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Mississippi Adjuster License Exam Questions And Correct Answers (Verified Answers) Plus R, Exams of Law

Illinois College (IC)Law

Mississippi Adjuster License Exam Questions And Correct Answers (Verified Answers) Plus Rationales 2025

Typology: Exams

2024/2025

Available from 07/01/2025

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Mississippi Adjuster License Exam Questions And
Correct Answers (Verified Answers) Plus Rationales
2025
This test covers insurance terms, policy provisions, state regulations, claim
handling, and ethics.
1. What is the primary purpose of insurance?
• A. To generate profit for insurers
• B. To transfer risk from the insured to the insurer
• C. To eliminate all possible losses
• D. To protect only the insurer
• The primary purpose of insurance is to transfer financial risk from the
insured to the insurer in exchange for a premium.
2. Which of the following is an example of a physical hazard?
• A. Dishonesty
• B. Poor financial planning
• C. Icy sidewalks
• D. Legal liability
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Download Mississippi Adjuster License Exam Questions And Correct Answers (Verified Answers) Plus R and more Exams Law in PDF only on Docsity!

Mississippi Adjuster License Exam Questions And

Correct Answers (Verified Answers) Plus Rationales

This test covers insurance terms, policy provisions, state regulations, claim handling, and ethics.

  1. What is the primary purpose of insurance?
  • A. To generate profit for insurers
  • B. To transfer risk from the insured to the insurer
  • C. To eliminate all possible losses
  • D. To protect only the insurer
  • The primary purpose of insurance is to transfer financial risk from the insured to the insurer in exchange for a premium.
  1. Which of the following is an example of a physical hazard?
  • A. Dishonesty
  • B. Poor financial planning
  • C. Icy sidewalks
  • D. Legal liability
  • A physical hazard is a tangible condition that increases the likelihood of a loss, like icy sidewalks.
  1. In Mississippi, adjusters are required to renew their license every:
  • A. 1 year
  • B. 2 years
  • C. 3 years
  • D. 4 years
  • Mississippi adjuster licenses must be renewed every two years.
  1. What does indemnity mean in insurance?
  • A. To make a profit after a loss
  • B. To restore the insured to their original financial position
  • C. To punish the at-fault party
  • D. To provide more than what was lost
  • Indemnity means restoring the insured to the same financial condition they were in before the loss, no more or less.
  1. Which of the following best describes a moral hazard?
  • A. Intentional loss for financial gain
  • B. Wet floor in a grocery store
  • C. Tree falling due to a storm
  • D. Economic downturn
  • D. Canceling the insured's coverage
  • Subrogation allows the insurer to recover losses from the party that caused the loss, after paying the insured.
  1. What is an insurable interest?
  • A. Having high deductible options
  • B. A financial stake in the insured item
  • C. Understanding the policy limits
  • D. Having multiple policies
  • An insurable interest means the policyholder would suffer financially if the insured item were lost or damaged. 10.A policy that covers only the specific perils listed is called:
  • A. Comprehensive
  • B. Named-peril
  • C. Open-peril
  • D. Blanket-peril
  • Named-peril policies only cover risks specifically listed in the contract. 11.What is the purpose of a deductible?
  • A. To increase the insurer’s risk
  • B. To reduce small claims and control premiums
  • C. To allow coverage for excluded losses
  • D. To increase indemnity
  • Deductibles lower the number of small claims and help keep premiums affordable. 12.Which part of the policy contains the insurer's promise to pay?
  • A. Declarations
  • B. Conditions
  • C. Insuring agreement
  • D. Exclusions
  • The insuring agreement outlines what the insurer will cover and under what circumstances. 13.In Mississippi, a licensed adjuster must notify the Department of Insurance of a change of address within:
  • A. 90 days
  • B. 30 days
  • C. 60 days
  • D. 15 days
  • Adjusters in Mississippi must report address changes within 30 days to remain compliant. 14.What is a waiver in insurance terms?
  • A. A new premium payment
  • B. The voluntary relinquishment of a known right
  • C. Additional coverage endorsement
  • C. Recovery of the damaged property by the insurer after payment
  • D. Replacement value
  • Salvage allows the insurer to recover part of a claim payout by retaining damaged property. 18.Which of the following is an example of a supplementary payment?
  • A. Personal property damage
  • B. Fire loss
  • C. Bail bond fees
  • D. Water damage
  • Supplementary payments include items like court costs or bail bonds, in addition to the main liability coverage. 19.Which type of adjuster is employed by an insurance company?
  • A. Public
  • B. Independent
  • C. Staff adjuster
  • D. Freelance
  • Staff adjusters are salaried employees of insurance companies. 20.A policyholder lies about damage to get a larger claim payment. This is:
  • A. Miscommunication
  • B. Insurance fraud
  • C. Waiver
  • D. Estoppel
  • Knowingly misrepresenting facts to obtain payment is considered insurance fraud. 21.An independent adjuster:
  • A. Works only for one carrier
  • B. Cannot work in Mississippi
  • C. Is hired by insurers on a contract basis
  • D. Is always salaried
  • Independent adjusters are contractors hired to handle claims on behalf of multiple insurers. 22.What does "actual cash value" mean?
  • A. Cost of repairs
  • B. Replacement cost
  • C. Replacement cost minus depreciation
  • D. Purchase price
  • Actual Cash Value (ACV) factors in depreciation from the replacement cost. 23.What is the purpose of an exclusion clause?
  • A. To list losses not covered by the policy
  • B. To guarantee all coverage
  • C. To add endorsements
  • D. To void coverage
  • The first step is to acknowledge the claim and begin investigating its validity and scope. 27.Which of the following is required for a contract to be legally binding?
  • A. Consideration only
  • B. Offer only
  • C. Offer, acceptance, and consideration
  • D. Premium payment only
  • A valid insurance contract must have offer, acceptance, and consideration (something of value exchanged). 28.What does “estoppel” mean in insurance?
  • A. A type of deductible
  • B. Preventing a party from asserting a right due to past actions
  • C. Proof of loss
  • D. Subrogation process
  • Estoppel stops a party from asserting something contrary to what was previously implied by their actions. 29.What is the purpose of the declarations page?
  • A. Lists exclusions
  • B. Summarizes key policy information like insured’s name, limits, and premium
  • C. Details how to file a claim
  • D. Identifies the underwriter
  • The declarations page provides a summary of critical policy information at the beginning of the contract. 30.In a liability policy, what are “limits of liability”?
  • A. Policy expiration dates
  • B. Number of insureds
  • C. Maximum amount the insurer will pay for a claim
  • D. Minimum claim amount required
  • Limits of liability cap the amount an insurer will pay under the policy terms. 31.Under Mississippi law, how long must claim records be maintained by an adjuster or insurer?
  • A. 1 year
  • B. 2 years
  • C. 3 years
  • D. 5 years
  • Mississippi requires claims records to be retained for at least three years for regulatory review. 32.What is the “duty to defend” in a liability policy?
  • A. The insured’s duty to hire counsel
  • B. The insurer’s obligation to provide legal defense for covered claims
  • C. The court’s role in a dispute
  • C. During mediation
  • D. When the claim is denied
  • Claims are confidential; sharing information without consent or legal obligation is prohibited. 36.What does "reservation of rights" mean?
  • A. Canceling a policy
  • B. Notifying the insured that coverage may not apply
  • C. Agreeing to full settlement
  • D. Denying coverage immediately
  • A reservation of rights lets the insurer investigate or defend a claim without waiving coverage exclusions. 37.What is proximate cause?
  • A. Location of accident
  • B. The primary cause of a loss
  • C. Secondary loss factor
  • D. The police report
  • Proximate cause is the initial event that set the loss in motion and directly caused the damage. 38.When must an adjuster notify the insured of a claim decision in Mississippi?
  • A. Within 90 days
  • B. Within 30 days after receiving proof of loss
  • C. Within 15 days
  • D. Within 60 days
  • Mississippi law generally requires claim decisions within 30 days of receiving the completed proof of loss. 39.Which type of adjuster represents the interests of the policyholder?
  • A. Independent adjuster
  • B. Staff adjuster
  • C. Public adjuster
  • D. Catastrophe adjuster
  • Public adjusters advocate for the policyholder, not the insurance company. 40.What is a “reservation of rights” letter used for?
  • A. Denying coverage
  • B. Granting full benefits
  • C. Allowing the insurer to investigate while preserving coverage defenses
  • D. Requesting arbitration
  • This letter preserves the insurer’s right to deny coverage while investigating the claim. 41.An adjuster must act in:
  • A. The insurer’s sole interest
  • B. Good faith and fair dealing
  • C. Favor of denial
  • D. 2 years
  • Insureds generally have 3 years to initiate a lawsuit on a denied claim in Mississippi. 45.Which document initiates the claim investigation?
  • A. Proof of loss
  • B. Policyholder’s premium
  • C. Notice of loss
  • D. Declaration page
  • The claim process starts when the insurer receives a notice of loss. 46.What is the purpose of the conditions section of an insurance policy?
  • A. Lists optional riders
  • B. Summarizes total costs
  • C. Outlines duties and obligations of both parties
  • D. Defines covered locations
  • Policy conditions define responsibilities such as how to file claims and how disputes are handled. 47.Who is responsible for proving a loss under an insurance policy?
  • A. Insurance Commissioner
  • B. Insurer
  • C. Insured
  • D. Adjuster
  • The burden of proving a covered loss rests on the insured. 48.Which policy provision prevents the insured from collecting twice for the same loss?
  • A. Liberalization
  • B. Nonconcurrency
  • C. Other insurance clause
  • D. Endorsement
  • The other insurance clause ensures the insured cannot profit by recovering from multiple policies. 49.A written statement from the insured describing the loss is known as:
  • A. Warranty
  • B. Proof of loss
  • C. Declaration
  • D. Binder
  • Proof of loss is the formal, written documentation of the claim submitted by the policyholder. 50.Which of the following is required to obtain an adjuster license in Mississippi?
  • A. College degree
  • B. Public notary
  • C. Passing the state licensing exam