Indiana Independent Adjuster Practice Test: Indiana law, Part 2

Correct answer: C. Requiring a preliminary report, then a proof of loss with the same facts

Item (12) of IC 27-4-1-4.5 lists delaying the investigation or payment of claims by requiring an insured, a claimant, or the physician of either to submit a preliminary claim report and then a formal proof of loss form containing substantially the same information. Recorded statements, inspections and competing estimates are ordinary investigation steps and are not on the list when used reasonably.

Reference: IC 27-4-1-4.5(12)

Correct answer: B. Ascribing fault to a claimant despite an obvious absence of fault

Item (15) of IC 27-4-1-4.5 makes it an unfair claim settlement practice, in negotiating liability claims, to ascribe a percentage of fault to a person seeking recovery from an insured in spite of an obvious absence of fault on that person's part. Keisha was stopped at a red light and rear-ended, so assigning her 30% without evidence fits this item rather than the others.

Reference: IC 27-4-1-4.5(15)

Correct answer: D. 20 business days from receipt of the complaint

IC 27-4-1-5.6(c) gives the commissioner 10 business days from receiving a written complaint to send a copy to the insurer and respond to the complainant. Under subsection (d), the insurer must investigate and, within 20 business days from receiving the complaint, give the commissioner and the complainant a written report of its reasons for action or inaction and, if the claim is unsettled, a good faith estimate of settlement time.

Reference: IC 27-4-1-5.6(c) and (d)

Correct answer: A. $50,000 for each act or violation

IC 27-4-1-6(a) requires a cease and desist order and allows a civil penalty of not more than $25,000 for each act or violation, rising to not more than $50,000 for each act or violation when the person knew or reasonably should have known of the violation. In that case the commissioner may also suspend or revoke the license. The $10,000 cap is the adjuster licensing penalty in IC 27-1-28-18(e).

Reference: IC 27-4-1-6(a)

Correct answer: C. Defamation

IC 27-4-1-4(a)(3) defines defamation as making or circulating, directly or indirectly, any oral or written statement that is false, or maliciously critical of or derogatory to, the financial condition of an insurer. Boycott, coercion and intimidation involve unreasonable restraint of trade, rebating involves inducements not specified in the policy, and unfair discrimination involves treating people of the same class and risk differently.

Reference: IC 27-4-1-4(a)(3)

Correct answer: B. Written notice letting her choose manufacturer, aftermarket or used parts

IC 27-4-1.5-8 bars an insurer that pays for exterior repairs from directing a body shop to repair the vehicle until it gives the insured written notice of the right to approve the type of body parts: new parts made by or for the manufacturer, new parts not made by or for the manufacturer, or used parts. The rule applies only in the five years after the model year.

Reference: IC 27-4-1.5-8(a) to (d)

Correct answer: A. $75,000

IC 9-25-4-5 sets minimums of $25,000 per person and $50,000 per accident for bodily injury, and $25,000 for property damage. The first claimant is capped at $25,000, so injuries total $57,000 before the per-accident cap reduces bodily injury to $50,000. Property damage is capped at $25,000. The policy pays $50,000 plus $25,000, or $75,000.

Reference: IC 9-25-4-5

Correct answer: D. It binds all insureds and need not be re-offered at renewal

IC 27-7-5-2 requires insurers to make uninsured and underinsured motorist coverage available in limits at least equal to the bodily injury liability limits, but a named insured may reject either or both in writing. A named insured's rejection is a rejection on behalf of all other insureds, and unless coverage is later requested in writing, the same insurer need not offer it on a renewal or replacement policy.

Reference: IC 27-7-5-2(a) and (b)

Correct answer: B. No, credit is not a listed reason once 60 days have passed

Once a policy that is not a renewal has been in effect 60 days, IC 27-7-6-4 limits cancellation to listed reasons such as nonpayment, a suspended license or registration, fraud or material misrepresentation, violation of policy terms, and certain medical or substance conditions. Underwriting dislike of credit is not on the list. If a valid reason existed, IC 27-7-6-5 would require 20 days' notice, or 10 days for nonpayment.

Reference: IC 27-7-6-4; IC 27-7-6-5(a)

Correct answer: C. $9,300

IC 27-7-9-8(a)(1) pays the actual cash value loss less a deductible equal to 2% of the structure's insured value, but no less than $250 and no more than $500. Two percent of $160,000 is $3,200, so the $500 maximum applies, and the payment is $9,800 minus $500, or $9,300. Subtracting $3,200 ignores the cap, and $250 is the floor, not this deductible.

Reference: IC 27-7-9-8(a)(1)

Correct answer: D. Collapse of an underground coal mine that damages a house

IC 27-7-9-3 defines mine subsidence as the collapse of an underground coal mine resulting in damage to a structure. The definition expressly excludes loss caused by earthquake, landslide, volcanic eruption, or collapse of storm or sewer drains, so those losses are not mine subsidence even when the ground gives way. Coverage is available only for structures in counties identified under IC 27-7-9-6.

Reference: IC 27-7-9-3

Correct answer: A. $300,000

IC 27-6-8-7(a) caps the association's payment at $300,000 per covered claim, and all claims of any kind that arise out of or relate to bodily injury to or death of one person count as a single claim. Rafael's $260,000 and his wife's related $90,000 total $350,000, but together they form one claim, so the association pays at most $300,000, not the insurer's $500,000 limit.

Reference: IC 27-6-8-7(a)

Correct answer: B. $950

HEA 1260 (2026) rewrote IC 27-6-8-7(a)(1)(B) effective July 1, 2026. An unearned premium claim is now paid up to $10,000 per policy, but only the part of each claim above $50 is covered. Olivia's 4 unused months equal 4/12 of $3,000, or $1,000, so the association pays $1,000 minus $50, or $950. The $800 answer applies the repealed rule that paid 80% of unearned premium.

Reference: IC 27-6-8-7(a)(1)(B), as amended by HEA 1260 (2026), effective July 1, 2026

Correct answer: C. $2,000

IC 22-3-3-8 pays 66 2/3% of the average weekly wage, here $500 a week. Under IC 22-3-3-7, compensation begins with the eighth day of disability, but the first seven days are also paid when the disability continues longer than 21 days. Imani's 28 days qualify, so all four weeks are payable: 4 times $500 is $2,000. Leaving out the waiting week would give $1,500.

Reference: IC 22-3-3-7(a); IC 22-3-3-8

Correct answer: D. Written consent from an insurance regulator citing this law

18 U.S.C. 1033(e)(1)(A) makes it a federal crime, punishable by up to five years in prison, for a person convicted of a felony involving dishonesty or a breach of trust to willfully engage in the business of insurance. Under (e)(2), the person may participate with the written consent of an insurance regulatory official authorized to regulate the insurer, and the consent must specifically refer to that subsection. There is no age-of-conviction cutoff.

Reference: 18 U.S.C. 1033(e)