Arkansas Insurance Adjuster Practice Exam

What kind of authority does Jerry have when adjusting Jackie's hurricane claim?

1. Express authority

2. Implied authority

3. Expert authority

4. Agency authority

The correct answer is: Implied authority

In the context of adjusting an insurance claim, implied authority refers to the permission or power that an adjuster has to take actions that are necessary to perform their duties effectively, even if those actions are not explicitly stated in a contract or agreement. If Jerry is adjusting Jackie's hurricane claim, he likely has implied authority to make decisions related to the claim, such as determining the extent of damages, negotiating settlements, or recommending certain actions based on industry standards and practices. This authority allows an adjuster to operate within the scope of their role and carry out necessary tasks without needing to consult with superiors for every action, as long as those actions align with standard procedures. Express authority, on the other hand, is specifically granted through direct statements or written agreements. Expert authority is not a common term in the insurance context; it could imply that someone has specialized knowledge but does not pertain to an adjuster's ability to make decisions regarding claims. Agency authority relates to the relationship between the principal and agent, but in this context, implies that Jerry operates with the implied understanding of what is required in his role as an adjuster.