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Arizona Public Adjuster Practice Exam

20 exam-style questions drawn from the same bank as our full Arizona Public Adjuster course (Arizona Adjuster — Exam Prep). Answer all 20, then grade yourself — most state exams require 70% to pass. Explanations for every question are part of the full course.

1. A case reserve differs from a bulk reserve in that a case reserve is:
Funded out of surplus rather than out of the insurer's loss reservesSet by the state regulator rather than by the insurer's claim departmentSet on one specific known claim rather than on a category in aggregateDisclosed to the insured rather than held as an internal carrier figure
2. An 8-year-old composition shingle roof with a 20-year expected useful life is destroyed. RCV is $15,000. Using straight-line depreciation, what is the ACV?
$12,000$7,500$6,000$9,000
3. The appraisal condition in a standard property policy is available to resolve a dispute about:
The amount of loss, where the parties disagree on scope or priceWhether the insured breached a policy condition after the lossWhether the insurer handled the claim in accordance with model rulesWhether an exclusion applies to the reported cause of the loss
4. Under the standard appraisal clause, the amount of loss is set when:
Both appraisers and the umpire sign the same figure without exceptionAny two of the three, appraisers or umpire, agree on the amountThe umpire issues a decision that the two appraisers afterward endorseThe insurer's appraiser accepts the figure proposed by the insured
5. Absent a special endorsement, BACF physical damage deductibles apply:
Once per policy term, regardless of how many separate losses occurPer vehicle, per loss — each damaged auto bears its own deductibleOnly to comprehensive losses, and never to any collision loss at allPer occurrence across the entire fleet as the standing default rule
6. Theft of firearms under standard HO Coverage C is typically sub-limited to approximately what amount?
$2,500$200$10,000$1,500
7. A client asks her public adjuster whether the carrier's denial letter gives her a claim for bad faith and how long she has to sue. The professional response is to:
Explain the policy language and the carrier's stated basis, then refer her to an attorneyAdvise her to file suit immediately to preserve the deadlineDecline to discuss the denial at all, since coverage is now a legal matterAnalyze the denial against the state's bad faith standard and advise her
8. After a total loss caused by an at-fault third party, what is the key trade-off between claiming first-party under the owner's own policy versus third-party against the tortfeasor's liability carrier?
First-party always pays more, because the owner's own carrier owes full replacement cost while the tortfeasor's liability carrier owes only depreciated actual cash value on any total lossFirst-party is faster but involves the deductible (with the carrier subrogating); third-party avoids the deductible and may add loss-of-use and diminished-value damages, but is slowerThere is no real trade-off, because the owner is required to exhaust the first-party claim under its own policy before it is ever permitted to approach the at-fault driver's liability carrierThird-party is always faster, because a tortfeasor's liability carrier must accept fault and pay the full claim within a fixed federal deadline that first-party carriers are not held to
9. After a carrier pays its insured for a loss caused by a negligent third party, subrogation allows the carrier to:
Cancel the policy retroactively to the date of lossStep into the insured's shoes and pursue the wrongdoer to the extent of its paymentRecover its payment from the insured if the claim later proves excessiveDemand the insured sue the wrongdoer on the carrier's behalf
10. Which of the following is one of the settlement options standard property forms give the insurer?
Repair, rebuild, or replace the property with like kind and qualityAssign the open claim to a third party purchaser of damaged propertyRequire the insured to accept a contractor of the insurer's choosingReduce the limit of insurance to the amount actually paid on the loss
11. A claim has been negotiated for many months, a supplement is pending, and the policy's suit limitation period is about to expire. The adjuster's obligation is to:
Ask the carrier for a written extension and rely on it once it has been grantedWait for the supplement decision before raising a legal question with the clientTell the client in writing that negotiation does not extend it, and refer to counselAssure the client that a pending supplement tolls the period until it is decided
12. An employee runs a business errand in her own personal car. On the employer's Business Auto Coverage Form, that vehicle falls under which covered-auto symbol?
Symbol 8 — hired autos the business leases, rents, or borrows from someone elseSymbol 3 — owned private passenger autos only, limited to the company's own carsSymbol 2 — owned autos only, covering vehicles the employer itself holds title toSymbol 9 — non-owned autos used in the business but not owned, hired, or borrowed
13. An insured refuses a properly demanded examination under oath because he finds it intrusive. The usual consequence is:
A material breach of a policy condition that can defeat the claim entirelyNone, because the examination is discovery available only inside a lawsuitA reduction of the claim by the insurer's cost of the aborted proceedingA delay in payment while the insurer investigates by some other route
14. While her $80,000 property claim is pending, a client wants to accept $15,000 from the negligent contractor who caused the loss and sign a general release. The main danger is that signing the release could:
Convert the first-party property claim into a third-party liability claim against the contractorImpair the carrier's subrogation rights and give the carrier a defense to the property claimAutomatically reduce the pending property claim by exactly the $15,000 accepted from the contractorObligate the contractor's liability insurer to pay the entire remaining $65,000 of the loss
15. Wind and water intrusion through skirting and plumbing in the underbelly means the adjuster should:
Ignore the entire underside of the homeScope under the home, not just inside itDeny the water-intrusion claim outrightAssume Coverage C contents responds here
16. The insured's duties after a loss are found in which part of the policy?
The declarations page, which states the limits and the deductibleThe insuring agreement, which states the perils the form coversThe conditions, which the insurer's obligation to pay depends onThe definitions, which fix the meaning of the terms used elsewhere
17. An adjuster tells an insured not to bother filing a proof of loss, and the insured files none. The insurer's later reliance on that condition is most directly barred by:
The anti concurrent causation clause found in the policy conditionsA nonwaiver agreement implied from the adjuster's course of conductEstoppel, because the insured relied on the statement to its own detrimentWaiver, because the insured performed the condition in some other form
18. Which part of an insurance policy is the only part unique to the individual policyholder?
The declarations pageThe insuring agreementThe conditionsThe exclusions
19. Which pairing correctly matches the adjuster type to BOTH its principal and its typical compensation source?
Public adjuster: principal is the insurer; paid from the claim proceedsPublic adjuster: principal is the insured; paid by the insuredIndependent adjuster: principal is the insured; paid by the adjusting firmStaff adjuster: principal is the insurer; paid a percentage of amounts saved
20. A public adjuster signs a contract to adjust a client's fire claim and then offers to perform the reconstruction work through his own contracting company. Under the NAIC Public Adjuster Licensing Model Act pattern, this arrangement is:
Prohibited only when the repair contract price ends up exceeding the adjusting fee chargedProhibited — a public adjuster may not also act as the repair contractor on the same lossPermitted as long as the adjuster fully discloses the dual role to the insured in writingPermitted as long as the repair bid is the lowest of three genuinely competitive bids

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