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New Jersey Public Adjuster Practice Exam

20 exam-style questions drawn from the same bank as our full New Jersey Public Adjuster course (New Jersey 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. A public adjuster owns a fifty percent interest in the restoration company he recommends to each of his clients, and he does not mention it. The core problem is:
A licensing problem, since restoration contractors must hold adjuster licensesA recordkeeping problem, since two entities must maintain one combined claim fileAn undisclosed conflict of interest, since he profits from pricing his own repair workA fee problem, since two fees on one loss exceeds the customary percentage
2. Which of the following is one of the four recognized sources of a supplement?
Code required work the building official imposes when a permit is pulledA change in the policy limits at the renewal following the date of lossThe carrier's failure to acknowledge the notice of loss promptlyThe insured's dissatisfaction with the adjuster assigned to the claim
3. An endorsement settles roof surfacing on an actual cash value basis. The insured completes the roof replacement and asks whether the depreciation withheld on the roof can now be claimed. The correct answer is:
It cannot, because salvage rights in the old roof surfacing offset the withheld sumIt can, because completing the repair converts the settlement to replacement costIt can, because the deductible was already applied to the roof portion of the lossIt cannot, because depreciation on a category settled at value is not recoverable
4. Two neighbors have identical hail damage to identical fourteen year old roofs. One is paid replacement cost with recoverable depreciation; the other receives roughly half as much with nothing recoverable. The most likely explanation is:
The second insured failed to submit a timely notice of the hail lossThe second policy applied a higher deductible to wind and hail lossesThe second roof was found to be deteriorated rather than storm damagedThe second policy carries an ACV roof or roof payment schedule endorsement
5. On a first party property claim, the burden of proving both the fact of the loss and its amount rests on:
The insurer, which must disprove any figure the insured submitsThe umpire, who values the damaged property for both partiesThe insured, who must show what existed and what restoring it costsThe contractor, who prepared the written repair estimate
6. An item still works properly, but its design and configuration are outdated. This reduction in value is classified as:
Physical depreciation, from age, use, and wearSalvage value, from residual worth after lossExternal obsolescence, from outside conditionsFunctional obsolescence, from outdated design
7. A $30,000 covered loss is insured by two policies with pro rata other-insurance clauses: Policy A has a $150,000 limit and Policy B has a $50,000 limit. How much does Policy A pay?
$22,500$30,000$7,500$15,000
8. During a covered kitchen repair an electrician opens a wall, finds aluminum branch wiring, and the inspector will not sign off without remediation. The remediation cost is properly treated as:
A code enforcement cost payable only if ordinance or law coverage appliesDirect damage from the covered loss, since the wall was opened by the repairAn uninsurable betterment that the contractor must absorb as overheadDebris removal expense, since the old wiring is removed from the structure
9. Even under many replacement-cost contents provisions, which property is still settled at actual cash value?
Consumer electronics and fine jewelry piecesHousehold furniture and everyday personal clothingBooks, fine artwork, and household collectiblesCarpeting, appliances, awnings, and outdoor equipment
10. When a drying invoice is evaluated, category and class each drive a different part of the scope:
Class drives what is discarded; category drives the number of air moversClass drives the contamination controls; category drives the drying goalCategory drives what must be removed and discarded; class drives drying time and equipmentCategory drives the deductible applied; class drives the depreciation withheld
11. A slow, smoldering, low oxygen fire characteristically leaves:
Wet smoke residue, sticky and smeary with a strong persistent odorProtein residue, nearly invisible and confined to kitchen surfacesDry smoke residue, a fine powdery film removable with chemical spongesFuel oil soot, heavy and oily and spread through the heating system
12. An actual cash value roof settlement endorsement applies to wind and hail damage to roof surfacing. Its effect on the withheld depreciation is that the depreciation becomes:
Recoverable on proof that the roof was replaced within the policy periodRecoverable only if the roof is replaced with a higher grade materialNon recoverable, because the settlement basis for the roof is actual cash valueDeferred until the ordinance or law limit for the roof is exhausted
13. Public adjusters represent insureds on:
Third party liability claims brought against another person's policySubrogation actions brought by the insurer against a responsible partyFirst party claims made by the insured under the insured's own policyCoverage litigation filed on the insured's behalf in court
14. Under a replacement-cost settlement, an insured receives the ACV payment but decides never to repair or replace the damaged roof. What happens to the recoverable depreciation?
It must still be released because the loss was coveredIt is added to the next renewal premium as a creditIt is paid automatically 12 months after the ACV paymentIt is forfeited, and the recovery stops at ACV
15. Under the DP forms, a detached structure on the premises that is rented to another party or used for business is:
Covered under Coverage CExcluded under Coverage BCovered under Coverage AFully covered under Coverage B
16. Which statement accurately describes the reasonable expectations doctrine?
It applies only to commercial policies that were individually negotiated between two sophisticated and separately counseled business partiesIt has been formally abolished in every state and completely replaced by the contra proferentem rule of construing ambiguities against the drafterIt is applied uniformly in every state as the single primary rule of policy interpretation, overriding the plain-meaning and contra proferentem doctrinesIts availability is state-specific — some states apply it even against clear policy text, some only when the policy is ambiguous, and others reject it entirely
17. On an HO form, Coverages A through D are collectively called:
Section II — LiabilitySection I — PropertyThe Insuring AgreementSchedule A
18. When a carrier pays for property as a total loss, its right to the residual value of the damaged property is called:
SubrogationContributionCoinsuranceSalvage
19. For purposes of the DP vacancy provisions, a dwelling is “vacant” when:
The residents are temporarily away but the contents remainIt has been rented to a tenantIt is substantially empty of furnishingsIt is listed for sale
20. Insurance is described as a unilateral contract because:
Only the insured makes a legally enforceable promise once the signed application and first premium reach the insurerOnly one of the two parties is ever held to the standard of utmost good faith over the entire life of the policyOnly the insurer makes a legally enforceable promise; the insured cannot be sued for failing to pay premiumThe insurer may unilaterally rewrite the printed policy terms after issuance without notice to or consent from the insured

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