Texas All-Lines Adjuster Practice Test
TX Adjuster Contracts & Policy Provisions Practice Questions
Contracts & Policy Provisions makes up 7 of every 50 questions on a Tigertest TX Adjuster practice test. Here are 10 of the 28 questions on it, each with the answer and the reason.
Updated by the Tigertest team. Based on the Pearson VUE Texas all-lines adjuster content outline effective September 2026. Original questions; 50 per test, weighted like the real 150-question exam. Not affiliated with TDI or Pearson VUE.
1. Before investigating a questionable claim, an adjuster has the insured sign a document stating that the investigation does not give up any of the insurer's policy rights. This is a:
- A.Proof of loss
- B.Non-waiver agreement
- C.Reservation of rights
- D.Release of all claims
Answer: B. A non-waiver agreement is a two-party document signed by the insured. A reservation of rights is a one-sided letter from the insurer.
2. A reservation of rights letter differs from a non-waiver agreement because it:
- A.Ends any duty to defend
- B.Must be filed with TDI
- C.Admits the claim is covered
- D.Is a one-way notice, unsigned
Answer: D. The insurer sends a reservation of rights letter on its own to keep its coverage defenses while it investigates or defends. The insured does not have to sign it.
3. The voluntary giving up of a known right is:
- A.Waiver
- B.Indemnity
- C.Estoppel
- D.Subrogation
Answer: A. Waiver is the intentional relinquishment of a known right. Estoppel bars a party from asserting a right because of its conduct and the other party's reliance.
4. An adjuster tells an insured not to bother filing a proof of loss, and the insurer later denies the claim for lack of one. The insured's best argument is:
- A.Liberalization
- B.Indemnity
- C.Estoppel
- D.Subrogation
Answer: C. The insured relied on the insurer's representative to their detriment, so the insurer may be estopped from enforcing the proof of loss condition.
5. A statement in a policy that the insured guarantees to be true, such as a promise to keep a sprinkler system in service, is a:
- A.Binder
- B.Declaration
- C.Warranty
- D.Representation
Answer: C. A warranty is part of the contract and must be strictly true. A representation is a statement on the application believed true, and voids coverage only if material.
6. A lender holding a mortgage on a house has an insurable interest in it:
- A.Up to the unpaid loan balance
- B.Only after a foreclosure
- C.Only if it occupies the house
- D.For the full value of the house
Answer: A. A mortgagee's financial stake, and so its insurable interest, is the unpaid debt secured by the property.
7. Who lacks an insurable interest in a rental house?
- A.A contractor with a lien
- B.The landlord who owns it
- C.The bank holding the mortgage
- D.A guest who stayed there once
Answer: D. Insurable interest requires a financial loss if the property is damaged. Owners, mortgagees and lienholders have one; a former guest does not.
8. Under the standard mortgage clause, if the owner fails to file a proof of loss, the mortgagee must file one within how many days after the insurer's notice?
- A.90 days
- B.60 days
- C.10 days
- D.30 days
Answer: B. The mortgage clause requires the mortgagee to render proof of loss within 60 days after notice of the owner's failure to do so.
9. Under the standard mortgage clause, before canceling the policy the insurer must notify the mortgagee at least:
- A.On the cancellation date
- B.10 days before
- C.Five days before
- D.30 days before
Answer: B. The standard mortgage clause requires at least 10 days' written notice of cancellation to the mortgagee.
10. An insurer pays the mortgagee after denying the owner's claim because the owner set the fire. The insurer then:
- A.Must also pay the owner in full
- B.Forgives the remaining loan
- C.Becomes the owner of the house
- D.Steps into the lender's rights
Answer: D. When the insurer pays the mortgagee but denies the owner, it is subrogated to the mortgagee's rights and can collect the debt from the owner.
Practice all 28 contracts & policy provisions questions, and the rest of the 200-question bank, in the free TX Adjuster training sets. Questions you miss come back until you have mastered them.
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