California Adjuster PSI Exam 2025 | Questions,
Answers, and Explanations | Verified Answers
1. What is the primary responsibility of an insurance adjuster?
A) To process insurance claims
B) To determine the validity of claims and the amount of compensation
C) To sell insurance policies
D) To market insurance products
Answer: B) To determine the validity of claims and the amount of compensation
2. Which of the following is a requirement to become a licensed insurance
adjuster in California?
A) Must be a U.S. citizen
B) Must complete a 12-hour pre-licensing course
C) Must have a college degree in law
,D) Must have a background in accounting
Answer: B) Must complete a 12-hour pre-licensing course
3. What does "subrogation" refer to in insurance?
A) The process of determining the premium for insurance
B) The right of the insurer to recover costs from a third party
C) The type of policy that covers liability for professional mistakes
D) A form of temporary insurance coverage
Answer: B) The right of the insurer to recover costs from a third party
4. Which of the following is NOT considered an excluded cause in most insurance
policies?
A) Intentional acts
B) Natural disasters
C) Wear and tear
D) Accidental damage
,Answer: D) Accidental damage
5. What is the purpose of the California Insurance Code?
A) To protect the interests of insurers
B) To regulate the insurance industry and protect consumers
C) To provide guidelines for brokers and agents only
D) To establish licensing requirements for claims adjusters
Answer: B) To regulate the insurance industry and protect consumers
6. Which type of insurance policy provides coverage for a business’s property in
case of theft, fire, or vandalism?
A) General Liability Insurance
B) Property Insurance
C) Worker’s Compensation Insurance
D) Professional Liability Insurance
Answer: B) Property Insurance
, 7. In the context of an insurance claim, what is the term “deductible” referring to?
A) The total amount of coverage provided
B) The portion of the claim paid by the policyholder before the insurance
coverage applies
C) The amount the insurer charges for the policy
D) The value of the property insured
Answer: B) The portion of the claim paid by the policyholder before the insurance
coverage applies
8. Which of the following best defines "actual cash value" (ACV)?
A) The cost of replacement without depreciation
B) The market value at the time of loss, including depreciation
C) The amount of the premium paid for the policy
D) The amount the policyholder can claim under any circumstance
Answer: B) The market value at the time of loss, including depreciation
Answers, and Explanations | Verified Answers
1. What is the primary responsibility of an insurance adjuster?
A) To process insurance claims
B) To determine the validity of claims and the amount of compensation
C) To sell insurance policies
D) To market insurance products
Answer: B) To determine the validity of claims and the amount of compensation
2. Which of the following is a requirement to become a licensed insurance
adjuster in California?
A) Must be a U.S. citizen
B) Must complete a 12-hour pre-licensing course
C) Must have a college degree in law
,D) Must have a background in accounting
Answer: B) Must complete a 12-hour pre-licensing course
3. What does "subrogation" refer to in insurance?
A) The process of determining the premium for insurance
B) The right of the insurer to recover costs from a third party
C) The type of policy that covers liability for professional mistakes
D) A form of temporary insurance coverage
Answer: B) The right of the insurer to recover costs from a third party
4. Which of the following is NOT considered an excluded cause in most insurance
policies?
A) Intentional acts
B) Natural disasters
C) Wear and tear
D) Accidental damage
,Answer: D) Accidental damage
5. What is the purpose of the California Insurance Code?
A) To protect the interests of insurers
B) To regulate the insurance industry and protect consumers
C) To provide guidelines for brokers and agents only
D) To establish licensing requirements for claims adjusters
Answer: B) To regulate the insurance industry and protect consumers
6. Which type of insurance policy provides coverage for a business’s property in
case of theft, fire, or vandalism?
A) General Liability Insurance
B) Property Insurance
C) Worker’s Compensation Insurance
D) Professional Liability Insurance
Answer: B) Property Insurance
, 7. In the context of an insurance claim, what is the term “deductible” referring to?
A) The total amount of coverage provided
B) The portion of the claim paid by the policyholder before the insurance
coverage applies
C) The amount the insurer charges for the policy
D) The value of the property insured
Answer: B) The portion of the claim paid by the policyholder before the insurance
coverage applies
8. Which of the following best defines "actual cash value" (ACV)?
A) The cost of replacement without depreciation
B) The market value at the time of loss, including depreciation
C) The amount of the premium paid for the policy
D) The amount the policyholder can claim under any circumstance
Answer: B) The market value at the time of loss, including depreciation
