CA INSURANCE ADJUSTER EXAM
QUESTIONS AND ANSWERS 100% PASS
2026/2027
The roof of Robbie's home was badly damaged by hail and had to be replaced. Fortunately,
Robbie's insurance covered losses caused by hail. In this situation, hail is a(n): - ANS peril
Which of the following conditions in an apartment building is a physical hazard?
a. fire
b. landlord with a bad attitude
c. slippery stairways
d. stained flooring - ANS c. slippery stairways
A hazard is a condition that increases the likely number of losses or the likely severity of a loss.
Slippery stairways are a physical hazard because they increase the likelihood that someone
could slip and be injured.
Which of the following is an example of risk transfer?
a. Derek decides not to buy a motorcycle.
b. Leslie shovels her sidewalk immediately after every snowstorm.
c. Lucia has a burglar alarm installed in her home.
@2026 ALLRIGHTS RESERVED 1
,d. Sybil buys an auto insurance policy. - ANS Sybil buys an auto insurance policy.
By buying insurance, Sybil transfers certain risks to an insurance company in exchange for paying
a premium.
Theodore pays an annual premium to the insurance company that covers many of the risks
associated with his business. What risk management technique is Theodore using? - ANS D.
risk transfer
Using insurance to cover a risk is a classic example of transferring a risk. The insured party with
the risk transfers it to the insurance company in exchange for a premium.
True or False- In the typical insurance sales transaction, the insurance company makes the initial
offer to the insurance applicant. - ANS False-Correct. In the typical insurance transaction, the
applicant is the offeror who makes an offer to the insurance company (the offeree) through a
signed application plus the initial premium.
The fact that insurance policy language is written by an insurance company and is
nonnegotiable makes insurance policies: - ANS c. contracts of adhesion
Most insurance contracts are contracts of adhesion because the policy is drafted by the insurer
and little if any negotiation is normally available with respect to the policy's wording.
When applying for a businessowners insurance policy, Brandy did not mention the hazardous
and illegal activity that goes on in the backroom of her shop because she realized no insurer
that knew about it would insure her business. What is Brandy's failure to disclose this activity
considered? - ANS b. concealment
The deliberate withholding of material facts is concealment.
Esther, an underwriter for QRS Insurance Company, is not able to provide the coverage
requested in Benny's insurance application. Esther can reject the application, or she can: -
ANS b. make a counteroffer An insurer's offer to issue a policy that is different from what the
applicant applied for constitutes a counteroffer
@2026 ALLRIGHTS RESERVED 2
, Which of the following correctly explains why insurance policies are contracts of adhesion?
a. Federal insurance regulators determine the wording of the policy.
b. The insurance company determines the wording of the policy.
c. The loss exposure is usually greater than the premium.
d. The premium is usually greater than the loss exposure. - ANS b. The insurance company
determines the wording of the policy.
With an insurance contract, the insurer invariably determines the policy's wording, and the
insurance buyer who wants that policy has to "adhere," or stick, to the policy's written
provisions.
. In California, which one of the following does not qualify as insurance?
a. Casandra's homeowners policy
b. Debbie's agreement to regularly clean a dining hall
c. Kelly's auto insurance policy
d. Mason's workers compensation insurance - ANS b. Debbie's agreement to regularly clean
a dining hall
Debbie's agreement to regularly clean a dining hall is not a promise to pay for loss or damage
arising from an uncertain event.
Wilmer's auto insurance paid $2,000 of the $2,500 it will cost to repair the collision damage to
Wilmer's car. It did not pay the remaining $500 because Wilmer's policy has a(n) - ANS c.
Deductible.
Wilmer's policy has a $500 collision deductible, which means the insurer will not pay $500 of a
collision loss.
@2026 ALLRIGHTS RESERVED 3
QUESTIONS AND ANSWERS 100% PASS
2026/2027
The roof of Robbie's home was badly damaged by hail and had to be replaced. Fortunately,
Robbie's insurance covered losses caused by hail. In this situation, hail is a(n): - ANS peril
Which of the following conditions in an apartment building is a physical hazard?
a. fire
b. landlord with a bad attitude
c. slippery stairways
d. stained flooring - ANS c. slippery stairways
A hazard is a condition that increases the likely number of losses or the likely severity of a loss.
Slippery stairways are a physical hazard because they increase the likelihood that someone
could slip and be injured.
Which of the following is an example of risk transfer?
a. Derek decides not to buy a motorcycle.
b. Leslie shovels her sidewalk immediately after every snowstorm.
c. Lucia has a burglar alarm installed in her home.
@2026 ALLRIGHTS RESERVED 1
,d. Sybil buys an auto insurance policy. - ANS Sybil buys an auto insurance policy.
By buying insurance, Sybil transfers certain risks to an insurance company in exchange for paying
a premium.
Theodore pays an annual premium to the insurance company that covers many of the risks
associated with his business. What risk management technique is Theodore using? - ANS D.
risk transfer
Using insurance to cover a risk is a classic example of transferring a risk. The insured party with
the risk transfers it to the insurance company in exchange for a premium.
True or False- In the typical insurance sales transaction, the insurance company makes the initial
offer to the insurance applicant. - ANS False-Correct. In the typical insurance transaction, the
applicant is the offeror who makes an offer to the insurance company (the offeree) through a
signed application plus the initial premium.
The fact that insurance policy language is written by an insurance company and is
nonnegotiable makes insurance policies: - ANS c. contracts of adhesion
Most insurance contracts are contracts of adhesion because the policy is drafted by the insurer
and little if any negotiation is normally available with respect to the policy's wording.
When applying for a businessowners insurance policy, Brandy did not mention the hazardous
and illegal activity that goes on in the backroom of her shop because she realized no insurer
that knew about it would insure her business. What is Brandy's failure to disclose this activity
considered? - ANS b. concealment
The deliberate withholding of material facts is concealment.
Esther, an underwriter for QRS Insurance Company, is not able to provide the coverage
requested in Benny's insurance application. Esther can reject the application, or she can: -
ANS b. make a counteroffer An insurer's offer to issue a policy that is different from what the
applicant applied for constitutes a counteroffer
@2026 ALLRIGHTS RESERVED 2
, Which of the following correctly explains why insurance policies are contracts of adhesion?
a. Federal insurance regulators determine the wording of the policy.
b. The insurance company determines the wording of the policy.
c. The loss exposure is usually greater than the premium.
d. The premium is usually greater than the loss exposure. - ANS b. The insurance company
determines the wording of the policy.
With an insurance contract, the insurer invariably determines the policy's wording, and the
insurance buyer who wants that policy has to "adhere," or stick, to the policy's written
provisions.
. In California, which one of the following does not qualify as insurance?
a. Casandra's homeowners policy
b. Debbie's agreement to regularly clean a dining hall
c. Kelly's auto insurance policy
d. Mason's workers compensation insurance - ANS b. Debbie's agreement to regularly clean
a dining hall
Debbie's agreement to regularly clean a dining hall is not a promise to pay for loss or damage
arising from an uncertain event.
Wilmer's auto insurance paid $2,000 of the $2,500 it will cost to repair the collision damage to
Wilmer's car. It did not pay the remaining $500 because Wilmer's policy has a(n) - ANS c.
Deductible.
Wilmer's policy has a $500 collision deductible, which means the insurer will not pay $500 of a
collision loss.
@2026 ALLRIGHTS RESERVED 3
