Free AR-ADJ Practice Questions

Question 1

After a tenant's customer sues a building owner, the owner requests a defense from the tenant's liability insurer. The lease required the tenant to add the owner as an additional insured. The owner appears only as certificate holder, and the complete policy contains no provision granting the owner insured status. What controls the owner's claim to insured status?

Accepted Answer

The policy terms; neither the lease nor the certificate alone creates insured status.

Answer

The certificate, which gives the owner the tenant's liability coverage.

Answer

The lease, which obligates the insurer to defend the building owner.

Answer

The allegations against the tenant, which give the owner access to the tenant's defense coverage.

Question 2

Fourteen working days have passed since an Arkansas property insurer received a properly executed proof of loss for water damage. An engineer's report is still needed to determine the cause, and the delay is reasonable. The claim cannot yet be accepted or denied. Which response meets the insurer's immediate obligation?

Accepted Answer

Send the insured a written explanation of the delay within 15 working days after receiving the proof.

Answer

Deny without prejudice at 15 working days; reconsider when the engineer's report arrives.

Answer

Restart the 15-working-day decision period when the engineer submits the completed report.

Answer

Wait until the 45-calendar-day investigation period expires before sending an additional-time notice.

Question 3

A homeowner attributes foundation cracks to an insured contractor's recent driveway work. Current photographs show the cracks, but a dated inspection from before the work shows a similar pattern. Neither record establishes whether the cracks widened. How should the adjuster address these competing explanations?

Accepted Answer

Compare pre-work and current findings for new cracking or aggravation attributable to the contractor.

Answer

Deny the foundation claim because the inspection proves cracks existed before the work.

Answer

Value all foundation repairs as new damage because discovery followed the driveway work.

Answer

Suspend adjustment and refer for fraud investigation because the pre-work record conflicts with the owner's discovery account.

Question 4

A renewal review shows 28 approved continuing-education hours, with one hour designated as ethics. The licensee is a self-employed nonresident adjuster who qualified in Arkansas by examination, and no exemption applies. The credits all belong to the current two-year cycle. Which finding belongs in the review?

Accepted Answer

The total hours are sufficient, but the three-hour ethics minimum has not been met.

Answer

The record is deficient; Arkansas requires 24 approved hours in each year rather than in each renewal cycle.

Answer

The record is sufficient; excess general hours can replace the missing ethics hours.

Answer

The record is deficient; three ethics hours are required in addition to 24 general hours.

Question 5

For a covered equipment loss, a policy pays actual cash value initially and eligible replacement cost after replacement, subject to one $1,000 deductible for the loss. The insurer already paid $10,200 after depreciation and that deductible. Replacement is now complete. The invoice includes $16,000 for like-kind replacement and a $2,600 capacity upgrade that is not covered. All replacement conditions are met, and the policy limit does not restrict recovery. What additional payment is due?

Accepted Answer

$4,800

Answer

$3,800

Answer

$5,800

Answer

$7,400

Question 6

At a storm-damaged home, an adjuster notices a strong gas odor near the entrance. The owner is preparing to go inside to retrieve receipts. Neither the gas utility nor emergency personnel has assessed the site. What takes priority?

Accepted Answer

Keep everyone away and contact emergency responders or the gas utility from a safe location.

Answer

Have the owner close the nearest interior gas valve before the adjuster enters to document the loss.

Answer

Photograph the entryway first to preserve evidence of the initial scene.

Answer

Ventilate through exterior doors, then enter once the gas odor has diminished.

Question 7

A claims manager proposes: 'The $14,500 building payment is approved, but hold it until the homeowner agrees to our contents valuation.' The building claim is fully investigated and ready for payment. The disputed contents claim falls under a separate coverage. Which instruction should replace the manager's proposal?

Accepted Answer

Issue the building payment without making settlement of the contents claim a condition.

Answer

Wait until the contents valuation is resolved so the insurer can close both coverage files together.

Answer

Obtain a release of all claims from the event before issuing the otherwise undisputed building payment.

Answer

Refer the file to counsel and suspend both payments until the disagreement about the contents is resolved.

Question 8

An authorized producer orally binds a commercial property risk on May 1. The insurer issues the contemplated policy on May 22, effective May 1. A loss occurs May 28, with no cancellation or later coverage change. The adjuster's notes still describe the risk as covered by a '90-day binder.' Which contract governs the loss?

Accepted Answer

The issued policy, which replaced the binder when the policy was issued.

Answer

The binder, which remains the controlling contract for its full 90-day term.

Answer

Both contracts, with the more favorable provisions available to the insured.

Answer

The binder until the policy is delivered, because issuance alone does not terminate temporary coverage.

Question 9

A licensed adjuster deposits a claimant's settlement check into a personal account and uses the proceeds for personal expenses. After the misuse is discovered, the adjuster replaces the money in full and argues that repayment eliminates any licensing issue. Which statement accurately describes the Insurance Commissioner's authority?

Accepted Answer

Misappropriation remains a disciplinary ground even after the money has been repaid.

Answer

Discipline requires an unreimbursed loss at the time of the hearing.

Answer

Only a criminal conviction can support license discipline for this misuse.

Answer

Repayment limits the Commissioner to a warning unless similar conduct is established in other claims.

Question 10

An unsettled claim's ledger reads: 'Paid indemnity: $12,000; outstanding case reserve: $18,000; case incurred: $30,000.' No expenses or recoveries are included. A reviewer treats $30,000 as an approved amount still payable to the claimant. What does that entry actually represent?

Accepted Answer

The estimated total indemnity, including amounts already paid, not an approved unpaid settlement.

Answer

The adjuster's negotiation authority, established by adding paid indemnity to the outstanding reserve.

Answer

The additional money required to conclude the claim, excluding payments already made.

Answer

The minimum amount contractually payable, because the insurer has recorded it as an incurred loss.

Free AR-ADJ Practice Questions

Domain 1: GENERAL INSURANCE DEFINITIONS

Question 1

Question 2

Question 3

Domain 2: ARKANSAS INSURANCE COMMISSIONER, LICENSING

Question 4

Question 5

Domain 3: UNFAIR TRADE PRACTICES

Question 6

Question 7

Domain 4: GENERAL ADJUSTING PRACTICES

Question 8

Question 9

Question 10

That's 10 of 1,030