Alabama Insurance Adjuster Practice Exam

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Prepare for the Alabama Insurance Adjuster Test. Enhance your readiness with flashcards and multiple choice questions, complete with hints and explanations. Gear up for your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

If Howard's flood policy has a limit of $150,000 and the total damage to his dwelling and garage is $125,000, how much will the policy pay in total?

$100,000
$125,000
$150,000
$75,000

The correct answer is: $125,000

In this scenario, Howard's flood policy has a coverage limit of $150,000, and the total damage incurred amounts to $125,000. Insurance policies typically provide coverage up to the specified limit unless there are exclusions or deductibles that apply. Since the total damage of $125,000 is within the coverage limit of $150,000, Howard's policy will pay the full amount of the damage. Thus, the policy will cover the entire amount of $125,000 because it does not exceed the maximum limit established in the policy. This amount represents the insured value of the losses, and as such, it becomes the payout amount for the claim, aligning directly with the damage assessed.