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Montana Public Adjuster Practice Exam

20 exam-style questions drawn from the same bank as our full Montana Public Adjuster course (Montana Public 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. What are the base perils on an unendorsed DP-1 Basic Form (DP 00 01)?
Fire, lightning, and internal explosionFire, theft, and vandalismFire, lightning, and windstormThe 16 broad-form named perils
2. The insured named on a homeowners policy dies, and the insured dwelling is later damaged by a covered peril. Who is generally the proper claimant?
The original selling agent who placed the policy, acting as the insured's representative for the property after deathNo one at all, because a property policy terminates immediately and automatically on the death of the named insuredThe estate or heirs, because the insurable interest passes with the property and most policies extend coverage to a legal representativeThe mortgagee alone, which may collect the entire loss payment regardless of the remaining unpaid loan balance
3. In insurance-contract terms, a statement the applicant believes to be true when made, and which voids coverage only if it is material, is best classified as a:
MisrepresentationRepresentationConcealmentExpress warranty
4. In liability claim vocabulary, special damages are:
Amounts awarded to punish outrageous conductNon-economic harms such as pain and sufferingDamages paid under a policy's supplementary payments clauseMeasurable economic losses such as medical bills and lost wages
5. Which of the following is one of the 16 named perils covered on HO-3 Coverage C?
DecayFloodTheftMold
6. A pipe bursts in the unit above your client's, ruining her hardwood floors, custom built-ins, and furniture. The master policy is bare walls. Where does each item land?
Floors are the master policy's; built-ins and furniture are her HO-6Floors and built-ins are her HO-6 Coverage A; furniture is her Coverage CEverything is the upstairs owner's liability, so her own policies do not respondAll three items fall to the master policy because common plumbing failed
7. A homeowner discovers hidden damage in October and reports it, but the loss actually occurred during a windstorm two months after the policy period had already ended. What is the coverage result?
Covered, hidden damage is always legally deemed to occur on the date it is first discoveredCovered, discovery of the damage within a reasonable time revives the expired policy periodCovered, the claim was properly reported while a later renewal policy was in forceNot covered, losses outside the policy period are not covered regardless of when discovered
8. How does the construction of an exclusion differ from the construction of an exception to that exclusion?
Ambiguous exclusions are construed strictly against the insurer, while exceptions that restore coverage are construed broadly in favor of the insuredBoth the exclusion and the exception are construed narrowly and strictly against the insured who is seeking coverageBoth the exclusion and the exception are construed broadly in favor of the insurer as the party bearing the coverage riskExclusions are construed broadly in favor of the insured, while exceptions that restore coverage are construed against the insured
9. When analyzing whether a loss is covered, the disciplined reading order through the policy is:
Conditions, then declarations, then exclusions, then insuring agreementInsuring agreement, then exclusions, then conditions, then endorsementsExclusions, then insuring agreement, then endorsements, then conditionsEndorsements, then conditions, then declarations, then exclusions
10. A carrier investigated and paid on a claim for months, and its conduct led the insured to reasonably rely to their detriment before the carrier tried to assert a defense it knew about all along. Which doctrine bars the carrier?
Waiver of premiumEstoppelSubrogationConcealment
11. Which situation is most likely to defeat the "competent parties" element required for a valid insurance contract?
The applicant had been adjudicated legally incompetent at the time of contractingThe applicant read only the declarations page before signing the applicationThe applicant signed the application in a hurry without reading every clauseThe applicant paid the first premium by personal check rather than in cash
12. For the commissioner to act on MCA 33-18-201 unfair claim settlement practices, the practices generally must occur:
With such frequency as to indicate a general business practiceIn three or more counties simultaneouslyAt least once, in any single claim fileOnly after a written warning issued by the commissioner
13. The ISO Commercial Inland Marine Conditions (CM 00 01):
Entirely replace each of the individual inland marine class forms with one single blanket coverage formStandardize every single coverage grant and insuring agreement across all inland marine class formsAre strictly a personal-lines inland marine floater form, and never a commercial-lines one at allSupply common conditions such as valuation, appraisal, and duties after loss that pair with each class form
14. Fire destroys roughly half a structure. The building official determines the damage crosses the local threshold and orders the entire structure brought to current code, including demolition of the undamaged half. The correct mapping is:
Coverage A pays the rebuild upgrade, Coverage B the undamaged value, Coverage C the demolitionCoverage A pays the demolition, Coverage B the rebuild upgrade, Coverage C the undamaged valueCoverage A pays the undamaged value, Coverage B the demolition, Coverage C the rebuild upgradeCoverage A pays all three costs, with B and C responding only after A is exhausted
15. The SFIP definition of “flood” requires a general and temporary condition of inundation affecting:
An entire community that has been formally designated as a flood-prone special hazard zone by FEMA mappingAny amount of normally dry land at all, no matter how small the affected area actually happens to beAt least five separate insured properties that are located within a formally declared federal disaster areaTwo or more acres of normally dry land, or two or more properties (at least one of which is the insured's)
16. How is a dwelling loss settled under an unendorsed DP-1?
Fair market valueActual cash valueReplacement costFunctional replacement
17. After proof of loss statements are completed, MCA 33-18-201 requires the insurer to:
Reopen the underwriting file for reviewTransfer the file to a Montana-resident adjusterAffirm or deny coverage within a reasonable timePay the claim in full within 24 hours
18. The good-faith settlement practice in MCA 33-18-201 obliges insurers to attempt prompt, fair, and equitable settlements of claims in which:
The insured has hired a public adjusterLiability has become reasonably clearSuit has already been filedThe claim exceeds a stated dollar amount
19. A proof of loss is best described as:
A sworn statement by the insured setting out the claim and its amountA written acknowledgment that the insurer received the notice of lossA release the insured signs when the claim payment is deliveredAn estimate the insurer's field adjuster prepares for the claim file
20. A common construction endorsement limits payment to:
The lowest of three contractor bids obtained by the insuredRepairs performed by contractors on the insurer's preferred vendor listMaterials and methods commonly used in the area, not what was actually thereThe original cost of the structure as shown on the application

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