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Oklahoma Psi All Lines Adjuster Practice Exam 1 Questions
And Correct Answers (Verified Answers) Plus Rationales 2025
This style mirrors the PSI format: multiple choice, real-world scenarios, and Oklahoma-specific nuances where applicable.
1. An adjuster must provide a written status report to the insured within how many days of receiving a claim? A) 10 days B) 20 days C) 30 days D) 60 days Rationale: Oklahoma insurance code requires adjusters to handle claims promptly; a 30-day window is standard for status updates unless otherwise specified. 2. Which of the following best describes an “All Lines” adjuster license in Oklahoma? A) It covers only property lines. B) It covers health insurance only. C) It covers property, casualty, marine, and transportation lines. D) It covers life insurance only.
Rationale: The “All Lines” license in Oklahoma allows an adjuster to handle a broad range of claims, excluding life and health unless specifically authorized.
3. When must an Oklahoma adjuster notify the Insurance Commissioner of a change of address? A) Within 60 days B) Within 30 days C) Within 90 days D) Annually Rationale: Per Oklahoma statutes, adjusters must keep licensing information current, including address changes within 30 days. 4. Under Oklahoma law, which of the following would be considered an unfair claims settlement practice? A) Denying a claim with a valid reason B) Paying a claim in full C) Failing to adopt reasonable standards for claim investigation D) Negotiating a fair settlement Rationale: Failure to adopt standards for investigation is specifically listed as an unfair practice under the Unfair Claims Settlement Practices Act. 5. If an insured makes a fraudulent claim, what should the adjuster do? A) Pay the claim anyway B) Deny the claim and report the fraud
C) The insured files a claim for hail damage to their roof D) A customer slips and falls in the insured’s store Rationale: A first-party claim is when the insured seeks benefits under their own policy.
9. What must an adjuster do if they discover a conflict of interest while handling a claim? A) Continue anyway B) Deny the claim C) Disclose the conflict to all parties and withdraw if necessary D) Ignore the conflict Rationale: Ethical rules require disclosure of conflicts of interest; adjusters must act in good faith and avoid compromising situations. 10. A windstorm claim is filed, but the policy excludes flood damage. The adjuster should: A) Pay for all damage B) Cover only windstorm-related damage C) Cover flood damage too D) Deny the entire claim Rationale: Only covered perils should be paid; exclusions must be honored under the policy. ✅ Oklahoma PSI All Lines Adjuster Practice Exam Questions 11– 50
11. An insured’s car is totaled. The adjuster should base the settlement amount on: A) The amount the insured requests B) The original purchase price C) The actual cash value (ACV) of the vehicle D) The replacement cost of a new vehicle Rationale: Auto claims are settled based on ACV, which factors in depreciation. 12. What does the term “reservation of rights” mean? A) The insured’s right to cancel the policy B) The adjuster’s right to refuse payment C) The insurer may deny coverage after investigating D) The agent’s right to adjust claims Rationale: A reservation of rights notifies the insured that coverage may not apply pending investigation. 13. What is the deductible in an insurance policy? A) The amount the insurer pays before coverage starts B) The amount the insured must pay before insurance kicks in C) A penalty fee for filing a claim D) The total policy limit Rationale: Deductibles reduce small claims and lower premium costs.
17. Which of these is an example of moral hazard? A) An insured lives in a tornado zone B) A hailstorm damages multiple homes C) An insured intentionally damages their property for payout D) A car accident due to icy roads Rationale: Moral hazard means dishonesty or increased risk due to the insured’s behavior. 18. How long must Oklahoma adjusters keep claim files? A) 1 year B) 2 years C) 5 years D) As required by company policy or state law, typically 3– 5 years Rationale: Records must be available for regulatory review and dispute resolution. 19. What is “proof of loss”? A) A summary of the adjuster’s report B) A receipt for repairs C) A sworn statement from the insured describing the loss D) A denial letter Rationale: Proof of loss is a formal, signed statement detailing the claim. 20. Which coverage pays for damage to the other party’s property in an auto accident?
A) Collision B) Property damage liability C) Comprehensive D) Medical payments Rationale: Property damage liability covers third-party property losses.
21. What is a “binder” in insurance? A) A denial of coverage B) A type of claim form C) A temporary proof of coverage D) A refund check Rationale: A binder provides immediate coverage until the formal policy is issued. 22. Under Oklahoma law, when must an adjuster respond to an insured’s written inquiry? A) 90 days B) Promptly, no later than 30 days C) Within one week D) No requirement Rationale: Prompt, fair communication is part of fair claim settlement practices. 23. An adjuster negotiates a claim settlement. What must they do? A) Only document phone calls B) Keep discussions off the record
D) Disclosing conflicts and recusing themselves if necessary Rationale: Ethical practice demands impartiality and transparency.
27. If an insured disagrees with the settlement amount, what clause may help resolve the dispute? A) Salvage clause B) Appraisal clause C) Exclusions clause D) Subrogation clause Rationale: The appraisal clause allows for third-party valuation. 28. A commercial liability policy covers: A) Only property damage to the insured’s own property B) Workers’ compensation C) Bodily injury and property damage to others due to business operations D) Personal auto claims Rationale: CGL covers third-party bodily injury/property damage related to business. 29. What is actual cash value (ACV)? A) Replacement cost plus depreciation B) Replacement cost minus depreciation C) The deductible amount
D) Market value plus deductible Rationale: ACV = Replacement cost minus depreciation.
30. Which adjuster type works exclusively for the insurance company? A) Public adjuster B) Independent adjuster C) Staff adjuster D) Catastrophe adjuster Rationale: Staff adjusters are direct employees of the insurer. 31. When handling a claim, an adjuster should do all EXCEPT: A) Investigate thoroughly B) Delay payment without reason C) Communicate clearly D) Document facts Rationale: Unreasonable delay is an unfair claim practice. 32. What is the main purpose of the Unfair Claims Settlement Practices Act? A) Reduce insurer profits B) Prevent fraud by insureds only C) Protect policyholders from unfair treatment D) Eliminate all exclusions Rationale: This act sets standards for fair claim handling.
36. An insured’s boat is damaged by an excluded peril. The adjuster should: A) Pay full value B) Deny coverage for that peril C) Pay half D) Cancel the policy Rationale: Coverage only applies to covered perils. 37. What does an adjuster do during subrogation? A) Files proof of loss B) Pursues a third party for recovery C) Issues payment immediately D) Ignores other responsible parties Rationale: Subrogation recovers amounts paid from liable third parties. 38. What is the purpose of an estimate of damages? A) Confuse the insured B) Establish the basis for settlement C) Delay the claim D) Avoid paying taxes Rationale: Estimates support fair, documented settlements. 39. An adjuster must be licensed in Oklahoma if: A) They only adjust out-of-state claims B) They don’t handle any money
C) They handle Oklahoma claims for an insurer D) They are the insured’s friend Rationale: All adjusters must hold a valid license in the state where they adjust claims.
40. What is the standard way to handle disagreements over the value of damaged property? A) File suit immediately B) Ignore the insured C) Use the appraisal clause D) Cancel the policy Rationale: The appraisal clause is an alternative dispute resolution tool. 41. What is the purpose of salvage? A) Hide evidence B) Increase claim payouts C) Recover value from damaged property D) Delay payment Rationale: Salvage helps insurers reduce claim costs. 42. Which type of adjuster may represent the policyholder? A) Staff adjuster B) Public adjuster C) Independent adjuster
46. What does insurable interest require? A) A friendship with the insurer B) The policyholder must be a neighbor C) A financial stake in the property D) No connection needed Rationale: Without insurable interest, a contract is void. 47. Which policy type provides the broadest coverage? A) Named peril B) Basic form C) All risk/open peril D) Limited liability Rationale: Open peril covers all risks except those specifically excluded. 48. If an adjuster acts beyond their authority, the insurer may be: A) Unaffected B) Bound by the adjuster’s actions C) Able to deny all claims D) Protected by law Rationale: Adjusters are agents; the insurer may be bound by their acts.
49. Which federal act requires proper handling of flood insurance claims? A) Unfair Claims Settlement Act B) National Flood Insurance Program (NFIP) C) Gramm-Leach-Bliley Act D) Stafford Act Rationale: The NFIP governs flood insurance claims. 50. When must an adjuster deliver a denial letter? A) After paying the claim B) Never C) Promptly, with a clear explanation D) At policy renewal Rationale: A clear, prompt denial with reasons is required by fair claims practice laws. 51. If an adjuster receives a claim involving multiple claimants with conflicting interests, they must: A) Side with the insurer automatically B) Choose one claimant to pay C) Handle each claim fairly and impartially D) Withdraw immediately Rationale: Adjusters must treat all parties equitably and avoid bias.
55. What is the definition of peril? A) The chance of loss B) The cause of loss C) The value of property D) The settlement check Rationale: A peril is what causes the loss (e.g., fire, windstorm). 56. Which loss is likely covered under a named-peril policy? A) Damage by an excluded event B) Wear and tear C) Damage by a listed peril such as fire D) Gradual deterioration Rationale: Only listed perils are covered in named-peril policies. 57. What is the primary purpose of coinsurance in property insurance? A) Eliminate deductibles B) Increase claim payouts C) Encourage policyholders to insure to value D) Provide total replacement cost Rationale: Coinsurance ensures policyholders carry adequate limits. 58. An adjuster must provide which information when denying a claim? A) Just the word “Denied” B) No explanation needed
C) A clear reason for denial and reference to policy language D) A personal apology only Rationale: Transparency and proper notice help prevent unfair practice violations.
59. When is an adjuster’s license renewal due in Oklahoma? A) Every 5 years B) Never C) Every 2 years D) Monthly Rationale: Adjusters renew biennially and meet continuing education requirements. 60. An adjuster discovers an error in their prior claim report. They should: A) Ignore it B) Hide the file C) Correct the error and document the change D) Destroy the file Rationale: Accuracy and transparency protect the adjuster and insurer. 61. If an insured wants to dispute a claim denial, they may: A) Accept it with no recourse B) File criminal charges C) File a complaint with the Oklahoma Insurance Department
