a
death benefit if injuries prove fatal
Accumulated Depreciation – correct answer ✅The total decrease in an item’s
value over a period of time. Formula: (annual depreciation x number of
years used). Subtract this number from the item’s replacement cost to get its
actual cash value (ACV).
Acreage Reporting Date – correct answer ✅In crop insurance, the deadline for
providing the insurer with an acreage report, which is used to
determine the amount of coverage needed and the premium charged for a
particular crop.
Actual Cash Value (ACV) – correct answer ✅A valuation method used by insurers
to reflect an item’s current market value right before being damaged
or destroyed. Formula: (replacement cost – accumulated depreciation)
Alabama Adjusters License Exam Questions and
Answers (verified answers) 361 Questions
Actual Production History – correct answer ✅A history of a farmer’s crop yields
over a multi-year period, which is used to determine the normal
production level of a farm.
Adhesion – correct answer ✅Characteristic of an insurance contract. Means that
one party (the insurer) sets the terms, and the other
(the policyholder) can “take it or leave it.
Adjusted Gross Revenue
(Crop Insurance) – correct answer ✅Narrowest (and least expensive) form of crop
revenue insurance. Insures farm revenue as a whole
instead of individual crops. Guarantees a percentage of the insured farm’s average
revenue.
Adjuster – correct answer ✅An agent who, for compensation, processes insurance
claims. The adjuster investigates the damages,
evaluates the claim, and makes a fair and equitable settlement based on the
insurance contract. Can
represent either the insured or the insurer.
Alabama Adjusters License Exam Questions and
Answers (verified answers) 361 Questions
Adjuster – Emergency – correct answer ✅Adjusters who are temporarily licensed
by the insurance commissioner to handle claims during
catastrophes or emergencies that produce an overwhelming number of claims in a
short period of time.
Adjuster – Independent – correct answer ✅Self-employed adjusters who contract
with multiple insurers at the same time. Paid on a commission or
fee-plus-expenses basis for each claim. Also called: Fee Adjuster, Bureau Adjuster.
Adjuster – Public – correct answer ✅An adjuster who is hired to represent the
claimant and help determine a fair indemnification. Usually
specializes in appraisals and negotiation. Paid commission, usually a percentage of
final settlement.
Adjuster – Staff – correct answer ✅Salaried employee of one insurance company
who can work locally, regionally, or nationally. Also called:
Company Adjuster
Advance Payment
Settlement – correct answer ✅A settlement option that lets the insurer offer
some financial relief to the claimant before the claim has
Alabama Adjusters License Exam Questions and
Answers (verified answers) 361 Questions
been fully settled. The insurer makes advance payments to the claimant, which
are then subtracted from
the final settlement amount. Often used when a claimant suffers bodily injury and
is unable to work.
Agency Authority – correct answer ✅The agent’s authority to act on behalf of
someone else (the principal), usually an insurer. This authority is
derived from the agent’s contract with the principal. It can be apparent, express,
or implied
Agency Authority –
Apparent – correct answer ✅Indirect authority that the agent can reasonably be
assumed to have, based on appearances. If an
adjuster is equipped to represent an insurer (with the insurer’s permission), then
an individual can assume
that the adjuster has the authority to act on the insurer’s behalf.
Agency Authority –
Express – correct answer ✅Authority that is expressly given to the agent in
writing. Allows the agent to act on behalf of the principal.
University of Alabama AL P&C Study Test Questions
(Verified Solutions) 2023
If a company cancels an auto policy mid-term, the refund will be made on a :
A. pro rata basis
B. short rate basis
C. retroactive basis
D. coinsurance basis – correct answer ✅A. Pro Rata Basis
What is the term used to describe terminating the insurance relationship at
the end of the policy period?
A. Cancellation
B. Nonrenewal
C. Separation
D. Exclusion – correct answer ✅B. Nonrenewal
Which is the best example of an indirect loss?
A. Sequential loss
University of Alabama AL P&C Study Test Questions
(Verified Solutions) 2023
B. Liability loss
C. Employee theft
D. Loss of use – correct answer ✅D. Loss of use
Which is a two party contract?
A. Property
B. Casualty
C. Liability
D. Auto – correct answer ✅A. Property
Insurance contracts offset
A. speculative risk
B. pure risk
C. gambling
D. created risk – correct answer ✅B. Pure risk
University of Alabama AL P&C Study Test Questions
(Verified Solutions) 2023
Which of the following is a third party contract?
A. Property
B. Casualty
C. Earthquake
D. Theft – correct answer ✅B. Casualty
Risk is best define as
A. chance of loss
B. certainty of loss
C. financial loss
D. sentimental loss – correct answer ✅A. chance of loss
Being subject to a loss is
A. liability
B. indemnity
University of Alabama AL P&C Study Test Questions
(Verified Solutions) 2023
C. exposure
D. subrogation – correct answer ✅C. exposure
The ranking insured in a Personal Lines contract is the
A. named insured
B. first named insured
C. mortgagee
D. husband – correct answer ✅A. named insured
To be paid a claim under a P & C contract, insurable interest must exist
A. At the time of application
B. on the policy date
C. at the time of loss
D. at the time of claim settlement – correct answer ✅C. at the time of loss
This type of company is run for the benefit of the policyowners:
Alabama Insurance: Property and Casualty Exam A
Questions (Latest 2023)
What is hazard? – correct answer ✅An increase in the possibility that a loss
might occur
What rating method involves modifying the premium based on the insureds
loss experience over a specified period of time? – correct answer
✅Experience Rating
In a particular state, an insurance company must file policy forms and rates
with the state the insurance department and wait for official approval before
using the new forms and rates. This is an example of a/an – correct answer
✅prior approval state
Which Surety bond guarantees that bills for labor and materials will be paid
by the contractor as they are due? – correct answer ✅Payment Bond
Which of the following can be insured under an unendorsed Homeowners
Policy?
a. farm
b. mobile home
c. dwelling that the owner rents to his cousin
Alabama Insurance: Property and Casualty Exam A
Questions (Latest 2023)
d. private residence in which the owner occupant also maintains an office for
her accounting business – correct answer ✅d
Which of the following losses to covered equipment would be covered under
the Equipment Breakdown Protection coverage form?
a. damage that occurs while the equipment is undergoing a pressure test
b. damage caused by fire
c. damage resulting from a windstorm
d. damage from an explosion caused by the centrifugal force of moving parts
- correct answer ✅d
Which of the following coverage’s IS included in the Homeowners policy but
is Not included in an endorsed Dwelling policy?
a. dwelling
b. other structures
c. personal property
d. liability – correct answer ✅d
Alabama State Licensing Exam Property and Casualty
(Verified Answers) (65 qs)
a company in chartered in Guam or Puerto Rico doing regular business in
new York would be considered by new workers to be a
- domestic company
- foreign company
- alien company
- international company – correct answer ✅2. foreign company
If a company cancels an auto policy mid-term, the refund will be made on a - Pro rata basis
- short rate basis
- retroactive basis
- coinsurance basis – correct answer ✅1. pro rata basis
What is the term used to describe terminating the insurance relationship at
the end of the policy period.
Alabama State Licensing Exam Property and Casualty
(Verified Answers) (65 qs)
- cancellation
- non renewal
- separation
- exclusion – correct answer ✅2. non renewal
Which is the best example of an indirect loss? - sequential loss
- liability loss
- employee theft
- loss of use – correct answer ✅4. loss of use
Which is a two party contract? - property
- casualty
- liability
- auto – correct answer ✅1. Property
Alabama State Licensing Exam Property and Casualty
(Verified Answers) (65 qs)
Insurance contracts offsets
- speculative risk
- pure risk
- gambling
- created risk – correct answer ✅2. pure risk
Which of the following is a third party contact? - property
- casualty
- earthquake
- theft – correct answer ✅2. casualty
Risk is best defined as - chance of loss