A federal agency wants to apply a general federal law to an insurer's claim practices in a state that already regulates those practices by statute. Under the McCarran-Ferguson Act, what is the general result?

State law controls, since federal law generally yields where states regulate insurance

The NAIC decides which law applies, because its model acts are binding on every state

Both laws apply equally, and the insurer must follow whichever rule is more restrictive

Federal law controls, because claim handling is interstate commerce under federal rules

A dwelling is insured under a policy that follows the 165-line Standard Fire Policy. After a kitchen fire, the insured gives the insurer immediate written notice. Unless the insurer grants an extension in writing, when must the insured furnish a signed, sworn proof of loss?

Within 60 days after the insurer's request

Within 12 months after the loss

A law firm insured under the ISO CGL policy serves wine at a client open house. An intoxicated guest later causes a car accident and the injured driver sues the firm under the state's liquor liability statute. How does the CGL respond?

Covered, because the firm is not in the business of serving alcohol

Excluded, because the injury was expected or intended

Excluded, because liquor liability is excluded for every insured

Covered only for medical expenses under Coverage C

An insured pays a $1,200 premium for a homeowners policy, and a month later a fire causes a $180,000 covered loss. Which characteristic of insurance contracts does this illustrate?

Aleatory, because the exchange of value depends on chance

Unilateral, because only the insurer makes a promise

Adhesion, because the insurer wrote the policy terms

Personal, because the contract follows the insured person

A tenant's lease requires the tenant to indemnify the landlord for injuries to third parties on the leased premises. A customer is injured and sues the landlord, who demands that the tenant pay. How does the tenant's ISO CGL policy treat this assumed liability?

Covered, because the lease is an insured contract

Excluded, because the landlord is not a named insured

Covered only for medical expenses under Coverage C

Excluded by the contractual liability exclusion

Claims Adjuster License

Free Claims Adjuster Practice Questions

10 sample questions for the Claims Adjuster License, with the correct answer and an explanation for each. No account needed. Try each one before you open the answer.

Sections covered on the exam: Insurance Regulation and Claims Practices, Auto Insurance, Dwelling and Homeowners Policies, Farm Property and Liability Coverage, Commercial Package Policy, Businessowners Policy, Inland Marine, Ocean Marine, and Specialty Lines, Workers' Compensation.

Question 1 · Insurance Regulation and Claims Practices
A federal agency wants to apply a general federal law to an insurer's claim practices in a state that already regulates those practices by statute. Under the McCarran-Ferguson Act, what is the general result?
- A.State law controls, since federal law generally yields where states regulate insurance
- B.The NAIC decides which law applies, because its model acts are binding on every state
- C.Both laws apply equally, and the insurer must follow whichever rule is more restrictive
- D.Federal law controls, because claim handling is interstate commerce under federal rules
Show answer and explanation
Answer: A. State law controls, since federal law generally yields where states regulate insurance
The McCarran-Ferguson Act leaves the regulation of insurance to the states and provides that a general federal law does not override state insurance law unless the federal law specifically relates to insurance. The tempting idea that interstate commerce automatically brings federal control is exactly what the Act was passed to limit. NAIC model acts are only recommendations until a state adopts them.
Question 2 · Auto Insurance
Item Amount
Replacement cost of roof $12,000
Expected useful life 20 years
Age of roof at time of loss 8 years
Deductible $1,000
A roof on a home with a policy that settles roof losses at actual cash value is destroyed by hail. Using straight-line depreciation and the figures below, how much will the insurer pay?
- A.$6,200
- B.$3,800
- C.$7,200
- D.$11,000
Show answer and explanation
Answer: A. $6,200
Depreciation = 8 ÷ 20 = 40% × $12,000 = $4,800; ACV = $12,000 − $4,800 = $7,200; payment = $7,200 − $1,000 deductible = $6,200. Paying $7,200 forgets the deductible, and $3,800 subtracts the deductible from the depreciation rather than from the actual cash value.
Question 3 · Dwelling and Homeowners Policies
A dwelling is insured under a policy that follows the 165-line Standard Fire Policy. After a kitchen fire, the insured gives the insurer immediate written notice. Unless the insurer grants an extension in writing, when must the insured furnish a signed, sworn proof of loss?
- A.Within 30 days after the loss
- B.Within 60 days after the loss
- C.Within 60 days after the insurer's request
- D.Within 12 months after the loss
Show answer and explanation
Answer: B. Within 60 days after the loss
The Standard Fire Policy requires the insured to render a signed, sworn proof of loss within 60 days after the loss unless the time is extended in writing. The 60-days-after-request wording comes from homeowners forms, not the Standard Fire Policy, and 12 months is the suit-against-us deadline.
Question 4 · Auto Insurance
Under the ISO Personal Auto Policy, after a covered accident the insurer paid a $300 premium for a bail bond the insured needed, and at the insurer's request the insured attended four days of trial, losing $260 per day in wages. How much will the insurer pay under Part A supplementary payments?
- A.$1,100
- B.$1,340
- C.$1,050
- D.$1,290
Show answer and explanation
Answer: C. $1,050
Supplementary payments pay up to $250 for bail bonds and up to $200 a day for loss of earnings when the insurer asks the insured to attend hearings or trials: $250 + (4 × $200) = $1,050, in addition to the limit of liability. Paying $1,290 caps the bail bond correctly but pays the full $260 a day instead of the $200 daily cap.
Question 5 · Commercial Package Policy
A law firm insured under the ISO CGL policy serves wine at a client open house. An intoxicated guest later causes a car accident and the injured driver sues the firm under the state's liquor liability statute. How does the CGL respond?
- A.Excluded, because the injury was expected or intended
- B.Excluded, because liquor liability is excluded for every insured
- C.Covered only for medical expenses under Coverage C
- D.Covered, because the firm is not in the business of serving alcohol
Show answer and explanation
Answer: D. Covered, because the firm is not in the business of serving alcohol
The CGL liquor liability exclusion applies only to insureds in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages. A law firm hosting an event has host liquor exposure, which remains covered. Treating the exclusion as applying to every insured is the common error.
Question 6 · Insurance Regulation and Claims Practices
An insurer with no claims office in a distant region contracts with an outside claims firm whose licensed adjusters will handle its claims there for a fee per file. The adjusters act for the insurer but are not its employees. What type of adjusters are they?
- A.Public adjusters
- B.Independent adjusters
- C.Company field adjusters
- D.Staff adjusters
Show answer and explanation
Answer: B. Independent adjusters
Independent adjusters are hired by insurers on a contract or fee basis to handle claims on the insurer's behalf without being its employees. Public adjusters are the most tempting choice because they also work for fees, but they are hired by and represent insureds. Staff and company field adjusters are the insurer's own employees.
Question 7 · Auto Insurance
An insured pays a $1,200 premium for a homeowners policy, and a month later a fire causes a $180,000 covered loss. Which characteristic of insurance contracts does this illustrate?
- A.Unilateral, because only the insurer makes a promise
- B.Adhesion, because the insurer wrote the policy terms
- C.Personal, because the contract follows the insured person
- D.Aleatory, because the exchange of value depends on chance
Show answer and explanation
Answer: D. Aleatory, because the exchange of value depends on chance
An aleatory contract involves an unequal exchange of values that depends on an uncertain future event, such as paying a small premium and collecting a large loss. Unilateral is tempting because only the insurer makes an enforceable promise, but that characteristic describes who is bound, not the unequal exchange.
Question 8 · Dwelling and Homeowners Policies
An insured has an ISO HO-3 with a $100,000 Coverage C limit. Personal property worth $15,000 is stolen from the vacation cabin he owns, which is not an insured location for Coverage A. Ignoring the deductible, how much will the insurer pay?
- A.$15,000
- B.$10,000
- C.$1,000
- D.$5,000
Show answer and explanation
Answer: B. $10,000
Coverage C limits personal property usually located at an insured's residence other than the residence premises to 10% of the Coverage C limit or $1,000, whichever is greater: 10% × $100,000 = $10,000. Paying the full $15,000 ignores this limitation on property kept at a secondary residence.
Question 9 · Auto Insurance
Under the ISO Personal Auto Policy, an insured with a $300,000 single limit of liability causes an accident that results in $230,000 of bodily injury damages and $90,000 of property damage. How much must the insured pay personally?
- A.$0
- B.$70,000
- C.$90,000
- D.$20,000
Show answer and explanation
Answer: D. $20,000
A single limit applies to all bodily injury and property damage from one accident combined, so the insurer pays $300,000 of the $320,000 total and the insured owes $20,000. Answering $0 treats the single limit as if it applied separately to bodily injury and to property damage.
Question 10 · Commercial Package Policy
A tenant's lease requires the tenant to indemnify the landlord for injuries to third parties on the leased premises. A customer is injured and sues the landlord, who demands that the tenant pay. How does the tenant's ISO CGL policy treat this assumed liability?
- A.Excluded, because the landlord is not a named insured
- B.Covered only for medical expenses under Coverage C
- C.Covered, because the lease is an insured contract
- D.Excluded by the contractual liability exclusion
Show answer and explanation
Answer: C. Covered, because the lease is an insured contract
The contractual liability exclusion has an exception for liability assumed in an insured contract, which includes a lease of premises and any assumption of another's tort liability for third-party injury. The tenant's assumed obligation is therefore covered. Applying the exclusion without its insured-contract exception is the tempting mistake.

Item	Amount
Replacement cost of roof	$12,000
Expected useful life	20 years
Age of roof at time of loss	8 years
Deductible	$1,000

Keep practicing for the Claims Adjuster

TTP Prep has 200 Claims Adjuster practice questions with explanations, timed and mock-exam modes, 107 flashcards, interactive lessons, a printable cheat sheet and a readiness score. Start free, no card needed.

Take a free Quick 10 See everything in the Claims Adjuster prep