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Insurance · Adjuster Basics and Licensing

What ethical duty does an adjuster owe regarding fair and honest treatment of all parties?

Reviewed by Jordan Morley, Editorial Lead at 247SimpleTests. Written by the 247SimpleTests Editorial Team from the official source material cited on every question.

Correct answer

To handle claims honestly, fairly, and competently — applying the policy correctly, treating claimants with fairness and respect, avoiding misrepresentation, and complying with laws and regulations

  1. A To delay all claims
  2. B To handle claims honestly, fairly, and competently — applying the policy correctly, treating claimants with fairness and respect, avoiding misrepresentation, and complying with laws and regulations
  3. C To favor the insurer at all costs
  4. D To pay the smallest amount possible

Why this is the answer

An adjuster owes ethical duties of honesty, fairness, and competence in handling claims. This means applying the policy terms correctly, conducting a proper investigation, treating claimants fairly and with respect, communicating truthfully (avoiding misrepresentation of facts or policy provisions), settling valid claims promptly and fairly, and complying with all applicable laws and unfair-claims-practices regulations. While staff and independent adjusters work for the insurer, they must still treat claimants fairly and cannot engage in deceptive or bad-faith conduct. Maintaining professional ethics protects consumers, the insurer's reputation, and the adjuster's license. Understanding the adjuster's ethical obligations is foundational content for the exam.
Source: NAIC Adjuster, Ethics

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About this topic: Adjuster Basics and Licensing

Adjuster basics cover the types of adjuster (staff, independent, public), licensing and continuing-education requirements, the adjuster's duties to the insurer and the insured, and the stages of a claim from first notice to closure. This is one of 9 Insurance Adjuster questions on adjuster basics and licensing, each with a full explanation on a single study page.

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