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Maine “Property & Casualty Adjuster” license Exam Questions And Correct Answers (Verified Answers) Plus Rationales 2025
Typology: Exams
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C. The insurer pays more than the loss D. The insurer pays even if there is no loss Indemnity restores the insured to the same financial position they were in before the loss—no profit allowed.
C. Serves as a claim report D. Eliminates the deductible A binder provides temporary insurance until the actual policy is issued. 11.What is subrogation? A. A method of premium calculation B. The insurer's right to recover from a third party after paying a claim C. A clause that limits coverage D. A deductible option Subrogation allows the insurer to seek recovery from the party at fault after paying the insured’s claim. 12.Which of the following types of authority is written in the agent’s contract? A. Express authority B. Implied authority C. Apparent authority D. Assumed authority Express authority is explicitly stated in the agent's agreement with the insurer. 13.An adjuster discovers the insured intentionally set fire to their property. The claim is: A. Payable under the standard fire policy B. Covered up to replacement cost C. Denied due to intentional act D. Partially covered
Intentional acts by the insured are excluded from coverage. 14.What is the difference between a named insured and an additional insured? A. Named insured is always the driver B. There is no difference C. Additional insured cannot file a claim D. Additional insured is added by endorsement An additional insured gains coverage through an endorsement, often for business relationships. 15.What is an endorsement? A. A policy limit B. A deductible C. A written modification to the policy D. A legal defense Endorsements are written amendments that modify coverage or terms of the original policy. 16.What type of policy insures against legal liability for injury or damage? A. Inland marine B. Liability insurance C. Homeowners D. Commercial property Liability insurance pays for damages the insured is legally responsible for. 17.Which policy covers goods being transported by truck?
C. Original purchase price D. Appraised value ACV compensates the insured based on the item’s depreciated value. 21.What is the main purpose of coinsurance in a property insurance policy? A. To reduce the insurer’s obligation B. To encourage insureds to carry adequate coverage C. To eliminate deductibles D. To cover replacement cost automatically Coinsurance requires the insured to carry a percentage of coverage relative to property value, promoting adequate insurance. 22.Which of the following is considered a direct loss? A. Loss of rental income B. Fire damage to a building C. Business interruption D. Loss of market share Direct loss refers to physical damage to the property itself. 23.The term "loss of use" is an example of: A. Direct physical loss B. Total loss C. Indirect loss D. Proximate loss Loss of use occurs as a consequence of a direct loss, making it an indirect loss.
24.Under the Maine Insurance Code, how long must an adjuster maintain records? A. 2 years B. 3 years C. 5 years D. 7 years Maine law requires insurance adjusters to retain records for a minimum of three years. 25.In Maine, an adjuster license must be renewed: A. Annually B. Biennially (every 2 years) C. Every 3 years D. Only if inactive Adjuster licenses in Maine are renewed every two years, as required by state regulation. 26.A temporary adjuster license in Maine is valid for: A. 30 days B. 90 days C. 6 months D. 180 days Temporary adjuster licenses may be issued for up to 180 days under certain circumstances. 27.Which of the following is NOT a duty of the insurance adjuster?
C. To list exclusions D. To provide a claim history The declarations page identifies the parties, property, and terms specific to the policy. 31.What is the standard valuation method under most property policies unless otherwise stated? A. Replacement cost B. Actual cash value C. Stated amount D. Agreed value Policies typically default to ACV unless an endorsement modifies the valuation to replacement cost. 32.Which term describes the legal transfer of a policy to another party? A. Assignment B. Subrogation C. Endorsement D. Waiver Assignment involves transferring the policyholder's rights to another party, usually requiring insurer approval. 33.Which clause prevents an insured from collecting more than the actual loss?
A. Other Insurance clause B. Deductible clause C. Indemnity clause D. Liberalization clause The principle of indemnity ensures that the insured does not profit from insurance. 34.What type of bond guarantees work will be completed as agreed? A. Performance bond B. Fidelity bond C. Bid bond D. Judicial bond Performance bonds are common in construction and ensure a project is completed according to terms. 35.A homeowner policy typically excludes which of the following? A. Fire B. Theft C. Vandalism D. Flood Flood is excluded and requires a separate policy through the National Flood Insurance Program or private insurers. 36.Under a liability policy, a split limit of 100/300/50 means: A. $300,000 per person for bodily injury B. $100,000 total bodily injury per accident
A. Declarations B. Definitions C. Exclusions D. Insuring agreement The insuring agreement outlines what is covered and the insurer’s obligations. 40.Which of the following best describes "salvage"? A. Deductible recovery B. Waiver of premium C. Insurer's right to recover damaged property after paying a claim D. Adjuster's fees Salvage allows the insurer to recoup some losses by taking ownership of damaged property after settlement. 41.Which of the following is considered replacement cost coverage? A. Original purchase price B. Actual cash value C. Market value D. Cost to replace without depreciation Replacement cost coverage pays to replace damaged property with new items without deduction for depreciation. 42.In property and casualty insurance, “contributory negligence” means: A. The injured party contributed to their own loss B. The insurer was negligent
C. The loss was unavoidable D. The insured had no duty of care Contributory negligence limits or denies recovery when the injured party shares fault. 43.A standard homeowners policy includes how many sections? A. Two: Liability only B. Three: Property, liability, umbrella C. Two: Property and liability D. Four: A, B, C, D Homeowners policies are divided into property coverage and liability coverage sections. 44.Maine requires that a written notice of cancellation for non-payment of premium be provided at least: A. 30 days B. 10 days C. 45 days D. 5 days For non-payment, insurers must give at least 10 days' notice before canceling coverage. 45.What is the purpose of the “liberalization clause” in a policy? A. Automatically expands coverage if the insurer adopts a broader form B. Limits the insured's rights
49.What is a declaration of value in inland marine insurance? A. Replacement cost B. Salvage value C. Stated value of goods in transit D. Policy limit Inland marine policies often rely on the declared value of goods to set coverage. 50.If an adjuster discovers fraud during a claim, they must: A. Ignore it if the damage is minor B. Settle anyway C. Report it to the insurer and authorities if required D. Cancel the policy Adjusters are obligated to report suspected fraud to the insurer and comply with state regulations. 51.The term “aggregate limit” in a liability policy refers to: A. The limit per claim B. The deductible amount C. The maximum the insurer will pay during the policy period D. The per occurrence limit The aggregate limit is the total amount the insurer will pay for all claims during the policy period. 52.Which of the following would typically be covered under a commercial property policy?
A. Employee dishonesty B. Personal auto damage C. Business furniture and fixtures D. Workers’ compensation Commercial property policies cover tangible business property such as fixtures, furniture, and equipment. 53.When an insurer cancels a policy midterm, any unearned premium must be: A. Refunded to the insured on a pro-rata basis B. Kept by the insurer C. Paid at next renewal D. Forfeited due to cancellation Insurers must refund unearned premiums when they cancel a policy before the end of the term. 54.Which of the following is NOT considered an insurable interest? A. A homeowner in their own house B. A business in its inventory C. A neighbor’s house D. A lienholder on a car To have an insurable interest, the party must suffer a financial loss if the insured item is damaged. 55.The clause that requires the insured to do everything possible to protect the property after a loss is the:
A. Personal and advertising injury coverage B. Products liability C. Bodily injury liability D. Property damage liability Personal and advertising injury coverage protects against non-physical personal harm, including defamation and false imprisonment. 59.Which of the following best defines a “reservation of rights” letter? A. Declines a claim outright B. Allows insurer to investigate while preserving coverage defenses C. Agrees to full payment of claim D. Binds the insurer to pay A reservation of rights letter lets the insurer investigate without admitting coverage. 60.A standard homeowners policy will cover theft of personal property: A. Only if someone is injured B. Never C. On or off premises (with some limits) D. Only during business travel Theft is typically covered anywhere, though off-premises losses may have lower limits. 61.An adjuster acting without a license in Maine could be subject to:
A. A warning only B. Federal charges C. Fines and administrative penalties D. Automatic license renewal Adjusting without a license is illegal and may result in monetary penalties and disciplinary action. 62.The purpose of errors and omissions insurance for adjusters is to: A. Cover property damage B. Protect against professional mistakes or negligence C. Replace a surety bond D. Serve as general liability E&O insurance protects adjusters against claims arising from mistakes made during the adjustment process. 63.A policy provision that excludes coverage when another policy covers the same loss is: A. Liberalization B. Replacement cost clause C. Other insurance clause D. Pro rata liability The other insurance clause outlines how multiple policies will share or exclude coverage. 64.What is a surety bond?