Free AIC Adjuster L1 Practice Questions: General

AIC means Alberta Insurance Council on this page. This route is for Alberta Adjuster Level 1 licensing practice. Use this focused AIC Adjuster Level 1 page as a short practice test for General. The items are original Finance Prep sample exam questions built for scenario-based practice, not trivia, puzzle questions, official AIC questions, copied live-exam content, or exam dumps.

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Sample questions

These are original Finance Prep practice questions aligned to this topic area. 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 topic drills, mixed sets, and timed mock exams in Finance Prep.

Question 1

Topic: General

A supervised Adjuster Level 1 receives first notice of a weekend commercial water loss in Edmonton. A supply line is still leaking, water is spreading toward stock and electrical equipment, and the insured asks whether they should wait until the adjuster visits on Monday before doing anything. What is the most appropriate response?

• A. Tell the insured to take reasonable emergency steps now, such as shutting off the water, protecting undamaged property, arranging emergency extraction if safe, and keeping photos, invoices, and damaged items where possible.
• B. Authorize permanent repairs and disposal of all wet stock so the business can reopen quickly.
• C. Tell the insured not to touch anything until a full site inspection is completed by the adjuster.
• D. Advise the insured that emergency work is unnecessary unless coverage has already been confirmed in writing.

Best answer: A

What this tests: General

Explanation: The key point is that an insured should take reasonable emergency action to protect property and reduce further loss when damage is continuing. In a water loss, shutting off the source, moving or covering undamaged property, arranging safe emergency drying, and documenting conditions can prevent avoidable damage. The adjuster should also protect the claim file by asking for photographs, invoices, and preservation of damaged items when practical. A Level 1 adjuster should document the advice and involve the supervising Adjuster Level 3 or principal as required, but urgent mitigation does not need to wait for a Monday inspection when the loss is actively worsening.

• Waiting for a site inspection can allow preventable damage to continue and may conflict with the insured’s duty to reduce loss.
• Permanent repairs and disposal of evidence go too far unless properly documented and authorized.
• Coverage review is important, but emergency steps to reduce an active loss may be needed before a final coverage position is confirmed.

Immediate reasonable mitigation and evidence preservation are appropriate when delay would increase damage or compromise the claim investigation.

Question 2

Topic: General

A Level 1 adjuster is assigned a homeowner claim under direct supervision. The insured reports that a pipe burst and damaged finished basement walls. During the first call, the insured says the house had been empty for about six weeks while the family stayed in another province, and no one was checking the home. The policy wording has not yet been reviewed, and the insurer has not given instructions on the vacancy or water damage issue.

What is the most appropriate claim-handling implication?

• A. Treat the vacancy information as a coverage issue and seek insurer instruction or supervisory review before making any coverage commitment.
• B. Confirm coverage because sudden pipe bursts are normally insured water losses under homeowner policies.
• C. Tell the insured to complete repairs first and submit invoices before any coverage issue is considered.
• D. Deny the claim immediately because an empty home is always excluded from property coverage.

Best answer: A

What this tests: General

Explanation: The key point is that a potentially material coverage fact has appeared before coverage has been reviewed. An unoccupied or vacant home may trigger policy conditions, exclusions, permit requirements, or other wording that affects a water damage claim. A Level 1 adjuster should gather and document the facts, continue appropriate investigation, and avoid promising payment or denying coverage without authority. The proper response is to refer the issue for insurer instruction or supervisory review, especially because Level 1 work is performed under direct supervision and reports require Level 3 approval and countersignature. A reservation or limited communication may be needed so the insured understands that investigation is continuing and coverage has not yet been confirmed.

• Confirming coverage too early ignores a fact that may materially affect the policy response.
• Denying immediately overstates the effect of an empty home without reviewing the actual wording and insurer position.
• Waiting for invoices first does not address the immediate need to preserve the coverage issue and control communications.

Possible vacancy and water damage conditions can affect coverage, so a Level 1 adjuster should not commit the insurer before review and instruction.

Question 3

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 coverage dispute and ask the insured to submit a proof of loss challenging the insurer’s coverage position.
• B. Treat it as a conduct concern requiring immediate reporting to the Alberta Insurance Council before notifying the Level 3 supervisor.
• C. Treat it as a claim disagreement and negotiate a higher settlement amount to resolve the insured’s frustration.
• 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 4

Topic: General

A supervised Adjuster Level 1 is preparing a file summary for an Adjuster Level 3 to review before approving a proposed contents payment. The file includes the insured’s notice of loss, photos of damaged items, and a contractor’s cleanup invoice. The notes state only: “Water entered basement. Contents damaged. Recommend payment less deductible.” Which documentation weakness most directly undermines coverage review and payment support?

• A. The file does not record the adjuster’s travel time to the property.
• B. The file does not document the apparent source and timing of the water entry.
• C. The file does not identify the broker who sold the policy.
• D. The file does not include the insured’s preferred method of payment.

Best answer: B

What this tests: General

Explanation: The key point is that claim notes must support the coverage decision, not just the payment amount. For a water loss, the apparent source and timing of the water entry are central facts. They help the supervising Adjuster Level 3 determine whether the loss fits an insured peril, whether exclusions or conditions may apply, and whether further investigation is needed before approving a payment. Photos and invoices may show damage and cost, but they do not by themselves establish why the loss happened or whether it is covered. A Level 1 adjuster should document the facts gathered, identify gaps, and avoid presenting a payment recommendation that cannot be tied back to coverage and evidence.

• Payment preference may be needed later for administration, but it does not decide coverage or support the loss amount.
• Travel time is an expense or timekeeping issue, not a core coverage or payment-support fact.
• Broker identity may be useful background, but the missing water source and timing are the material weakness for coverage review.

The source and timing of the water entry are needed to assess coverage, exclusions, conditions, and whether the proposed payment is supportable.

Question 5

Topic: General

A supervised Level 1 adjuster is making first contact with an insured after a basement water loss. The insured asks, “Will the insurer pay for all of this damage?” The adjuster has not yet reviewed the policy wording, cause of loss, deductible, limits, or any applicable exclusions. Which response is most appropriate?

• A. “I cannot discuss the claim process until the insurer decides whether there is coverage.”
• B. “Yes, water losses are usually covered, so you should go ahead and replace everything that was damaged.”
• C. “No, basement water losses are normally excluded, so the insurer likely will not pay.”
• D. “I will gather the loss details, review them with the policy and insurer instructions, and keep you informed. Coverage and any payment decision will depend on that review.”

Best answer: D

What this tests: General

Explanation: The key point is that an adjuster may explain the claim process, but should not guarantee coverage or payment before completing the required review. At first contact, the adjuster can describe next steps: gather facts, document the damage, review the policy wording, consider deductible, limits, exclusions, and endorsements, and obtain insurer or supervising adjuster direction where required. A Level 1 adjuster must be especially careful to work within supervision and avoid making unauthorized commitments. Clear, neutral wording helps the insured understand the process without creating an expectation that the claim will be paid or denied before the investigation is complete.

• Saying the insurer will pay assumes coverage before reviewing the cause of loss and policy terms.
• Saying the loss is likely excluded is also premature without the policy review and investigation.
• Refusing to explain the process is unnecessary; the adjuster can explain next steps while reserving the coverage decision.

This wording explains the process while avoiding any promise of coverage or payment before the facts and policy have been reviewed.

Question 6

Topic: General

A supervised Adjuster Level 1 is handling a water damage claim for an insured homeowner. The insured says the loss occurred “sometime last weekend” and asks the adjuster to write the date of loss as Friday so the claim will “move faster.” The adjuster has not yet confirmed the date with repair records, photographs, or witness information. What should the adjuster do?

• A. Record the insured’s exact statement, note that the date is unconfirmed, and seek supporting information before reporting the date as established.
• B. Leave the date of loss blank in all file notes until the insurer makes a coverage decision.
• C. Use Friday as the date of loss because the insured is entitled to the benefit of the doubt at the start of the claim.
• D. Tell the insured that the date can be changed later if the insurer questions it.

Best answer: A

What this tests: General

Explanation: The key point is that utmost good faith applies to claim communications and documentation by both the insured and the adjuster. A Level 1 adjuster should not misstate or assume a material claim fact to make the file easier to process. The proper approach is to document what the insured actually said, identify what remains unconfirmed, and obtain supporting information such as repair records, photos, weather information, or witness details. Accurate file notes help the insurer make a fair coverage decision and protect the integrity of the claim process. If the date later becomes important to coverage, the file will show what was known, when it was known, and what steps were taken to verify it.

• Using Friday as a confirmed date misrepresents an unverified material fact.
• Leaving the date blank in all notes removes useful information and weakens the claim record.
• Suggesting that an inaccurate date can be changed later does not meet the adjuster’s duty of honest and careful documentation.

Utmost good faith requires accurate, complete claim documentation and disclosure of uncertainty rather than presenting an unverified fact as confirmed.

Question 7

Topic: General

A Level 1 adjuster in Alberta is handling an automobile physical damage claim under direct supervision. The insured phones to complain that the repair estimate is too low and says the insurer is “acting in bad faith.” The adjuster has not completed the coverage review, and no settlement authority has been given. What is the best professional response?

• A. Tell the insured that complaints about bad faith must be made only to the broker, then close the file until the broker responds.
• B. Tell the insured the insurer was wrong, promise to increase the estimate, and send a revised payment request immediately.
• C. Explain that the estimate is final because an appraiser prepared it, and advise the insured that no further review is available.
• D. Acknowledge the concern, document the complaint, explain that the estimate and coverage review will be reviewed with the Level 3 supervisor, and advise that a response will follow.

Best answer: D

What this tests: General

Explanation: The key point is to acknowledge the complaint without making admissions, promises, or coverage decisions beyond authority. A Level 1 adjuster should communicate professionally, record the insured’s concern, and escalate or review the matter with the supervising Adjuster Level 3 or principal as required. The adjuster can explain the process and next steps, but should not admit bad faith, concede coverage, revise a settlement, or deny further review unless properly authorized and supported by the file. Complaints and disputes should be handled with care because they affect fairness, documentation, and the insurer’s position.

• Promising to increase the estimate admits error and commits the insurer before authority and review are in place.
• Sending the insured only to the broker avoids the adjuster’s responsibility to document and escalate the complaint through the proper claim process.
• Treating the estimate as final ignores the complaint and may unfairly shut down review before coverage, damage, and supervision issues are addressed.

This response recognizes the complaint, preserves the file record, and stays within the Level 1 adjuster’s supervised authority.

Question 8

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. 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.
• C. Issue the cheque to the contractor and note in the file that the insured authorized the change by phone.
• D. Change the payee to the contractor if the insured confirms the request by text message.

Best answer: B

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 9

Topic: General

A Level 1 adjuster is assigned to make first contact on a water damage claim under direct supervision. The insured says, “The plumber told me the pipe leaked slowly for months, but I need you to confirm today that the insurer will pay for everything.” The Level 1 adjuster has not yet reviewed the policy wording, obtained the plumber’s report, or discussed the file with the supervising Adjuster Level 3.

What is the most appropriate response?

• A. Explain that coverage and payment cannot be confirmed until the facts and policy are reviewed, document the discussion, and seek direction from the supervising Adjuster Level 3.
• B. Advise the insured that the insurer will likely pay the claim if the plumber confirms there was no intentional damage.
• C. Promise payment for emergency repairs only, because mitigation costs are always covered even when the cause of loss is uncertain.
• D. Tell the insured the claim will be denied because long-term leakage is usually not covered under property policies.

Best answer: A

What this tests: General

Explanation: The key point is that a Level 1 adjuster must not make admissions, denials, or settlement promises before the claim facts, policy wording, and supervising instructions support that position. Early contact should gather information, explain the claim process, and avoid statements that could mislead the insured or bind the insurer without authority. A possible long-term leak is a coverage issue that requires careful review of the cause of loss, policy conditions, exclusions, and evidence. Because the adjuster is Level 1, reports and claim positions require appropriate Adjuster Level 3 supervision, approval, and countersignature where applicable.

• Denying the claim immediately assumes the facts and policy outcome before the investigation is complete.
• Promising emergency repair payment treats mitigation costs as automatically covered, which is not safe without policy and claim review.
• Saying the claim will likely be paid based only on lack of intentional damage ignores other coverage issues and overstates the adjuster’s authority.

A Level 1 adjuster should communicate process and next steps without making unsupported coverage or settlement commitments before investigation and supervisory review.

Question 10

Topic: General

A supervised Level 1 adjuster is assigned a new Alberta liability claim. The claimant says the insured store employee admitted the floor was wet, asks the adjuster to confirm the store is liable, and wants assurance that medical expenses will be paid. The adjuster has not yet reviewed the policy, obtained the insured’s statement, or received instructions from the insurer. What is the best professional response?

• A. Promise payment for reasonable medical expenses to maintain good faith, then confirm coverage after the insurer reviews the file.
• B. Explain that liability and coverage cannot be confirmed yet, gather and document the facts, and seek direction from the supervising Adjuster Level 3 or insurer before making any commitment.
• C. Tell the claimant the store is responsible because an employee admitted the floor was wet, but state that the final amount will be decided later.
• D. Deny the claim until the claimant provides complete medical records and signs a release.

Best answer: B

What this tests: General

Explanation: The key point is that a Level 1 adjuster should not make commitments before the claim is investigated and authority is confirmed. An admission of liability, a denial of coverage, or a promise of settlement can prejudice the insurer and exceed the adjuster’s supervised role. Here, the adjuster has not reviewed the policy, obtained the insured’s statement, or received insurer instructions. The proper response is to communicate fairly but cautiously: acknowledge the information, explain that the matter is still under review, document the conversation, gather necessary facts, and refer the issue to the supervising Adjuster Level 3 or insurer before any coverage or settlement position is taken.

• Treating the employee’s comment as a final admission ignores the need to investigate liability, causation, damages, and policy response.
• Denying the claim at this stage is also unsupported because the adjuster lacks the policy review, insured’s statement, and insurer direction.
• Promising payment before authority is confirmed may create an improper settlement commitment and exceed a Level 1 adjuster’s role.

A Level 1 adjuster must avoid unsupported admissions, denials, or settlement promises until the facts, coverage, and authority are properly reviewed.

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Related focused pages

• Free AIC Adjuster Level 1 Practice Exam
• Free AIC Adjuster L1 Practice Questions: Property
• Free AIC Adjuster L1 Practice Questions: Automobile
• Free AIC Adjuster L1 Practice Questions: Liability

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