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Connecticut “Casualty Adjuster” license Exam
Questions and Correct Answers (Verified Answers)
Plus Rationales 202 5
- What does liability insurance primarily protect against? A. Property damage B. Theft C. Legal responsibility for injuries or damages D. Fire losses Liability insurance covers the insured’s legal obligations to others for bodily injury or property damage.
- Which of the following is NOT considered a type of casualty insurance? A. Auto liability B. Fire insurance C. Workers' compensation D. General liability Fire insurance is a form of property insurance, not casualty insurance.
- In Connecticut, how often must an adjuster license be renewed? A. Every year B. Every 2 years C. Every 3 years
D. Every 5 years Connecticut casualty adjuster licenses must be renewed biennially (every 2 years).
- What is the purpose of an umbrella liability policy? A. To replace primary insurance B. To provide first-dollar coverage C. To provide excess liability coverage above other policies D. To cover professional liability Umbrella policies offer additional liability limits beyond the insured’s primary coverage.
- The term “tort” refers to: A. A breach of contract B. A civil wrong not arising from a contract C. Criminal activity D. A type of insurance A tort is a civil wrong that causes harm, which may result in liability.
- What is subrogation? A. Assigning a policy to another insurer B. Filing a lawsuit C. The insurer’s right to recover from a third party D. Binding arbitration Subrogation allows an insurer to recover its payment from the responsible third party.
D. The insured is always at fault Bad faith involves unfair or dishonest refusal to pay a valid claim. 11.The “duty to defend” in a liability policy obligates the insurer to: A. Pay judgments only B. Investigate claims only C. Provide legal defense for covered claims D. Pay all legal costs regardless of coverage The insurer must defend the insured against lawsuits related to covered losses. 12.A reservation of rights letter is used to: A. Deny the claim immediately B. Cancel the policy C. Notify the insured that coverage may not apply D. File suit It informs the insured that the insurer is investigating but may later deny coverage. 13.In casualty insurance, “limits of liability” refers to: A. The premium charged B. The maximum amount the insurer will pay C. The deductible D. The loss ratio Limits of liability define the insurer’s financial responsibility per claim or policy term.
14.Which party has the burden of proof in an insurance claim? A. The insurer B. The claimant C. The broker D. The agent The insured or claimant must prove the loss and damages in most cases. 15.The Connecticut Insurance Department regulates: A. Federal insurance programs B. Insurance companies and adjusters operating in Connecticut C. Stock exchanges D. Only health insurers The Connecticut Insurance Department oversees insurance industry practices in the state. 16.The adjuster's primary duty in handling a claim is to: A. Side with the insurer B. Side with the claimant C. Fairly and impartially evaluate the claim D. Act as a mediator Adjusters must remain neutral and base decisions on facts and policy terms. 17.A “release of liability” is typically obtained when: A. A policy is renewed B. A claim is settled C. A lawsuit is filed
21.What is the purpose of a deductible in a casualty insurance policy? A. To increase premiums B. To reduce the number of small claims C. To eliminate liability D. To penalize the insured Deductibles discourage small claims and reduce the insurer's exposure to minor losses. 22.Which of the following losses would typically be excluded from a general liability policy? A. Bodily injury to a customer B. Intentional acts of the insured C. Property damage caused by the insured D. Advertising injury Intentional acts are generally excluded because insurance is designed for fortuitous events. 23.What is considered an “occurrence” under a liability policy? A. An accident resulting in injury or damage B. A deliberate act C. A claim denial D. A policy renewal An occurrence is an accident or continuous exposure to conditions resulting in loss. 24.If an insurer cancels a policy mid-term, they must:
A. Give no notice B. Provide advance written notice per state regulations C. Wait until the policy renews D. Refund no premium Connecticut requires written notice of cancellation and appropriate return of unearned premium. 25.A claims-made policy triggers coverage based on: A. The date of the accident B. The date the claim is made C. The policy effective date D. The date of policy delivery Claims-made policies cover claims first reported during the policy period, regardless of when the incident occurred (within limits). 26.In casualty insurance, “bodily injury” includes: A. Property damage B. Emotional distress only C. Physical harm, sickness, or death D. Financial loss Bodily injury refers to harm to a person’s body, not to property or finances. 27.What is indemnification in the context of insurance? A. Charging extra premium B. Restoring the insured to their original financial position C. Denying all claims D. Cancelling the policy
31.Which of the following is NOT a duty of an adjuster? A. Investigating the claim B. Determining coverage C. Selling insurance policies D. Negotiating settlements Selling insurance is the job of an agent or producer, not an adjuster. 32.What is the role of the “proof of loss” document? A. It cancels the claim B. It files suit C. It provides a sworn statement of the loss D. It waives all rights The proof of loss gives formal details about the loss to support the claim. 33.When an insurer waives a policy condition, it means: A. The insurer voluntarily gives up a right B. The insurer denies coverage C. The insured breaches the contract D. The policy expires Waiver is the voluntary relinquishment of a known right, often through conduct. 34.Which liability policy section includes exclusions? A. Declarations B. Conditions C. Definitions
D. Insuring Agreement The exclusions section details what is not covered under the policy. 35.Punitive damages are awarded to: A. Compensate for actual loss B. Punish and deter egregious conduct C. Cover legal fees only D. Replace medical payments Punitive damages are not compensatory but are meant to punish and set an example. 36.Which of the following must be present to prove negligence? A. Fraud and misrepresentation B. Duty, breach, causation, and damages C. Insurance coverage D. Intent to harm Negligence requires the existence of a duty, a breach of that duty, causation, and resulting damages. 37.Medical payments coverage under a liability policy is: A. Coverage only after fault is established B. No-fault coverage for injuries on the premises C. Available only in automobile policies D. Not available under general liability Medical payments cover injuries regardless of fault to promote quick resolution. 38.If a claimant exaggerates a loss intentionally, it is:
It allows the insurer to defend the claim while preserving the option to deny coverage. 42.What is the statute of limitations for filing a liability claim in Connecticut for bodily injury? A. 1 year B. 2 years C. 4 years D. 6 years Connecticut generally allows 2 years for bodily injury claims from the date of the incident. 43.A policy endorsement is: A. A written amendment to the policy terms B. A renewal notice C. A premium invoice D. A declaration page Endorsements modify the original policy, either adding or excluding coverage. 44.When must an adjuster notify the Department of Insurance of a change of address? A. Within 90 days B. At license renewal C. Within 30 days D. It is not required Connecticut requires adjusters to report address changes within 30 days.
45.Which party is typically responsible for initiating a claim? A. The insurer B. The insurance agent C. The insured or claimant D. The reinsurer The person who suffers the loss initiates the claim process. 46.Which part of a policy outlines the insurer’s promise to pay? A. Exclusions B. Conditions C. Insuring Agreement D. Definitions The insuring agreement defines the scope of coverage and the insurer's obligations. 47.“Aggregate limit” in liability insurance means: A. The deductible amount B. The maximum amount the insurer will pay in a policy period C. The amount per claim D. The sub-limit for fire damage The aggregate limit is the most the insurer will pay for all claims during the policy term. 48.A licensee who violates Connecticut insurance laws may be subject to: A. A premium refund B. Fines, suspension, or license revocation
D. Indemnity Subrogation allows the insurer to pursue a third party that caused the loss. 52.A “first-party claim” involves: A. A third party suing the insurer B. The insured seeking payment from their own insurer C. Subrogation recovery D. A liability settlement First-party claims are made by the insured to their own insurer for covered losses. 53.A “third-party claim” is one where: A. Someone other than the insured makes a claim against the policy B. The insured buys a rider C. An agent files a lawsuit D. A policy lapses Third-party claims are filed by someone injured or harmed by the insured. 54.In liability policies, the insurer has a duty to: A. Adjust premiums annually B. Pay interest C. Defend the insured in lawsuits covered by the policy D. Arbitrate every claim The duty to defend is a key benefit of liability insurance. 55.Which of the following actions by an adjuster would be considered an unfair claims practice?
A. Settling a claim quickly B. Refusing to settle fraudulent claims C. Delaying claims without reason D. Requesting supporting documents Unjustified delays in processing claims violate Connecticut insurance regulations. 56.The difference between “actual cash value” and “replacement cost” is: A. Coverage area B. Depreciation C. Deductibles D. Policy term Actual cash value subtracts depreciation, while replacement cost pays the full cost to replace. 57.An adjuster should decline a claim if: A. The insured seems upset B. The loss is not covered under the policy C. The claimant is not local D. Police weren’t involved Coverage determination is based on policy terms, not emotions or location. 58.What should an adjuster do first when assigned a new claim? A. Deny the claim B. Refer it to legal counsel C. Review the policy and contact the insured
A. Verbal agreement B. Notarization only C. Court approval D. Immediate payment Courts must approve settlements involving minors to protect their rights. 63.What is the Connecticut Unfair Claims Settlement Practices Act designed to do? A. Set premium rates B. Ensure fair and prompt claims handling C. Regulate agents D. Cancel policies This law protects consumers from unethical claims practices. 64.A general release signed by the claimant indicates: A. Full and final settlement of all claims B. Agreement to further negotiations C. Denial of liability D. Insurer’s waiver of coverage A general release ends the claim in exchange for compensation. 65.What is considered a material misrepresentation? A. Typo in application B. False statement that affects underwriting decisions C. Adjuster’s opinion D. Claimant’s feelings Material misrepresentation can void coverage or lead to denial.
66.What is “bad faith” in insurance? A. Honest disagreement B. Unreasonable refusal to pay a valid claim C. Adjuster’s mistake D. Denial based on exclusions Bad faith involves unfair treatment and may lead to legal action against the insurer. 67.Which of the following is NOT part of a standard liability policy? A. Insuring Agreement B. Exclusions C. Coinsurance clause D. Conditions Coinsurance applies to property policies, not liability. 68.If an adjuster accepts payment from a contractor, this may be considered: A. Standard practice B. Not applicable C. A conflict of interest or unethical conduct D. A deductible Adjusters must avoid any behavior that could compromise their neutrality. 69.A recorded statement should be taken: A. Before reading the policy B. During policy sale C. To document the facts of the loss
