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Georgia Adjuster License Practice Exam
Questions And Correct Answers (Verified
Answers) Plus Rationales 2025
This exam covers topics like insurance law, types of coverage, claims processes, and Georgia-specific regulations.
- What is the primary duty of an insurance adjuster in Georgia? A. Sell insurance policies B. Investigate and settle insurance claims C. Represent policyholders in court D. Establish insurance laws An adjuster’s main responsibility is to investigate, evaluate, and settle claims fairly and promptly.
- Which of the following is NOT considered an unfair claims settlement practice in Georgia? A. Misrepresenting policy provisions B. Failing to act promptly on claims C. Offering fair settlements D. Requesting proof of loss Requesting proof of loss is a legitimate part of the claims process.
- Under Georgia law, how long does an adjuster have to acknowledge receipt of a claim? A. 10 business days B. 15 calendar days C. 30 calendar days D. 45 business days Georgia requires acknowledgment of a claim within 15 calendar days.
- What type of adjuster works on behalf of the insured? A. Independent adjuster B. Public adjuster C. Staff adjuster D. Catastrophe adjuster Public adjusters represent policyholders, not insurers.
- In Georgia, an adjuster license must be renewed: A. Every year B. Every 6 months C. Every 2 years D. Every 4 years Georgia adjuster licenses must be renewed every 2 years.
- What is a deductible? A. A portion the insurer pays B. A type of policy limit
Liability insurance covers third-party injuries or property damage for which the insured is legally responsible. 10.What is a reservation of rights letter? A. A letter denying coverage B. A letter stating the insurer is investigating while reserving the right to deny coverage C. A bill for premiums D. A renewal notice This letter protects insurers while they investigate claims that may not be covered. 11.In Georgia, what must happen before an adjuster license is issued? A. Payment of claim taxes B. Completion of required prelicensing education and passing the exam C. Background check only D. Submission of claim samples Applicants must complete education requirements and pass the exam. 12.The term "actual cash value" means: A. Replacement cost B. Loan value C. Replacement cost minus depreciation D. Market value Actual cash value accounts for depreciation.
13.Which law prohibits unfair methods of competition in insurance? A. HIPAA B. McCarran-Ferguson Act C. Unfair Trade Practices Act D. Federal Trade Act The Unfair Trade Practices Act regulates ethical insurance conduct. 14.In Georgia, how many hours of continuing education are required every renewal cycle? A. 10 B. 24 C. 30 D. 15 Georgia requires 24 hours of CE every two years. 15.Which of the following is a duty of the insured after a loss? A. Sell damaged property B. Notify the insurer promptly C. Ignore the situation D. Cancel the policy Prompt notice of loss is required to initiate the claims process. 16.What does a "proof of loss" form do? A. It replaces the claim file B. It officially documents the amount and circumstances of a loss
A. It is cheaper B. It reimburses for the full cost of new items C. It includes depreciation D. It pays cash value Replacement cost pays for new items without factoring depreciation. 21.Which document gives authority to an adjuster? A. License certificate B. Letter of authority C. Business card D. Policy declaration page A letter of authority permits an adjuster to act on the insurer's behalf. 22.A nonresident adjuster must: A. Retake the Georgia licensing exam B. Hold a license in good standing in their home state C. Be sponsored by a Georgia resident D. Pay double the license fee Nonresident adjusters are recognized if their home state offers reciprocity. 23.The "standard of care" in claims handling refers to: A. How nice the adjuster is B. The reasonable actions expected from professionals C. The type of car covered D. The age of the policyholder
The standard of care is a legal expectation of professional behavior. 24.If an insured exaggerates a claim intentionally, it is considered: A. Mistake B. Insurance fraud C. Omission D. Subrogation Inflating claims knowingly is insurance fraud. 25.What is the purpose of an adjuster's investigation? A. Sell more policies B. Avoid paying claims C. Determine coverage, liability, and damages D. Hire contractors Investigation ensures accurate and fair claim settlement. 26.Under property insurance, what perils are typically excluded? A. Fire and wind B. Theft and lightning C. Earthquake and flood D. Smoke and vandalism Standard policies exclude earthquake and flood unless added. 27.The first party in an insurance contract is: A. The claimant B. The insured
31.Which of the following best describes “loss reserve”? A. The maximum policy limit B. Estimated amount the insurer sets aside for a claim C. Commission paid to an adjuster D. Policyholder’s deductible Loss reserve is the insurer’s estimate of the amount needed to settle a claim. 32.Which of the following types of insurance adjusts claims involving bodily injury and property damage to others? A. Property insurance B. Workers’ compensation C. Liability insurance D. Life insurance Liability insurance protects against damages to others caused by the insured. 33.What is an adjuster’s primary responsibility during a catastrophe (CAT) situation? A. Refuse small claims B. Only handle fire claims C. Process claims quickly, fairly, and efficiently D. Refer all claims to home office In catastrophe events, adjusters must expedite fair claim resolution. 34.Which of the following is NOT considered part of the claim file? A. Recorded statements B. Damage estimates
C. Marketing brochures D. Photographs of the damage Marketing brochures are not relevant to claim documentation. 35.In Georgia, a licensed adjuster must report a change of address within: A. 90 days B. 10 days C. 30 days D. 60 days Address changes must be reported to the Georgia Department of Insurance within 30 days. 36.A liability policy with limits of 25/50/25 means: A. $25,000 per person, $25,000 per accident, $50,000 property damage B. $25,000 per person, $50,000 per accident, $25,000 property damage C. $50,000 per person, $25,000 per accident, $25,000 property damage D. $25,000 property damage, $25,000 bodily injury total, $50,000 per person The format is: $25,000 bodily injury per person, $50,000 per accident, $25, property damage. 37.What is the purpose of an exclusion in an insurance policy? A. To increase premiums B. To define covered perils C. To remove specific risks from coverage D. To clarify endorsements Exclusions clearly state what risks or losses are not covered under the policy.
C. Failing to affirm or deny coverage within a reasonable time D. Asking for a recorded statement Delays in confirming or denying coverage violate fair claims practices. 42.Georgia law requires insurers to notify claimants of acceptance or denial of a claim within: A. 10 days B. 30 days C. 60 days D. 90 days Insurers must notify claimants of acceptance or denial within 60 days of receiving proof of loss. 43.Which of the following is NOT considered a third party in a liability claim? A. Injured pedestrian B. Damaged property owner C. Bystander with losses D. The insured The insured is the first party; third parties are external claimants. 44.Which coverage would apply if an insured’s tree falls on a neighbor’s car? A. Collision B. Comprehensive C. Liability D. Medical payments Liability coverage pays for damage the insured causes to others' property.
45.What is "good faith" in claim handling? A. Favoring the insurer B. Ignoring the policyholder’s concerns C. Fair, honest, and prompt handling of claims D. Only denying all claims Good faith means acting ethically and fairly throughout the claims process. 46.Which term describes damage that happens over time due to repeated exposure? A. Sudden loss B. Accident C. Occurrence D. Intentional act An occurrence can involve continuous or repeated exposure causing damage. 47.Under Georgia law, how long must claim records be maintained? A. 6 months B. 2 years C. 3 years D. 5 years Claims records must be retained for a minimum of 3 years. 48.A “declaration page” in an insurance policy includes: A. Adjuster’s contact information B. Named insured, policy limits, and effective dates
C. To resolve disputes over the value of loss D. To confirm liability The appraisal clause provides a method for resolving disagreements about the amount of a loss. 52.Which of the following perils is typically excluded from a standard homeowners policy? A. Fire B. Hail C. Flood D. Theft Flood is usually excluded and requires a separate policy (NFIP or private). 53.What type of damages are awarded to punish the wrongdoer? A. Special damages B. Punitive damages C. Compensatory damages D. General damages Punitive damages are meant to punish and deter wrongful conduct. 54.A liability claim for slander or libel falls under which coverage? A. Medical payments B. Personal injury liability C. Bodily injury D. Products liability Slander and libel are types of personal injury, not bodily injury.
55.What does the term "reservation of rights" mean? A. Denying a claim B. Accepting full liability C. The insurer reserves the right to deny the claim while investigating D. Filing a lawsuit It protects the insurer's rights while investigating questionable coverage. 56.The pro rata clause in insurance policies is used to: A. Pay the full claim amount B. Reimburse the insured for lost income C. Prevent overpayment when multiple policies exist D. Cancel duplicate policies Pro rata ensures each insurer pays its fair share if multiple policies apply. 57.What is a binder? A. A denial letter B. A temporary insurance contract C. A deductible summary D. A cancellation notice A binder provides immediate, temporary coverage before the formal policy is issued. 58.A “statute of limitations” refers to: A. The amount of coverage B. The time limit to file a lawsuit or claim
62.If an adjuster knowingly falsifies a claim document, it is considered: A. An error B. An oversight C. Fraud D. Arbitration Knowingly falsifying documents is a serious ethical and legal violation called fraud. 63.What is comparative negligence? A. Only one party can be at fault B. No one is at fault C. Each party’s percentage of fault reduces their recovery D. The insurer is always at fault In comparative negligence, recovery is reduced based on each party’s share of fault. 64.Georgia follows which negligence system? A. Pure contributory B. Modified comparative C. No-fault D. Absolute Georgia follows a modified comparative negligence rule (50% bar rule). 65.What is the purpose of coinsurance in property policies? A. Avoid taxes B. Reduce premiums only
C. Encourage policyholders to insure property to value D. Deny coverage Coinsurance requires adequate insurance coverage or a penalty applies. 66.A temporary license in Georgia is valid for up to: A. 30 days B. 60 days C. 6 months (180 days) D. 1 year Temporary licenses can be issued for a maximum of 180 days. 67.Which is NOT a typical duty of an adjuster? A. Investigate claims B. Determine coverage C. Negotiate settlements D. Represent claimants in court Adjusters do not act as legal representatives in court. 68.In Georgia, when must insurers pay accepted claims? A. Within 10 days B. Within 10 business days after accepting liability C. Within 30 days D. After policy expiration Payment is required within 10 business days of accepting liability. 69.The definition of "accident" in liability insurance generally includes:
