Reviewed by the CoveragePrep editorial team · Sources: state insurance departments, statutes, exam candidate handbooks · How we research
AK state law · part 2 of 2
Alaska Independent Adjuster Practice Test: Alaska law, Part 2
15 more Alaska law questions for the Alaska Independent Adjuster exam. Every explanation cites the statute or rule it is based on, so you can read the source when a rule surprises you. Start with part 1 on the main Alaska adjuster page if you have not done it yet.
Subtopics in this part: Accepting or denying first-party claims, Notice to unrepresented claimants, Method of claim payment, Auto total loss valuation, Property claim settlement, Releases and partial payments, General business practice, Unfair claim practice penalties, Insurance fraud reporting, Auto liability minimums, Uninsured and underinsured motorist coverage, Depreciation of labor, Mandatory appraisal, Alaska Insurance Guaranty Association, Concurrent causation.
0 of 15 answered
Accepting or denying first-party claims · Application
Wen submits a properly executed proof of loss for theft of business equipment, and the policy sets no other time limit. Under 3 AAC 26.070, how soon must the adjuster advise Wen in writing whether the claim is accepted or denied?
Show answer and explanation
Correct answer: C. Within 15 working days, with updates every 45 working days
3 AAC 26.070(a)(1) requires written acceptance or denial of a first-party claim within 15 working days after a properly executed proof of loss, unless the coverage document sets another limit; paying within that time counts as acceptance. If more time is needed, the claimant gets written reasons within the deadline, then again 45 working days later and at least every 45 working days after that. Undisputed amounts must be paid within 30 working days.
Kofi, a third-party claimant without an attorney, is negotiating directly with an adjuster. The time limit for filing his suit expires on August 30. Under 3 AAC 26.070(c), what is the latest date the adjuster may give written notice of that deadline and still keep negotiating?
Show answer and explanation
Correct answer: A. July 1
3 AAC 26.070(c) bars continuing direct negotiations with a claimant who is not an attorney or represented by one up to a time limit unless written notice clearly stating the limit and its effect is given at least 60 calendar days before it expires. Counting back 60 calendar days from August 30 gives July 1 (30 days back to July 31, then 30 more). July 31 gives only 30 days of warning, and August 15 only 15.
An insurer based in another state settles a Juneau homeowner's claim, and its check is drawn on a bank that has no branch in Alaska. Under 3 AAC 26.070(d), when is paying with that check allowed?
Show answer and explanation
Correct answer: B. Only if it is payable in cash at a bank with an Alaska location
3 AAC 26.070(d) requires judgments and settlements, including advances and partial payments, to be paid by a negotiable check payable in cash upon presentation to a bank in Alaska, by electronic funds transfer, or by a prepaid card the director approves. A check drawn on an out-of-state bank must be payable in cash at one or more banks with a physical location in Alaska. AS 21.96.030 likewise limits payment instruments unless the policyholder or beneficiary agrees to another form.
Under 3 AAC 26.300, a comparable motor vehicle must have similar mileage. A totaled sedan had 30,000 miles on the date of loss. What is the highest mileage a comparable vehicle may have?
Show answer and explanation
Correct answer: A. 34,000 miles
3 AAC 26.300(15) defines similar mileage as not exceeding the loss vehicle's mileage by more than 4,000 miles or 10 percent, whichever is greater. Ten percent of 30,000 is 3,000, less than 4,000, so the 4,000-mile allowance applies: 30,000 + 4,000 = 34,000. Using 10 percent alone gives 33,000. A comparable vehicle must also be the same make, the same or newer model year, with similar body style and options, in as good or better condition.
Hail damages two sides of a home insured on a replacement cost basis. The siding is discontinued, and new siding cannot match the color of the undamaged sides. Under 3 AAC 26.090(l), how must the adjuster handle the claim?
Show answer and explanation
Correct answer: B. Replace siding in the area so the home has a uniform appearance
Under 3 AAC 26.090(l)(2), when property is replaced on a replacement cost basis and the new material does not match in quality, color or size, the person adjusting the claim must replace the property in the area to provide a reasonably uniform appearance, for interior or exterior losses. The claimant pays nothing for betterment or other cost beyond the deductible. A flat mismatch allowance or a betterment charge does not meet the rule.
An adjuster issues an advance payment under the dwelling coverage of a fire claim. The draft's back says that cashing it releases the insurer from all liability under the policy. Under 3 AAC 26.060, this practice is:
Show answer and explanation
Correct answer: C. Prohibited for partial payments under a coverage
3 AAC 26.060(5) bars issuing a check, draft or other payment in partial settlement of a loss under a coverage if it contains language releasing the payer from any other liability. Paragraph (4) similarly bars asking a first-party claimant to sign a release extending beyond the subject matter of the payment. The claimant's initials or an appraisal clause do not cure the problem, and partial payments are exactly what the rule addresses.
During a 12-month period an insurer handled 3,500 claims. Under the 3 AAC 26.300 definition, what is the fewest late claim acknowledgments that meets the percentage test for a general business practice?
Show answer and explanation
Correct answer: D. 35
3 AAC 26.300(6) defines frequency indicating a general business practice as violating any one standard on 1 percent or more of claims handled within 12 months, or repeated violations of one standard without reasonable explanation. One percent of 3,500 is 35. Under 3 AAC 26.010, each violation is an unfair act, while a general business practice is an unfair practice carrying a larger penalty of up to $25,000 under AS 21.36.910(d).
After a hearing, the director finds that an adjuster knew or should have known that his claim practices violated AS 21.36. Under AS 21.36.910(e), what may be ordered in addition to the basic penalty?
Show answer and explanation
Correct answer: C. License action and up to $25,000 per violation or $250,000 for a practice
AS 21.36.910(d) lets the director order restitution and penalties of up to $2,500 per violation or $25,000 for a general business practice. If the person knew or should have known of the violation, subsection (e) adds suspension or revocation of the license and a penalty of up to $25,000 per violation or $250,000 for a general business practice. 3 AAC 26.010(d) applies this added penalty to violations of the claim standards.
While adjusting a burglary claim, Ruth finds receipts that appear forged and has reason to believe the claim is fraudulent. Under AS 21.36.390, what is her duty, and what protection does she have?
Show answer and explanation
Correct answer: A. Report it to the director, with immunity for a good faith report
AS 21.36.390(a) requires an insurer or licensee with reason to believe a fraudulent claim has been made to send the director a report with the information the director requires. Under subsection (c), a person acting in good faith is not civilly liable for filing the report, and AS 21.36.365 gives similar immunity for reports to law enforcement and fraud bureaus. The director investigates and refers violations to prosecutors.
Omar carries only Alaska's minimum auto liability limits. He causes a crash that injures Beth ($70,000 in damages) and Carl ($20,000) and destroys a $30,000 pickup. What is the most his liability coverage pays for these claims?
Show answer and explanation
Correct answer: D. $95,000
AS 28.22.101(d) sets minimum limits of $50,000 per person and $100,000 per accident for bodily injury and $25,000 for property damage. Beth is capped at $50,000 and Carl receives $20,000, for $70,000 of bodily injury, within the $100,000 per accident limit. Property damage is capped at $25,000. Total: $50,000 + $20,000 + $25,000 = $95,000. Omar is personally exposed for the other $20,000 owed to Beth and $5,000 for the pickup.
Uninsured and underinsured motorist coverage · Application
When buying an auto policy, Dale waived uninsured and underinsured motorist coverage in writing. His daughter, a listed driver, is later hurt by an uninsured driver and says she never agreed to the waiver. Under AS 21.96.020, which statement is correct?
Show answer and explanation
Correct answer: B. Dale's written waiver binds every insured under the policy
AS 21.96.020(c) and (d) require insurers to offer uninsured and underinsured motorist coverage, and subsection (e) lets the insured waive it in writing, in whole or in part. After a waiver, the insurer need not re-offer the coverage at renewal, and the waived coverage stays out unless the insured asks in writing. Subsection (h) makes a named insured's selection or rejection valid for all insureds under the policy, so the daughter is bound.
A home is insured under a residential property policy issued in 2026, with no labor depreciation endorsement. A covered windstorm requires a new roof costing $9,000 in materials and $7,000 in labor. Materials depreciate 40 percent, and the deductible is $1,000. Under AS 21.60.030, what is the actual cash value payment?
Show answer and explanation
Correct answer: D. $11,400
AS 21.60.030, effective January 1, 2026, bars depreciating the expense of labor in a residential property policy unless the insured chose an optional stand-alone endorsement with a premium reduction. Only materials depreciate: $9,000 x 0.60 = $5,400. Adding undepreciated labor of $7,000 gives $12,400, less the $1,000 deductible, for $11,400. Depreciating labor too would give $8,600, a valuation AS 21.36.125(a)(18) makes an unfair claim practice.
Under Alaska's mandatory appraisal statute, AS 21.96.035, after one party makes written demand for appraisal, when must each side name its appraiser, and when must the appraisers state the loss amount?
Show answer and explanation
Correct answer: B. Within 10 days; within 15 days after the umpire is chosen
AS 21.96.035 requires first-party property, auto and inland marine policies issued in Alaska to include an appraisal clause. After written demand, each party names a competent appraiser within 10 days; the appraisers choose an impartial umpire, and within 15 days after the umpire is chosen (unless the umpire extends it) each appraiser states the loss in writing. Agreement of any two binds both sides, and the umpire allocates costs other than counsel or adjuster fees.
Alaska Insurance Guaranty Association · Application
An admitted property and casualty insurer is ordered liquidated as insolvent. Under AS 21.80.060, which covered claim does the Alaska Insurance Guaranty Association pay in full, without the general claim cap?
Show answer and explanation
Correct answer: A. A workers' compensation claim of an injured Alaska employee
AS 21.80.060(a)(1) limits the association's payment on each covered claim to an amount less than $500,000 and caps unearned premium claims at $10,000 per policy, but requires full payment of covered claims under workers' compensation policies. Punitive damages are excluded from covered claims by AS 21.80.180. Claimants must first exhaust other applicable insurance (AS 21.80.100), and claims must exist before, or arise within 30 days after, the liquidation order.
An adjuster concludes that a covered peril was the dominant cause of a loss, while an excluded peril also played a part in the chain of causes but only on a secondary basis. Under AS 21.36.096, the insurer:
Show answer and explanation
Correct answer: C. May not deny the claim because of the secondary excluded peril
AS 21.36.096 prohibits an insurer from denying a claim when an insured risk is the dominant cause of the loss and the denial rests on an excluded risk that also appears in the chain of causes but operates only on a secondary basis. The statute contains no exception for policy wording and does not call for apportioning the loss, so the secondary excluded peril cannot be the basis for denying this claim.