Alabama Independent Adjuster Practice Test

Correct answer: A. No, salaried insurer employees are excluded from the definition

Section 27-9A-3(a) defines an independent adjuster as someone who adjusts claims for an insurer as an independent contractor or as the employee of an independent contractor, and subsection (b)(2) excludes a salaried employee of an insurer. Determining claim amounts is adjusting work, but the license requirement attaches to independent status, so staff adjusters like Darnell need no Alabama license. Emergency registration is for unlicensed independent adjusters, not staff.

Reference: Ala. Code 27-9A-3(a) and (b)(2)

Correct answer: C. None, because technical help to a licensed adjuster is excluded

Section 27-9A-3(b)(3) excludes a person employed solely to obtain facts about a claim or to furnish technical assistance to a licensed independent adjuster. Priya's engineering report supports the adjuster, who still determines the amount payable and settles the claim. An apprentice license is for someone learning to adjust claims under supervision, and emergency registration covers unlicensed adjusters an insurer deploys after a declared emergency.

Reference: Ala. Code 27-9A-3(b)(3)

Correct answer: B. Alabama has no such license, and the State Bar sees it as law practice

Public adjusters are not licensed or regulated by the Alabama Department of Insurance, so there is no Alabama public adjuster license, exam or bond. NIPR's Alabama licensing rules add that the Alabama State Bar considers negotiating claims directly with an insurer on an insured's behalf to be the practice of law. Chapter 27-9A licenses only independent adjusters, who work for insurers, and apprentices adjust only under a supervising independent adjuster.

Reference: NIPR, Alabama nonresident adjuster licensing business rules; Ala. Code 27-9A-3(a)

Correct answer: D. Property and casualty, workers' compensation, and crop

Section 27-9A-7(a) lists three lines of authority: property and casualty, workers' compensation, and crop. Rule 482-1-151-.06 builds four exams around them: property and casualty excluding workers' compensation and crop, workers' compensation, crop, and a combined exam covering all three. Accident and health claims fall outside the chapter, because 27-9A-3(b)(11) excludes people who adjust life, accident and health, annuity or disability claims.

Reference: Ala. Code 27-9A-7(a); Ala. Admin. Code r. 482-1-151-.06(1)

Correct answer: B. 105

With 150 equally weighted questions, each is worth 100/150, or about 0.667 points, so 70 points requires 70 divided by 0.667, or 105 correct answers, exactly 70% of 150. The University of Alabama, which administers Alabama's insurance exams for the Department, lists 105 correct as the passing mark for this 3-hour exam. Unanswered questions count as wrong, so answering every item is the better strategy.

Reference: Ala. Admin. Code r. 482-1-151-.06(4); University of Alabama Insurance Testing, exam table

Correct answer: A. After a 90-day wait measured from March 2

Rule 482-1-151-.06(5)(a) requires a 90-day wait after a second failed exam for the same line of authority, counted from the last failure. The 180-day wait in (5)(b) applies only after two more failures, before each later attempt, and all waiting periods expire 24 months after the last failed exam. Each attempt also needs a new registration and the nonrefundable $75 fee.

Reference: Ala. Admin. Code r. 482-1-151-.06(5) and (8)

Correct answer: C. 90 days

Rule 482-1-151-.06(3)(a) waives the licensing exam for a resident applicant whose out-of-state license was earned by examination, is in good standing, and is current or was cancelled within 90 days before the application; Ala. Code 27-9A-9(a) likewise allows 90 days after an out-of-state license expires, and 27-9A-9(b) allows 90 days after establishing Alabama residency. The 12-month window in 27-9A-9(c) is a different exemption, for former Alabama licensees who reapply within 12 months of cancelling an Alabama license.

Reference: Ala. Admin. Code r. 482-1-151-.06(3)(a); Ala. Code 27-9A-9

Correct answer: D. $160, effective as of the reinstatement

The biennial renewal fee is $80. Within the first 30 days after expiration, 27-9A-7(c) allows reinstatement retroactive to the expiration date for 1.5 times the fee, or $120. After 30 days but within 12 months, 27-9A-7(d) requires double the fee, $160, and the license is reinstated only as of the reinstatement. Kenji is 45 days late, so he pays $160 and has a gap in licensure. After 12 months he would have to reapply.

Reference: Ala. Code 27-9A-7(c) to (e); Ala. Admin. Code r. 482-1-151-.10(1)(a)

Correct answer: B. At the end of May 2027

Individual licenses expire every two years at the end of the licensee's birth month: in odd-numbered years for people born in odd years, and in even-numbered years for people born in even years. Aisha was born in 1993, so her license runs to the end of May in the next odd year, 2027. An initial license cannot expire within its first 90 days, and October 2026 to May 2027 is longer than that. December 31 of odd years is the business entity expiration date.

Reference: Ala. Admin. Code r. 482-1-151-.10(2) and (3)

Correct answer: A. None, because he has not been licensed one full year

Alabama independent adjusters must complete 24 hours of approved CE, including 3 hours of ethics, each biennium, but 27-9A-13(b)(1) exempts licensees not licensed for one full year before the end of the CE biennium, which Rule 482-1-151-.11(7)(a) ties to the license expiration date. From his next renewal on, Rafael needs the full 24 hours, and the Department does not let excess hours carry over to the next reporting period.

Reference: Ala. Code 27-9A-13(a) and (b)(1); Ala. Admin. Code r. 482-1-151-.11(7)(a)

Correct answer: D. No, an apprentice may be paid only a salary or an hourly wage

Section 27-9A-11(c)(4) limits an apprentice's compensation to a salaried or hourly basis, so a per-file or fee-schedule arrangement is not allowed, even with supervisor approval. The apprentice may be paid, however, and may take part in adjusting Alabama claims, with the supervising licensed adjuster reviewing and making the final determination on each claim under (c)(3).

Reference: Ala. Code 27-9A-11(c)(3) and (4)

Correct answer: C. It runs up to 12 months, once per lifetime, with no renewal

Under 27-9A-11(c)(6), the apprentice license is valid for no more than 12 months, is nonrenewable, and may be held only once in a person's lifetime. The apprentice may adjust claims only in Alabama under (c)(2), and a licensed independent adjuster may supervise no more than five active apprentices at a time under (c)(1). Passing the licensing exam during the term converts it to a full independent adjuster license with no additional fee.

Reference: Ala. Code 27-9A-11(c)(1), (2) and (6); Ala. Admin. Code r. 482-1-151-.08(8)

Correct answer: A. The insurer, within five days after deployment

Section 27-9A-5(b) puts the duty on the insurer to register each emergency independent adjuster within five days of deployment. The registration lasts no more than 90 days unless the Commissioner extends it, and Rule 482-1-151-.09 sets the registration fee at $60 per adjuster, paid by the insurer. Registered emergency adjusters must follow the same conduct and record rules as licensed independent adjusters.

Reference: Ala. Code 27-9A-5(b), (d) and (g); Ala. Admin. Code r. 482-1-151-.09

Correct answer: B. Pass the appropriate Alabama adjuster exam and be fingerprinted

Section 27-9A-6(c) bars a resident of another state from designating Alabama as home state unless he passes the Alabama independent adjuster exam, and since January 1, 2015 the Department has also required fingerprinting for these applicants. The Department lists Ohio among the states that do not license independent adjusters. Once licensed, Alabama designated home state adjusters complete the same 24 hours of CE, including 3 of ethics, as residents.

Reference: Ala. Code 27-9A-6(c); ALDOI Independent Adjuster Requirements

Correct answer: D. Deal directly with him only if his lawyer consents

Section 27-9A-15(3) bars an independent adjuster from dealing directly with any policyholder or claimant who is represented by legal counsel without that counsel's consent, and from giving legal advice. Celia should communicate through the lawyer. Closing the file would not satisfy her duty to give prompt, fair service, and asking the claimant to waive counsel is exactly the direct dealing the statute prohibits.

Reference: Ala. Code 27-9A-15(2) and (3)

Correct answer: C. Only with written authority from his principal

Section 27-9A-15(6) prohibits an independent adjuster from having any financial interest in an adjustment or acquiring any interest or title in salvage without first receiving written authority from the principal, the insurer that hired him. Matching a bid or waiting until payment does not cure the conflict. The rule is not an absolute ban, because written authority from the principal makes the purchase permissible.

Reference: Ala. Code 27-9A-15(6)

Correct answer: A. Identify as an independent adjuster and name any employer

Section 27-9A-15(5) requires every independent adjuster, apprentice adjuster and emergency adjuster to identify himself or herself as an independent adjuster and, if applicable, to identify the employer when dealing with any policyholder or claimant. The section's other standards include honest and fair communications, prompt and courteous service, no legal advice, and compliance with privacy and information security laws. Contract copies and fee disclosures are not part of it.

Reference: Ala. Code 27-9A-15

Correct answer: B. Full loss liability and possible license revocation

Section 27-10-2(b), amended in 2024, makes an independent adjuster who directly or indirectly investigates a loss under a policy issued by an unauthorized insurer liable for the full amount of the insured's loss, and the Commissioner may revoke the license after a hearing. It does not apply to lawful surplus lines contracts, coverage the insured procured and paid tax on, or transactions that need no certificate of authority. Premium tax liability is in 27-10-2(a), for people who represent or aid unauthorized insurers.

Reference: Ala. Code 27-10-2(b) (as amended by Act 2024-71)

Correct answer: D. Within 15 days of June 3, because notice to the producer counts

Rule 482-1-125-.06(1) requires an insurer to acknowledge a first-party claim within 15 days of notification unless it pays within that time, and notice to the insurer's producer is notice to the insurer, so the clock started June 3. Acknowledgment by the producer satisfies the rule, and a non-written acknowledgment must be dated and noted in the claim file. Sending claim forms within 15 days under paragraph (4) also complies.

Reference: Ala. Admin. Code r. 482-1-125-.06(1) and (4)

Correct answer: C. Notice within 30 days of why more time is needed, then every 45 days

Under 482-1-125-.07(1) and (2), the insurer must accept or deny within 30 days after proofs of loss, or the time in the policy, or notify the claimant within that period of the reasons it needs more time. If the investigation remains open, it must explain why 45 days from the initial notification and every 45 days after that. The notices stop if the claim goes into litigation, and a documented, reasonable basis to suspect fraud relaxes them.

Reference: Ala. Admin. Code r. 482-1-125-.07(1) and (2)

Correct answer: B. September 9, 30 days after the documents arrived

Rule 482-1-125-.07(6) requires payment within 30 days, or the time in the policy, after the insurer has accepted liability, reached agreement on the amount and received any documents needed to complete the settlement. The last of those events was August 10, and counting 30 calendar days under the Alabama Rules of Civil Procedure (excluding the starting day) gives Wednesday, September 9. Agreement alone does not start the clock while required documents are outstanding.

Reference: Ala. Admin. Code r. 482-1-125-.07(6) and .03(c)

Correct answer: A. Written notice of the expiration date about 45 days before it

Rule 482-1-125-.07(4) bars insurers from knowingly ceasing or prolonging negotiations to let a statute of limitations run. For an unrepresented first-party claimant with an unresolved claim, the insurer must send written notice of the expiration date, as the insurer understands it, and of the effect of expiration, approximately 45 calendar days before the period may expire. The duty exists precisely because the claimant has no lawyer to warn her.

Reference: Ala. Admin. Code r. 482-1-125-.07(4)

Correct answer: D. Taxes, license and transfer fees, as on the totaled car

A cash settlement under 482-1-125-.08(1)(b) is the actual cost, less any deductible, to buy a comparable vehicle of the same manufacturer and model year, with similar body style, condition, options and mileage, including applicable taxes, license fees and transfer fees. Those taxes and fees are limited to what would have been paid on the totaled vehicle, and the rule does not condition them on buying a replacement. Paragraph (6), on insurer-directed repairs, states that it creates no duty to pay diminished value.

Reference: Ala. Admin. Code r. 482-1-125-.08(1)(b)

Correct answer: C. No, unless limits are paid or a compromise is agreed

Rule 482-1-125-.05(3) forbids telling a first-party claimant on a check, draft or accompanying letter that a payment is final or a release unless the policy limit has been paid or the claimant and insurer agreed to a compromise settlement on coverage and amount. Paragraph (4) also bars partial-settlement checks with language releasing the insurer or its insured from total liability. Cashing the check does not change that.

Reference: Ala. Admin. Code r. 482-1-125-.05(3) and (4)

Correct answer: A. $10,800, plus copies of the depreciation worksheets

For residential fire and extended coverage settled at actual cash value, 482-1-125-.09(2) defines ACV as replacement cost at the time of loss less depreciation: $18,000 minus 40% ($7,200) equals $10,800. On the insured's request, the insurer must provide copies of the claim file worksheets detailing every deduction for depreciation. $7,200 is the depreciation itself, not the payment, and nothing in the rule bars depreciating a roof.

Reference: Ala. Admin. Code r. 482-1-125-.09(2)