CALIFORNIA ADJUSTER UPDATED TEST EVALUATION
QUESTIONS AND ANSWERS GRADED A+
✔✔SFIP Loss Payment Condition - ✔✔The insurer has 60 days from when it receives a
proof of loss to pay the claim.
✔✔What is the Special Loss Settlement under a flood policy? - ✔✔It pays the lowest of:
1) The dwelling's replacement cost
2) 1.5 times the dwelling's actual cash value
3) The policy limit
✔✔Flood insurance Coverage A covers how much for a detached garage? - ✔✔It will
pay 10% of the policy coverage limit for detached garages.
✔✔The two forms of excess liability policies are: - ✔✔Follow Form: follows a base
policy to the letter
Stand Alone: covers what the base policy covers, but sets its own exclusions and
limitations to coverage.
✔✔What is Self-Insured Retention (SIR)? - ✔✔It is a deductible in an umbrella policy. If
the base policy does not cover the loss, you will have to pay the amount of the base
policy as a deductible before the umbrella policy will pay out.
✔✔Umbrella Policy - ✔✔Extra liability insurance that is able to "drop down" to fill
coverage gaps in underlying policies.
✔✔Adjusting - ✔✔The process of comparing a claimant's losses to the promises made
in an insurance policy.
✔✔What is the effect of ambiguity in an insurance contract? - ✔✔Typically any
ambiguity favors the insured because the policy was drafted by the insurer.
✔✔Public Adjuster - ✔✔Hired by the policyholder and represents them in the claim
process.
✔✔Non-waiver Agreement - ✔✔Claimant agrees that adjuster's words and actions do
not bind the insurer. Allows insurer to inspect damages without relying completely on
independent adjuster. Usually used in catastrophic situations.
✔✔Additional insured - ✔✔Person or organization that is added to the policy at the
request of the First Named Insured and benefits from the policy, but not allowed to
make changes.
, ✔✔Liberalization - ✔✔If the insurer broadens coverage without raising premiums,
existing policies are also automatically provided this expanded coverage.
✔✔ Business Owner Package (BOP) - ✔✔bundles property, liability, and income
protection in a single package. Sometimes referred to as homeowner's insurance for
businesses.
✔✔Is inflation coverage (guard) feature typically found in a BOP? - ✔✔Yes
✔✔What is the value feature in a BOP? - ✔✔Replacement Cost
✔✔What are the two basic types of coverage in a Commercial Package Policy? -
✔✔Liability and Property coverages
✔✔What is a surety bond? - ✔✔A contract establishing liability including at least 3
parties:
1. The PRINCIPAL who agrees to fulfill an obligation, 2. the OBLIGEE to whom the
principal owes the obligation, and 3. the SURETY who guarantees to pay the obligee if
the principal defaults.
✔✔Surety - ✔✔The party that becomes legally liable for debt, failure or default of
another party.
✔✔Indemnitor - ✔✔Fourth party in a surety bond who agrees to reimburse the surety for
losses sustained if the principal defaults.
✔✔Limited Cooking and Fast Food Restaurant qualifications for a BOP. - ✔✔1. 7,500
sq. ft. or fewer
2. Max seating of 75 for limited cooking and 150 for fast food
3. Beer and wine sales no more than 25% annual income
4. No liquor sales
5. Has Maintenance of fire extinguishing equipment
✔✔Self Storage Facilities qualifications for a BOP. - ✔✔1. Maximum of two stories
2. No storage of pollutants, waste, chemicals, or industrial materials.
✔✔What types of businesses are NOT qualified for a BOP? - ✔✔1. Car dealerships,
service stations, repair shops
2. Parking lots, garages
3. Amusement parks
4. Bars, nightclubs, and the like
5. Banks and similar institutions
6. Manufacturing and servicing businesses (except those specifically eligible)
7. Condominium associations (except residential and office).
QUESTIONS AND ANSWERS GRADED A+
✔✔SFIP Loss Payment Condition - ✔✔The insurer has 60 days from when it receives a
proof of loss to pay the claim.
✔✔What is the Special Loss Settlement under a flood policy? - ✔✔It pays the lowest of:
1) The dwelling's replacement cost
2) 1.5 times the dwelling's actual cash value
3) The policy limit
✔✔Flood insurance Coverage A covers how much for a detached garage? - ✔✔It will
pay 10% of the policy coverage limit for detached garages.
✔✔The two forms of excess liability policies are: - ✔✔Follow Form: follows a base
policy to the letter
Stand Alone: covers what the base policy covers, but sets its own exclusions and
limitations to coverage.
✔✔What is Self-Insured Retention (SIR)? - ✔✔It is a deductible in an umbrella policy. If
the base policy does not cover the loss, you will have to pay the amount of the base
policy as a deductible before the umbrella policy will pay out.
✔✔Umbrella Policy - ✔✔Extra liability insurance that is able to "drop down" to fill
coverage gaps in underlying policies.
✔✔Adjusting - ✔✔The process of comparing a claimant's losses to the promises made
in an insurance policy.
✔✔What is the effect of ambiguity in an insurance contract? - ✔✔Typically any
ambiguity favors the insured because the policy was drafted by the insurer.
✔✔Public Adjuster - ✔✔Hired by the policyholder and represents them in the claim
process.
✔✔Non-waiver Agreement - ✔✔Claimant agrees that adjuster's words and actions do
not bind the insurer. Allows insurer to inspect damages without relying completely on
independent adjuster. Usually used in catastrophic situations.
✔✔Additional insured - ✔✔Person or organization that is added to the policy at the
request of the First Named Insured and benefits from the policy, but not allowed to
make changes.
, ✔✔Liberalization - ✔✔If the insurer broadens coverage without raising premiums,
existing policies are also automatically provided this expanded coverage.
✔✔ Business Owner Package (BOP) - ✔✔bundles property, liability, and income
protection in a single package. Sometimes referred to as homeowner's insurance for
businesses.
✔✔Is inflation coverage (guard) feature typically found in a BOP? - ✔✔Yes
✔✔What is the value feature in a BOP? - ✔✔Replacement Cost
✔✔What are the two basic types of coverage in a Commercial Package Policy? -
✔✔Liability and Property coverages
✔✔What is a surety bond? - ✔✔A contract establishing liability including at least 3
parties:
1. The PRINCIPAL who agrees to fulfill an obligation, 2. the OBLIGEE to whom the
principal owes the obligation, and 3. the SURETY who guarantees to pay the obligee if
the principal defaults.
✔✔Surety - ✔✔The party that becomes legally liable for debt, failure or default of
another party.
✔✔Indemnitor - ✔✔Fourth party in a surety bond who agrees to reimburse the surety for
losses sustained if the principal defaults.
✔✔Limited Cooking and Fast Food Restaurant qualifications for a BOP. - ✔✔1. 7,500
sq. ft. or fewer
2. Max seating of 75 for limited cooking and 150 for fast food
3. Beer and wine sales no more than 25% annual income
4. No liquor sales
5. Has Maintenance of fire extinguishing equipment
✔✔Self Storage Facilities qualifications for a BOP. - ✔✔1. Maximum of two stories
2. No storage of pollutants, waste, chemicals, or industrial materials.
✔✔What types of businesses are NOT qualified for a BOP? - ✔✔1. Car dealerships,
service stations, repair shops
2. Parking lots, garages
3. Amusement parks
4. Bars, nightclubs, and the like
5. Banks and similar institutions
6. Manufacturing and servicing businesses (except those specifically eligible)
7. Condominium associations (except residential and office).
