CALIFORNIA INDEPENDENT
ADJUSTER EXAM
insurance---ans-✔✔protection-against-possible-unforeseen-financial-loss
spreading-risk---ans-✔✔Premiums-enter-pool.-Insurer-pays-for-claims-out-of-the-pooled-
premiums.
Violation-of-Principle-of-Indemnity---ans-✔✔Insurer-should-be-restored,-no-better,-no-
worse---made-whole.-Also-means-insurer-can-not-profit-from-loss.
Idemnification-may-include---ans-✔✔Repairs-to-property,-living-expense-reimbursement,-
rental-cars/hotel-and-costs-directly-associated-with-a-loss-as-allowed-under-the-policy.
insurance-policy-contract---ans-✔✔Provide-financial-protection-for-a-fee.
4-requirements-of-a-legal-contract---ans-✔✔Agreement---offer-and-acceptance
consideration--all-parties-bring-something-of-value-(money-for-car)
competent-parties--18-years-old,-sober,-sane
legal-purpose--Example---no-contracts-for-laundering.
Termination-of-Offer---ans-✔✔Revocation-by-offeror
Rejection-by-the-Offeree
Time-lapse
Termination-by-operation-of-law--Illegal-or-becomes-illegal.
Note:-Asking-for-more-info-is-not-a-legal-rejection.
Insured---ans-✔✔Individual-or-organization-that-pays-premiums-in-exchange-for-
protection.
Insurer---ans-✔✔Company,-group,-or-gov.-agency-offering-financial-protection.
legal-contract---ans-✔✔Legally-binding-contract--Insurer-agrees-to-take-on-specified-risks-
in-exchange-for-the-insured's-premiums.
,6-Characteristics-of-Insurance-Contracts---ans-✔✔Personal--protects-policyholder,-not-
property-or-vehicle.-
Coverage-follows-the-person,-not-the-property.-
Adhesion--Insured-has-no-say-in-the-wording-/-Courts-favor-the-insured-in-the-event-of-
ambiguity.-Reasonable-expectations.-
Utmost-Good-Faith--Honest-about-the-risk-of-the-insurer.-Insurer-may-not-conceal-or-
misrepresent-facts.-
Aleatory--Depending-on-a-unknown-future-event.-
Unilateral--Insurance-contracts.-Insurer-has-an-obligation-for-covered-losses.-The-insurer-
has-no-obligation-and-can-stop-paying-premiums-any-time.-
Conditional--insurer-only-has-to-perform-if-certain-conditions-are-met.-(covered-loss)
Doctrine-of-Reasonable-Expectations---ans-✔✔States-that-a-policy-includes-coverages-
that-an-average-person-would-reasonably-expect-it-to-include,-regardless-of-what-the-
policy-actually-provides.
Aleatory---ans-✔✔Depending-on-a-unknown-future-event.
Insurer-only-has-to-pay-if-and-when-covered-losses-occur.
4-essential-parts-of-an-insurance-contract---ans-✔✔*D*eclaration-&-*D*efinitions
*I*nsuring-Agreement
*C*onditions-
*E*xclusions
*E*ndorsements
Declarations-Page---ans-✔✔An-insurance-policy-information-page-or-pages-providing-
specific-details-about-the-insured-and-the-subject-of-the-insurance.
Definitions-section-of-contract---ans-✔✔Not-essential-but-common.-
Defines-terms-used-to-write-policy
Insuring-agreement---ans-✔✔summarizes-the-major-promises-of-the-insurer
Conditions-of-insurance-contract---ans-✔✔provisions-in-the-policy-that-qualify-or-place-
limitations-on-the-insurer's-promise-to-perform
Exclusion-Section-of-insurance-contract---ans-✔✔Common-exclusions--
Earthquakes
Flooding
war
nuclear-hazards
, intentional-acts
Endorsements-of-contract---ans-✔✔Add-or-reduce-coverage
Change-premium-price-after-policy-period-ends
Can-be-added-at-any-time
Certificate-of-insurance---ans-✔✔Includes-basic-policy-details
proof-of-coverage
often-required-and-kept-in-the-vehicle
Type-of-Insurers---ans-✔✔Insurance-Co.
Other-private-groups
Government-entities-like-FEMA,-Social-Security-and-Medicare
Government-Insurers-/-Social-Insurance---ans-✔✔Designed-to-meet-needs-of-general-
public.
Govt.-holds-monopoly
Private-Insurers---ans-✔✔Sell-insurance-based-on-consumer-preferences
exists-to-generate-a-profit
Stock-Insurance-Co.---ans-✔✔Always-for-profit
publicly-traded
AFLAC,-Geico-and-Allstate
Mutual-insurance-co---ans-✔✔owned-by-policyholders-(no-shareholders)
Policy-holders-elect-board-of-directors
Nationwide,-State-Farm
Re-insurer---ans-✔✔Provides-insurance-for-insurers
Reciprocal-Insurer---ans-✔✔an-unincorporated-organization-in-which-all-members-insure-
one-another
Fraternal-Benefits-Societies---ans-✔✔Non-profit
Engage-in-charitable-activities-
Consists-of-people-with-similar-religions,-ethnicities,-religion.-
Must-be-assessable-by-law
members-are-both-providers-and-recipients-
If-claims-payment-is-impaired,-members-help-pay-the-difference.
Self-Insurance---ans-✔✔Self-Insurers-set-aside-money-to-protect-against-potential-losses-
rather-than-pay-premiums.
ADJUSTER EXAM
insurance---ans-✔✔protection-against-possible-unforeseen-financial-loss
spreading-risk---ans-✔✔Premiums-enter-pool.-Insurer-pays-for-claims-out-of-the-pooled-
premiums.
Violation-of-Principle-of-Indemnity---ans-✔✔Insurer-should-be-restored,-no-better,-no-
worse---made-whole.-Also-means-insurer-can-not-profit-from-loss.
Idemnification-may-include---ans-✔✔Repairs-to-property,-living-expense-reimbursement,-
rental-cars/hotel-and-costs-directly-associated-with-a-loss-as-allowed-under-the-policy.
insurance-policy-contract---ans-✔✔Provide-financial-protection-for-a-fee.
4-requirements-of-a-legal-contract---ans-✔✔Agreement---offer-and-acceptance
consideration--all-parties-bring-something-of-value-(money-for-car)
competent-parties--18-years-old,-sober,-sane
legal-purpose--Example---no-contracts-for-laundering.
Termination-of-Offer---ans-✔✔Revocation-by-offeror
Rejection-by-the-Offeree
Time-lapse
Termination-by-operation-of-law--Illegal-or-becomes-illegal.
Note:-Asking-for-more-info-is-not-a-legal-rejection.
Insured---ans-✔✔Individual-or-organization-that-pays-premiums-in-exchange-for-
protection.
Insurer---ans-✔✔Company,-group,-or-gov.-agency-offering-financial-protection.
legal-contract---ans-✔✔Legally-binding-contract--Insurer-agrees-to-take-on-specified-risks-
in-exchange-for-the-insured's-premiums.
,6-Characteristics-of-Insurance-Contracts---ans-✔✔Personal--protects-policyholder,-not-
property-or-vehicle.-
Coverage-follows-the-person,-not-the-property.-
Adhesion--Insured-has-no-say-in-the-wording-/-Courts-favor-the-insured-in-the-event-of-
ambiguity.-Reasonable-expectations.-
Utmost-Good-Faith--Honest-about-the-risk-of-the-insurer.-Insurer-may-not-conceal-or-
misrepresent-facts.-
Aleatory--Depending-on-a-unknown-future-event.-
Unilateral--Insurance-contracts.-Insurer-has-an-obligation-for-covered-losses.-The-insurer-
has-no-obligation-and-can-stop-paying-premiums-any-time.-
Conditional--insurer-only-has-to-perform-if-certain-conditions-are-met.-(covered-loss)
Doctrine-of-Reasonable-Expectations---ans-✔✔States-that-a-policy-includes-coverages-
that-an-average-person-would-reasonably-expect-it-to-include,-regardless-of-what-the-
policy-actually-provides.
Aleatory---ans-✔✔Depending-on-a-unknown-future-event.
Insurer-only-has-to-pay-if-and-when-covered-losses-occur.
4-essential-parts-of-an-insurance-contract---ans-✔✔*D*eclaration-&-*D*efinitions
*I*nsuring-Agreement
*C*onditions-
*E*xclusions
*E*ndorsements
Declarations-Page---ans-✔✔An-insurance-policy-information-page-or-pages-providing-
specific-details-about-the-insured-and-the-subject-of-the-insurance.
Definitions-section-of-contract---ans-✔✔Not-essential-but-common.-
Defines-terms-used-to-write-policy
Insuring-agreement---ans-✔✔summarizes-the-major-promises-of-the-insurer
Conditions-of-insurance-contract---ans-✔✔provisions-in-the-policy-that-qualify-or-place-
limitations-on-the-insurer's-promise-to-perform
Exclusion-Section-of-insurance-contract---ans-✔✔Common-exclusions--
Earthquakes
Flooding
war
nuclear-hazards
, intentional-acts
Endorsements-of-contract---ans-✔✔Add-or-reduce-coverage
Change-premium-price-after-policy-period-ends
Can-be-added-at-any-time
Certificate-of-insurance---ans-✔✔Includes-basic-policy-details
proof-of-coverage
often-required-and-kept-in-the-vehicle
Type-of-Insurers---ans-✔✔Insurance-Co.
Other-private-groups
Government-entities-like-FEMA,-Social-Security-and-Medicare
Government-Insurers-/-Social-Insurance---ans-✔✔Designed-to-meet-needs-of-general-
public.
Govt.-holds-monopoly
Private-Insurers---ans-✔✔Sell-insurance-based-on-consumer-preferences
exists-to-generate-a-profit
Stock-Insurance-Co.---ans-✔✔Always-for-profit
publicly-traded
AFLAC,-Geico-and-Allstate
Mutual-insurance-co---ans-✔✔owned-by-policyholders-(no-shareholders)
Policy-holders-elect-board-of-directors
Nationwide,-State-Farm
Re-insurer---ans-✔✔Provides-insurance-for-insurers
Reciprocal-Insurer---ans-✔✔an-unincorporated-organization-in-which-all-members-insure-
one-another
Fraternal-Benefits-Societies---ans-✔✔Non-profit
Engage-in-charitable-activities-
Consists-of-people-with-similar-religions,-ethnicities,-religion.-
Must-be-assessable-by-law
members-are-both-providers-and-recipients-
If-claims-payment-is-impaired,-members-help-pay-the-difference.
Self-Insurance---ans-✔✔Self-Insurers-set-aside-money-to-protect-against-potential-losses-
rather-than-pay-premiums.
