AdjusterPRO Final Exam Questions and
Answers 100% Solved | Graded A+
-+What is a reserve, in insurance terms? - ✔✔A pool of collected premiums
that the insurer sets aside to pay claims
Which of these scenarios is NOT an example of indemnification? -
✔✔When trying to renew her dog's license, Ellen has to pay a penalty to
the city for letting its rabies vaccination lapse.
Ellen having to pay a fine is not an example of indemnification.
Indemnification means being restored to the financial condition you were in
before a loss. In three of these situations, someone experienced a loss and
was then "made whole": Joe-Bob's neighbor lost his TV, Alice lost her
house, and Hugh lost the use of his car. But in the case of Ellen's dog, the
city did not experience a loss; it simply imposed a penalty to teach Ellen a
lesson about keeping up with her dog's shots.
Greg plays trombone in his school band during football games. During a
rally song in the stands one day, Greg annoys one of the opposing team's
fans, who grabs his $400 trombone and hurls it down the bleachers,
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©NINJANERD 2025/2026. YEAR PUBLISHED 2025.
,completely destroying it. Greg's insurance pays him $400 to replace the
trombone, but then the opposing team's coach also offers to replace the
instrument, at whatever the cost. So Greg orders a new $3,200 trombone
and has the opposing team's athletic department absorb the cost. Which
principle has Greg violated? - ✔✔The principle of indemnity
Which of the following statements is true about an insurance policy? - ✔✔It
relies on the utmost good faith of both the insured and the insurer
An insurance policy relies on the utmost good faith of both the insured and
the insurer.
Which of the following would you find in the Conditions section of an
insurance policy? - ✔✔The insured's duty after a loss
In which section of an insurance policy might you find the following
statement? "Damage to insured property must be reported within 15 days
of the damaging occurrence." - ✔✔Conditions
A captive insurance company: - ✔✔exists solely to provide insurance for its
parent company.
Cindy holds an insurance policy from Sine Nomine Insurance. This is not a
publicly traded company, and Cindy can participate in the election of the
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©NINJANERD 2025/2026. YEAR PUBLISHED 2025.
,board, receiving dividends if the company does well. Sine Nomine
Insurance could be best described as a: - ✔✔Sine Nomine Insurance is a
mutual insurance company.
When an insurer issues an insurance policy, the actual item, person, or
organization that is being insured is called the: - ✔✔risk.
Which of the following is a hazard? - ✔✔A driver's tendency to text while
driving
Which of the following situations does NOT involve an insurable risk? -
✔✔Dale just bought 30 shares of a hot new startup company online.
Which of the following situations does NOT involve an instance of "pure
risk?" - ✔✔Loss of money invested in the stock market
Which of the following is an insurable risk? - ✔✔football stadium
Risk avoidance is a risk management technique that: - ✔✔eliminates risk.
Amy needs more floor space in her antique furniture store, so she buys a
storage building 3 miles away. She is worried about keeping the furniture in
the storage building safe, so she puts in an alarm system and smoke
detectors. By purchasing the alarm system and smoke detectors, Amy is
practicing: - ✔✔risk reduction.
3
©NINJANERD 2025/2026. YEAR PUBLISHED 2025.
, Six Stars Development Company has just been offered a great deal on ten
large properties in Las Vegas. The economy in Las Vegas has been
declining recently, but the CEO of Six Stars expects it to recover soon. This
could be an exceptional opportunity for Six Stars, but it's also pretty risky.
Ultimately, the Six Stars executive team decides not to purchase the
properties. This is an example of: - ✔✔risk avoidance.
Jason's auto policy states that the insurer may cancel coverage if a
premium is more than 30 days late. However, Jason is currently more than
30 days late, and has been so five times in the last year, and his insurer
has done nothing about it. When Jason gets into an accident and files a
claim, which of the following is most likely to happen? - ✔✔An implied
waiver is one that is assumed based on someone's actions. When the
insurer decided to accept Jason's late premium payments, it implied that it
was waiving its right to cancel Jason's policy because of a late payment.
So, when Jason files a claim, the insurer may not claim that his policy is
void due to late payments.
In order to qualify for an insurance policy, Lydia's Fine Jewels must agree
to have a security guard on the premises 24/7. This is called a: - ✔✔A
warranty is a guarantee that certain conditions will be met. If the
policyholder violates a warranty, the insurer can void the policy.
4
©NINJANERD 2025/2026. YEAR PUBLISHED 2025.
Answers 100% Solved | Graded A+
-+What is a reserve, in insurance terms? - ✔✔A pool of collected premiums
that the insurer sets aside to pay claims
Which of these scenarios is NOT an example of indemnification? -
✔✔When trying to renew her dog's license, Ellen has to pay a penalty to
the city for letting its rabies vaccination lapse.
Ellen having to pay a fine is not an example of indemnification.
Indemnification means being restored to the financial condition you were in
before a loss. In three of these situations, someone experienced a loss and
was then "made whole": Joe-Bob's neighbor lost his TV, Alice lost her
house, and Hugh lost the use of his car. But in the case of Ellen's dog, the
city did not experience a loss; it simply imposed a penalty to teach Ellen a
lesson about keeping up with her dog's shots.
Greg plays trombone in his school band during football games. During a
rally song in the stands one day, Greg annoys one of the opposing team's
fans, who grabs his $400 trombone and hurls it down the bleachers,
1
©NINJANERD 2025/2026. YEAR PUBLISHED 2025.
,completely destroying it. Greg's insurance pays him $400 to replace the
trombone, but then the opposing team's coach also offers to replace the
instrument, at whatever the cost. So Greg orders a new $3,200 trombone
and has the opposing team's athletic department absorb the cost. Which
principle has Greg violated? - ✔✔The principle of indemnity
Which of the following statements is true about an insurance policy? - ✔✔It
relies on the utmost good faith of both the insured and the insurer
An insurance policy relies on the utmost good faith of both the insured and
the insurer.
Which of the following would you find in the Conditions section of an
insurance policy? - ✔✔The insured's duty after a loss
In which section of an insurance policy might you find the following
statement? "Damage to insured property must be reported within 15 days
of the damaging occurrence." - ✔✔Conditions
A captive insurance company: - ✔✔exists solely to provide insurance for its
parent company.
Cindy holds an insurance policy from Sine Nomine Insurance. This is not a
publicly traded company, and Cindy can participate in the election of the
2
©NINJANERD 2025/2026. YEAR PUBLISHED 2025.
,board, receiving dividends if the company does well. Sine Nomine
Insurance could be best described as a: - ✔✔Sine Nomine Insurance is a
mutual insurance company.
When an insurer issues an insurance policy, the actual item, person, or
organization that is being insured is called the: - ✔✔risk.
Which of the following is a hazard? - ✔✔A driver's tendency to text while
driving
Which of the following situations does NOT involve an insurable risk? -
✔✔Dale just bought 30 shares of a hot new startup company online.
Which of the following situations does NOT involve an instance of "pure
risk?" - ✔✔Loss of money invested in the stock market
Which of the following is an insurable risk? - ✔✔football stadium
Risk avoidance is a risk management technique that: - ✔✔eliminates risk.
Amy needs more floor space in her antique furniture store, so she buys a
storage building 3 miles away. She is worried about keeping the furniture in
the storage building safe, so she puts in an alarm system and smoke
detectors. By purchasing the alarm system and smoke detectors, Amy is
practicing: - ✔✔risk reduction.
3
©NINJANERD 2025/2026. YEAR PUBLISHED 2025.
, Six Stars Development Company has just been offered a great deal on ten
large properties in Las Vegas. The economy in Las Vegas has been
declining recently, but the CEO of Six Stars expects it to recover soon. This
could be an exceptional opportunity for Six Stars, but it's also pretty risky.
Ultimately, the Six Stars executive team decides not to purchase the
properties. This is an example of: - ✔✔risk avoidance.
Jason's auto policy states that the insurer may cancel coverage if a
premium is more than 30 days late. However, Jason is currently more than
30 days late, and has been so five times in the last year, and his insurer
has done nothing about it. When Jason gets into an accident and files a
claim, which of the following is most likely to happen? - ✔✔An implied
waiver is one that is assumed based on someone's actions. When the
insurer decided to accept Jason's late premium payments, it implied that it
was waiving its right to cancel Jason's policy because of a late payment.
So, when Jason files a claim, the insurer may not claim that his policy is
void due to late payments.
In order to qualify for an insurance policy, Lydia's Fine Jewels must agree
to have a security guard on the premises 24/7. This is called a: - ✔✔A
warranty is a guarantee that certain conditions will be met. If the
policyholder violates a warranty, the insurer can void the policy.
4
©NINJANERD 2025/2026. YEAR PUBLISHED 2025.
