Insurance Adjuster Exam Questions & Answers 2026 (1–10)

Question 1

What is the term for the initial report a policyholder makes to begin a claim?

TheoryPractice · Accepted Answer

First Notice of Loss. First Notice of Loss (FNOL) is the policyholder's initial report that triggers the claims process and starts applicable timelines for adjuster contact.

Question 2

Under most property policies, an insured's duty after a loss includes all of the following EXCEPT:

TheoryPractice · Accepted Answer

Determining the policy's coverage limits before reporting. Deciding coverage and limits is the adjuster's task. The insured's duties are notice, mitigation, protection of property, and cooperation.

Question 3

An adjuster sends a reservation of rights letter primarily to:

TheoryPractice · Accepted Answer

Investigate while preserving the right to later deny coverage. A reservation of rights notifies the insured that the insurer is investigating but may dispute coverage, preventing an unintended waiver of policy defenses.

Question 4

A 'proof of loss' is best described as:

TheoryPractice · Accepted Answer

A sworn statement of the amount and cause of loss. A proof of loss is a formal, usually sworn document in which the insured states the amount claimed and supporting facts; many policies require it within a set period.

Question 5

The MAIN purpose of a claim investigation is to:

TheoryPractice · Accepted Answer

Determine coverage, cause, and the value of the loss. Investigation gathers facts so the adjuster can decide whether coverage applies, what caused the loss, and the proper amount to pay.

Question 6

Setting a claim 'reserve' means the insurer:

TheoryPractice · Accepted Answer

Estimates and sets aside funds for the expected ultimate cost of the claim. A reserve is the insurer's good-faith estimate of the total amount it expects to pay on a claim, set aside on its financial statements.

Question 7

Subrogation allows an insurer that has paid a claim to:

TheoryPractice · Accepted Answer

Pursue recovery from the party legally responsible for the loss. After paying the insured, the insurer 'steps into the shoes' of the insured to recover from the at-fault third party, preventing double recovery.

Question 8

When an insurer takes title to damaged property after paying a total loss, the recovered property is called:

TheoryPractice · Accepted Answer

Salvage. Salvage is damaged property the insurer takes ownership of after settling; its sale proceeds offset the claim cost.

Question 9

Thorough, contemporaneous claim file documentation primarily serves to:

TheoryPractice · Accepted Answer

Support the adjuster's decisions and demonstrate good-faith handling. Good documentation records the basis for each decision, supports fair handling, and protects against bad-faith allegations.

Question 10

An independent adjuster differs from a staff (company) adjuster in that the independent adjuster:

TheoryPractice · Accepted Answer

Is hired on a contract basis by insurers rather than being an employee. Independent adjusters contract with one or more insurers to handle claims, whereas staff adjusters are direct employees of a single insurer.

Insurance Adjuster Exam Questions & Answers 2026 (1–10)

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