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GEORGIA “INDEPENDENT ADJUSTER” LICENSE COVERS
MULTIPLE LINES PRACTICE EXAM QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) PLUS RATIONALES 2025
The exam covers multiple lines, including property, casualty, liability, auto, and general insurance principles.
- What is the primary duty of an independent adjuster? A. Sell insurance policies B. Investigate and settle claims on behalf of the insurer C. Underwrite policies D. Offer legal advice
Independent adjusters are hired by insurers to assess claims, gather
evidence, and help determine settlements.
- Which of the following types of insurance would NOT typically be handled by an independent adjuster? A. Life insurance B. Auto insurance C. Commercial property insurance D. Liability insurance
Independent adjusters generally handle property and casualty claims;
life insurance is handled by specialized life insurance professionals.
- In Georgia, independent adjusters must be licensed by: A. U.S. Department of Insurance B. Georgia Office of Insurance and Safety Fire Commissioner C. Department of Labor D. Department of Commerce
The Georgia Office of Insurance and Safety Fire Commissioner regulates
the licensing of independent adjusters in the state.
- What is subrogation in insurance claims? A. The policyholder sues the at-fault party B. The insurer seeks recovery from a third party after paying a claim C. The policyholder recovers their deductible D. The insurer cancels a policy
Subrogation allows the insurer to recover costs from a third party that
caused the loss after compensating the insured.
- Which coverage pays for damage to your own vehicle in an at-fault accident? A. Liability coverage B. Collision coverage C. Comprehensive coverage D. Medical payments coverage
Collision coverage handles damages to your vehicle regardless of fault.
- An independent adjuster is expected to act with:
C. Independent adjusters only work auto claims D. Staff adjusters don’t require a license
Independent adjusters are hired by insurers or firms as needed, not as
full-time employees.
10.A covered peril causes fire damage to a business. The coverage for lost income is provided under: A. General liability insurance B. Commercial property coverage C. Business interruption insurance D. Equipment breakdown
Business interruption covers income lost during the restoration period.
11.Which of the following perils is typically covered under a standard homeowners policy? A. Earthquake B. Flood C. Fire D. War
Fire is one of the basic named perils covered under most standard
homeowners policies.
12.An insured has a liability limit of $100,000 per person and $300,000 per accident. Three people are injured. The total payout cannot exceed:
A. $100,
B. $200,
C. $300,
D. $400,
Per accident limits cap the total amount payable regardless of how
many individuals are involved.
13.Which part of an auto policy covers damage to the insured's vehicle not caused by a collision? A. Medical payments B. Uninsured motorist C. Collision D. Comprehensive
Comprehensive coverage pays for losses due to theft, hail, fire, and
vandalism.
14.The “Declarations” page of a policy includes all EXCEPT: A. Named insured B. Coverage limits C. Premium amount D. Policy definitions
Definitions are found in the policy's main body, not the declarations
page.
15.A deductible is:
18.An adjuster may deny a claim for which of the following reasons? A. The insured delayed reporting the claim B. The loss exceeded the deductible C. The loss was not covered by the policy D. The claimant was rude
Only losses covered by the policy language are eligible for payment.
19.A policy exclusion is: A. A situation or condition not covered by the policy B. An extension of coverage C. A limit on how much the insurer pays D. A way to avoid paying premiums
Exclusions specify which perils or events the policy does not cover.
20.A reservation of rights letter: A. Accepts liability for the claim B. Reserves the insurer's right to deny a claim after investigation C. Denies coverage immediately D. Cancels the policy
This letter informs the insured that coverage is being investigated and
may be denied.
21.Which type of adjuster is directly employed by an insurer? A. Staff adjuster B. Independent adjuster
C. Public adjuster D. General adjuster
Staff adjusters work directly for the insurance company as salaried
employees.
22.A public adjuster represents the: A. Insurance company B. Policyholder C. State government D. Court system
Public adjusters are hired by policyholders to help them get a fair
settlement.
23.What is salvage in property insurance? A. The total amount of a claim B. A deductible C. Remaining value of damaged property the insurer can sell D. A type of reinsurance
Salvage helps insurers recover some losses by reselling damaged goods.
24.The term "peril" refers to: A. The insured's risk profile B. The cause of a loss C. The deductible D. A policy provision
A. Wait until renewal B. Return no premium C. Provide notice and a prorated refund D. Charge an early termination fee
Insurers must refund unused premium and give notice before
cancellation.
29.What is insurable interest? A. A financial stake in the property being insured B. The insurer’s approval of a claim C. The deductible on a policy D. A coverage limit
You must stand to lose something of value if a loss occurs.
30.An adjuster must report suspected fraud to: A. The claimant B. No one C. The Georgia Insurance Commissioner D. The police
Suspected fraud must be reported to the Commissioner or authorized
agency.
31.The insured has $10,000 in coverage with a $1,000 deductible. The loss is $5,000. The insurer pays:
A. $10,
B. $5, 000
C. $4,
D. $1,
The insurer pays the covered amount minus the deductible.
32.Which is NOT a valid reason for claim denial? A. The claim is fraudulent B. The loss occurred before the policy started C. The loss was excluded D. The insured had prior claims
Past claims don’t justify denial unless relevant to the current loss.
33.Which document binds coverage before the policy is issued? A. Declaration B. Binder C. Rider D. Exclusion
A binder gives temporary insurance until the full policy is issued.
34.A homeowner’s insurance includes medical payments coverage for: A. The homeowner B. Guests injured on the premises C. Contractors D. Pets
A. Paying for any loss B. Restoring the insured to their pre-loss condition C. Paying market value D. Profit for the insurer
The principle of indemnity prevents the insured from profiting from a
loss.
39.An adjuster should avoid which of the following? A. Explaining policy coverage B. Giving legal advice C. Communicating with the insurer D. Taking statements
Adjusters are not licensed to give legal advice and must avoid doing so.
40.Loss of use coverage applies when: A. The insured can't live in the home due to a covered loss B. The home is rented C. There’s a liability claim D. There's flood damage
Loss of use pays for living expenses while the home is being repaired.
41.If an adjuster makes a settlement offer without investigating, it may be: A. Efficient B. Bad faith
C. Cost-saving D. Common practice
Failing to investigate before settling can violate fair claims laws.
42.What’s the purpose of a proof of loss? A. Replace the policy B. Sworn statement from the insured outlining the claim C. Cancel coverage D. Settle disputes
This document provides evidence supporting the insured’s loss claim.
43.The term "loss ratio" refers to: A. Claims paid divided by premiums received B. Deductibles plus claims C. Premiums vs commissions D. Policyholder satisfaction
Loss ratio measures how much of premiums are used for paying claims.
44.What does coinsurance encourage? A. Insuring property to value B. Lower premiums C. Adjuster involvement D. Underwriting
Coinsurance clauses penalize underinsured properties during claims.
45.Which best describes a rider?
C. Insurer D. Public adjuster
The insured must provide evidence supporting their claim.
49.The Fair Claims Settlement Practices regulation is designed to: A. Increase profits B. Reduce policy wording C. Ensure fair treatment of claimants D. Restrict competition
These laws require insurers and adjusters to act in good faith.
50.A non-renewal notice must be sent: A. The day coverage ends B. At least 30 days before expiration C. 60 days after expiration D. Only if requested
Georgia law requires insurers to notify insureds before the policy term
ends.
51.The Georgia Insurance Commissioner is responsible for: A. Writing insurance policies B. Regulating insurance industry practices in the state C. Investigating all claims D. Adjusting catastrophe claims
The Commissioner ensures that insurers and licensees comply with state
laws.
52.When must an adjuster notify the Commissioner of a change in address? A. Within 90 days B. Within 30 days C. During license renewal D. Not required
Adjusters are legally required to report address changes within 30 days.
53.A rider is also known as: A. A binder B. A declaration C. An endorsement D. A policy limit
Riders or endorsements modify the terms of the original insurance
policy.
54.The term "bodily injury" generally includes: A. Property damage B. Physical harm to a person, including sickness or death C. Emotional distress only D. Loss of use
Bodily injury covers physical harm, medical expenses, and related
claims.
A. Accidental B. Definite C. Intentional acts D. Measurable
Intentional acts by the insured are not covered; insurance is for
fortuitous losses only.
59.A temporary license in Georgia may be issued for: A. A public adjuster’s exam B. An employee of an insurer C. A surviving spouse of a deceased adjuster D. A person with a felony
Temporary licenses are granted in certain cases such as death or
disability of a licensee.
60.An adjuster who knowingly misrepresents facts during a claim may be guilty of: A. Harassment B. Poor service C. Unfair claims practice D. Procedural delay
Misrepresentation of claim facts is a prohibited unfair claims practice.
61.The time period in which an insured must file a claim is called:
A. The statute of limitations B. The reservation period C. The discovery clause D. The waiting period
Statutes of limitations define how long a person has to file a claim or
lawsuit.
62.The concept of “utmost good faith” means: A. Both parties must act honestly and fairly B. Insureds must pay premiums C. Adjusters must investigate quickly D. Insurers must pay all claims
Insurance contracts rely on honesty and disclosure by both insurer and
insured.
63.A “named peril” policy covers: A. Only specific perils listed in the policy B. All perils except exclusions C. Any accidental loss D. Bodily injury only
Named peril policies only cover events explicitly listed in the policy.
64.What is the primary purpose of insurance? A. Profit B. Transfer of risk
