Alabama Adjusters License Exam Questions and Answers (verified answers) 361 Questions
Question 1: What does accident insurance cover?
CORRECT ANSWER : Accident insurance covers expenses
associated with a covered accident and can extend to ambulance and emergency room expenses, intensive care, and hospital costs. It also provides for loss of income, and a death benefit if injuries prove fatal.
Question 2: What is accumulated depreciation and how is it
calculated?
CORRECT ANSWER : Accumulated depreciation is 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).
Question 3: What is the acreage reporting date in crop
insurance?
CORRECT ANSWER : In crop insurance, the acreage
reporting date is 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.
Question 4: What is actual cash value (ACV) and how is it
calculated?
CORRECT ANSWER : Actual cash value (ACV) is 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).
Question 5: What is actual production history in farming?
CORRECT ANSWER : Actual production history is 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.
Question 6: What does adhesion mean in the context of an
insurance contract?
CORRECT ANSWER : Adhesion is a characteristic of an
insurance contract. It means that one party (the insurer) sets the terms, and the other (the policyholder) can "take it or leave it."
Question 7: What is adjusted gross revenue in crop insurance?
CORRECT ANSWER : Adjusted gross revenue is the
narrowest (and least expensive) form of crop revenue insurance. It insures farm revenue as a whole instead of individual crops and guarantees a percentage of the insured farm's average revenue.
Question 8: What is an adjuster in insurance?
CORRECT ANSWER : An adjuster is 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.
Question 9: What is an emergency adjuster?
CORRECT ANSWER : Emergency adjusters 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.
Question 10: What is an independent adjuster?
CORRECT ANSWER : Independent adjusters are self-
employed adjusters who contract with multiple insurers at the same time. They are paid on a commission or fee-plus-
expenses basis for each claim. Also called: Fee Adjuster,
Bureau Adjuster.
Question 11: What is a public adjuster?
CORRECT ANSWER : A public adjuster is an adjuster who
is hired to represent the claimant and help determine a fair indemnification. They usually specialize in appraisals and negotiation and are paid commission, usually a percentage of the final settlement.