Florida Insurance Licensing Practice Exam

The adjuster's relationship to his principal, the insurer, is best described as:

1. A fiduciary relationship

2. A functional relationship

3. A final relationship

4. A festering relationship

The correct answer is: A fiduciary relationship

A fiduciary relationship is one in which the fiduciary, in this case the adjuster, has a duty to act in the best interests of their principal, the insurer. This means that the adjuster must act with honesty, loyalty, and care towards the insurer and their policyholders. Option B, a functional relationship, does not fully capture this sense of duty towards the insurer. Option C, a final relationship, does not accurately describe the ongoing nature of the adjuster's relationship with the insurer. Option D, a festering relationship, is not a commonly used term and does not describe any type of professional relationship. Therefore, A is the best choice to describe the adjuster's relationship with the insurer as a fiduciary one.