Arkansas Insurance Adjuster Practice Exam

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Prepare for the Arkansas Insurance Adjuster Exam with flashcards and multiple choice questions, each offering hints and explanations. Equip yourself for your test confidently!

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!

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When Sam's ship suffers $75,000 in damage, how much indemnification can he expect to get with a franchise deductible of $50,000?

$50,000
$25,000
$0
$75,000

The correct answer is: $0

In this situation, Sam's indemnification refers to the amount of money he will receive as compensation for the damage to his ship. The franchise deductible means that Sam will have to pay $50,000 of the damage cost out of his own pocket before the insurance kicks in to cover the remaining amount. Therefore, since the ship's damage is only $25,000 more than the franchise deductible, Sam can only expect to receive $25,000 in indemnification from the insurance company. Option A and D are incorrect because they do not take into account the franchise deductible. Option B is incorrect because it is the same amount as the remaining damage cost which is incorrect in this case.