Free AIC Adjuster Level 1 Practice Exam

AIC means Alberta Insurance Council on this page. This route is for Alberta Adjuster Level 1 licensing practice.

This free full-length AIC Adjuster Level 1 practice exam includes 100 original Finance Prep questions across the exam domains.

These are original Finance Prep practice questions aligned to the exam outline. They are not official AIC questions, copied live-exam content, or exam dumps. Use them to preview question style and explanation depth before continuing with mixed sets, topic drills, and timed mock exams in Finance Prep.

Practice count note: exam sponsors can describe total questions, scored questions, duration, or administrative exam-day rules differently. Always confirm current exam-day rules with the sponsor.

Practice questions

Questions 1-25

Question 1

Topic: General

A supervised Level 1 adjuster is handling an Alberta automobile injury claim. The file contains the claimant’s medical report, income records, recorded statement, accident-scene photos, and the adjuster’s claim notes. A repair vendor asks the adjuster to email the complete file so the vendor can “understand the whole claim before estimating the vehicle damage.” What is the most appropriate claim-handling implication?

• A. Email the full file because the vendor is assisting with the same insurance claim.
• B. Refuse to share any photos or vehicle information because all claim file material is confidential.
• C. Share only the information reasonably needed for the repair estimate, after confirming authority and any required consent or insurer instruction.
• D. Send the medical and income records but withhold the adjuster’s claim notes.

Best answer: C

What this tests: General

Explanation: The key point is that confidentiality does not prevent all information sharing, but it does require proper limits. Medical reports, income records, statements, photos, and claim notes can contain sensitive personal and claim information. A repair vendor normally needs vehicle damage information, photos, and repair-related facts, not the claimant’s medical, financial, statement, or internal claim-note material. A Level 1 adjuster should follow insurer instructions, obtain any required consent or authority, and disclose only what is reasonably necessary for the vendor’s assigned task. Sharing an entire claim file for convenience would be excessive and inconsistent with confidentiality expectations.

• Treating the vendor as part of the claim does not justify unrestricted disclosure of unrelated medical, financial, statement, or note material.
• Sending medical and income records to support a vehicle repair estimate is not reasonably necessary on these facts.
• Confidentiality requires controlled sharing, not a blanket refusal to provide repair-related photos or vehicle information when properly authorized.

Confidential claim information should be limited to the purpose for which it is needed and shared only with proper authority, consent, or instruction.

Question 2

Topic: General

A supervised Adjuster Level 1 is discussing a homeowner’s water damage claim with the insured. The policy wording includes this exclusion:

We do not insure the cost of making good faulty workmanship. Resulting insured damage is covered unless otherwise excluded.

The insured asks, “Does this mean the insurer will pay for the damaged flooring but not the plumber’s repair bill? Also, should I sue the plumber?” What is the best response?

• A. Explain the wording and the claim position being reviewed, but state that advice about suing the plumber should come from independent legal counsel.
• B. Advise the insured that the plumber is legally liable if the insurer pays for the flooring damage.
• C. Tell the insured that suing the plumber is the correct next step because the policy excludes faulty workmanship.
• D. Refuse to discuss the wording because any explanation of a policy exclusion is legal advice.

Best answer: A

What this tests: General

Explanation: The important distinction is between explaining the insurance contract and advising on legal rights. A Level 1 adjuster may discuss what the policy wording says, what coverage issue is being reviewed, what information is needed, and how the insurer is approaching the claim under supervision. That is part of ordinary claim handling. The adjuster should not tell the insured whether to sue, whether a third party is legally liable, or what legal strategy to follow. Those matters may require independent legal advice. The adjuster should keep the conversation clear, accurate, documented, and within authority.

• Telling the insured to sue turns a policy discussion into legal advice.
• Refusing to discuss the wording goes too far; explaining policy language is a normal adjusting function.
• Declaring the plumber legally liable is an unsupported legal conclusion, not a coverage explanation.

An adjuster may explain policy wording and the claim process, but should not advise the insured on legal rights or litigation decisions.

Question 3

Topic: Automobile

A Level 1 adjuster in Alberta is preparing an automobile claim report for the insurer after inspecting a damaged vehicle. The repair vendor has provided a revised estimate, the insured has not yet confirmed who was driving at the time of loss, and the adjuster’s Level 3 supervisor has not reviewed the report. The insurer asks for the report by the end of the day. What is the best professional response?

• A. Ask the repair vendor to send the report directly to the insurer because the vendor has the most current damage estimate.
• B. Submit the report immediately using the repair estimate and assume the named insured was driving unless corrected later.
• C. Delay all communication with the insurer until every coverage and liability issue is fully resolved.
• D. Complete the report with the confirmed facts, clearly note the missing driver information, and submit it only after Level 3 approval and countersignature if required.

Best answer: D

What this tests: Automobile

Explanation: The key point is that an automobile claim report is part of the insurer’s claim decision-making record. A Level 1 adjuster should not guess at missing facts or present unresolved information as confirmed. The report should distinguish verified information from information still being investigated, such as who was driving. Because Level 1 adjusting work is performed under ongoing direct supervision, reports relating to adjustment of claims require appropriate Level 3 review, approval, and countersignature when required. Meeting a deadline does not override accuracy, completeness, or supervision requirements. Timely communication is still important, but it must be reliable and properly authorized.

• Assuming the driver’s identity creates an inaccurate report and may affect coverage or liability review.
• Having the repair vendor send the report bypasses the adjuster’s documentation and supervision responsibilities.
• Waiting until every issue is resolved may be unnecessary; the report can be sent with unresolved facts clearly identified after proper review.

A Level 1 adjuster must ensure automobile claim reports are accurate and complete, identify unresolved facts, and obtain required Level 3 approval and countersignature.

Question 4

Topic: Property

A supervised Adjuster Level 1 is handling a residential water damage claim in Alberta. The insurer’s estimate applies depreciation to several damaged contents items and includes the policy deductible. The insured is upset and says the adjuster is “cheating” them, and asks the adjuster to remove the depreciation and deductible immediately so payment can be issued today. The Level 3 adjuster has not yet reviewed the disputed estimate.

What is the best professional response by the Level 1 adjuster?

• A. Remove the depreciation and deductible to resolve the complaint quickly, then advise the Level 3 adjuster after payment is issued.
• B. Acknowledge the concern, explain that the deductible and depreciation must be reviewed against the policy and estimate support, document the dispute, and refer the file to the Level 3 adjuster before any revised report or settlement position is issued.
• C. Ask the repair vendor to increase the estimate total so the insured receives the same net payment without changing the deductible or depreciation lines.
• D. Tell the insured that depreciation and deductibles are standard in all property claims and refuse to discuss the issue further.

Best answer: B

What this tests: Property

Explanation: The key point is that a Level 1 adjuster must deal with the insured fairly and professionally while staying within supervised authority. A dispute about depreciation, deductible, delay, or estimate scope should not be dismissed, hidden, or resolved by changing figures without support. The adjuster should acknowledge the concern, explain the claim process in clear terms, document the insured’s position, and arrange review by the supervising Level 3 adjuster before issuing a revised report or settlement position. This protects the insured’s right to have the dispute considered and protects the principal by keeping coverage, valuation, and payment decisions properly supported.

• Removing amounts before review exceeds the Level 1 role and may result in an unsupported payment.
• Refusing further discussion is poor public dealing and does not address a legitimate claim dispute.
• Inflating a vendor estimate is dishonest and undermines financial integrity and claim documentation.

This maintains fair communication, proper file documentation, and the required supervisory review before changing the claim position.

Question 5

Topic: Liability

A supervised Adjuster Level 1 receives a new liability claim for a slip and fall at an insured grocery store in Alberta. The store manager says the entrance camera footage is normally overwritten after 48 hours, and two employees may have seen the fall. The claimant is asking whether the insurer will accept fault. Which investigation step best preserves evidence without exceeding Level 1 authority?

• A. Independently deny liability because the claimant has not yet provided a formal proof of loss.
• B. Authorize settlement of the claim before the video is overwritten to avoid losing evidence.
• C. Tell the claimant the insured appears responsible so the claimant will cooperate with a statement.
• D. Promptly notify the supervising Adjuster Level 3 and ask the insured to preserve the video, incident report, and witness information while making no liability commitment.

Best answer: D

What this tests: Liability

Explanation: The key point is to protect evidence while staying within the limits of a supervised Level 1 role. In a liability claim, early evidence may include surveillance video, incident reports, cleaning records, photographs, and witness information. A Level 1 adjuster may help gather and document facts, but should not admit liability, deny the claim, or commit the insurer to settlement without proper instruction and supervision. Because the video may be overwritten quickly, the practical step is to escalate promptly to the supervising Adjuster Level 3 and ensure the insured is asked to preserve relevant material. That supports a fair investigation and avoids prejudicing the insurer’s position.

• Preserving video and witness information protects evidence without making a coverage or liability decision.
• Telling the claimant the insured appears responsible is an improper liability commitment before investigation is complete.
• Authorizing settlement exceeds Level 1 authority and skips the needed liability investigation.
• Denying liability based only on a missing proof of loss is premature and does not address the urgent evidence issue.

This preserves time-sensitive evidence and keeps the Level 1 adjuster within supervised authority without admitting liability.

Question 6

Topic: Automobile

A supervised Level 1 adjuster is assigned an Alberta automobile claim. The insured says she may have rolled through a stop sign, but there are no witness statements, police report, dashcam footage, or statement from the other driver yet. The other driver calls and asks the adjuster to confirm that the insurer accepts full responsibility and will pay all repair and rental costs immediately.

What should the Level 1 adjuster do?

• A. Tell the other driver that the insured is not at fault because liability cannot be proven without a police report.
• B. Confirm that the insurer accepts full responsibility because the insured mentioned she may have rolled through the stop sign.
• C. Offer to pay the other driver’s rental costs first and decide vehicle repairs after the police report is received.
• D. Explain that liability has not been determined, gather the missing facts, and seek direction from the supervising Adjuster Level 3 before any commitment is made.

Best answer: D

What this tests: Automobile

Explanation: The key point is that an adjuster must distinguish fact gathering from admitting liability or committing the insurer to payment. A possible admission by the insured is relevant, but it is not enough by itself to accept full responsibility, especially when key evidence has not been obtained. In an automobile third-party liability claim, the adjuster should collect the insured’s statement, the claimant’s version, police information if available, witness evidence, diagrams, photos, and other loss facts before supporting a liability position. As a Level 1 adjuster, the adjuster must also work under direct supervision and obtain appropriate direction before reports or commitments are made. The proper response is careful, neutral communication: liability is still under review, the claim is being investigated, and no payment commitment can be made yet.

• Accepting full responsibility based only on the insured’s uncertain comment is premature and may improperly bind the insurer.
• Paying rental costs before liability is determined is still a commitment on the claim and requires proper authority and support.
• Denying fault because there is no police report is also premature; liability can be assessed from multiple forms of evidence.

A Level 1 adjuster should not admit fault or bind the insurer before the liability facts are investigated and supervisory direction is obtained.

Question 7

Topic: General

A supervised Adjuster Level 1 is assisting on a liability claim for an Alberta insurer. During a call, the third-party claimant says a lawyer has now sent a formal demand letter alleging bad faith handling and threatening to start legal proceedings if payment is not made immediately. What is the most appropriate claim-handling implication?

• A. Escalate the matter to the Level 3 supervisor and principal so legal counsel can be considered or instructed.
• B. Settle the claim immediately to avoid a formal complaint.
• C. Ask the claimant to contact the Alberta Insurance Council for a coverage decision.
• D. Continue adjusting the file without escalation until a court document is served.

Best answer: A

What this tests: General

Explanation: The key point is that a Level 1 adjuster works under direct supervision and must recognize matters that require escalation. A formal demand alleging bad faith and threatening legal proceedings is not a routine coverage or payment discussion. The Level 1 adjuster should document the communication and promptly involve the Level 3 supervisor and the principal, so the insurer can decide whether legal counsel should be instructed. The AIC regulates licensing and conduct matters; it does not decide individual claim coverage or settlement disputes. The adjuster should not independently settle, admit liability, give legal advice, or delay escalation when a legal threat is raised.

• The AIC may be involved in regulatory or conduct complaints, but it does not make the insurer’s coverage decision.
• Immediate settlement would exceed a Level 1 role and could prejudice the principal’s position.
• Waiting for a court filing ignores the seriousness of a formal legal threat and bad faith allegation.

A threatened legal proceeding and bad faith allegation require prompt escalation beyond a Level 1 adjuster’s authority.

Question 8

Topic: General

A Level 1 adjuster is handling a property claim under direct supervision. During initial contact, the insured says the damaged laptop was purchased six months ago for $2,400, but later emails a receipt that shows a purchase price of $1,400. The insured asks the adjuster to “just use the higher amount because the insurer will depreciate it anyway.” What is the best professional response?

• A. Use the $2,400 amount because the insured provided it first and the adjuster should not challenge an insured’s statement without proof of fraud.
• B. Tell the insured the claim may be denied unless they withdraw the higher amount immediately.
• C. Use the $1,400 receipt amount without contacting the insured because the document is more reliable than the verbal statement.
• D. Document both amounts, ask the insured to clarify the discrepancy, and refer the issue to the Level 3 supervisor before relying on the claimed value.

Best answer: D

What this tests: General

Explanation: The key point is that utmost good faith applies to claim communications and documentation. An adjuster should not knowingly advance a claim value that appears inconsistent with the evidence. The Level 1 adjuster should make accurate file notes, seek clarification from the insured, preserve the receipt and the statement, and involve the Level 3 supervisor before a value is accepted or communicated as supported. This approach is fair to the insured and the insurer, avoids making an unsupported accusation, and keeps the file transparent for coverage and settlement review.

• Relying on the first verbal amount ignores later evidence and would create an inaccurate claim record.
• Using only the receipt without asking for clarification may miss a valid explanation, such as accessories or a different item.
• Threatening denial before clarification and supervision is premature and may be unfair.

Utmost good faith requires accurate disclosure and file documentation, especially where a claim amount is inconsistent.

Question 9

Topic: Liability

A supervised Adjuster Level 1 is assisting on a liability claim involving a customer who slipped in an insured grocery store. The Adjuster Level 3 has asked the Level 1 adjuster to obtain medical receipts and wage information so the insurer can evaluate the claim. Liability is still under investigation, and no settlement authority has been given. The claimant asks, “Does this mean the insurer is accepting responsibility and will pay my lost wages?” What is the most appropriate response?

• A. Tell the claimant the insurer accepts responsibility once medical and wage documents are requested.
• B. Offer to pay a portion of the lost wages now to show good faith while the investigation continues.
• C. Explain that the documents are being requested to evaluate the claim, and avoid promising liability acceptance or payment unless authorized.
• D. Refuse to speak with the claimant until liability has been fully decided.

Best answer: C

What this tests: Liability

Explanation: The key distinction is between gathering information for settlement evaluation and making a binding claim commitment. A Level 1 adjuster may assist with communication, documentation, and settlement support under supervision, but should not admit liability, promise payment, or create an expectation of settlement authority that has not been granted. Asking for medical receipts and wage information is a normal part of evaluating damages and preparing the file for review. The adjuster should be clear, fair, and accurate: the information is needed so the claim can be assessed, and any liability or payment decision will be made through the insurer’s authorized process and supervision.

• Treating a document request as liability acceptance confuses investigation with admission.
• Offering partial payment without authority commits the insurer and exceeds a Level 1 adjuster’s role.
• Refusing all communication is not appropriate; the claimant can be given accurate process information without an admission or payment promise.

Requesting settlement information supports evaluation and negotiation, but it does not authorize a Level 1 adjuster to admit liability or commit the insurer to payment.

Question 10

Topic: Property

A Level 1 adjuster in Alberta is reviewing a property claim for wind damage to a detached garage. The insured provides one contractor’s estimate that includes replacing several roof trusses, and the contractor notes that some damage may be due to pre-existing rot. No engineer or second repair estimate has been obtained, and the insurer has not yet authorized repairs. What is the best action before proceeding?

• A. Tell the insured to choose a cheaper contractor and submit a revised estimate after the work is complete.
• B. Authorize the insured’s contractor to start all repairs because the estimate is already in the claim file.
• C. Deny the truss portion of the claim immediately because rot is mentioned in the contractor’s note.
• D. Ask the Adjuster Level 3 for instructions and arrange further support, such as another estimate or expert review, before any repair authorization.

Best answer: D

What this tests: Property

Explanation: The key point is that a Level 1 adjuster should not move ahead on a repair authorization when the estimate raises unresolved issues about cause, scope, and possible structural damage. A single contractor estimate may be enough for a simple, low-risk repair, but here the file includes roof trusses and possible pre-existing rot. Those facts affect both the amount of the loss and whether all claimed damage resulted from the insured event. The proper supervised approach is to document the issue, seek Adjuster Level 3 direction, and obtain additional support such as a second estimate, an appraiser, or an engineering review if instructed. This protects the insured, the insurer, and the adjuster by keeping the claim decision tied to adequate evidence and authority.

• Starting all repairs from one estimate skips unresolved scope and causation issues.
• Denying the truss work immediately treats a possible cause issue as a proven exclusion without enough investigation.
• Asking for a cheaper contractor after completion does not address authority, causation, structural scope, or proper repair review.

Possible structural damage, pre-existing deterioration, and a single estimate require supervisory direction and further evidence before proceeding.

Question 11

Topic: General

A Level 1 adjuster is preparing a claim summary for an Adjuster Level 3 to review and countersign. The residential water damage file contains first notice details, photos, an insured statement saying a dishwasher supply line failed, and a contractor estimate for $8,400. The draft summary recommends payment after the deductible, but it does not identify the policy form, applicable water damage wording, exclusions considered, limits, deductible amount, or how the facts support coverage.

Which documentation weakness most directly undermines coverage review, payment support, and supervision approval?

• A. The insured’s statement was summarized instead of transcribed word for word.
• B. The claim summary does not include the broker’s marketing notes from policy placement.
• C. The file does not connect the known loss facts to the applicable policy terms and payment basis.
• D. The photos are not arranged in the same order as the contractor’s estimate.

Best answer: C

What this tests: General

Explanation: The key point is that claim documentation must support the adjusting decision. A Level 1 adjuster may gather facts and prepare a report, but supervision approval and countersignature require a clear file trail. The file should show the cause of loss, relevant policy wording, exclusions or conditions considered, deductible and limits, and the reason the recommended payment is supported. Photos, estimates, and statements are useful, but they do not replace a documented coverage analysis. Without that link, the Level 3 adjuster and insurer cannot readily verify whether the payment recommendation is justified.

• Reordering photos may improve readability, but it is not the main weakness if the file lacks coverage and payment reasoning.
• A summarized statement can be acceptable if it is accurate, dated, and complete enough for the issue being reviewed.
• Broker marketing notes are usually not needed to support a routine loss payment unless a specific coverage or representation issue makes them relevant.

A supervised payment recommendation must show how the facts, policy wording, deductible, limits, and exclusions support the coverage and payment position.

Question 12

Topic: Automobile

A supervised Adjuster Level 1 is reviewing an Alberta automobile physical damage claim. The insured has collision coverage, the deductible has been confirmed, photos support the damage, and a repair estimate was approved by the insurer. The vehicle is repairable and has now been picked up from the body shop. The shop asks the adjuster to recommend payment directly to it.

Which documentation should the adjuster obtain before recommending payment?

• A. The final repair invoice and the insured’s authorization or direction supporting payment to the repair shop
• B. A salvage bid and transfer documents for the damaged vehicle
• C. A claimant statement admitting fault for the collision
• D. A broker letter confirming that the insured paid the renewal premium on time

Best answer: A

What this tests: Automobile

Explanation: The key point is that a payment recommendation on an automobile physical damage claim must be supported by documents showing both the amount payable and the proper payee. For a repairable vehicle, the approved estimate helps establish the expected repair scope, but payment after the work is completed should be tied to the final repair invoice. If payment is being made directly to the body shop, the file should also support that the insured authorized or directed that payment. The deductible, coverage, and damage evidence still matter, but the missing documentation at the payment stage is proof of the completed charge and authority to pay the vendor. As a Level 1 adjuster, the recommendation and related report would still require appropriate Level 3 supervision and approval.

• Salvage documentation applies to a total loss or salvage handling issue, not to a repairable vehicle that has been returned to the insured.
• A broker premium letter is not the normal support for a physical damage repair payment once coverage has already been confirmed.
• A fault admission may affect liability issues, but it is not the document needed to support payment for the insured’s own collision damage repair.

Payment should be supported by documentation confirming the completed repair cost and the insured’s agreement to pay the repair vendor directly.

Question 13

Topic: Property

A Level 1 adjuster is assisting with a commercial property claim for a small bakery in Red Deer. A covered kitchen fire damaged the ovens, and the insurer has received a repair estimate showing the bakery will be closed for 12 days. The owner asks whether the claim can include business interruption support. What is the best next action before that support can be considered?

• A. Advise the owner that any 12-day closure automatically qualifies for business interruption payment.
• B. Confirm that the building repair estimate includes replacement cost pricing for the damaged ovens.
• C. Request sales, expense, and payroll records showing the bakery’s normal earnings and continuing costs during the shutdown period.
• D. Ask the repair vendor to add a separate line for lost profits to the property damage estimate.

Best answer: C

What this tests: Property

Explanation: The key point is that business interruption support is not based only on the fact that a business closed after a covered property loss. The adjuster needs financial and operational information to support the amount and period of the claimed loss. Useful facts include normal revenue, saved expenses, continuing expenses such as rent or payroll, the actual interruption period, and records showing how the loss affected operations. A Level 1 adjuster should gather and document this information under supervision before any payment recommendation or coverage position is made.

• A repair estimate supports the physical damage claim, but it does not show the business’s lost earnings or continuing expenses.
• A repair vendor should not create a lost-profit amount in a property repair estimate; financial support should come from business records.
• A closure period may be relevant, but it does not automatically prove coverage or the amount of a business interruption loss.

Business interruption support depends on financial and operational evidence of the income loss and continuing expenses caused by the covered interruption.

Question 14

Topic: Automobile

A supervised Adjuster Level 1 is handling an Alberta automobile claim. The insured reports a rear-end collision and minor vehicle damage. During the first contact, the insured also says they have a diagnosed concussion, ongoing neurological symptoms, missed work, and a lawyer has asked that all injury-related communication go through the lawyer. What is the most appropriate claim-handling step for the Adjuster Level 1?

• A. Escalate the injury portion to the supervising Adjuster Level 3 and obtain instructions before discussing benefits, liability, or settlement.
• B. Deny injury-related coverage until the insured provides complete medical records.
• C. Explain the likely accident benefits entitlement and request a release for the bodily injury claim.
• D. Continue handling the injury claim independently if the vehicle damage remains minor.

Best answer: A

What this tests: Automobile

Explanation: The key point is that injury claims can quickly move beyond basic fact gathering, especially when there are neurological symptoms, time away from work, and legal representation. A Level 1 adjuster may collect initial information and document the file, but must work under direct supervision and should not independently make coverage, liability, benefit, or settlement decisions that exceed their competence or authority. The appropriate step is to escalate to the supervising Adjuster Level 3 and follow instructions. Minor vehicle damage does not make the injury issues minor, and a lawyer’s involvement adds a communication and authority concern that must be handled carefully.

• Explaining benefits and requesting a release would be premature and beyond the Level 1 role on these facts.
• Handling the injury claim independently ignores the seriousness of the medical facts and the supervision requirement.
• Denying injury-related coverage because medical records are incomplete is not supported; the proper step is supervised investigation, not an immediate denial.

The injury facts and represented status exceed a Level 1 adjuster’s independent competence and authority, so Level 3 supervision and direction are required.

Question 15

Topic: Property

A supervised Adjuster Level 1 is handling a condominium water-damage claim. A restoration contractor attends the unit, prepares an emergency repair estimate, and tells the insured, “The insurer will pay this whole estimate and replace all damaged flooring throughout the unit.” The policy, deductible, cause of loss, and flooring scope have not yet been reviewed by the Adjuster Level 3 or the insurer. What should the Level 1 adjuster do?

• A. Explain that the contractor’s estimate is a repair recommendation only, document it, and seek coverage and payment direction through the insurer and supervising Adjuster Level 3.
• B. Tell the contractor to issue payment directly to the insured and recover the amount from the insurer later.
• C. Confirm the contractor’s statement to the insured because the vendor inspected the damage first.
• D. Deny the flooring portion immediately because the contractor discussed payment without authority.

Best answer: A

What this tests: Property

Explanation: The key point is that a repair vendor can assist with damage assessment, mitigation, and estimating, but the vendor does not decide policy coverage or bind the insurer to payment. A Level 1 adjuster should not adopt a contractor’s statement as a coverage decision, especially before the policy, deductible, cause of loss, and repair scope have been reviewed. The appropriate response is to keep the roles clear: record the vendor’s estimate, explain to the insured that coverage and payment remain subject to insurer review, and obtain direction from the supervising Adjuster Level 3. This protects the insured from misleading expectations and protects the claim file from unauthorized commitments.

• Treating the vendor’s estimate as binding confuses repair expertise with insurance authority.
• Having the contractor pay the insured would create an improper payment process and does not reflect the insurer’s claim authority.
• Denying flooring immediately is also unsupported; an unauthorized vendor comment does not decide coverage.
• Documenting the estimate and escalating for coverage and payment direction keeps the Level 1 adjuster within supervised authority.

A vendor may provide repair information, but coverage and payment positions must come from the insurer through the supervised claim process.

Question 16

Topic: General

A supervised Adjuster Level 1 is reviewing an insured homeowner’s basement water claim in Alberta. The declarations page shows a dwelling limit, a standard property deductible, and a listed Sewer Backup Endorsement with a separate $25,000 limit and $1,000 deductible. The main policy wording excludes sewer backup unless coverage is added by endorsement. The policy conditions require prompt notice and reasonable steps to protect the property from further damage.

Which claim review note correctly uses the policy structure?

• A. The sewer backup endorsement affects only the deductible, so the exclusion in the main policy wording still controls the coverage decision.
• B. The broker’s email confirming the claim should be used instead of the policy wording to decide the applicable limit and deductible.
• C. The declarations identify the purchased endorsement, applicable limit, and deductible; the insuring agreement, exclusion, endorsement, and conditions must be read together to assess coverage and claim duties.
• D. The policy conditions create coverage for sewer backup because they describe what the insured must do after a loss.

Best answer: C

What this tests: General

Explanation: The key point is that a claim review uses different parts of the policy for different purposes. The declarations usually identify the named insured, coverage parts, limits, deductibles, and listed endorsements. The insuring agreement gives the basic coverage grant. Exclusions remove or restrict coverage. Conditions set duties such as giving notice, protecting property, and cooperating with the insurer. Endorsements can add, remove, or modify coverage and may include their own limits or deductibles. In this file, the declarations show that sewer backup coverage was added, and the endorsement must be read with the main wording to determine how the exclusion is modified and what limit and deductible apply.

• A broker email may help document the file, but it does not replace the policy wording for coverage, limits, or deductibles.
• Conditions describe claim duties; they do not create coverage for a loss that is otherwise excluded.
• An endorsement can modify coverage, exclusions, limits, and deductibles, not just the deductible.

The note correctly separates the declarations, coverage grant, exclusion, endorsement, limits, deductibles, and conditions used in a coverage review.

Question 17

Topic: Liability

A supervised Level 1 adjuster is assigned a liability claim for an insured snow-removal contractor. The claimant says she slipped on an icy commercial walkway and asks the adjuster to confirm that the insurer will pay her medical expenses. The insured says its crew salted the walkway 20 minutes before the fall, but no witness statements or maintenance logs have been reviewed yet. What is the best professional response?

• A. Explain that the facts are still being investigated, avoid admitting or denying liability, and obtain principal instruction before communicating a coverage or liability position.
• B. Tell the claimant the claim will likely be denied because the insured says the walkway was salted.
• C. Tell the claimant the insurer accepts responsibility because the fall happened on the insured’s worksite.
• D. Ask the broker to decide whether the claimant should be paid before the insurer reviews the liability evidence.

Best answer: A

What this tests: Liability

Explanation: The key point is that liability and coverage positions should not be communicated before the facts and the principal’s instructions support them. A slip-and-fall allegation requires investigation of duty, breach, causation, and damages. The insured’s statement is important, but it does not by itself prove either liability or a complete defence. At Level 1, the adjuster works under direct supervision and should gather evidence, document the file, and avoid words that admit liability, promise payment, or deny the claim prematurely. If there is uncertainty about coverage, defence, or the insurer’s position, reservation or denial awareness and principal instruction are needed before communicating a position to the claimant.

• Accepting responsibility just because the fall occurred at the insured’s worksite ignores the need to investigate negligence and obtain authority.
• Denying the claim based only on the insured’s statement is premature and may be unfair without supporting evidence.
• Referring the decision to the broker is inappropriate because the insurer or principal, not the broker, directs the claim position.

A Level 1 adjuster should not communicate acceptance or denial before evidence is reviewed and the principal has instructed or approved the position.

Question 18

Topic: General

A supervised Adjuster Level 1 is gathering evidence on a homeowner claim in Calgary. The insured reports that a dishwasher hose failed suddenly on Saturday and damaged kitchen flooring. The file contains photos of the damaged flooring and a contractor’s repair estimate for $8,400. The principal asks whether the current file verifies coverage, not just the amount claimed. What is the best response?

• A. Delay all coverage review until the insured submits receipts proving the original cost of the flooring.
• B. Confirm coverage because the insured reported a sudden water escape from an appliance.
• C. Explain that the photos and estimate help support the amount of loss, and request the policy declarations, wording, endorsements, and confirmed loss facts needed for coverage review.
• D. Confirm coverage because the contractor’s estimate gives a detailed repair cost for damaged property.

Best answer: C

What this tests: General

Explanation: The key point is the difference between coverage evidence and amount-of-loss evidence. Photos, repair estimates, inventories, invoices, and receipts may help prove what was damaged and the value or repair cost. They do not, by themselves, show that the policy covers the claim. Coverage review depends on evidence such as the policy declarations, wording, endorsements, policy period, insured location, covered property, cause of loss, exclusions, conditions, and any relevant statements or inspection facts. A Level 1 adjuster should gather and organize both types of evidence, but coverage conclusions and reports must be handled under the required Level 3 supervision and approval.

• A contractor’s estimate may support repair cost, but it does not prove that the policy responds.
• The insured’s report of a sudden water escape is relevant to coverage, but it still needs to be checked against the policy and confirmed facts.
• Original-cost receipts may assist valuation, but waiting for them before reviewing coverage confuses quantum evidence with coverage evidence.

Photos and estimates mainly support quantum, while policy documents and confirmed facts about the loss verify whether coverage applies.

Question 19

Topic: Property

A supervised Adjuster Level 1 is handling a homeowners water damage claim. The notice of loss says the insured moved to Calgary 50 days before the loss and the house was “empty while listed for sale.” The policy file contains this wording:

Loss caused by escape of water from a plumbing system is excluded while the dwelling has been vacant for more than 30 consecutive days, unless a vacancy permit applies.

No vacancy permit is shown in the file. During the first interview, the insured says the house was still furnished, utilities were on, and a cousin “stayed there some weekends.” The contractor’s estimate states the damage was from a burst supply line.

What is the most appropriate next step for the Level 1 adjuster?

• A. Deny the claim immediately because the notice of loss says the house was empty for more than 30 days.
• B. Document the inconsistency, obtain further occupancy and permit facts, and refer the coverage issue to the supervising Adjuster Level 3 or insurer before making a coverage position.
• C. Accept coverage immediately because furniture and utilities mean the dwelling could not be vacant.
• D. Ask the contractor to remove the vacancy reference from the estimate so the claim can proceed as a plumbing loss.

Best answer: B

What this tests: Property

Explanation: The key point is that a Level 1 adjuster should not force a coverage conclusion when the wording and facts do not line up clearly. Vacancy can affect property coverage, but the file contains competing facts: the notice describes the house as empty for 50 days, while the insured gives information suggesting possible occupancy or at least a need to clarify the status. The proper claim-handling response is to document the conflict, gather relevant facts such as who stayed there, when, whether personal property remained, whether a vacancy permit existed, and what the insurer or broker records show. A Level 1 adjuster works under direct supervision, so any report or coverage recommendation must be reviewed and approved by the supervising Adjuster Level 3 or insurer before a position is taken with the insured.

• Immediate denial relies on one file note and ignores conflicting occupancy facts that still need investigation.
• Immediate acceptance treats furniture and utilities as conclusive, even though vacancy depends on the policy wording and complete facts.
• Changing or suppressing a vacancy reference would be improper documentation and would undermine fair claim handling.
• Supervised referral is appropriate because the issue affects coverage and requires a supported, approved position.

The apparent conflict between the policy exclusion and the occupancy facts requires further investigation and supervised approval before any coverage conclusion is communicated.

Question 20

Topic: Automobile

A Level 1 adjuster is reviewing an Alberta automobile claim under direct supervision. The insured told the adjuster that the vehicle was damaged in a hit-and-run while parked overnight. The police report says the insured reported a collision at an intersection and lists a witness who saw the insured driving at the time. What is the best next action?

• A. Ask the repair vendor to decide whether the damage pattern proves that the vehicle was parked or moving.
• B. Document the conflict, obtain direction from the supervising Level 3 adjuster, and follow up with the insured and witness before making a coverage recommendation.
• C. Deny the hit-and-run claim immediately because the police report is more reliable than the insured’s statement.
• D. Accept the insured’s statement as correct because the insured is the policyholder and made the claim directly.

Best answer: B

What this tests: Automobile

Explanation: The key point is that a conflict between the insured’s statement and the police report is an investigation issue, not an immediate coverage conclusion. A Level 1 adjuster should document the discrepancy, preserve both versions of the facts, and seek direction from the supervising Level 3 adjuster or principal. Follow-up may include asking the insured for clarification, obtaining the witness statement, and reviewing physical damage information. The adjuster should not ignore the conflict, choose one source without further work, or make an unsupported denial or acceptance decision.

• Accepting only the insured’s account ignores a material conflict in the claim facts.
• Denying immediately overstates what the police report proves before clarification and supervision.
• Asking the repair vendor to decide coverage shifts the adjuster’s investigation and coverage role to a vendor.

Conflicting police-report and insured-statement facts require documented investigation and supervisory direction before any coverage position is supported.

Question 21

Topic: General

A supervised Adjuster Level 1 is preparing settlement support for a small property claim. The insured submitted a contractor invoice for $4,800. The claim file also shows a prior $2,000 advance issued for the same repair category, and the insurer’s payment system has a pending vendor payment request entered by another staff member. What payment-control step best prevents overpayment, duplicate payment, or unauthorized payment before any further payment is issued?

• A. Tell the insured that payment will be delayed until a final release is signed for all possible future damage.
• B. Issue the full invoice amount to the insured and let accounting recover any duplicate amount later if needed.
• C. Ask the contractor to send a second copy of the invoice so the file has complete support for the amount claimed.
• D. Reconcile the invoice, prior advance, deductible, reserve, and pending payment request, then obtain required insurer and Adjuster Level 3 approval before payment is released.

Best answer: D

What this tests: General

Explanation: The key point is payment control before release of funds. A Level 1 adjuster should support settlement only after confirming what has already been paid, what is pending, what deductible or limits apply, and whether the proposed payee and amount are authorized. The prior advance and pending vendor request create a clear duplicate-payment and overpayment risk. Because a Level 1 adjuster works under direct supervision, the file also needs the required approval before reports or payment recommendations are acted on. Good payment control is preventive: reconcile the claim file and payment records before issuing money, rather than trying to correct an error after funds are released.

• A duplicate invoice copy may support documentation, but it does not address the prior advance or pending payment request.
• A final release may be relevant in some settlements, but demanding one for all possible future damage does not solve the immediate duplicate-payment control issue.
• Paying first and recovering later is poor financial control and may create an unauthorized or excessive payment.

Reconciling existing and pending payments with authority approval directly controls duplicate, excessive, and unauthorized payment risk.

Question 22

Topic: Property

A supervised Adjuster Level 1 is reviewing a residential theft claim. The insured lists a laptop and camera as stolen from the home, but the only receipt for the laptop is in another person’s name, and the camera may have been borrowed for a weekend trip. Before the adjuster supports payment for those items, what is the most appropriate claim-handling reason to request proof of ownership, possession, or insurable interest?

• A. To replace the coverage review with proof that a theft report was made
• B. To confirm the insured has a covered interest in the property and a right to claim payment for it
• C. To allow the adjuster to waive the deductible if the receipts are complete
• D. To determine whether the police will recover the stolen property before the claim can be opened

Best answer: B

What this tests: Property

Explanation: The key point is that property insurance pays for covered loss to property in which the insured has a valid interest. Proof of ownership, possession, or insurable interest helps confirm that the insured is the proper person to receive payment and that the item is within the policy’s covered property. A receipt in another person’s name or an item that may have been borrowed does not automatically defeat the claim, but it creates a necessary coverage and evidence question. A Level 1 adjuster should document the issue and obtain supporting information before recommending payment, under supervision.

• Police recovery may affect salvage or recovery handling, but it is not the main reason for proving ownership or insurable interest.
• A deductible is a policy term and is not waived simply because receipts are available.
• A theft report helps support that a loss occurred, but it does not prove the insured had a covered interest in each claimed item.

Payment support requires evidence that the insured had an insurable interest or proper claim to the property at the time of loss.

Question 23

Topic: Property

A Level 1 adjuster is assisting with a supervised fire claim for a rented commercial unit in Calgary. The tenant insured reports smoke damage to its inventory and wants the insurer to issue one payment to the tenant for all repairs. The broker confirms the building is owned by a landlord, and the tenant’s policy includes business contents coverage but does not list the building as insured property. What is the best action for the adjuster?

• A. Treat the landlord’s building damage as automatically covered under the tenant’s contents policy because the tenant occupies the premises.
• B. Ask the repair vendor to invoice only the tenant so ownership questions do not delay the repairs.
• C. Prepare a single building-and-contents settlement to the tenant because the loss occurred at the insured location.
• D. Document the tenant’s contents and business interest separately, confirm any landlord or mortgagee interests before building repair payment is considered, and refer the file to the Level 3 adjuster for direction.

Best answer: D

What this tests: Property

Explanation: The key point is that property claims often involve more than one interest in the same loss location. A tenant may have an insurable interest in contents, improvements, stock, or business income, but the landlord usually has the ownership interest in the building. If a mortgagee is involved, that interest may also affect payment documentation. A Level 1 adjuster should not collapse these interests into one payment request or assume the tenant can claim for property it does not own or insure. The file should clearly document ownership, policy coverage, lease or landlord information, any mortgagee or loss payee details, and the separate property interests before settlement support is provided under Level 3 supervision.

• Paying the tenant for building and contents ignores separate ownership and policy interests.
• Occupancy at the insured location does not make the landlord’s building covered property under the tenant’s policy.
• Vendor invoicing cannot solve an insurable interest or payment authority issue.

The tenant, landlord, and possible mortgagee interests affect who has an insurable interest and what documentation is needed before any payment or report is supported.

Question 24

Topic: Automobile

A supervised Adjuster Level 1 receives first notice of an Alberta automobile collision. The caller is the named insured’s spouse, the vehicle described is a pickup recently added to the household, and the driver was the insured’s 19-year-old son using it to deliver food for pay. The caller asks the adjuster to confirm that SPF 1 coverage applies and to authorize repairs immediately. What is the best action?

• A. Authorize repairs because the caller is part of the insured household and the loss involves an Alberta automobile.
• B. Verify the policy period, named insured authority, vehicle status, driver status, and vehicle use before confirming coverage or authorizing repairs.
• C. Deny the claim immediately because delivery use for pay is always outside automobile coverage.
• D. Proceed with repair authorization if the police report confirms the son was not at fault for the collision.

Best answer: B

What this tests: Automobile

Explanation: The key point is that automobile claim intake must identify facts that can affect whether the SPF 1 policy responds. Before confirming coverage, the adjuster should verify that the policy was in force on the loss date, the person reporting has a proper connection to the named insured, the pickup is listed or otherwise qualifies under the policy, the son’s driver status is acceptable, and the vehicle use at the time of loss is permitted or properly endorsed. A Level 1 adjuster should document these issues and work under supervision before making a coverage commitment or authorizing payment. Fault and repair urgency do not remove the need to confirm coverage basics.

• Authorizing repairs based only on household connection skips policy, vehicle, driver, and use verification.
• Denying immediately over delivery use goes too far without reviewing the wording, declarations, endorsements, and insurer instructions.
• Relying on a police report about fault does not establish that the vehicle, driver, use, and policy period meet coverage requirements.

These facts directly affect whether SPF 1 coverage may respond, so they must be verified before any coverage commitment is made.

Question 25

Topic: Automobile

A supervised Adjuster Level 1 is reviewing a covered collision claim under an Alberta automobile policy. The approved repair estimate is $5,200 before tax. GST is 5%. The applicable physical damage limit for this loss is $5,000, applied to the repair cost including tax before the deductible. The policy deductible is $500. There is no depreciation, betterment, or salvage deduction.

What payment should the adjuster recommend for approval?

• A. $5,000
• B. $4,960
• C. $4,500
• D. $4,700

Best answer: C

What this tests: Automobile

Explanation: The key point is to calculate the covered repair amount first, apply the stated limit as directed, and then apply the deductible. The repair estimate is $5,200 and GST at 5% is $260, for a tax-included repair cost of $5,460. Because the applicable limit is $5,000 and the facts say it applies before the deductible, the covered amount is capped at $5,000. The $500 deductible is then subtracted, leaving a recommended payment of $4,500. A Level 1 adjuster may calculate and recommend the amount, but payment reporting and approval remain subject to Level 3 supervision.

• $4,700 incorrectly subtracts the deductible from the pre-tax estimate and does not apply GST and the stated limit correctly.
• $4,960 uses the tax-included repair cost less the deductible but ignores the $5,000 limit.
• $5,000 applies the limit but fails to subtract the deductible.

The covered repair cost including GST exceeds the $5,000 limit, so the $500 deductible is subtracted from the $5,000 limited amount.

Questions 26-50

Question 26

Topic: Property

A supervised Level 1 adjuster is reviewing a small bakery claim after a covered water escape damaged the kitchen floor. The file has photos, a repair estimate, the date repairs started, and confirmation that the bakery was closed for four business days. The insured asks whether business interruption support can be considered. Which missing fact is most important to obtain first?

• A. A customer list showing who might have purchased baked goods during the closure
• B. A copy of the insured’s advertising plan for the next quarter
• C. A statement from the flooring contractor confirming the brand of replacement flooring
• D. Sales or accounting records showing the bakery’s normal income and the income lost during the closure

Best answer: D

What this tests: Property

Explanation: The key point is that business interruption is not supported by property damage alone. The adjuster needs financial or operational evidence showing that the insured business actually lost income, or incurred covered continuing expenses, because operations were interrupted by the insured loss. For an entry-level adjuster, the task is to gather and document the needed records, then have the coverage and payment position reviewed under supervision. Useful records may include sales summaries, accounting reports, daily till records, payroll or continuing expense records, and the dates operations were reduced or stopped. Repair details and photos help establish the property damage, but they do not prove the amount or existence of a business income loss.

• Replacement flooring details may support the building damage estimate, but they do not show lost income.
• Future advertising plans are not the first evidence needed to support an interruption loss from this event.
• A customer list may be background information, but it does not establish normal income, actual lost income, or continuing expenses.

Business interruption support requires evidence that the physical damage caused a measurable loss of business income or continuing expense.

Question 27

Topic: Automobile

A supervised Adjuster Level 1 is taking initial statements after a two-vehicle collision in Calgary. The insured driver says the claimant suddenly changed lanes without signalling. The claimant says the insured rear-ended them while they were stopped for traffic. There is no police report yet, and one witness has not been contacted. How should the adjuster document the file at this stage?

• A. Record that the insured is not at fault because the insured’s statement is the adjuster’s primary source of information.
• B. Record only the claimant’s allegation because third-party liability depends on the claimant’s version of the loss.
• C. Delay making any file notes until the police report and witness statement are both received.
• D. Record each person’s version separately, identify the source of each statement, note the unresolved conflict, and list the missing evidence to be obtained.

Best answer: D

What this tests: Automobile

Explanation: The key point is documentation discipline. Collision notes should distinguish observed facts, reported facts, allegations, and the adjuster’s own conclusions. When versions conflict, the file should show who said what, when it was said, and what evidence is still outstanding. A Level 1 adjuster should not resolve liability prematurely or phrase an allegation as an established fact. Good file notes allow the supervising Adjuster Level 3 and insurer to see the current evidence, the disputed points, and the next investigation steps, such as obtaining the police report, contacting witnesses, reviewing photos, and confirming vehicle damage patterns.

• Treating the insured’s version as conclusive is premature and may bias the liability review.
• Treating the claimant’s version as conclusive is also premature; it is an allegation until supported by evidence.
• Waiting to document the file risks loss of detail and creates a poor record of the claim investigation as it develops.

Separate, sourced notes preserve the facts and allegations without turning an unresolved dispute into an unsupported conclusion.

Question 28

Topic: Automobile

A supervised Adjuster Level 1 is handling an Alberta automobile third-party liability claim. The claimant’s lawyer sends a letter alleging negligence by the insured driver and demanding that the insurer admit liability within five days. The insured driver disputes fault and says the claimant suddenly changed lanes. What is the most appropriate next claim-handling step?

• A. Issue a denial letter immediately because the insured driver disputes fault.
• B. Advise the claimant’s lawyer that liability is accepted because a demand letter has been received.
• C. Negotiate the bodily injury settlement directly with the claimant’s lawyer to avoid delay.
• D. Refer the disputed liability issue to the supervising Adjuster Level 3 and obtain insurer instructions before making any admission or settlement commitment.

Best answer: D

What this tests: Automobile

Explanation: The key point is that disputed fault and lawyer involvement make the automobile liability claim legally sensitive. A Level 1 adjuster may gather facts, document statements, and support the claim investigation under direct supervision, but should not independently admit liability, deny liability, or commit the insurer to settlement. The proper step is to escalate to the supervising Adjuster Level 3 and follow the insurer’s instructions. Further investigation may be needed, such as statements, police report details, vehicle damage evidence, witness information, and any legal direction the insurer requires.

• Accepting liability based only on a demand letter ignores the insured’s disputed version and may improperly bind the insurer.
• Denying liability immediately is also unsupported because disputed fault requires investigation and supervision, not a reflex denial.
• Direct settlement negotiation with a lawyer is not appropriate for a Level 1 adjuster without supervision and insurer authority.

A disputed and lawyer-involved liability claim requires escalation and direction before a Level 1 adjuster admits liability or commits the insurer.

Question 29

Topic: General

A newly licensed Alberta Adjuster Level 1 is handling a residential water damage claim under an Adjuster Level 3 supervisor. The insured says a plumber believes the leak may have been ongoing for several months, but the plumber’s written report has not been received. The insurer asks the adjuster for a coverage recommendation by the end of the day. What is the best action for the Level 1 adjuster?

• A. Tell the insured the claim will be paid if the plumber confirms the leak began suddenly.
• B. Document the missing facts, request the plumber’s report, and provide any coverage recommendation only through the Level 3 supervisor for approval and countersignature.
• C. Recommend denial immediately because a long-term leak is usually excluded under property policies.
• D. Send the insurer a final coverage report directly, noting that the recommendation can be revised later if the report changes the facts.

Best answer: B

What this tests: General

Explanation: The key point is that a Level 1 adjuster must work under the direct supervision of an Adjuster Level 3 and must not make unsupported final coverage recommendations when important facts are missing. Here, the duration and cause of the leak may affect coverage, and the written plumber’s report has not yet been obtained. The proper response is to document what is missing, continue the investigation, and route any coverage recommendation through the Level 3 supervisor for approval and countersignature. This protects the insured, the insurer, and the adjuster by keeping the file evidence-based and within the Level 1 authority boundary.

• Immediate denial assumes a coverage conclusion before the written evidence is available.
• Promising payment to the insured improperly commits the claim before coverage has been reviewed and approved.
• Sending a final report directly to the insurer bypasses the Level 3 approval and countersignature requirement.

This keeps the Level 1 adjuster within supervised authority while recognizing that the coverage facts are incomplete.

Question 30

Topic: Automobile

A supervised Adjuster Level 1 is reviewing an Alberta automobile claim. The insured reports that another vehicle struck her parked car and left before she could speak to the driver. She has no licence plate number, no driver description, and no witness information, but she has filed a police report and provided the occurrence number. What is the best claim-handling conclusion at this stage?

• A. Treat the file as raising an unidentified motorist concern and continue gathering any available police, scene, and witness evidence under supervision.
• B. Conclude that the other driver was uninsured because the insured could not obtain insurance particulars at the scene.
• C. Treat the file as only missing third-party insurer information because a police report has been filed.
• D. Deny any automobile coverage review until the insured identifies the owner of the other vehicle.

Best answer: A

What this tests: Automobile

Explanation: The key point is the difference between missing details about a known third party and facts showing that the third party cannot be identified. If the insured has a name, plate number, or other identifying information but not the insurer’s policy details, the file may simply need more third-party information. Here, the other vehicle and driver are unknown, with no plate, description, or witness information. That points to a hit-and-run or unidentified motorist concern. A Level 1 adjuster should document the facts, confirm the police report, gather any available supporting evidence, and work under Level 3 supervision rather than deciding coverage independently.

• Filing a police report supports the investigation, but it does not turn an unidentified vehicle into a known third party.
• Lack of insurance particulars does not prove the other driver was uninsured; uninsured and unidentified are different concerns.
• Coverage review should not be refused simply because the other vehicle has not been identified; the missing identity is the issue to investigate.

With no identifying information for the other vehicle or driver, the file raises a hit-and-run or unidentified motorist issue rather than merely missing routine third-party details.

Question 31

Topic: Automobile

A supervised Adjuster Level 1 is assigned an Alberta automobile theft claim. The insured reported that the vehicle was stolen from a shopping centre parking lot. During the first contact, the insured gives inconsistent times for when the vehicle was last seen, says there is only one key available, and appears unusually eager to settle quickly. No police report, key analysis, financing information, or witness information has been reviewed yet.

What is the most appropriate claim-handling implication of these facts?

• A. They prove the insured intentionally misrepresented the theft and justify denying the claim immediately.
• B. They are suspicious indicators that should be documented and investigated further before any fraud or misrepresentation conclusion is made.
• C. They should be ignored unless the police first lay criminal charges against the insured.
• D. They require the adjuster to tell the insured that the insurer believes the theft was staged.

Best answer: B

What this tests: Automobile

Explanation: The key point is the difference between a red flag and proof. In an automobile theft claim, inconsistent times, missing keys, or pressure for fast settlement may justify closer review, careful file notes, and direction from the supervising Adjuster Level 3 or insurer. They do not, by themselves, establish fraud or misrepresentation. A Level 1 adjuster should gather and preserve relevant facts, such as the police report, key information, ownership and financing details, statements, location evidence, and any witness or surveillance information. Claim communication should remain fair, neutral, and professional until the evidence supports a coverage position.

• Immediate denial treats suspicion as proof and is not supported by the facts provided.
• Accusing the insured of staging the theft is premature and creates an unfair communication risk.
• Waiting for criminal charges is too narrow; civil claim investigation can proceed based on claim facts and insurer instructions.

Inconsistent details and unusual claim behaviour are red flags, but they are not proof of misrepresentation or fraud without supporting evidence.

Question 32

Topic: General

A supervised Adjuster Level 1 is handling a residential water damage claim in Alberta. The insurer has confirmed that the loss is covered, and the insured has not challenged the estimate or settlement amount. The insured tells the adjuster, “No one has returned my calls for two weeks, and I keep being asked to resend the same photos.” What is the best professional response?

• A. Treat it as a conduct concern requiring immediate reporting to the Alberta Insurance Council before notifying the Level 3 supervisor.
• B. Treat it as a claim disagreement and negotiate a higher settlement amount to resolve the insured’s frustration.
• C. Treat it as a coverage dispute and ask the insured to submit a proof of loss challenging the insurer’s coverage position.
• D. Treat it as a service complaint, document the concern, and escalate it through the insurer or adjusting firm’s complaint process under supervision.

Best answer: D

What this tests: General

Explanation: The key point is to identify what the insured is actually complaining about. The insurer has accepted coverage, and the insured is not disputing the amount payable. The problem is delay, poor communication, and repeated requests for documents. That is best handled as a service complaint: record the details, advise the Level 3 supervisor or principal as required, and follow the insurer’s or adjusting firm’s complaint-handling process. A coverage dispute involves disagreement about whether the policy responds. A claim disagreement usually concerns the amount, repair scope, liability position, or settlement terms. A conduct concern involves possible dishonesty, breach of confidentiality, unfair dealing, conflict of interest, or similar professional misconduct.

• Calling it a coverage dispute ignores that the insurer has already confirmed coverage.
• Negotiating a higher settlement does not address the stated problem, since the amount is not being challenged.
• Reporting directly to AIC is not the first response to ordinary service delay facts without misconduct indicators; supervision and the complaint process should be used.

The facts show dissatisfaction with communication and claim handling service, not a disagreement over coverage, quantum, or adjuster misconduct.

Question 33

Topic: Property

A supervised Adjuster Level 1 is helping prepare settlement support for a covered residential contents loss in Alberta. The policy settles this item on an actual cash value basis, calculated as replacement cost less depreciation. The file shows:

• Replacement estimate: $7,800
• Applicable depreciation: $1,300
• Contents limit for this item: $10,000
• Deductible: $500
• No taxes or other charges apply

What claim payment should be supported for this item?

• A. $6,000
• B. $7,300
• C. $7,800
• D. $6,500

Best answer: A

What this tests: Property

Explanation: The key point is to apply the valuation facts in order. Actual cash value is the replacement estimate reduced by depreciation: $7,800 - $1,300 = $6,500. The deductible is then applied to the covered amount: $6,500 - $500 = $6,000. The $10,000 limit does not reduce the payment because the calculated amount is below the limit. A Level 1 adjuster may help document this calculation, but settlement support and reporting remain subject to the supervising Adjuster Level 3’s approval and countersignature where required.

• $6,500 reflects actual cash value before applying the deductible.
• $7,300 subtracts only the deductible from the replacement estimate and misses depreciation.
• $7,800 uses the replacement estimate without applying depreciation or the deductible.

The actual cash value is $7,800 less $1,300 depreciation, then the $500 deductible is applied, and the result is within the $10,000 limit.

Question 34

Topic: Property

A supervised Level 1 adjuster receives first notice of a property claim from an insured homeowner in Calgary. The insured says, “There is water in the basement and some boxes are ruined.” The caller is upset and wants to know right away whether the policy will pay. What information is most important to obtain first so coverage review and investigation can properly begin?

• A. A final settlement amount based only on the insured’s description of the damage
• B. The date and time discovered, apparent source of the water, areas and property damaged, steps taken to prevent further damage, and any photos or repair invoices available
• C. A denial letter if the insured cannot immediately prove the exact cause of the water entry
• D. A signed full release from the insured before any inspection or estimate is arranged

Best answer: B

What this tests: Property

Explanation: The key point is that property claim intake should gather enough basic facts to start, not finish, the coverage review and investigation. For a water loss, the adjuster needs facts about when the loss occurred or was discovered, the likely source or cause, what property was damaged, whether the insured protected the property from further damage, and what evidence is already available. These details help determine which policy wording, exclusions, conditions, deductibles, limits, and proof requirements may apply. A Level 1 adjuster should document the information and proceed under supervision rather than promising payment, denying coverage, or setting a final amount before the facts are developed.

• A release is used after settlement, not as an intake requirement before investigation.
• A final settlement based only on a brief description is premature and lacks damage, coverage, and valuation support.
• Immediate denial for not knowing the exact cause ignores the adjuster’s role in investigating and documenting the loss facts.

These facts help identify the cause of loss, timing, damaged property, mitigation, and early evidence needed before coverage can be assessed.

Question 35

Topic: Property

A supervised Level 1 adjuster is reviewing a small bakery claim after a covered kitchen fire. The file includes these claimed amounts:

• Repairing smoke and fire damage to the ovens and wall finishes
• Lost net income while the bakery was closed for repairs
• Renting a temporary commercial kitchen to keep some orders going
• Lost future sales after several catering customers moved to another supplier

Which claimed amount is direct property damage?

• A. Repairing smoke and fire damage to the ovens and wall finishes
• B. Lost net income while the bakery was closed for repairs
• C. Lost future sales after several catering customers moved to another supplier
• D. Renting a temporary commercial kitchen to keep some orders going

Best answer: A

What this tests: Property

Explanation: The key distinction is whether the loss is physical damage to property or a financial result of that damage. Direct property damage is the actual physical loss or damage to insured property, such as damaged building finishes, equipment, stock, or contents. Lost income during the interruption is a business interruption issue. Renting a temporary location or equipment to reduce the interruption is usually an extra expense issue. Lost future customers or reputation-related sales can be a consequential loss issue and needs separate coverage analysis. A Level 1 adjuster should identify the category accurately and document the facts for review under supervision.

• Lost net income is not physical damage; it relates to interruption of business operations.
• Temporary kitchen rental is an expense incurred because of the loss, not damage to the bakery property itself.
• Lost future sales from customer movement is a consequential financial effect, not direct damage to tangible property.

Physical damage to insured tangible property is direct property damage.

Question 36

Topic: Automobile

An Adjuster Level 1 is assisting with an Alberta automobile physical damage claim. The insurer has agreed to pay the covered repair cost less the insured’s $500 deductible, subject to Adjuster Level 3 approval. The repair vendor’s final invoice is $4,900, and the vendor confirms the insured already paid the $500 deductible. The vendor also says it will send a $150 parts rebate to the independent adjusting firm if the invoice is paid at the full invoice amount. What is the most appropriate claim-handling implication?

• A. Accept the $150 rebate for the adjusting firm because it does not change the insured’s deductible.
• B. Support payment only for the documented amount owed by the insurer, disclose the proposed rebate, and obtain required Level 3 approval.
• C. Recommend payment of the full $4,900 because the vendor’s invoice is the best evidence of the repair cost.
• D. Delay the claim payment until the vendor agrees to send the rebate directly to the adjuster handling the file.

Best answer: B

What this tests: Automobile

Explanation: The key point is that claim payment support must be accurate and free from personal or firm benefit that is not disclosed and authorized. The insurer’s payable amount should reflect the covered repair cost after the insured’s deductible has already been collected by the vendor. A rebate connected to the claim payment is a financial integrity issue because it may reduce the true cost of the repair or create an improper benefit. A Level 1 adjuster should document the invoice facts, disclose the proposed rebate to the principal and supervising Adjuster Level 3, and support payment only for the amount properly owed under the claim. The Level 1 adjuster should not approve, redirect, or personally benefit from claim funds or vendor credits.

• Paying the full invoice ignores that the deductible has already been collected and fails to address the proposed rebate.
• Taking the rebate for the adjusting firm creates an undisclosed financial benefit connected to the claim payment.
• Redirecting the rebate to the individual adjuster is even more clearly improper and does not resolve the payment accuracy issue.

Financial integrity requires accurate payment support, disclosure of credits or rebates, and required supervisory approval before payment.

Question 37

Topic: Automobile

A supervised Level 1 adjuster is handling an Alberta automobile injury claim. The insured reports a soft-tissue injury and gives the name of a physiotherapy clinic. The clinic asks the adjuster to send confirmation of accident benefits coverage and says it can provide treatment notes if needed. The insured’s spouse also calls and asks what the treatment notes say. What is the most appropriate claim-handling implication?

• A. Discuss the treatment notes with the spouse because family members may help the insured manage the injury claim.
• B. Request the treatment notes from the clinic because the insured already mentioned the clinic during the claim call.
• C. Send the clinic all claim file notes so it can decide whether the accident benefits claim is payable.
• D. Confirm the insured’s consent or authority before requesting treatment notes or sharing medical details with anyone outside the authorized claim process.

Best answer: D

What this tests: Automobile

Explanation: The key point is that medical information should be handled only with proper consent or authority and only for a legitimate claim purpose. An insured naming a treatment provider may help identify where medical evidence could come from, but it does not automatically authorize unrestricted collection or disclosure of medical details. A Level 1 adjuster should follow insurer instructions, confirm the required consent or authorization, document it, and limit disclosure to what is needed for the claim. A spouse, repair vendor, or other third party is not automatically entitled to medical information merely because they are involved with the insured or the accident.

• Mentioning the clinic identifies a possible evidence source, but it does not replace consent or authority for medical records.
• A spouse may be helpful in the claim process, but medical details should not be shared unless the insured has authorized it or another proper authority exists.
• A clinic does not need the full claim file to treat the insured or provide records; disclosure should be limited and claim-purpose driven.

Medical information is sensitive, so the adjuster should confirm proper authority before collecting it from providers or disclosing it to others.

Question 38

Topic: Property

A Level 1 adjuster is reviewing a homeowner claim. The declarations show the insured location as a house in Red Deer. The insured reports that a camera and clothing were stolen from a locked hotel room in Edmonton during a weekend trip. The policy wording provided to the adjuster states that personal property owned by the insured is covered while on the insured location and while temporarily away from the premises, subject to the policy terms.

How should the adjuster classify the location issue for the initial coverage review?

• A. Require the insured to add the hotel as a scheduled location before any theft coverage can be considered.
• B. Deny the claim on the location issue because property is covered only at the Red Deer premises.
• C. Treat the stolen items as personal property temporarily away from the premises, not as a separate insured location.
• D. Treat the Edmonton hotel room as an insured location because the insured was staying there when the theft occurred.

Best answer: C

What this tests: Property

Explanation: The important distinction is between the place insured under the policy and property that is covered while away from that place. The insured location is the Red Deer house shown on the declarations. A hotel used for a weekend trip does not become an insured location simply because the insured occupied it temporarily. However, the wording given in the file extends coverage to personal property while temporarily away from the premises, subject to the remaining policy terms, limits, exclusions, deductible, and proof requirements. The adjuster should document the theft facts, ownership, value, police report or hotel report if available, and any applicable special limits, then review the file with the supervising Adjuster Level 3 as required.

• Calling the hotel an insured location confuses occupancy during travel with the premises described in the policy.
• Denying solely because the items were away from Red Deer ignores the wording that may cover personal property temporarily away.
• Requiring the hotel to be scheduled treats a temporary trip as a separate premises coverage issue, which is not the correct initial classification.

The hotel is not the insured location shown on the declarations, but the belongings may fall under coverage for personal property temporarily away from the premises.

Question 39

Topic: General

A supervised Alberta Adjuster Level 1 is preparing a file note on a small property water claim. The insured says a supply line burst while they were away for the afternoon. A plumber has repaired the line, and the insurer asks whether the file supports the reported cause of loss before coverage is reviewed. Which documentation best supports an objective, reproducible file conclusion?

• A. A brief note stating that the insured seemed credible and the loss probably happened as reported
• B. A dated file note summarizing the insured’s statement, plumber’s invoice describing the failed supply line, and photographs showing the damaged line and affected area
• C. A draft coverage opinion prepared before the plumber’s invoice and photographs are received
• D. A phone message from the broker confirming that the insured has never had a prior water claim

Best answer: B

What this tests: General

Explanation: The key point is that claim conclusions should be supported by evidence that another qualified reviewer can follow. Objective, reproducible documentation identifies the source of information, dates, observations, and records that connect the facts to the conclusion. In this situation, the insured’s statement alone is useful but not enough if the file is being used to support the reported cause of loss. A plumber’s invoice and photographs help document the physical cause and the affected area. A Level 1 adjuster should gather and record the evidence clearly, then work under supervision for any coverage conclusion or report requiring approval.

• A credibility note is subjective and does not show the evidence relied on.
• Prior loss history may be relevant to background, but it does not prove how this water loss occurred.
• A coverage opinion prepared before key evidence is received is premature and not reproducible from the file record.

This combines source, date, observation, and supporting records so another reviewer can understand and test the conclusion.

Question 40

Topic: Automobile

A supervised Adjuster Level 1 is reviewing an Alberta automobile claim. The insured says another vehicle changed lanes and struck her car. She obtained the other driver’s name, phone number, licence plate, and a photo of the other vehicle. The police occurrence number is available, but the police report has not yet been received and the other driver’s insurer is not identified in the file.

What is the most appropriate claim-handling implication at this stage?

• A. Classify the loss as an unidentified motorist claim because the other driver’s insurer is unknown.
• B. Classify the loss as an uninsured automobile claim because the police report has not yet been received.
• C. Treat the file as missing third-party insurance information and obtain the police report or other confirmation before raising an uninsured automobile concern.
• D. Proceed as though the insured was solely at fault because third-party coverage has not been confirmed.

Best answer: C

What this tests: Automobile

Explanation: The key point is the difference between missing information and a coverage concern. An unidentified motorist issue usually arises when the responsible driver or vehicle cannot be identified, such as a true hit-and-run with no usable identifying details. An uninsured automobile concern requires facts showing that the responsible vehicle was uninsured, not merely that the insurer has not yet been recorded in the claim file. Here, the insured has the other driver’s name, contact information, licence plate, and a photo of the vehicle. The file is incomplete because the police report and insurance particulars are still outstanding. A Level 1 adjuster should document the known facts and seek the missing confirmation under supervision before characterizing the matter as uninsured or unidentified.

• Unknown insurer information is not the same as an unidentified motorist when the driver and vehicle details are available.
• A missing police report does not prove the other vehicle was uninsured; it is a source to request and review.
• Fault should not be assumed merely because third-party insurance information has not yet been confirmed.

The other driver and vehicle are identified, so the immediate issue is incomplete third-party insurance information rather than proof of an uninsured or unidentified motorist.

Question 41

Topic: Automobile

A Level 1 adjuster is assigned an Alberta automobile collision file under direct supervision. The insured says the claimant “ran the red light.” The claimant says the insured “turned left without yielding.” A repair vendor has also sent photos showing front-end damage to both vehicles, but no police report or witness statement is on file yet. What is the best action for the adjuster when documenting the file?

• A. Record the insured’s version as the accepted facts because the insurer’s duty is owed to its own insured first.
• B. Record each version separately as an allegation, note the source of each statement, attach the photos, and identify the missing police and witness information for follow-up.
• C. Delay all file notes until the police report is received so the claim file does not contain conflicting information.
• D. Conclude that both drivers are equally at fault because the damage photos show front-end damage to both vehicles.

Best answer: B

What this tests: Automobile

Explanation: The key point is documentation discipline. A Level 1 adjuster should not turn disputed versions into final facts or ignore information that does not fit one account. The claim file should clearly separate who said what, when it was said, and what evidence supports or conflicts with each version. Photos, statements, police information, witness details, diagrams, and repair evidence may all help the insurer assess liability, but a supervised Level 1 adjuster should document the current state of the investigation rather than make an unsupported fault conclusion. Identifying missing evidence also helps the Adjuster Level 3 supervisor and the insurer decide the next claim steps.

• Treating the insured’s account as accepted fact ignores the claimant’s conflicting allegation and weakens the objectivity of the file.
• Waiting for the police report leaves the file incomplete and may lose important contemporaneous information.
• Equal fault cannot be concluded from front-end damage alone; liability depends on the collision facts and supporting evidence.

Conflicting collision facts should be documented objectively by source, with unresolved issues and missing evidence clearly identified for supervised follow-up.

Question 42

Topic: Automobile

A supervised Adjuster Level 1 receives a claim for automobile physical damage. The insured says her SUV struck a deer on an Alberta highway, was towed to a repair facility, and now has front-end damage. The file contains only the insured’s telephone report and a towing invoice. The deductible and physical damage coverage are not in dispute at this stage.

Before supporting a settlement amount, what evidence should the adjuster obtain next?

• A. A signed release from the insured confirming she accepts the first amount the insurer offers.
• B. Medical records from the driver, because injury evidence is needed before any vehicle damage can be valued.
• C. Damage photographs or inspection notes showing the impact area, a repair estimate or appraisal, and vehicle information supporting pre-loss value and condition.
• D. A police occurrence number only, because it confirms the loss happened on a public highway.

Best answer: C

What this tests: Automobile

Explanation: The key point is that automobile physical damage must be supported by evidence of what caused the damage, how far the damage extends, and what the loss is worth. The insured’s report and towing invoice are useful starting documents, but they do not establish the full repair scope or vehicle value. Photos, inspection notes, and an estimate or appraisal help connect the visible damage to the reported deer strike and quantify the repair cost. Vehicle details such as year, make, model, mileage, condition, and pre-loss value are also important, especially if the damage may approach a total loss. A Level 1 adjuster should gather and document this evidence for review under supervision before settlement support.

• A release is premature before the amount and basis of settlement are properly supported.
• A police occurrence number may help confirm an event was reported, but it does not prove repair scope or value.
• Medical records relate to injury handling, not valuation of the vehicle’s physical damage in this file.

These records address cause, extent, and value of the physical damage before a settlement amount is supported.

Question 43

Topic: Automobile

A Level 1 adjuster is reviewing an Alberta automobile physical damage claim. The insured was driving on an icy rural road, lost control, the vehicle rolled onto its side in the ditch, and the body panels and roof were damaged. No fire, theft, vandalism, hail, flood, animal impact, or falling object is reported.

Before confirming which coverages were purchased, which physical damage peril concept best matches these loss facts?

• A. Comprehensive
• B. Collision or upset
• C. All perils
• D. Specified perils

Best answer: B

What this tests: Automobile

Explanation: The key point is to classify the cause of physical damage before deciding whether the insured purchased the necessary coverage. A vehicle rolling onto its side is an upset. Collision or upset applies to damage caused by collision with another object or by the automobile upsetting. Comprehensive is for many non-collision physical damage losses, such as theft, vandalism, fire, hail, and similar causes, but the facts here do not point to those causes. Specified perils is narrower and responds only to listed perils. All perils is a broader purchased coverage concept, but it is not the best description of the actual loss event when the facts specifically show an upset.

• Comprehensive is tempting because icy-road damage is accidental, but the immediate cause is the vehicle upsetting.
• Specified perils does not fit because no listed peril such as fire, theft, lightning, windstorm, hail, or rising water is described.
• All perils is a coverage package concept, not the most precise classification of a rollover loss fact.

A rollover is an upset of the automobile, so the loss facts fit the collision or upset peril concept.

Question 44

Topic: General

A supervised Alberta Adjuster Level 1 is helping prepare a settlement recommendation on a small property claim. The insured says the damaged laptop was purchased last year for $2,400, but the only receipt in the file is for a different model costing $1,300. A repair vendor casually tells the adjuster, “If you use the higher amount, I can make the estimate match and we can close this today.” What is the best professional response?

• A. Ask the vendor to revise the estimate, then note only the final amount in the claim file to avoid confusing the insurer.
• B. Document the discrepancy, refuse to alter the evidence, and seek direction from the supervising Adjuster Level 3 before any settlement recommendation is made.
• C. Use the higher amount because the insured gave a direct statement and the claim is small.
• D. Tell the insured the claim will be denied immediately because the receipt does not match the claimed item.

Best answer: B

What this tests: General

Explanation: The key point is that an adjuster must not shape evidence to fit a desired settlement result. Integrity and trustworthiness require honest documentation, fair dealing, and accurate reporting to the principal or insurer. Here, the file contains a material discrepancy between the insured’s statement and the receipt, and the vendor has suggested changing an estimate to support a higher amount. A Level 1 adjuster should record the facts, preserve the evidence, avoid any misleading estimate or report, and obtain supervision before supporting payment. The discrepancy may be explainable, but it cannot be ignored or concealed.

• Relying on the insured’s higher amount overlooks conflicting documentary evidence.
• Having the vendor make the estimate match would compromise the accuracy and reliability of the claim file.
• An immediate denial goes beyond the known facts and the Level 1 role; the proper step is further review under supervision.

Integrity and trustworthiness require accurate evidence handling, full documentation, and supervised direction before supporting settlement.

Question 45

Topic: General

A supervised Alberta Adjuster Level 1 is handling a residential theft claim. The insured asks for immediate payment for a laptop and camera. The file contains a police occurrence number and the insured’s handwritten list, but no receipts, photos, serial numbers, bank records, or other ownership support. The Adjuster Level 3 has not approved any payment recommendation. What is the best action before payment is made?

• A. Recommend payment now because the police occurrence number confirms that a theft was reported.
• B. Request reasonable ownership proof and obtain Adjuster Level 3 approval before recommending payment.
• C. Deny the listed items because the insured did not provide receipts with the first notice of loss.
• D. Ask the broker to confirm the insured’s list and then issue payment without further review.

Best answer: B

What this tests: General

Explanation: The key point is that settlement support must be sufficient before payment is recommended. A police occurrence number supports that a theft was reported, but it does not prove that the insured owned the listed items or establish their value. Reasonable ownership proof may include receipts, photos, serial numbers, manuals, bank or credit card records, warranty records, or other documents depending on the circumstances. Because the adjuster is Level 1, the payment recommendation also needs appropriate Adjuster Level 3 supervision and approval before it proceeds. The response should keep the claim moving by requesting the missing support rather than paying prematurely or denying without giving the insured a fair chance to document the loss.

• A police occurrence number helps document the event, but it does not by itself prove ownership or value of the claimed property.
• Broker confirmation is not a substitute for claim evidence or Level 3 approval.
• Immediate denial is premature when the insured can still provide reasonable ownership support.

Payment support is incomplete because the file lacks ownership evidence and the Level 1 adjuster still requires Level 3 approval before recommending payment.

Question 46

Topic: General

A supervised Level 1 adjuster is preparing claim notes after inspecting a basement water loss in Calgary. The insured said the dishwasher supply line leaked overnight, the adjuster observed wet laminate flooring and water staining on the toe kick, and the repair vendor has not yet provided a cause report. What is the best claim note for the file?

• A. “Dishwasher definitely failed due to poor maintenance and caused all basement damage.”
• B. “Insured reports dishwasher supply line leaked overnight; observed wet laminate flooring and water staining on toe kick. Vendor cause report pending.”
• C. “Insured’s story seems believable, so coverage should be fine.”
• D. “Looks like a normal water claim; vendor will probably confirm the cause.”

Best answer: B

What this tests: General

Explanation: The key point is that claim notes should record objective facts, sources of information, and the status of evidence. A Level 1 adjuster should distinguish what the insured reported from what the adjuster personally observed and what remains to be confirmed. Here, the vendor has not issued a cause report, so the file note should not state a definite cause, assign fault, or predict coverage. Clear documentation supports supervision, coverage review, and later file handling because another reader can see what is known and what is still pending.

• Stating that poor maintenance definitely caused the loss goes beyond the available evidence.
• Saying the vendor will probably confirm the cause is casual shorthand and not a documented fact.
• Saying the insured seems believable and coverage should be fine mixes credibility and coverage opinions without support.

This note separates reported information, direct observations, and outstanding evidence without adding an unsupported conclusion.

Question 47

Topic: General

A supervised Adjuster Level 1 is preparing a draft settlement summary for a contents claim. The insurer has instructed that the item will be settled on an actual cash value basis, no special limit applies, and the applicable deductible is $200.

File facts:

• Repair vendor’s estimate if repair were authorized: $480
• Current price of a comparable new item: $1,100
• Depreciation for age and condition: $275

Which entry correctly distinguishes the figures for the settlement summary?

• A. Repair estimate $480; replacement cost $1,100; actual cash value $825; final settlement amount $480
• B. Repair estimate $480; replacement cost $825; actual cash value $625; final settlement amount $625
• C. Repair estimate $480; replacement cost $1,100; actual cash value $1,100; final settlement amount $900
• D. Repair estimate $480; replacement cost $1,100; actual cash value $825; final settlement amount $625

Best answer: D

What this tests: General

Explanation: The key point is that each figure serves a different purpose in the claim file. A repair estimate is a vendor’s estimate of what it would cost to restore the damaged item if repair were authorized. Replacement cost is the cost of buying a comparable new item, here $1,100. Actual cash value reflects depreciation, so it is $1,100 minus $275, or $825. The final settlement amount is the amount proposed for payment after applying the policy deductible, assuming no other limit or coverage issue changes the result. Here, $825 minus the $200 deductible gives a proposed final settlement of $625, subject to the required supervision and payment approval process.

• Treating $1,100 as actual cash value ignores depreciation for age and condition.
• Using $480 as the final settlement confuses a repair estimate with the amount payable on the instructed ACV basis.
• Calling $825 replacement cost and $625 actual cash value incorrectly applies depreciation and the deductible to the wrong labels.

Actual cash value is replacement cost less depreciation, and the final settlement amount reflects the deductible applied to that ACV figure.

Question 48

Topic: Liability

A Level 1 adjuster is assisting on a slip-and-fall liability claim under direct supervision. The claimant calls and says, “It has been three weeks. Are you delaying my claim on purpose? What are you still waiting for, and when will I be paid?” The file shows that the insurer is still waiting for a maintenance log and a witness statement before making a liability decision. What is the most appropriate response?

• A. Decline to discuss the reason for the delay because the claimant is not the insured and is not entitled to any process information.
• B. Tell the claimant that payment will be issued once the insurer receives the last document, because the delay is only administrative.
• C. Advise the claimant that the insured appears responsible but the amount cannot be discussed until all medical records are received.
• D. Explain that the claim is still under review, identify the outstanding maintenance log and witness statement, give a realistic process update, document the call, and refer any settlement commitment to the supervising Level 3 adjuster.

Best answer: D

What this tests: Liability

Explanation: The key point is fair and honest claimant communication. A liability claimant is not owed confidential insured information, but the adjuster should still deal in good faith and provide an accurate process update that does not mislead or create an unsupported expectation of payment. Here, the file has a specific reason for the delay: the insurer is still waiting for evidence needed to assess liability. A Level 1 adjuster should explain that the claim remains under review, state what evidence is outstanding at a high level, avoid admitting liability or promising payment, document the communication, and work under Level 3 supervision for settlement or coverage positions.

• Promising payment after the last document is received is improper because the missing evidence may affect whether liability exists at all.
• Refusing to give any process information is too restrictive; good faith communication allows a clear status update without disclosing confidential insured information.
• Saying the insured appears responsible goes beyond the supported file facts and risks an unauthorized liability admission.

Good faith requires a clear, honest process update without misleading the claimant or committing the insurer before the liability review is complete.

Question 49

Topic: Property

A Level 1 adjuster is assigned a residential water damage claim. The insured reported the loss the next morning and arranged emergency drying. Before the adjuster could inspect, the insured removed and discarded the damaged laminate flooring and soaked drywall. The policy condition requires the insured to give prompt notice, take reasonable steps to protect the property from further damage, show the damaged property when requested, and cooperate in the investigation. The insured has several photos and a contractor’s emergency invoice.

What is the most appropriate claim-handling outcome?

• A. Deny the entire claim immediately because any disposal of damaged property voids property coverage.
• B. Pay the claim as presented because prompt notice was given and emergency drying was reasonable.
• C. Ignore the discarded materials because property preservation conditions apply only to theft claims.
• D. Treat the discarded materials as a condition issue, document the facts, gather alternate evidence, and seek Level 3 and insurer direction before recommending payment or denial.

Best answer: D

What this tests: Property

Explanation: The key point is that policy conditions can affect claim handling when they impair the insurer’s ability to confirm cause, scope, or amount of loss. Prompt notice and emergency mitigation are helpful, but they do not erase the insured’s duties to cooperate and preserve or show damaged property when required. A Level 1 adjuster should not make an automatic coverage decision. The proper approach is to document what happened, obtain available substitute evidence such as photos, invoices, contractor notes, and statements, and refer the condition issue to the supervising Adjuster Level 3 and insurer for direction.

• Automatic denial is too strong because the effect of the condition issue depends on the facts and the insurer’s review.
• Immediate payment is premature because the discarded materials may affect inspection of cause and damage.
• Property preservation duties are not limited to theft; they can matter whenever the insurer needs to inspect damaged property.

Discarding damaged property may affect the insurer’s ability to inspect the loss, but the available photos and invoices mean the issue should be investigated and escalated rather than decided automatically.

Question 50

Topic: Automobile

A Level 1 adjuster is assigned an Alberta automobile physical damage claim under supervision. The insured vehicle was towed to a repair shop after a front-end collision, the shop wants to begin teardown today, and the insurer has not yet completed its damage review or confirmed whether any parts should be retained. What is the best action for the adjuster?

• A. Ask the repair shop to preserve the vehicle and damaged parts until the insurer or appraiser authorizes teardown, document the request, and advise the supervising Level 3 adjuster.
• B. Tell the insured to move the vehicle home to reduce storage charges before the inspection occurs.
• C. Close the physical damage review based on the towing invoice and the insured’s description of the collision.
• D. Authorize the teardown immediately so the shop can produce a more detailed estimate for the file.

Best answer: A

What this tests: Automobile

Explanation: The key point is to protect physical evidence before repair, disposal, or movement changes the condition of the vehicle. In an automobile physical damage claim, the insurer or appraiser may need to inspect the vehicle, confirm the cause and extent of damage, review whether damage is related to the reported loss, and decide whether any damaged parts should be retained. A Level 1 adjuster should not independently authorize a step that could destroy evidence or limit the insurer’s review. The proper response is to preserve the vehicle, document the instruction to the repair vendor, and involve the supervising Level 3 adjuster or insurer as required.

• Immediate teardown may be useful later, but it can destroy or alter evidence before approval.
• Moving the vehicle to reduce storage could affect inspection and chain of information if not directed by the insurer.
• A towing invoice and the insured’s description are not enough to complete a fair physical damage review.

Preserving the vehicle and parts maintains evidence for a fair physical damage review while keeping the Level 1 adjuster within supervised authority.

Questions 51-75

Question 51

Topic: Liability

A Level 1 adjuster is assigned to a liability claim under direct supervision. A customer alleges she fell when a stair tread broke at the insured’s retail store. The insured says a contractor is coming tomorrow to replace the stair tread, and a staff member has the broken piece in the back room. What is the best next action?

• A. Advise the claimant that the insured is responsible because the stair tread failed during store hours.
• B. Tell the insured to complete the repair immediately and discard the broken tread once photos are taken.
• C. Ask the insured to keep the broken tread available, obtain photos and witness information, document the request, and promptly seek Level 3 direction.
• D. Issue a written coverage position to the insured before the contractor changes the scene.

Best answer: C

What this tests: Liability

Explanation: The key point is to preserve evidence without making an unsupervised liability or coverage decision. In a liability investigation, the condition of the scene, the broken component, photographs, repair details, and witness information may all be important. A Level 1 adjuster should act promptly to prevent loss of evidence, make clear file notes, and report the issue to the supervising Adjuster Level 3 for direction. The adjuster should not admit liability, direct disposal of physical evidence, or issue a formal coverage position without proper authority and approval.

• Discarding the broken tread risks losing important physical evidence, even if photographs are taken.
• Admitting responsibility goes beyond investigation and may prejudice the insurer’s position.
• Issuing a written coverage position is not appropriate for a Level 1 adjuster without Level 3 approval and adequate review.

This preserves key physical and witness evidence while keeping the Level 1 adjuster within supervised authority.

Question 52

Topic: General

A supervised Adjuster Level 1 receives a new property claim from an insured for water damage in a basement. The insured says the leak was discovered six weeks ago, the damaged flooring was removed and discarded before anyone inspected it, and the insured did not report the claim earlier because they hoped the repairs would be inexpensive. The policy requires prompt notice of loss and cooperation with the insurer’s investigation. What is the best professional response?

• A. Document the delay and discarded evidence, ask for the reason and any available photos or invoices, and refer the coverage concern to the Adjuster Level 3 or insurer before any coverage position is given.
• B. Advise the insured that the claim is denied because late reporting automatically voids the policy.
• C. Proceed with settlement because the insured has explained why the claim was not reported sooner.
• D. Tell the repair vendor to estimate the damage and avoid mentioning the notice issue unless the insurer asks.

Best answer: A

What this tests: General

Explanation: The key point is that late reporting and loss of damaged property are coverage-review facts, not automatic conclusions for a supervised Level 1 adjuster. The insured’s six-week delay may raise a prompt-notice issue, and discarding the flooring may affect the insurer’s ability to investigate the cause and extent of damage. The proper response is to record the facts accurately, gather available supporting evidence, avoid promising payment or issuing a denial, and bring the concern to the supervising Adjuster Level 3 or insurer for direction. Coverage reservation or denial communication must be handled carefully and within authority.

• An immediate denial overstates the Level 1 adjuster’s authority and assumes the legal effect of late notice without proper review.
• Proceeding to settlement ignores facts that may affect policy conditions and the insurer’s investigation rights.
• Avoiding the notice issue would be incomplete and could mislead the principal about a material coverage concern.

The facts may support a late-notice or cooperation concern, but a Level 1 adjuster should investigate, document, and escalate rather than deny coverage independently.

Question 53

Topic: General

A supervised Adjuster Level 1 is taking first notice of a homeowners water loss in Alberta. The insured reports that an upstairs toilet supply line broke overnight, water is still running, the kitchen ceiling below is sagging, and she plans to wait for confirmation of coverage before calling a plumber or restoration contractor.

What is the most appropriate claim-handling implication of this intake detail?

• A. Confirm coverage because sudden water escape is always covered under a homeowners policy.
• B. Tell the insured to wait until a proof of loss is completed before authorizing any repairs.
• C. Close the first notice as incomplete until the insured obtains a contractor’s final repair estimate.
• D. Treat it as an immediate mitigation issue and advise reasonable emergency steps, while avoiding any promise of coverage.

Best answer: D

What this tests: General

Explanation: The key point is that first notice details can create urgent claim-handling needs before a final coverage decision is made. Ongoing water and a sagging ceiling indicate possible further damage and safety concerns. A Level 1 adjuster should act within supervision by documenting the facts, notifying the supervisor or insurer as required, and advising the insured to take reasonable emergency steps such as shutting off water if safe, contacting a plumber or restoration contractor, protecting undamaged property, taking photos, and keeping receipts. This does not mean promising coverage or authorizing a final settlement. Coverage, limits, deductibles, exclusions, and policy conditions still need review.

• Waiting for a proof of loss ignores the insured’s duty to take reasonable steps to limit further damage.
• Saying the loss is always covered overstates coverage before the policy wording and facts are reviewed.
• Requiring a final estimate before setting up the claim delays necessary intake, documentation, and mitigation steps.

Ongoing water and a sagging ceiling create a need to prevent further damage and address safety while coverage is still being reviewed.

Question 54

Topic: General

A Level 1 adjuster in Alberta receives a first notice of loss by phone for a small kitchen fire. The insured gives the date and time of loss, describes smoke damage to contents, and says a contractor is already on site. The broker then emails a different loss time and a different contact number for the insured. What is the best action when opening the claim file and recording these initial contacts?

• A. Use the broker’s email as the official record because written information is more reliable than a phone call.
• B. Record only the insured’s phone details because the insured is the policyholder and the broker’s information is secondary.
• C. Delay opening the claim file until the contractor provides a written estimate and confirms the extent of damage.
• D. Open the file with a dated record of each contact, note the conflicting information, and follow up to confirm the correct details before relying on them.

Best answer: D

What this tests: General

Explanation: The key point is disciplined claim file setup. Initial claim records should show who provided information, when it was received, what was said, and what still needs confirmation. Conflicting details should not be ignored or silently overwritten. A Level 1 adjuster should document both sources, identify the inconsistency, and make a timely follow-up contact or seek direction as needed. This protects the accuracy of the file, supports later coverage and investigation work, and helps the supervising Adjuster Level 3 or insurer understand what information has been verified and what remains outstanding.

• Treating the broker’s email as automatically controlling ignores a conflict that must be resolved.
• Recording only the insured’s version omits a material contact and weakens the file history.
• Waiting for a contractor estimate delays basic file setup; the claim file should be opened and documented before damage assessment is complete.

Accurate, dated file notes and prompt follow-up on conflicting facts support a reliable claim record from the start.

Question 55

Topic: General

A supervised Adjuster Level 1 receives first notice of a residential water damage claim. The insured says a basement wall is wet after a heavy rain and asks, “So this is covered, right?” The policy has not yet been reviewed, and no inspection, photos, or statement have been obtained. Which response best distinguishes proper initial fact gathering from a premature claim conclusion?

• A. “I will gather the loss details, review the policy, and report the information for coverage review before any coverage position is confirmed.”
• B. “Heavy rain losses are usually covered, so you can arrange repairs and expect reimbursement.”
• C. “Coverage depends only on whether the repair cost is higher than the deductible.”
• D. “Basement seepage is excluded, so there is no need to submit photos or repair estimates.”

Best answer: A

What this tests: General

Explanation: The key point is that first notice is not the time to promise coverage, deny coverage, or commit the insurer to payment. A Level 1 adjuster should collect the basic facts, document what was reported, identify urgent mitigation needs, obtain supporting information, and review the policy and instructions under supervision. In this situation, the cause of water entry, policy wording, exclusions, endorsements, deductible, damage details, and evidence are not yet known. A proper response explains the process and gathers information without creating an unsupported expectation. Coverage conclusions should be based on the file facts, policy review, and appropriate supervisory approval.

• Saying heavy rain losses are usually covered promises an outcome before the cause of loss and policy terms are known.
• Saying seepage is excluded denies the claim before the investigation and policy review are complete.
• Focusing only on the deductible ignores the need to establish cause of loss, covered property, exclusions, limits, and supporting evidence.

This keeps the contact focused on evidence gathering and avoids confirming coverage before the facts and policy are reviewed.

Question 56

Topic: Property

A supervised Adjuster Level 1 prepares a property claim report for a kitchen fire loss in Calgary. The report will be sent to the insurer to support a coverage and payment decision. The file contains a contractor estimate, photos, the insured’s statement, and a note that the cause of loss is still being reviewed. The Level 1 adjuster notices that the draft report omits the open cause-of-loss issue and has not yet been reviewed by the supervising Adjuster Level 3.

What should the Level 1 adjuster do before the report is issued?

• A. Remove all opinions from the report and issue only the contractor estimate and photographs.
• B. Revise the report to include the missing material information and obtain the required Level 3 approval and countersignature.
• C. Send the report as drafted because the insurer can ask follow-up questions if the cause of loss becomes important.
• D. Ask the insured to approve the report because the insured provided the statement and photos.

Best answer: B

What this tests: Property

Explanation: The key point is that claim reports are relied on by the insurer, supervising adjuster, and sometimes other parties to make coverage, reserve, and payment decisions. A property claim report should fairly present the material facts known at the time, including unresolved issues such as an open cause-of-loss review. Omitting that issue could make the report misleading even if the omission was not intentional. For an Adjuster Level 1, the supervision requirement is also central. Reports relating to adjustment of claims require approval and countersignature by an Adjuster Level 3. The proper action is to correct the report and have it reviewed before it is issued, not to shift the problem to the insurer or the insured after the fact.

• Sending the report as drafted is not acceptable because it leaves out a material unresolved issue.
• Providing only photos and an estimate does not replace a complete adjusting report when the insurer needs claim findings and open issues.
• The insured does not approve or countersign the adjuster’s report; supervisory review belongs to the Level 3 adjuster.

A property claim report must be accurate and complete, and a Level 1 adjuster’s report requires the supervising Level 3 adjuster’s approval and countersignature when it relates to adjustment of the claim.

Question 57

Topic: Property

A supervised Level 1 adjuster is reviewing a residential theft claim. The insured reports that several high-value electronics were stolen, but the first inventory lists no model numbers, the purchase receipts are missing, and a neighbour says the insured was moving boxes out of the home the day before the reported break-in. Which claim-handling implication best fits these facts?

• A. Report the insured to AIC before completing the coverage review or evidence gathering.
• B. Accept the claim as presented because missing receipts are common in residential contents claims.
• C. Treat the facts as suspicious indicators that require further investigation and documentation before any fraud conclusion is made.
• D. Deny the claim immediately because the neighbour’s statement proves the insured fabricated the theft.

Best answer: C

What this tests: Property

Explanation: The key point is the difference between a red flag and proof. Missing receipts, incomplete item details, and a witness account that appears inconsistent with the reported theft are suspicious indicators. They call for careful follow-up, such as obtaining a detailed statement, checking police information, requesting ownership evidence, clarifying the neighbour’s observations, and documenting the file. They do not, on their own, establish fraud. A Level 1 adjuster should avoid accusing the insured or denying the claim without sufficient evidence and proper supervision. The file should be developed objectively and referred for appropriate review or instruction if the concerns remain significant.

• Immediate denial overstates the evidence; a neighbour’s observation may be relevant but does not prove fabrication.
• Accepting the claim as presented ignores inconsistent evidence and missing proof that should be investigated.
• Reporting the insured to AIC is not the next property claim-handling step on these facts; the adjuster must first develop and document the evidence through the claim process.

Inconsistent or missing evidence may justify further inquiry, but it is not proof of fraud by itself.

Question 58

Topic: Automobile

A supervised Alberta Adjuster Level 1 is handling an SPF 1 collision claim. The police report and driver statements have been received, the repair estimate is complete, and the adjuster has drafted a report recommending acceptance of the insured’s physical damage claim subject to the deductible. What is the best action before the report or recommendation is sent to the insurer?

• A. Ask the broker to approve the recommendation before sending the report to the insurer.
• B. Send the report directly because the coverage recommendation is routine and the investigation is complete.
• C. Forward only the repair estimate and let the insurer infer the coverage recommendation from the file.
• D. Submit the draft to the supervising Adjuster Level 3 for review, approval, and countersignature before it proceeds.

Best answer: D

What this tests: Automobile

Explanation: The key point is the supervision boundary for an Alberta Adjuster Level 1. A Level 1 adjuster can gather facts, document the file, communicate within instructions, and help prepare claim materials under ongoing direct supervision. However, a report or recommendation relating to the adjustment of a claim must be reviewed, approved, and countersigned by an Adjuster Level 3 before it proceeds. The fact that this is an automobile claim, that the investigation appears complete, or that the recommendation seems straightforward does not remove that requirement. The Level 1 adjuster should not bypass the supervising Level 3 or substitute broker, vendor, or file-documentation steps for the required supervisory approval.

• A routine collision claim still requires Level 3 review when a Level 1 report or recommendation is being advanced.
• Broker approval is not a substitute for the supervising Adjuster Level 3’s approval and countersignature.
• Sending only the repair estimate avoids stating the recommendation but does not properly complete the supervised adjustment reporting process.

A Level 1 adjuster may assist with the claim, but reports and recommendations about adjustment require Level 3 approval and countersignature.

Question 59

Topic: Property

A supervised Level 1 adjuster is reviewing a homeowner claim for water damage from a burst supply line. The first notice says the insured had been “away for a while,” and a neighbour mentioned the house looked empty. The policy has conditions and limitations that may depend on whether the dwelling was vacant, unoccupied, or being checked during the absence. What file action best supports a fair property coverage review?

• A. Ask the broker to decide whether the vacancy condition applies because the broker arranged the policy.
• B. Confirm the insured’s absence dates, occupancy arrangements, property checks, heat maintenance, and any applicable policy wording before reaching a coverage position.
• C. Treat the claim as excluded because the neighbour described the house as empty.
• D. Pay the building damage first and review any policy conditions only if the insurer later questions the loss.

Best answer: B

What this tests: Property

Explanation: The key point is that property conditions and limitations often turn on precise facts. A vague report that the insured was “away for a while” does not establish vacancy, unoccupancy, failure to maintain heat, or failure to arrange checks. A Level 1 adjuster should document the dates, who had access, whether furniture and utilities remained, whether the home was being monitored, what heat was maintained, and the exact policy wording or endorsement before supporting a coverage recommendation. This protects both the insured and the insurer by avoiding a premature denial or unsupported payment. Any final report or coverage position must be handled under the required Level 3 supervision and approval process.

• Relying only on a neighbour’s description is not enough to apply a condition or limitation.
• Paying before reviewing relevant conditions may ignore coverage issues that must be considered fairly and promptly.
• The broker may provide policy or placement information, but the adjuster must investigate and report facts for the insurer’s coverage review.

A fair review requires the adjuster to gather the facts that determine how the vacancy, unoccupancy, and maintenance wording applies.

Question 60

Topic: General

A Level 1 adjuster is handling an Alberta automobile claim under direct supervision. The insured leaves a voicemail asking for an update on payment. The adjuster also needs to send the repair estimate and photos to a body shop, but the email address in the file was taken from a handwritten note and has not been confirmed. What is the best professional response?

• A. Send the estimate to the broker first and ask the broker to forward it to the body shop.
• B. Reply to the email address in the file because the body shop is a normal part of an automobile claim.
• C. Confirm the recipient’s contact information and authority before sending the estimate or photos, and document the communication in the claim file.
• D. Leave a detailed voicemail for the insured describing the estimate amount, deductible, and repair plan.

Best answer: C

What this tests: General

Explanation: The key point is that claim information must be shared only with the proper person or organization for a legitimate claim purpose. A handwritten email address that has not been confirmed creates a privacy risk because estimates and photos can contain personal and claim-specific information. A Level 1 adjuster should verify contact information and authority before sending documents, then record what was done in the file. Voicemail also requires care: leaving detailed claim or payment information can disclose private information if someone else hears the message. Under supervision, the adjuster should use secure, confirmed communication channels and follow the principal’s instructions for sharing claim documents.

• Treating the body shop as a normal claim participant does not remove the need to confirm the email address and authority.
• A detailed voicemail can disclose private claim information to anyone with access to the phone.
• Sending documents through the broker does not solve the privacy issue unless the broker is authorized and forwarding is appropriate under the principal’s instructions.

Confirming the recipient and authority reduces the risk of disclosing claim information to the wrong person and supports proper file documentation.

Question 61

Topic: Property

A supervised Level 1 adjuster is reviewing documents for a residential theft claim in Alberta. The insured reported that a laptop, camera, and several power tools were stolen during a break-in. Which item should the adjuster flag for further verification before relying on it to support the claim?

• A. A contractor’s estimate to repair the damaged door frame that matches the police report description of forced entry
• B. An inventory list that includes three high-value power tools not mentioned in the first notice of loss or the insured’s initial statement
• C. A photo of the laptop on the insured’s desk taken during a family video call several months before the loss
• D. A store receipt for the camera that shows the insured’s name, the correct model, and a purchase date two years before the loss

Best answer: B

What this tests: Property

Explanation: The key point is that claim documents do not all carry the same reliability. A receipt, photo, estimate, inventory, or statement may support a property claim, but the adjuster should verify evidence that conflicts with earlier information, appears incomplete, or changes the value or nature of the claim. Here, the inventory adds high-value tools that were not reported in the first notice of loss or the insured’s initial statement. That does not prove fraud, but it is a meaningful inconsistency. A Level 1 adjuster should document the concern and seek further verification, such as purchase records, photos, ownership details, or guidance from the supervising Adjuster Level 3.

• A receipt with matching identity, model, and a pre-loss purchase date is generally consistent evidence.
• A pre-loss photo showing the laptop in the insured’s possession can help support ownership.
• A repair estimate that matches the forced-entry facts is not inconsistent on its face.
• A later inventory adding unreported high-value items requires follow-up because it changes the claim after earlier statements.

A later inventory adding high-value items that were omitted from the first report and initial statement is an inconsistency that should be verified before being relied on.

Question 62

Topic: Property

A Level 1 adjuster is reviewing a homeowner property claim under direct supervision. The covered loss facts documented so far are a sudden dishwasher supply-line leak on July 8 that damaged the kitchen floor and lower cabinets. The insured submits a repair invoice that includes kitchen floor removal, cabinet drying, repainting an upstairs bedroom, and replacing a cracked basement window. What is the best action for the adjuster?

• A. Deny the entire invoice because it includes repairs outside the kitchen damage described in the claim file.
• B. Ask for an itemized breakdown and supporting details, then document which charges relate to the dishwasher leak before seeking Level 3 approval.
• C. Tell the vendor to remove the unrelated items from the invoice without recording the reason in the claim file.
• D. Recommend payment of the full invoice because it was submitted by the insured after the covered water loss.

Best answer: B

What this tests: Property

Explanation: The key point is that a repair invoice supports payment only to the extent it matches the covered loss facts and is adequately documented. Here, the covered facts are limited to a dishwasher supply-line leak damaging the kitchen floor and lower cabinets. Charges for kitchen floor removal and cabinet drying appear connected, but repainting an upstairs bedroom and replacing a cracked basement window do not match the documented cause or location of loss. A Level 1 adjuster should not simply approve, deny, or alter the invoice. The proper approach is to obtain an itemized explanation, confirm what work is related to the covered water damage, document the file, and seek the required supervisory approval before any payment recommendation.

• Paying the full invoice ignores that some repair items do not match the covered loss facts.
• Denying the entire invoice goes too far because some charges may be related to the covered kitchen damage.
• Having the vendor remove items without file documentation weakens the claim record and does not properly explain the coverage connection.

The invoice includes work that does not match the documented covered damage, so the adjuster should verify and separate supported repair costs before recommending payment.

Question 63

Topic: General

A supervised Alberta Adjuster Level 1 is investigating a liability claim. The insured says a store customer slipped on water near the entrance, but a witness tells the adjuster by phone that the floor looked dry. The insured asks the adjuster to “just write down the witness version” and not contact the claimant because the claim is probably exaggerated. What is the best professional response?

• A. Ask the claimant only questions designed to confirm exaggeration, since the insured has raised that concern.
• B. Obtain and document relevant information from the insured, claimant, witness, and available vendors or records before forming a claim position.
• C. Rely on the witness statement because it supports the insured and avoids unnecessary contact with the claimant.
• D. Tell the claimant the insurer will deny the claim unless the claimant can immediately prove the floor was wet.

Best answer: B

What this tests: General

Explanation: The key point is that an adjuster must investigate fairly and impartially. A Level 1 adjuster should gather relevant facts from appropriate sources, keep accurate file notes, and avoid deciding the claim based only on the version that favours one party. Information from the insured and witness is important, but the claimant’s account and any available records, such as incident reports, maintenance logs, video, or vendor records, may also be relevant. The adjuster should not mislead, pressure, or prejudge any person providing information. Any claim position or report must also stay within Level 1 supervision requirements.

• Relying only on the witness ignores other relevant sources and creates an unfair, incomplete investigation.
• Questions aimed only at confirming exaggeration are biased and can undermine the reliability of the information obtained.
• Threatening denial before completing the investigation is premature and inconsistent with fair dealing.

A fair investigation requires balanced, relevant information from appropriate sources before supporting a coverage or liability conclusion.

Question 64

Topic: Property

A supervised Adjuster Level 1 is preparing a property claim report for Adjuster Level 3 approval. The recommendation is to pay for hail damage repairs to the insured dwelling roof, less the policy deductible. Which documentation best supports the recommendation being sent for approval?

• A. A signed release from the insured before the Level 3 adjuster has approved the report
• B. An itemized roofing estimate and dated damage photos showing hail-related damage to the insured dwelling roof
• C. A contractor note recommending full roof replacement because the shingles were near the end of their useful life
• D. A broker email stating that the insured is a long-term customer and wants the claim settled quickly

Best answer: B

What this tests: Property

Explanation: The key point is that a property claim recommendation must be supported by claim file evidence that links the loss facts to the coverage and payment being recommended. For a hail damage payment, useful documentation should show the damaged insured property, the apparent covered cause of loss, and the repair cost basis. Dated photos and an itemized repair estimate are directly relevant because they support both the existence of hail damage and the amount recommended, subject to the deductible. A Level 1 adjuster should not rely on customer relationship comments, unsupported replacement preferences, or premature settlement documents when sending a report for supervisory review.

• Customer service pressure does not prove coverage, cause of loss, or quantum.
• Age-related replacement recommendations may raise a valuation or betterment issue, but they do not support paying for hail damage without connecting the damage to the insured peril.
• A release should not be obtained to support a recommendation before the supervised report has the required approval.

These documents connect the covered cause of loss, damaged property, and repair amount to the payment recommendation.

Question 65

Topic: General

A supervised Adjuster Level 1 receives a new residential property claim. On July 8, 2026 at 10:15 a.m., the adjuster speaks by telephone with the insured, Maria Chen. Maria says water entered her basement through the north window well during a July 7 storm, wetting laminate flooring and two bookcases. She says she moved undamaged items away from the area and has contacted a contractor for an estimate. No coverage decision has been made.

Which claim note best records the contact?

• A. 2026-07-08, 10:15 a.m. - Telephone call with insured Maria Chen. She reported water entered through the north basement window well during the July 7 storm, wetting laminate flooring and two bookcases. She stated she moved undamaged items and contacted a contractor. Next action: request photos and the contractor estimate, then review coverage with the Adjuster Level 3 before advising on coverage.
• B. 2026-07-08 - Water came in through a window well, so the loss is probably excluded as seepage. Tell the insured after checking the file.
• C. 10:15 a.m. - Insured seems honest and says the basement is damaged. Follow up sometime after repairs are complete.
• D. July 8 - Maria called about a basement flood. It looks like a covered storm loss, so payment should be arranged after the contractor sends pricing.

Best answer: A

What this tests: General

Explanation: The key point is that claim notes should be factual, complete, and useful to anyone reviewing the file later. A strong note identifies when the contact occurred, who provided the information, what was reported, and what will happen next. It should separate reported facts from conclusions and should not make premature coverage promises or denials. For an Adjuster Level 1, the note should also reflect the need for supervision before coverage advice or reporting is finalized. In this contact, the important facts are the telephone source, the date and time, the reported path of water entry, the damaged property, the insured’s mitigation steps, and the next evidence needed for review.

• Treating the loss as covered before policy review is premature and may mislead the insured.
• Recording impressions such as whether the insured seems honest does not replace objective facts, source details, and a clear next action.
• Suggesting an exclusion before completing the coverage review is also premature and does not properly document the supervised next step.

This note records the date, time, source, reported facts, mitigation information, and a clear supervised next action without making an unsupported coverage decision.

Question 66

Topic: General

A supervised Adjuster Level 1 is handling a property claim. The insured is upset about the proposed settlement amount and says the adjuster is “hiding behind the insurer.” The file contains incomplete notes about the settlement discussion, and the insured asks for the name of someone who can review the complaint. Which escalation path best protects fairness, documentation, and public confidence?

• A. Document the concern, advise the Adjuster Level 3 supervisor, follow the insurer’s complaint process, and provide the insured with appropriate complaint contact information.
• B. Stop communicating with the insured until the insured provides a signed proof of loss.
• C. Tell the insured that the settlement is final because a Level 1 adjuster cannot change the insurer’s position.
• D. Send the insured directly to the Alberta Insurance Council before notifying the insurer or supervisor.

Best answer: A

What this tests: General

Explanation: The key point is that a complaint or dispute should be handled openly, promptly, and through the proper channels. A Level 1 adjuster should not ignore the concern, argue about finality, or bypass supervision. The file should clearly record what the insured said, what was explained, and what next steps were provided. Because a Level 1 adjuster works under ongoing direct supervision, the Adjuster Level 3 supervisor should be involved, especially where fairness, settlement communication, or complaint handling is in issue. Following the insurer’s complaint process and giving appropriate contact information supports fair treatment and public confidence.

• Declaring the settlement final does not address the complaint fairly and may leave the file poorly documented.
• Sending the insured directly to the regulator before internal escalation can bypass the insurer’s complaint process and the Level 3 supervisor.
• Stopping communication because a proof of loss is outstanding does not respond to the complaint or support public confidence.

This path preserves the file record, uses required supervision, and directs the insured to a fair review process.

Question 67

Topic: General

A newly licensed Alberta Adjuster Level 1 is assigned a commercial property claim involving a suspected boiler explosion and possible business interruption loss. The adjuster has handled only basic residential water claims, has not reviewed boiler-related exclusions before, and the insured is pressing for an immediate coverage opinion. What is the best professional response?

• A. Continue handling the matter independently because the adjuster can learn the technical issues while adjusting the claim.
• B. Decline all contact with the insured until an engineer determines the exact cause of the loss.
• C. Advise the insured that coverage appears available, then ask the Adjuster Level 3 to review the file later.
• D. Tell the insured that no coverage opinion can be given yet and promptly escalate the file to the supervising Adjuster Level 3 for direction.

Best answer: D

What this tests: General

Explanation: The key point is competence. An adjuster should not give a coverage opinion or manage a technical claim beyond their knowledge, skill, and licence authority. A Level 1 adjuster in Alberta works under direct supervision of an Adjuster Level 3, and reports relating to claim adjustment require Level 3 approval and countersignature. Here, the suspected boiler explosion and possible business interruption issue are outside the adjuster’s experience. The proper response is to avoid an unsupported coverage statement, document the concern, and seek supervisory direction promptly. Escalation protects the insured, the principal, and the adjuster’s professional obligations for competence, integrity, and fair dealing.

• Giving a coverage opinion first is risky because the adjuster has not established competence or obtained proper supervisory direction.
• Learning while independently handling a technical claim does not satisfy the duty to act competently.
• Refusing all contact goes too far; the adjuster can communicate process information while escalating the technical decision.
• Escalation to the supervising Adjuster Level 3 fits both the competence concern and the Level 1 supervision requirement.

A Level 1 adjuster must work within competence and supervision limits, especially when a technical coverage issue is beyond their experience.

Question 68

Topic: Liability

A Level 1 adjuster is assigned a slip-and-fall liability claim under direct supervision. The claimant says the insured store “must be responsible” because the floor was wet. The adjuster has not yet reviewed the policy, obtained the insured’s statement, checked maintenance records, interviewed witnesses, or received authority from the insurer or the supervising Adjuster Level 3. How should the adjuster respond to the claimant?

• A. Advise the claimant that no liability exists because the claimant has not yet proven the claim.
• B. Offer to settle immediately to show good faith and prevent the claimant from complaining.
• C. Acknowledge the claimant’s concern, explain that the facts and coverage must be reviewed, and avoid admitting liability or promising payment.
• D. Tell the claimant the store is responsible because the incident occurred on the insured’s premises.

Best answer: C

What this tests: Liability

Explanation: The key point is that an adjuster must not commit the insurer or insured before the claim has been properly investigated and authority has been obtained. A slip-and-fall allegation requires facts about the condition of the floor, notice to the insured, maintenance practices, witnesses, causation, damages, and applicable coverage. A Level 1 adjuster also works under direct supervision, and claim reports require Adjuster Level 3 approval and countersignature. Good faith does not mean admitting liability early; it means communicating fairly, documenting the claim, gathering evidence, and staying within authority. The proper response is to acknowledge the claimant’s concern while making clear that liability and coverage are still under review.

• Premises ownership alone does not prove negligence or coverage.
• Immediate settlement without investigation can exceed authority and prejudice the insurer’s position.
• Denying liability before investigation is also improper because the facts have not been established.

Liability should not be admitted until the facts, coverage, authority, and supervision requirements have been completed.

Question 69

Topic: Automobile

A supervised Adjuster Level 1 is taking an initial injury report after an Alberta automobile collision. The insured says, “My neck is stiff, I missed two shifts, and the other driver keeps calling me. Should I go to physiotherapy, and can I tell them they are legally at fault?” What is the most appropriate response by the adjuster?

• A. Tell the insured to begin physiotherapy immediately because early treatment will help prove the injury claim.
• B. Advise the insured not to speak with the other driver because any contact could make the insured legally responsible.
• C. Tell the insured that the other driver is at fault if the insured’s version of the accident is consistent and documented.
• D. Record the reported symptoms, work absence, and contact concerns; explain the accident benefits process and forms; recommend that the insured seek medical and legal advice from qualified professionals as needed; and refer any coverage or liability position for supervision.

Best answer: D

What this tests: Automobile

Explanation: The key point is the boundary between claim process support and professional advice. A Level 1 adjuster may gather injury facts, document symptoms and lost time as reported, explain the accident benefits claim process, identify required forms or records, and escalate coverage or liability issues for supervision. The adjuster should not diagnose injuries, prescribe treatment, tell the insured what medical care to obtain, or give legal opinions about fault or how to deal with another driver. If the insured needs medical direction, the adjuster should point the insured to a health care provider. If the insured needs legal advice, the adjuster should suggest speaking with a lawyer or other qualified source. Clear documentation and supervised handling protect the claimant, the insurer, and the adjuster.

• Directing physiotherapy crosses into medical advice and also suggests a claim strategy rather than neutral process support.
• Telling the insured not to speak with the other driver because of legal responsibility gives legal advice and overstates the effect of contact.
• Declaring the other driver at fault is a liability conclusion that should not be made by a Level 1 adjuster during initial injury intake.

This keeps the adjuster within injury intake and benefit process support while avoiding medical or legal advice.

Question 70

Topic: Property

A supervised Level 1 adjuster is reviewing a tenant’s property claim for theft of tools from a detached garage behind the apartment building. The file includes a police report, an itemized tool list, and receipts showing the insured purchased the tools. The tenant policy declarations identify the insured apartment unit, but the file does not say anything about the detached garage. Which missing property fact most affects the coverage or payment decision?

• A. Whether the police report was filed during business hours
• B. Whether the detached garage was part of the insured location or an assigned storage area for the tenant
• C. Whether the landlord also stored maintenance supplies in another garage
• D. Whether the insured preferred replacement tools from the same manufacturer

Best answer: B

What this tests: Property

Explanation: The key point is that a property claim payment depends on more than the value of the missing items. The adjuster must confirm that the property was covered and that the loss location fits the policy wording. Here, ownership is already supported by receipts, so the remaining fact that most affects coverage is whether the detached garage is part of the insured location or an assigned storage area connected to the tenant’s premises. A Level 1 adjuster should document that fact and seek supervisory direction before supporting a coverage or payment recommendation.

• Replacement preference may affect repair or replacement handling, but it does not decide whether the loss location is covered.
• The timing of the police report filing is not the central coverage issue given the facts provided.
• The landlord’s storage practices in another garage do not establish whether this tenant’s detached garage qualifies as an insured location.

The location of the stolen property matters because coverage may depend on whether the garage qualifies as an insured location or covered storage area.

Question 71

Topic: General

A supervised Adjuster Level 1 is handling a residential water damage claim in Alberta. The insured wants to throw out the damaged laminate flooring and have a contractor begin cleanup immediately. The cause of the leak may be a recently installed dishwasher supply line, and the insurer may later seek recovery from the installer or product supplier. What should the adjuster do before disposal or permanent repair work proceeds?

• A. Tell the insured to dispose of all damaged materials immediately because mitigation always takes priority over evidence preservation.
• B. Arrange for the damaged parts and relevant evidence to be photographed, documented, and preserved as instructed before disposal or permanent repairs.
• C. Authorize permanent replacement right away because recovery against another party can be considered after repairs are complete.
• D. Advise the insured that the installer must remove the damaged materials before the insurer can inspect them.

Best answer: B

What this tests: General

Explanation: The key point is that mitigation and evidence preservation must both be considered. An insured should take reasonable steps to prevent further damage, but disposal, cleanup, repair, or replacement can destroy evidence needed to confirm the cause of loss, assess salvage value, or support recovery from a responsible third party. In this situation, the dishwasher supply line may point to a product or installation issue. Before damaged parts are discarded or permanent repairs proceed, the adjuster should ensure the file contains proper photographs, notes, estimates, and instructions about retaining key materials for inspection. As an Adjuster Level 1, the adjuster should work under supervision and follow insurer instructions, especially where recovery rights may be affected.

• Immediate disposal may reduce ongoing mess, but it can prejudice recovery if cause-related evidence is lost.
• Permanent replacement before inspection can make it harder to prove the source and extent of damage.
• Letting the installer control removal is risky because that party may be involved in the potential recovery claim.

Preserving and documenting the damaged item and cause-related evidence protects the insurer’s possible salvage and recovery rights.

Question 72

Topic: Property

A supervised Alberta Adjuster Level 1 is assigned a residential theft claim. The insured reports that several electronics were stolen, but the purchase receipts supplied have inconsistent dates, and a neighbour’s statement suggests the insured may have moved some items out before the reported break-in. The insured is upset and asks whether the claim is being treated as fraud. What is the best professional response?

• A. Remove the neighbour’s statement from the file until the insurer decides whether it will deny the claim.
• B. Ignore the receipt discrepancies unless the police confirm that the insured committed fraud.
• C. Record the inconsistencies as objective file notes, continue gathering evidence fairly, and report the concerns to the supervising Adjuster Level 3 for direction.
• D. Tell the insured the claim appears fraudulent and no payment will be made unless the insured proves otherwise.

Best answer: C

What this tests: Property

Explanation: The key point is that suspicious indicators are not the same as proof of fraud. An adjuster must act in good faith, document facts accurately, and avoid unfair accusations or premature conclusions. In this situation, the proper Level 1 response is to record the receipt discrepancies and witness information objectively, continue the investigation, and obtain direction from the supervising Adjuster Level 3 or principal. The insured should be treated professionally and kept informed without being misled or accused beyond the evidence. Good file notes should separate observed facts from opinions and should preserve the basis for later coverage or investigation decisions.

• Accusing the insured of fraud and threatening non-payment is premature and inconsistent with fair claim handling.
• Removing an unfavourable statement would compromise file integrity and could mislead the insurer.
• Ignoring inconsistencies unless police confirm fraud fails to investigate and document relevant claim evidence.

Good faith requires fair handling and objective documentation while escalating suspicious or inconsistent evidence through proper supervision.

Question 73

Topic: General

A supervised Adjuster Level 1 is handling first contact on a homeowner water-damage claim. The insured is upset because no coverage decision has been made after three days. The file is missing the plumber’s report on the cause of the leak, and the policy may contain a limitation that depends on that cause. What is the most appropriate good-faith communication to the insured?

• A. Explain that coverage is still under review because the cause of loss is not confirmed, identify the missing report, outline the next step, and avoid promising payment or denial before review.
• B. Tell the insured the claim will likely be paid because delays in receiving reports should not affect the insured’s confidence in the process.
• C. Avoid discussing the reason for the delay and simply say the insurer will contact the insured when a decision is ready.
• D. Advise the insured that the claim is denied until the plumber’s report is received and the insured proves the loss is covered.

Best answer: A

What this tests: General

Explanation: The key point is that good faith requires clear, honest communication without overstating what is known. When coverage depends on a missing fact, such as the cause of a water leak, the adjuster should explain what information is outstanding, why it matters, and what will happen next. A Level 1 adjuster should not commit the insurer to payment, deny coverage, or give a final coverage opinion without the required review and supervision. The insured is entitled to a fair process and reasonable process expectations, including being told that the delay relates to missing claim information rather than being ignored.

• Promising likely payment is misleading when the policy limitation depends on facts not yet known.
• Treating the claim as denied until more proof arrives is premature unless the insurer has completed the required coverage review.
• Refusing to explain the reason for the delay is poor communication and does not support fair dealing with the insured.

This is correct because it is accurate, transparent, and fair while respecting the limits of an unresolved coverage review.

Question 74

Topic: General

A Level 1 adjuster in Alberta receives first notice of a basement water claim. The insured says a heavy rainstorm occurred overnight, water was found near the floor drain, and a plumber has not yet inspected the drain or sewer line. The insured asks, “Is this covered?” What is the best professional response at this stage?

• A. Tell the insured the claim is denied because basement water near a floor drain is always excluded.
• B. Ask when the water was first discovered, where it appeared to enter, what mitigation has been done, and advise that coverage will be reviewed after the facts and policy are confirmed.
• C. Advise the insured to wait for the insurer’s decision before taking any steps to dry or protect the basement.
• D. Tell the insured the claim is covered because the water appeared during a heavy rainstorm.

Best answer: B

What this tests: General

Explanation: The key point is to separate early fact gathering from a coverage decision. At first notice, a supervised Level 1 adjuster should record the reported loss facts, ask neutral questions about cause, timing, location, damage, mitigation, and available evidence, and then review the policy with proper supervision or insurer instruction. The facts given do not yet establish whether the water entered through surface water, sewer backup, a drain issue, seepage, or another cause. Coverage may also depend on policy wording, endorsements, exclusions, limits, and conditions. Giving a definite coverage or denial statement before confirming those facts would be premature and could mislead the insured.

• A coverage promise based only on a rainstorm ignores the need to confirm cause of loss and policy terms.
• An automatic denial based only on water near a floor drain assumes facts that have not been investigated.
• Delaying mitigation is poor claim handling because the insured should take reasonable steps to protect property from further damage.

Initial contact should gather the facts needed for coverage review without making a claim conclusion before investigation.

Question 75

Topic: Automobile

A supervised Adjuster Level 1 is handling an Alberta automobile claim involving minor vehicle damage. During the initial call, the insured says they have persistent headaches, missed work for two weeks, are being referred to a specialist, and want the adjuster to confirm whether all treatment and wage loss will be paid under accident benefits. What should the Level 1 adjuster do next?

• A. Negotiate a full and final settlement of the accident benefits claim to prevent the file from becoming more complex.
• B. Advise the insured that headaches are subjective and should not be included in the claim until a specialist confirms the diagnosis.
• C. Document the information, avoid giving a coverage or medical opinion, and refer the injury and accident benefits issues to the Adjuster Level 3 or insurer for instructions.
• D. Tell the insured that accident benefits will pay all treatment and wage loss because the injuries arose from an automobile accident.

Best answer: C

What this tests: Automobile

Explanation: The key point is that a Level 1 adjuster works under ongoing direct supervision and must recognize when a claim issue is beyond entry-level authority or competence. Persistent symptoms, missed work, specialist referral, medical causation, and entitlement to accident benefits require careful coverage review and supervisory direction. The Level 1 adjuster may gather and document the facts, request ordinary claim information as instructed, and keep communication professional, but should not promise payment, reject symptoms, interpret medical significance, or settle the injury claim independently. Escalation protects the insured, the principal, and the adjuster by ensuring that coverage, medical, and benefit decisions are handled with the required authority and file oversight.

• Promising that all treatment and wage loss will be paid gives a coverage conclusion before proper review and approval.
• Dismissing headaches as subjective is an unsupported medical or claims conclusion and is not fair claim handling.
• Negotiating a full and final settlement is beyond the Level 1 role where injury facts and accident benefits issues require supervision.
• Documenting the facts and seeking Level 3 or insurer direction keeps the adjuster within competence and authority.

The injury facts and benefit questions exceed a Level 1 adjuster’s authority, so the file should be escalated under direct supervision before conclusions are communicated.

Questions 76-100

Question 76

Topic: Automobile

An Adjuster Level 1 receives an Alberta automobile claim from an insured who found fresh damage to the rear bumper after the vehicle was parked overnight on a street. The insured believes it was a hit-and-run but has no witness information and has not contacted police. The insured asks the adjuster to confirm that the claim will be handled as an unidentified automobile loss and to authorize repairs immediately. What is the most appropriate response?

• A. Deny the claim immediately because the insured did not contact police before reporting the loss to the adjuster.
• B. Tell the insured that a police report is unnecessary if photos of the bumper damage are provided with the repair estimate.
• C. Document the reported facts, ask the insured to make a police report and provide the report details, gather available evidence, and submit the coverage and payment recommendation for Adjuster Level 3 review.
• D. Confirm hit-and-run coverage based on the insured’s verbal report and authorize repairs because the damage is consistent with another vehicle impact.

Best answer: C

What this tests: Automobile

Explanation: The key point is that unidentified automobile and hit-and-run claims require careful documentation because the insurer must verify how the loss occurred, whether another vehicle was involved, and whether policy and claim-handling requirements have been met. A Level 1 adjuster should not confirm coverage, deny the claim, or authorize payment based only on an unverified verbal report. The proper approach is to record the insured’s account, obtain police report information where required or expected, preserve evidence such as photos and location details, and gather any witness, surveillance, or repair information. Because the claim involves a coverage classification and possible payment decision, the Level 1 adjuster must work under direct supervision and obtain Adjuster Level 3 review before reports or recommendations are finalized.

• Confirming coverage and authorizing repairs too early overlooks the need to verify the hit-and-run facts and obtain supervised approval.
• Denying immediately is premature because the missing police report may be a documentation issue to address, not an automatic final conclusion on the facts given.
• Relying only on photos and an estimate does not establish all necessary loss circumstances for an unidentified automobile claim.

A hit-and-run or uninsured automobile claim depends on careful proof of the loss circumstances and must be reviewed under Level 3 supervision before a Level 1 adjuster supports a coverage or payment position.

Question 77

Topic: Liability

A Level 1 adjuster is reviewing a slip-and-fall claim at an insured retail store. The claimant says they fell near the entrance and broke a wrist. The file includes medical records confirming the fracture and a witness statement that the floor was wet. The file does not yet show whether store staff knew, or reasonably should have known, about the wet floor before the fall. Which liability element needs more evidence before a supported liability analysis can be made?

• A. Causation
• B. Breach of duty
• C. Damages
• D. Identity of the claimant

Best answer: B

What this tests: Liability

Explanation: The key point is that liability analysis looks at duty, breach, causation, and damages. A retail store generally owes customers a duty to take reasonable care for their safety. Damages are supported by the confirmed wrist fracture. Causation is partly supported because the claimant alleges the fall caused the injury, although it may still need further review. The specific missing liability issue is breach: whether the insured failed to act reasonably in the circumstances. In a slip-and-fall claim, that often depends on facts such as how long the hazard was present, whether staff knew or should have known about it, inspection practices, warning signs, and cleanup efforts. A Level 1 adjuster should document the gap and seek supervisory guidance rather than admitting liability on incomplete facts.

• Confirmed medical records make damages a supported issue, not the main missing element.
• A fall followed by a wrist fracture raises causation facts, but the stated file gap concerns the insured’s conduct.
• The claimant is already identified as the person who fell and made the injury claim.
• Knowledge of the wet floor and reasonable inspection or cleanup practices go to breach of duty.

The missing issue is whether the insured failed to meet the expected standard of care by not addressing a hazard it knew or should have known about.

Question 78

Topic: Property

A supervised Alberta Adjuster Level 1 receives first notice of a homeowner water claim. The insured says a dishwasher supply line suddenly burst while the family was away for the weekend. The repair vendor’s initial invoice describes “slow leak under cabinet, soft subfloor, and mould-like staining.” Photos show dark staining behind the cabinet, but no plumber’s cause report has been obtained. What is the best action for the adjuster?

• A. Document the inconsistency and seek Level 3 direction to verify the cause and duration of the leak before supporting a coverage or payment recommendation.
• B. Ask the vendor to revise the invoice so it matches the insured’s description of a sudden burst.
• C. Accept the insured’s description as sufficient because the loss was reported promptly after discovery.
• D. Deny the claim immediately because mould-like staining always proves the loss is excluded.

Best answer: A

What this tests: Property

Explanation: The key point is that water loss facts can change the coverage analysis. A sudden and accidental discharge may be treated differently from seepage, leakage over time, deterioration, or mould-related damage. Here, the insured’s report of a sudden burst conflicts with the vendor’s note and photos suggesting a slow leak and older damage. A Level 1 adjuster should not ignore the conflict, alter records, approve payment, or deny coverage without sufficient support. The proper supervised response is to document the discrepancy, obtain direction from the Level 3 adjuster or insurer, and gather verification such as a plumber’s cause report, additional photos, repair details, and timing information.

• Prompt reporting after discovery does not resolve the cause or duration of the leak.
• Mould-like staining may raise a coverage issue, but it does not by itself justify an immediate denial without further investigation and supervision.
• Asking a vendor to change an invoice to fit the claim story would compromise claim file integrity and fair handling.

The sudden-loss report conflicts with vendor and photo evidence suggesting possible long-term leakage, so the cause and duration need verification before any claim conclusion.

Question 79

Topic: Property

A supervised Level 1 adjuster is reviewing a residential fire claim. The dwelling policy includes replacement cost settlement for contents, but the wording states that replacement cost is payable only after the damaged property is actually repaired or replaced and the cost is incurred. The insurer has already issued an actual cash value payment for a damaged sofa, less the deductible. The insured now sends a store quotation for a new sofa and asks for the remaining replacement cost amount before buying it.

What is the correct claim-handling outcome?

• A. Pay the full quotation amount immediately because the policy includes replacement cost coverage.
• B. Deny the entire contents claim because the insured did not replace the sofa before the actual cash value payment was issued.
• C. Explain that the additional replacement cost amount is not supported until the insured replaces the sofa and provides proof of the incurred cost.
• D. Pay the remaining amount based on the quotation if the insured verbally confirms an intention to replace the sofa.

Best answer: C

What this tests: Property

Explanation: The key point is that replacement cost coverage often changes the settlement timing, not the need to satisfy policy conditions. An actual cash value payment may be supported before repair or replacement, but the additional replacement cost amount usually depends on the insured actually repairing or replacing the damaged property and showing the cost incurred. A quotation shows an expected price, but it does not prove that replacement has occurred or that the insured has incurred the expense. The Level 1 adjuster should document the request and explain the condition, subject to the insurer’s instructions and required supervision.

• Immediate payment of the quotation ignores the stated condition that the cost must be incurred.
• Denying the entire contents claim goes too far because the actual cash value payment has already been supported.
• A verbal intention to replace does not satisfy a condition requiring actual replacement and proof of cost.

The policy condition requires actual replacement and proof of incurred cost before the replacement cost holdback can be paid.

Question 80

Topic: Property

A supervised Adjuster Level 1 receives a property claim for water damage at an insured rental house in Alberta. The loss notice says the tenant moved out 42 days before the loss, the owner had not arranged regular inspections, and a pipe froze after the heat was turned down. Before recommending that the insurer accept the claim, what is the most appropriate coverage issue to flag for review?

• A. Whether the building should automatically be settled on a replacement cost basis
• B. Whether the insurer must waive the deductible because the loss involved water damage
• C. Whether the claim should be treated as a liability claim against the former tenant
• D. Whether vacancy, maintenance, or freezing-related policy conditions and exclusions affect coverage

Best answer: D

What this tests: Property

Explanation: The key point is that vacancy, failure to maintain or inspect, delay in discovering damage, freezing, wear and tear, intentional acts, and excluded perils can change the coverage analysis on a property claim. A Level 1 adjuster should not assume a water loss is covered simply because water damaged insured property. Here, the rental house had been vacant for a significant period, inspections were not arranged, and the immediate damage involved freezing. Those facts should be documented and referred for coverage review under the applicable policy conditions, exclusions, and any vacancy or freezing limitations before a payment recommendation is made.

• Treating the matter first as a liability claim against the former tenant skips the insured’s own property coverage review.
• Replacement cost settlement depends on policy wording and settlement conditions; it is not automatic from the loss notice.
• A deductible is not waived merely because the cause of loss involves water damage.

The vacant period, lack of inspection, and frozen pipe facts directly raise property policy condition and exclusion issues that require review before a coverage recommendation.

Question 81

Topic: General

A supervised Adjuster Level 1 is working on an Alberta property claim. The Alberta Insurance Council sends the adjusting firm a request for claim file information after the insured complains about delayed contact. The insurer examiner, who is the firm’s principal on the claim, tells the Level 1 adjuster to delete notes showing missed callbacks and to wait before telling the Level 3 supervisor. What is the best professional response?

• A. Contact the insured directly and ask them to withdraw the complaint before responding to AIC.
• B. Follow the principal’s instruction because the insurer controls the claim file and may decide what AIC receives.
• C. Preserve the claim file, promptly involve the Level 3 supervisor, and ensure any response to AIC is accurate and complete within the adjuster’s authority.
• D. Delete only the informal notes and keep a private copy in case AIC asks more questions later.

Best answer: C

What this tests: General

Explanation: The key point is that an adjuster’s conduct duties are not suspended because a principal gives an improper instruction. A Level 1 adjuster must act with integrity, deal honestly with AIC, comply with governing legislation and conduct expectations, and remain within supervised authority. Altering or concealing claim notes would undermine file integrity and could mislead the regulator. The proper response is to preserve the record, involve the Level 3 supervisor promptly, and ensure the firm’s response to AIC is truthful, complete, and authorized. The adjuster may still respect the principal relationship, but not by participating in deception or delaying regulatory cooperation.

• Treating the insurer’s instruction as controlling misses the adjuster’s independent conduct duties to AIC and the public.
• Keeping a private copy after deleting notes still alters the official claim record and does not cure the misconduct.
• Pressuring the insured to withdraw a complaint is improper and avoids the duty to respond honestly through the correct process.

Integrity, supervision, and cooperation with AIC require the file to be preserved and handled honestly through the proper supervisory channel.

Question 82

Topic: General

A supervised Adjuster Level 1 is handling a homeowner water damage claim. The insured says a plumber installed a new supply line two days before it burst. The damaged connector is still at the house, and the insured wants the cleanup crew to throw it out. Coverage has not yet been confirmed, and no recovery review has been completed. Which file note or follow-up best preserves a recovery opportunity without exceeding Level 1 authority?

• A. Close the recovery issue because the insurer has not yet confirmed coverage or paid the claim.
• B. Send the plumber a demand letter immediately for the estimated claim amount and advise that legal action will follow if payment is not made.
• C. Tell the insured to discard the connector after photographs are taken because the insurer can rely on the invoice and repair estimate.
• D. Note the plumber as a possible recovery party, ask the insured to keep the connector and related invoices, photograph the item, and refer the recovery issue to the supervising Adjuster Level 3 for direction.

Best answer: D

What this tests: General

Explanation: The key point is to protect possible recovery rights without acting beyond supervised Level 1 authority. A burst supply line installed shortly before the loss creates a possible subrogation or recovery issue, but the adjuster should not make liability demands, threaten legal action, or decide the recovery position independently. The appropriate entry-level action is to document the potential third party, preserve physical evidence, collect basic supporting records, and escalate the issue to the supervising Adjuster Level 3. Preserving the connector matters because it may later help establish cause, defect, workmanship, or responsibility. Recovery may still be considered even before coverage and payment are finalized, but any formal recovery action should follow insurer direction and proper supervision.

• Immediate demand letters and legal threats exceed the supervised Level 1 role and may prejudice the file.
• Discarding the connector risks losing important physical evidence even if photographs and invoices exist.
• Closing recovery just because coverage has not yet been confirmed is premature; the potential must still be documented and protected.

This preserves evidence and flags possible subrogation while leaving recovery decisions and communications to the Level 3 supervisor.

Question 83

Topic: General

A supervised Adjuster Level 1 is handling a homeowner water damage claim. A restoration contractor calls and asks for the insured’s policy limits, deductible, and coverage concerns so the contractor can “explain the claim better” to the insured. The file shows the contractor has inspected the damage, but there is no written authorization from the insured and no instruction from the insurer allowing this information to be shared with the contractor.

What is the most appropriate claim-handling implication?

• A. Disclose the information because the contractor has already inspected the damage at the insured’s home.
• B. Confirm the insured’s consent or the insurer’s authority before disclosing the requested claim information.
• C. Ask the contractor to send the request by email and then place the email in the claim file.
• D. Disclose only the policy limits because contractors need them to prepare a repair estimate.

Best answer: B

What this tests: General

Explanation: The key point is that claim information belongs in a controlled communication process. A repair contractor may need some facts to scope damage or coordinate repairs, but that does not automatically authorize disclosure of policy limits, deductibles, coverage concerns, or other claim details. Before sharing information with a third party, an adjuster should confirm the insured’s consent, the insurer’s instruction, or another clear authority to disclose. A Level 1 adjuster should also work within supervision and document the authority relied on. Keeping an email request in the file does not replace consent or authority.

• Prior inspection by a contractor does not create permission to receive confidential policy or claim information.
• Policy limits are sensitive claim information and should not be shared merely because a contractor is preparing an estimate.
• A written request from the contractor documents the request, but it does not establish authority to disclose.

Policy limits, deductible details, and coverage concerns should not be disclosed to a third party unless proper consent or authority is confirmed.

Question 84

Topic: Property

A Level 1 adjuster is assisting with a residential fire claim in Alberta. The insured’s contents list includes several high-value electronics, but the purchase receipts appear altered and a neighbour privately tells the adjuster that some listed items were removed from the home before the fire. The insured asks the adjuster to send copies of the neighbour’s statement and the receipts to the insured’s contractor “so everyone can sort it out.” What is the best professional response?

• A. Give the neighbour’s information to the insured so the insured can confirm whether the neighbour is reliable.
• B. Secure the receipts and statement in the claim file, document the inconsistencies, and ask the supervising Adjuster Level 3 or insurer for direction before any further disclosure.
• C. Send the documents to the contractor because the contractor is already involved in the property repair estimate.
• D. Tell the insured that fraud is suspected and refuse further contact until the insured explains the receipts.

Best answer: B

What this tests: Property

Explanation: The key point is to preserve evidence and control confidential information when fraud indicators appear. Altered receipts and a private witness statement may be significant to the insurer’s investigation, but a Level 1 adjuster should not accuse the insured of fraud or disclose sensitive information to a contractor or other person without proper authority. The adjuster should keep original or received documents secure, make accurate file notes, avoid unnecessary disclosure, and seek direction from the supervising Adjuster Level 3 or the insurer. This supports a fair investigation while protecting the insured’s, witness’s, and insurer’s interests.

• Involving the contractor in repair estimating does not authorize sharing confidential witness information or suspected fraud evidence.
• Accusing the insured of fraud is premature and may be unfair before the insurer completes its investigation.
• Giving the insured the neighbour’s information could compromise confidentiality, witness cooperation, and the integrity of the evidence.

This protects potentially important evidence, preserves confidentiality, and keeps the Level 1 adjuster within supervised authority.

Question 85

Topic: Liability

A restaurant insured reports that a customer slipped near the entrance and is alleging the floor mat was curled and poorly maintained. The customer says two patrons saw the fall. The manager says a cleaning contractor had serviced the entrance area earlier that morning, but the file has no photos, incident report, contract, invoices, or witness contact details yet. What is the most appropriate next inquiry for the supervised adjuster?

• A. Ask the insured to admit responsibility so the claim can proceed quickly to settlement discussions.
• B. Close the liability investigation until the customer provides a signed release.
• C. Request only the customer’s medical invoices because damages must be confirmed before liability facts are investigated.
• D. Gather the incident report, photos of the entrance and mat, statements from the customer and manager, witness contact information, and the cleaning contract or invoices.

Best answer: D

What this tests: Liability

Explanation: The key point is that a liability investigation needs evidence about duty, breach, causation, damages, and possible involvement of other parties before any claim conclusion is supported. In a slip-and-fall claim, useful early evidence includes statements from the claimant and insured, witness information, photos of the accident area and alleged hazard, the insured’s incident report, and any contract or invoice showing who maintained the area. Medical invoices may later support damages, but they do not establish how the fall happened or whether the insured was negligent. A Level 1 adjuster should gather and document relevant facts under supervision rather than admit liability or move directly to settlement.

• Medical invoices may help assess damages, but they do not replace evidence about the condition of the premises or how the incident occurred.
• An admission of responsibility is not appropriate before the facts, coverage position, and supervisory instructions are reviewed.
• A release is a settlement document; it is not a reason to suspend the investigation before basic liability evidence is collected.

These items directly address what happened, the condition of the premises, who observed it, and whether another party may have been involved.

Question 86

Topic: General

A supervised Adjuster Level 1 is helping prepare a property claim settlement payment. The insurer’s instruction says the cheque is to be issued jointly to the named insured and the mortgagee shown on the policy. Before the payment is released, the insured phones and asks the adjuster to “just make the cheque payable to my contractor instead” because the contractor wants to be paid quickly. What should the adjuster do?

• A. Release the cheque to the insured alone so the insured can decide whether to pay the contractor.
• B. Issue the cheque to the contractor and note in the file that the insured authorized the change by phone.
• C. Decline to change the payee on the oral request, document the call, and obtain insurer and Adjuster Level 3 direction before any payment change is made.
• D. Change the payee to the contractor if the insured confirms the request by text message.

Best answer: C

What this tests: General

Explanation: The key point is financial integrity in handling claim funds. A Level 1 adjuster should not redirect settlement funds based on an oral request when the insurer has already provided specific payee instructions, especially where a mortgagee is named. Changing payees can affect the insurer’s obligations, the mortgagee’s interest, and the audit trail for claim payments. The proper response is to document the request, keep the payment on hold or unchanged, and obtain direction from the insurer and the supervising Adjuster Level 3 before any payment is altered. Good claim payment control requires clear authority, accurate records, and no informal handling of funds or payment instructions.

• A text message from the insured alone does not replace insurer authority or supervision where the payment instruction names specific payees.
• A phone authorization noted in the file is not enough to redirect claim funds to a third party.
• Paying the insured alone ignores the insurer’s joint-payee instruction and the mortgagee’s stated interest.

Payment instructions must be controlled, documented, and approved rather than changed on an unsupported oral request.

Question 87

Topic: General

A supervised Level 1 adjuster is reviewing a property claim for an insured restaurant after a kitchen fire. The insured reports that a recently serviced deep fryer overheated, the fire investigator’s preliminary note identifies the fryer as the area of origin, and the insured has an invoice from the service contractor dated two days before the loss. What is the best action for the adjuster?

• A. Discard the damaged fryer once the insured confirms it has no salvage value.
• B. Close the file as a normal fire claim because subrogation applies only to automobile losses.
• C. Document the contractor information and alert the supervising Level 3 adjuster that subrogation recovery should be considered.
• D. Advise the insured that the service contractor is legally liable for the full fire loss.

Best answer: C

What this tests: General

Explanation: The key point is recognizing a possible recovery from a third party. Subrogation may arise when the insurer pays its insured and another person or business may be responsible for causing the loss. Here, the recent service work, the contractor invoice, and the preliminary origin information all point to a potential claim against the service contractor. A Level 1 adjuster should not make a legal liability finding or independently pursue recovery, but should document the facts, preserve relevant evidence, and bring the issue to the supervising Level 3 adjuster or insurer. Preserving the fryer and service records may be important before any disposal or repair decisions are made.

• Declaring the contractor legally liable goes beyond the Level 1 role and the available facts.
• Treating subrogation as limited to automobile claims is wrong; recovery can arise in property claims as well.
• Discarding the fryer could destroy evidence needed to investigate cause and possible recovery.

Another party may have contributed to the loss, so the file should preserve the recovery possibility and be escalated through supervision.

Question 88

Topic: Automobile

A supervised Adjuster Level 1 is reviewing an Alberta automobile claim. The insured’s car collided with another vehicle in an Edmonton intersection. The insured says she entered on a green light. The other driver says the insured ran a red light and is claiming vehicle damage and a minor injury. Before a liability recommendation can be supported, which inquiry is most appropriate?

• A. Ask the broker whether the insured’s renewal premium may increase after the claim.
• B. Obtain driver, witness, police, and scene evidence about the traffic signal, right of way, vehicle positions, and point of impact.
• C. Determine whether the insured has replacement cost coverage for personal items in the vehicle.
• D. Confirm whether the insured wants original equipment manufacturer parts used in the repair estimate.

Best answer: B

What this tests: Automobile

Explanation: The key point is to separate automobile physical damage handling from liability fact gathering. When another driver alleges the insured caused the collision and seeks damages, the adjuster needs facts that help determine fault: what each driver did, traffic controls, right of way, speeds, vehicle positions, point of impact, weather and road conditions, witness accounts, photos, dashcam footage, and police information. A Level 1 adjuster should gather and document those facts under supervision before any liability recommendation is made. Repair preferences, premium effects, and personal property coverage may be relevant elsewhere, but they do not resolve whether the insured is legally responsible to the other party.

• Repair-part preferences relate to vehicle damage estimating, not the facts needed to assess fault.
• Renewal premium questions are not a liability investigation issue and should not drive the claim decision.
• Personal property coverage concerns first-party property, not whether the insured is liable to the other driver.

These facts directly address fault and the third-party liability allegation arising from the collision.

Question 89

Topic: Liability

A Level 1 adjuster is handling a slip-and-fall liability claim under direct supervision. The claimant says the adjuster has been unfair, misunderstood the statement, and failed to return calls. The claimant asks to speak with someone in authority and threatens to complain to the insurer and the Alberta Insurance Council. What is the most appropriate escalation action?

• A. Issue an independent final denial letter so the claimant has a clear position to challenge.
• B. Document the concern and promptly refer it to the supervising Adjuster Level 3 and the principal for direction under the complaint process.
• C. Admit liability to reduce conflict and then continue settlement discussions with the claimant.
• D. Tell the claimant that communication complaints must wait until the claim is settled.

Best answer: B

What this tests: Liability

Explanation: The key point is that a Level 1 adjuster does not handle a disputed communication or conduct concern independently. A complaint about unfair treatment, missed communication, or misunderstanding of a statement affects both claim handling and professional conduct. The adjuster should make clear file notes, remain courteous, avoid arguing or changing the claim position without authority, and escalate promptly to the supervising Adjuster Level 3 and the principal or insurer according to their complaint process. This preserves fair dealing, confidentiality, supervision requirements, and accurate claim documentation.

• Admitting liability to calm the claimant is improper because liability decisions require evidence, authority, and supervision.
• Delaying the complaint until settlement ignores the claimant’s current handling concern and may worsen a conduct issue.
• Issuing an independent final denial exceeds the Level 1 role and does not address the disputed communication process.

A disputed handling or communication issue should be documented and escalated through supervision and the principal before the Level 1 adjuster takes further position.

Question 90

Topic: General

A supervised Level 1 adjuster receives notice of a homeowner claim in Alberta. A windstorm tore shingles from the roof, and rain is entering the attic. The insured asks whether they should wait for the insurer’s appraiser before doing anything. What is the most appropriate claim-handling implication of mitigation?

• A. The adjuster should treat all later water damage as automatically excluded because it occurred after the windstorm.
• B. The insured should take reasonable temporary steps, such as covering the opening, to prevent further damage and keep records of the cost.
• C. The insurer should recover the full repair cost from the insured because the roof was not repaired before inspection.
• D. The insured should leave the property unchanged until coverage is confirmed and a final repair estimate is approved.

Best answer: B

What this tests: General

Explanation: The key point is that mitigation is about reducing further loss after damage has occurred. In a property claim, reasonable emergency steps may include tarping a roof, shutting off water, moving undamaged contents, or arranging temporary protection. These actions do not by themselves prove coverage or set the final settlement amount, but they help preserve the property and limit avoidable damage. A Level 1 adjuster should explain the need for reasonable protection, tell the insured to keep receipts and photos, and document the file for supervisory review. Waiting unnecessarily can increase the loss and create preventable coverage or proof issues.

• Waiting for a final estimate before any temporary protection can allow avoidable damage to continue.
• Treating later damage as automatically excluded ignores the need to assess whether reasonable mitigation steps were taken.
• Charging the insured for the full repair cost is not the purpose of mitigation; the issue is preventing further damage and documenting reasonable expenses.

Mitigation means taking reasonable action after a loss to reduce further damage while documenting the steps taken.

Question 91

Topic: General

A supervised Adjuster Level 1 is handling a small liability claim. The claimant is upset about the time taken to review the file and says, “If you do not pay this week, I will complain to the Alberta Insurance Council.” The adjuster believes more witness information is still needed before liability can be assessed. Which response best reflects appropriate dealings with the claimant?

• A. Explain the claim status respectfully, identify the information still needed, document the conversation, and continue the review under supervision.
• B. Tell the claimant that complaints usually make insurers less willing to settle quickly.
• C. Offer a small payment immediately to prevent the claimant from contacting the regulator.
• D. Stop communicating with the claimant until all witness information has been received.

Best answer: A

What this tests: General

Explanation: The key point is that an adjuster must deal fairly, honestly, and respectfully with insureds and claimants, even when the person is upset or threatening to complain. A claim should not be paid merely to avoid regulatory attention, and a claimant should not be discouraged from using a complaint process. If liability facts are incomplete, the adjuster should explain the status in neutral terms, say what information is still needed, document the contact, and continue the investigation with required supervision. This supports fairness and public confidence in the claims process.

• Discouraging a complaint by suggesting it will hurt settlement prospects is unfair and could undermine confidence in the process.
• Paying to prevent a regulatory complaint is not a proper claim-handling reason for settlement.
• Cutting off communication because the file is incomplete is not fair dealing; the claimant should receive accurate status information.

Fair dealing requires respectful, accurate communication while the file is investigated and documented under proper supervision.

Question 92

Topic: Liability

A Level 1 adjuster is handling a slip-and-fall liability claim under direct supervision. The claimant says the adjuster misrepresented the insurer’s position during a phone call and threatens to complain unless the claim is paid immediately. The file notes do not clearly show exactly what was said. What should the adjuster do next?

• A. Offer a settlement to avoid a complaint, while noting that payment does not admit liability.
• B. Acknowledge the concern, document the complaint, preserve the communication record, and promptly escalate the matter to the Level 3 supervisor and principal for direction.
• C. Refer the claimant directly to the Alberta Insurance Council and close the file until the regulator responds.
• D. Deny the allegation in writing and tell the claimant that no further discussion will occur until a lawsuit is started.

Best answer: B

What this tests: Liability

Explanation: The key point is that a Level 1 adjuster should not try to resolve a disputed handling complaint alone, especially where the file does not clearly support what was communicated. The proper action is to acknowledge the concern without arguing or admitting fault, make a clear file note, preserve any available records, and escalate promptly to the Level 3 supervisor and the principal or insurer for direction. This protects the claimant’s right to fair treatment, the insurer’s position, and the adjuster’s supervision obligations. It also avoids making an unsupported coverage, liability, or settlement commitment in response to pressure.

• Denying the allegation and cutting off communication is poor claimant handling and may worsen a complaint.
• Offering payment just to avoid a complaint is not proper settlement support and may prejudice the insurer’s position.
• Referring the claimant to AIC may be appropriate information in some complaint contexts, but it does not replace documenting and escalating the handling dispute through supervision and the principal.

A disputed claimant communication should be documented and escalated through supervision and the principal before any further claim position is taken.

Question 93

Topic: General

A supervised Level 1 adjuster is reviewing a covered water damage claim under a property policy. The insured asks whether the settlement can include an extra amount because the claim process has been stressful and the home is now “worth more” after repairs. The repair estimate restores the damaged rooms to their pre-loss condition, subject to the deductible and policy limits. What settlement approach best reflects the principle of indemnity?

• A. Increase the settlement because completed repairs may improve the market value of the home.
• B. Support payment for the covered cost to restore the damaged property to its pre-loss position, less any applicable deductible and subject to policy limits.
• C. Pay the full replacement cost of all rooms in the home, even those not damaged by the covered loss.
• D. Recommend an additional payment because the insured experienced inconvenience during the claim process.

Best answer: B

What this tests: General

Explanation: The key point is that indemnity shapes claim settlement by limiting recovery to the insured’s actual covered loss. In a property claim, the goal is generally to restore the damaged property or compensate for its loss so the insured is returned, as closely as the policy allows, to the financial position held before the loss. The settlement is still controlled by the wording, limits, deductible, exclusions, and valuation terms. Indemnity does not support a windfall, a payment for unrelated inconvenience, or payment for undamaged property simply because a claim occurred.

• Stress and inconvenience may be relevant to customer service, but they do not expand the indemnity settlement for covered property damage.
• A possible increase in market value after repairs is not the measure of the covered loss.
• Undamaged rooms are outside the loss being indemnified unless the policy wording specifically provides otherwise.

Indemnity aims to put the insured back in the same financial position as before the covered loss, not to create a profit.

Question 94

Topic: General

A Level 1 adjuster is assisting with an Alberta property claim under direct supervision. The insured is upset about a delay in obtaining a repair estimate and asks the adjuster to “promise the insurer will pay for everything so I can stop worrying.” The coverage review is not complete, and the Level 3 adjuster has not approved any coverage position. What is the best professional response?

• A. Reassure the insured that the loss will be fully covered because the estimate delay is not the insured’s fault.
• B. Ask the repair vendor to tell the insured that payment is expected once the estimate is received.
• C. Explain the claim process honestly, avoid promising coverage, document the conversation, and refer any coverage position to the Level 3 adjuster for approval.
• D. Tell the insured that coverage is doubtful so the insured will not develop unrealistic expectations.

Best answer: C

What this tests: General

Explanation: The key point is that fair dealing requires honesty, accuracy, and respect for authority limits. A Level 1 adjuster should not promise coverage or payment before the coverage review is complete and before the Level 3 adjuster has approved the position. The adjuster can still respond professionally by explaining the process, acknowledging the insured’s concern, documenting the contact, and escalating the coverage issue through the proper supervisory channel. This protects the insured from misleading assurances and protects confidence in the claim process. It also avoids using a vendor to communicate an unofficial coverage position.

• Promising full payment is misleading because coverage has not been confirmed.
• Suggesting coverage is doubtful is also unfair because the facts and supervision approval do not support that conclusion.
• Using the repair vendor to deliver a coverage message is inappropriate because coverage communication should come through the adjuster or insurer with proper authority.

This response is fair, accurate, documented, and respects the Level 1 adjuster’s supervision limits.

Question 95

Topic: General

A supervised Adjuster Level 1 is preparing an Alberta automobile physical damage claim file for Adjuster Level 3 review. The file contains the policy declarations, police report, photos, repair invoice, and deductible calculation. A cheque request for $4,800 has been drafted, but the only settlement note says, “Approved by phone,” with no name, date, amount, or instruction from the insurer’s claim examiner.

Which missing record creates the greatest file-quality risk?

• A. A written confirmation from the repair vendor that parts are available
• B. A dated record or email showing the insurer’s settlement authority and approved payment amount
• C. A second set of vehicle damage photos taken after repairs were completed
• D. A copy of the broker’s original application for the automobile policy

Best answer: B

What this tests: General

Explanation: The key point is that a claim file must support not only the amount of the payment, but also the adjuster’s authority to recommend or request that payment. A Level 1 adjuster works under supervision and must be able to show that the insurer or principal authorized the settlement step being taken. A vague note such as “Approved by phone” does not identify who gave authority, when it was given, what amount was approved, or any conditions attached to the approval. That creates a major file-quality and authority risk before the Level 3 review and countersignature. Other documents may be useful, but they do not carry the same immediate risk when the file already contains coverage, damage, invoice, and deductible support.

• Broker application records may help with underwriting history, but the immediate problem is unsupported settlement authority.
• Repair parts availability may affect repair timing, not whether the payment request is properly authorized.
• Post-repair photos can support completion, but the file already has damage photos and the decisive gap is authority for payment.

Settlement support is highest risk when the file does not show the principal’s authority for the payment being requested.

Question 96

Topic: Automobile

A supervised Adjuster Level 1 receives first notice of an Alberta automobile claim. The insured’s vehicle was rear-ended at a stop sign. The insured reports bumper damage and also says, “My neck is sore, I saw a clinic doctor, and I may miss work tomorrow.” Which claim-handling implication best fits these facts?

• A. Handle the claim only as a vehicle physical damage claim because the first reported damage is to the bumper.
• B. Treat the matter only as a third-party liability claim because the other driver struck the insured’s vehicle.
• C. Wait for the repair estimate before recording any injury-related information in the claim file.
• D. Flag the claim for possible accident benefits and gather basic injury, medical-treatment, and work-loss information under supervision.

Best answer: D

What this tests: Automobile

Explanation: The key point is that an automobile claim may involve more than vehicle damage when injury facts are reported. Neck pain, a clinic visit, and possible missed work are all indicators that accident benefits or other injury-related claim handling may be needed. A Level 1 adjuster should not ignore those facts or delay documenting them until the vehicle estimate is complete. The appropriate response is to recognize the injury component, gather basic facts such as symptoms reported, treatment received, and work impact, and proceed under insurer instruction and Level 3 supervision. This does not require the Level 1 adjuster to make medical conclusions or promise payment; it requires proper recognition, documentation, and escalation within the claim process.

• Vehicle damage handling is still needed, but bumper damage does not remove the injury-related aspect of the loss.
• Third-party liability facts may also be relevant, but the insured’s medical and work-loss information points to accident benefits handling.
• Waiting for a repair estimate risks leaving important injury facts undocumented at first notice.

Reported pain, medical attendance, and possible work absence are injury-related facts that may involve accident benefits handling.

Question 97

Topic: General

A Level 1 adjuster is helping review a small commercial property claim under supervision. A fire damaged a photocopier located in the insured’s office. The photocopier is owned by a leasing company, but the insured’s lease agreement says the insured must repair or replace the photocopier if it is damaged while in the insured’s possession. The insured asks whether she has any claim-related interest because she does not own the photocopier.

How should the adjuster treat the insured’s interest?

• A. Conclude that the insured has no insurable interest because only the legal owner can ever have an insurable interest in property.
• B. Treat the insured as entitled to the full claim proceeds solely because the photocopier was in her possession when the fire occurred.
• C. Recognize that the insured may have an insurable interest because she could suffer a financial loss under the lease agreement.
• D. Refuse to consider the lease agreement because insurable interest is determined only by the name printed on the purchase invoice.

Best answer: C

What this tests: General

Explanation: The key point is that insurable interest is based on the possibility of financial loss, not only on legal ownership. A person may have a claim-related interest in property if damage to that property would affect the person financially. Here, the insured does not own the photocopier, but the lease agreement may require her to repair or replace it after damage. That obligation gives her a potential financial stake in the damaged property. The adjuster should document the lease facts and have coverage and payment issues reviewed under appropriate supervision. Recognizing an insurable interest does not automatically decide the amount payable or who receives proceeds; those issues still depend on the policy wording, proof of loss, ownership interests, and any applicable loss payee or lease arrangements.

• Legal title is not the only way to have an insurable interest; a contractual obligation can create a financial stake.
• Possession alone does not automatically create a right to full claim proceeds; the policy and supporting documents still matter.
• The purchase invoice may help prove ownership, but it does not replace the broader insurable interest analysis.

A person can have an insurable interest when damage to property would cause that person a financial loss, even if legal title belongs to someone else.

Question 98

Topic: General

A supervised Alberta Adjuster Level 1 receives a first notice call from an insured. The insured says a small kitchen fire damaged cabinets in a rented house, the fire department attended, and the next-door tenant is claiming smoke damage to clothing. The insurer has not yet confirmed coverage. What is the best first action?

• A. Authorize full cabinet replacement immediately so the insured can restore the kitchen before coverage is reviewed.
• B. Tell the insured that only the cabinet damage can be considered because the neighbour is not named on the insured’s policy.
• C. Ask the broker to obtain all details later and wait to create the claim file until the proof of loss is submitted.
• D. Open the claim file by recording the policy and contact details, date and location of loss, description of the fire damage, fire department attendance, neighbour’s contact information, and any urgent mitigation needs.

Best answer: D

What this tests: General

Explanation: The key point is that first notice is an information-gathering and file-setup step, not a final coverage or settlement decision. At intake, an Adjuster Level 1 should document enough facts to identify the insured, policy, loss time and location, type and cause of loss, damaged property, involved third parties, emergency services, witnesses, injuries if any, and immediate steps needed to protect property or people. Here, the neighbour’s smoke damage allegation is important because it may create a liability or third-party claim issue that must be recorded and referred for supervised review. Coverage confirmation, payment authority, denial, and settlement commitments should wait until the file is reviewed under appropriate supervision and insurer instructions.

• Limiting the claim to cabinet damage ignores the neighbour’s allegation, which is a relevant first notice fact even before coverage is determined.
• Authorizing full replacement is premature because coverage, scope, cause, and authority have not been confirmed.
• Waiting for a proof of loss misses the purpose of first notice: timely claim setup, contact information, investigation planning, and mitigation awareness.

First notice should capture the essential facts needed to set up the file, identify affected parties, and support supervised coverage and investigation steps.

Question 99

Topic: Automobile

A Level 1 adjuster is gathering facts under Adjuster Level 3 supervision for an Alberta automobile third-party liability claim. The insured driver says he entered an intersection and collided with the claimant’s vehicle. The claimant says the insured failed to yield. The police report confirms the location and vehicle damage but does not assign fault. Which missing fact would most affect the liability assessment?

• A. Which repair facility the claimant prefers to use
• B. When the broker forwarded the first notice of loss to the insurer
• C. Whether the insured has a collision deductible under the automobile policy
• D. Which driver had the applicable traffic control or right-of-way at the intersection

Best answer: D

What this tests: Automobile

Explanation: The key point is to identify the fact that bears most directly on fault. In an intersection collision, liability usually turns on who had the right-of-way, what traffic controls applied, and whether a driver failed to yield or obey a signal or sign. A Level 1 adjuster should gather that fact before supporting any liability conclusion, and the file should remain subject to Level 3 supervision and approval. Other claim facts may matter for coverage, administration, or damages, but they do not answer the central fault question.

• A collision deductible affects first-party physical damage handling, not whether the insured was legally at fault to a third party.
• A preferred repair facility may matter for damage handling, but it does not determine who breached a driving duty.
• The broker’s timing may be relevant to notice or file handling, but it is not the decisive fact for intersection liability.

Right-of-way and traffic control directly affect whether either driver breached a duty in the collision.

Question 100

Topic: General

A Level 1 adjuster at an independent adjusting firm is preparing a closed file for review on a covered commercial water damage claim in Alberta. The file contains the notice of loss, policy wording, photos, vendor estimate, proof of loss, payment calculation, and settlement letter. Four possible missing records are identified.

Which missing record creates the greatest risk in the claim file?

• A. Documentation that the supervising Adjuster Level 3 approved and countersigned the Level 1 adjuster’s report sent to the insurer.
• B. A broker acknowledgement that the claim payment was issued to the insured.
• C. A duplicate copy of the contractor’s estimate already saved elsewhere in the file.
• D. A business card from the restoration vendor who attended the loss site.

Best answer: A

What this tests: General

Explanation: The key point is that file quality is not only about having damage documents and payment support. For an Alberta Level 1 adjuster, supervision must be clear in the claim file. Reports relating to the adjustment of claims require approval and countersignature by an Adjuster Level 3. If the file shows that a Level 1 adjuster reported to the insurer without that approval record, the file has a serious compliance and authority gap. The other missing items may be useful for administration or convenience, but they do not carry the same risk when the core claim documents are already present.

• A duplicate estimate is not critical if the estimate is already saved and supports the payment.
• A vendor business card may help with contact details, but it is not proof of coverage, damage, payment, or required supervision.
• A broker acknowledgement may be helpful communication evidence, but the file already contains the settlement letter and payment support.
• Missing Level 3 approval and countersignature affects the Level 1 adjuster’s authority to report on the claim.

A Level 1 adjuster’s claim report requires Level 3 approval and countersignature, so the absence of that record creates a direct supervision and authority risk.

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