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Nevada “Independent Adjuster” License Practice Exam
Questions and Correct Answers (Verified Answers) Plus
Rationales 2025
- What is the main responsibility of an independent adjuster in Nevada? A. Represent the insured B. Represent the insurance company C. Investigate and adjust claims on behalf of the insurer D. Sell insurance policies
Independent adjusters are hired by insurance companies to handle
claims, not to sell policies or represent the insured.
- Which entity licenses independent adjusters in Nevada? A. Nevada Secretary of State B. Nevada Division of Insurance C. Nevada Attorney General D. U.S. Department of Insurance
The Nevada Division of Insurance is responsible for licensing and
regulating adjusters in the state.
- How long is a Nevada independent adjuster license valid? A. 1 year B. 3 years
C. 4 years D. Lifetime
Nevada licenses are valid for 3 years and must be renewed before
expiration to maintain good standing.
- What is required for license renewal in Nevada? A. Background check B. Retaking the licensing exam C. Continuing education and renewal fee D. Fingerprint submission
Adjusters must complete continuing education and pay a renewal fee
to renew their license.
- What is the continuing education (CE) requirement for Nevada independent adjusters? A. 10 hours every year B. 12 hours every 3 years C. 24 hours every 3 years, including 3 in ethics D. 30 hours every 5 years
Adjusters must complete 24 CE hours every three years, with 3 hours
in ethics.
- An adjuster must notify the Nevada Division of Insurance of an address change within: A. 60 days B. 30 days
D. Notify the insured
Before taking any action, the adjuster must verify whether the policy
covers the reported loss.
10.What does ACV stand for? A. Actual Covered Value B. Actual Cash Value C. Additional Claim Value D. Adjusted Cash Valuation
ACV refers to the depreciated value of property at the time of loss.
11.Depreciation is best defined as: A. Increase in property value B. Cost of labor C. Reduction in property value over time D. Market inflation
Depreciation is the loss in value due to age, wear, or obsolescence.
12.What is a deductible? A. The portion of the loss the insured must pay B. A bonus for filing a claim C. The total value of the policy D. The premium paid annually
The deductible is the amount subtracted from the claim payout, paid
out-of-pocket by the insured.
13.What is the standard of proof in civil insurance claim cases? A. Beyond a reasonable doubt B. Preponderance of the evidence C. Absolute certainty D. Clear and convincing
In civil cases, including insurance claims, a preponderance of evidence
(more likely than not) is the standard.
14.Who determines the amount of loss in a disputed claim when both parties cannot agree? A. The court B. Appraisers and umpire through appraisal process C. The adjuster D. The insurance commissioner
Most policies include an appraisal clause that allows independent
appraisers and an umpire to resolve disputes.
15.What type of policy pays based on the cost to replace without depreciation? A. ACV policy B. Replacement cost policy C. Indemnity policy D. Umbrella policy
Replacement cost policies pay the full cost of replacing damaged
property without considering depreciation.
19.What is the role of an umpire in the appraisal process? A. Represent the insured B. Resolve disputes between appraisers C. Issue policy endorsements D. Act as a mediator for settlement offers
When appraisers disagree, an umpire is called in to make a binding
decision.
20.A written statement made under oath is known as: A. Notice of loss B. Sworn proof of loss C. Waiver D. Declaration
A sworn proof of loss is a signed, written statement of the facts of the
loss made under oath.
21.What is insurable interest? A. When the insured causes the damage B. When the insured benefits from the preservation of the property C. When the insured has no stake in the property D. When the insurer profits
Insurable interest means the insured would suffer a financial loss if
the property is damaged.
22.Which type of adjuster works for the public and not for the insurer?
A. Independent adjuster B. Staff adjuster C. Public adjuster D. General adjuster
Public adjusters represent the policyholder in claims and negotiate
with insurers.
23.What is salvage? A. Property not covered by insurance B. Property that can be recovered and sold after a loss C. Unclaimed property D. A denied claim
Salvage refers to damaged property that still has some value after a
loss.
24.What is proximate cause? A. The last event in the loss B. The direct cause of loss without which the damage would not have occurred C. A contributing factor D. The insurer's decision
Proximate cause is the primary cause that sets everything in motion
and leads to the loss.
25.What type of coverage pays for damages the insured is legally liable for? A. Property coverage B. Liability coverage
D. The deductible is waived
Underreporting can trigger coinsurance penalties, reducing claim
payouts.
29.Who is the first party in an insurance contract? A. The third party B. The insured (policyholder) C. The agent D. The adjuster
The insured is the first party; the insurer is the second party.
30.In liability claims, who is the third party? A. The insurer B. The claimant who suffered damage C. The underwriter D. The adjuster
A third party is someone making a claim against the insured for
liability.
31.Which of the following is NOT a duty of the insured after a loss? A. Protect the property from further damage B. Notify the insurer promptly C. Repair the damage before inspection D. Cooperate with the investigation
The insured should not make repairs until the adjuster inspects the
property.
32.Which best defines a waiver? A. Fraudulent act B. Intentional relinquishment of a known right C. Temporary policy D. Contract amendment
A waiver is when a party voluntarily gives up a known legal right.
33.What is a non-waiver agreement? A. Policy endorsement B. An agreement signed to reserve rights for both parties C. A denial letter D. Replacement cost coverage
This agreement allows the insurer to investigate without admitting
liability.
34.What is the purpose of policy exclusions? A. To increase coverage B. To define what is not covered by the policy C. To clarify premiums D. To list deductibles
Exclusions remove certain risks or losses from coverage.
35.What is moral hazard?
D. Insurance premiums
Supplementary payments cover legal defense expenses.
39.What type of adjuster is employed directly by an insurance company? A. Public adjuster B. Staff adjuster C. Independent adjuster D. Freelance adjuster
Staff adjusters work directly for the insurer, unlike independents or
public adjusters.
40.The financial responsibility of the insured in a liability claim is called: A. Insurable interest B. Legal liability C. Coinsurance D. Deductible
Legal liability refers to the insured being legally responsible for
another’s loss.
41.What is a proof of loss used for? A. Issuing the policy B. Documenting and validating the claim C. Requesting premium refund D. Scheduling repairs
The proof of loss supports the claim with detailed information and
documentation.
42.Which party usually initiates the appraisal clause? A. The insurer only B. Either the insurer or insured C. The adjuster D. The agent
Either party can invoke the appraisal clause in case of disputes over
value.
43.What is the term for ending an insurance policy before its expiration? A. Endorsement B. Cancellation C. Lapse D. Subrogation
Cancellation is the formal termination of a policy before its end date.
44.Which form of property valuation provides the least payout? A. Actual cash value (ACV) B. Replacement cost C. Stated value D. Agreed value
ACV subtracts depreciation, resulting in a lower payout than
replacement cost.
A. Nothing B. They may face license revocation and legal penalties C. The insurer is fined D. The policy is voided
Providing false information can result in serious disciplinary actions.
49.When must a licensee report a criminal conviction to the Division? A. Only for felonies B. Only when renewing the license C. Within 30 days of the conviction D. Within a year
Nevada law requires disclosure of criminal convictions within 30 days.
50.What is the penalty for acting as an adjuster without a license in Nevada? A. Warning letter B. Fine and/or imprisonment C. Temporary license issued D. Additional training required
Unlicensed adjusting is a violation of state law and may result in
serious penalties.
51. What is a binder in insurance? A. A canceled policy B. A temporary agreement providing coverage before the policy is issued C. A premium notice
D. A formal rejection of a claim
A binder serves as temporary proof of insurance until the actual policy
is issued.
52. What is an endorsement in an insurance policy? A. Cancellation form B. Deductible waiver C. A written amendment to the policy D. Claim summary
An endorsement is used to modify the terms, coverage, or conditions
of an insurance policy.
53. What is the purpose of the declarations page in a policy? A. Define covered perils B. Explain exclusions C. Summarize the key policy details D. Describe arbitration process
The declarations page includes insured names, coverage amounts,
effective dates, and premium.
54. What does “aggregate limit” mean in liability insurance? A. Deductible B. Per occurrence limit C. Maximum the insurer will pay during the policy period D. Value of the property
D. The Department of Insurance
Staff adjusters are salaried employees of insurance companies.
58. A claim file must be maintained for how long in Nevada? A. 1 year B. 5 years C. 3 years from date of claim closure D. Indefinitely
Claim files must be retained for at least 3 years after the claim is
closed.
59. A policy’s insuring agreement outlines: A. The exclusions B. The promises and coverage provided C. The conditions D. The claim filing process
This section defines what is covered and the insurer’s obligations.
60. Which of the following is a common liability exclusion? A. Bodily injury B. Property damage to others C. Intentional acts D. Negligence
Policies typically exclude intentional damage caused by the insured.
61. What is a non-admitted insurer? A. Insurer licensed in all 50 states B. Insurer not licensed in the state but allowed to sell surplus lines C. Insurer that offers life policies D. Public adjusting company
Non-admitted carriers offer surplus lines insurance and are not
licensed but permitted under special rules.
62. In Nevada, an adjuster must maintain ethical conduct to avoid: A. Customer complaints B. High loss ratios C. License suspension or revocation D. Low ratings
Violations of ethical conduct may lead to loss of license or penalties.
63. When must a licensee notify the Division of Insurance of a name change? A. At renewal B. Within 60 days C. Every December D. Within 30 days
Licensees must report name or address changes within 30 days.
64. What is required before an adjuster license is issued in Nevada? A. Life insurance experience B. Passing the state exam and background check C. College degree D. Sponsored by an agency
