Arkansas Insurance Adjuster Practice Exam

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Prepare for the Arkansas Insurance Adjuster Exam with our comprehensive quiz, featuring multiple choice questions and in-depth explanations. Master essential concepts and increase your chances of success on the test!

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When Sam's ship suffers $75,000 in damage, how much indemnification can he expect to get from his insurer, given his Ocean Marine hull policy has a franchise deductible of $50,000?

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

The correct answer is: $75,000

The correct answer is A because when an insurance policy has a franchise deductible, the insurer only covers the excess amount above the deductible. In this scenario, Sam's ship suffered $75,000 in damage, which exceeds the deductible of $50,000, so he can expect to receive the full amount of $75,000 as indemnification from his insurer. The other options, B, C, and D, are incorrect because they do not consider the deductible amount and suggest that Sam would receive less than $75,000 in indemnification.